Feedback Control and the Economy

Here’s a video on the fundamentals of communication and control systems. It’s rather dry and abstract, but it may prove useful as a point of reference.

Many of our readers will not know what “The Laplace Domain” could possibly be. In short, every time the lecturer writes (s) he is just reminding us that what looks like multiplication is actually something much more complicated, which some rather abstruse math converts into a multiplication. When we’re done, we’ll convert it back. In this video, it doesn’t matter much. (By the way, the trick only works in linear systems, which is why engineers find climate science overwhelming. I know I did.)

This is the basic idea of much of engineering, and the core of the mathematics behind the discipline once known as “cybernetics”. We have a system which can do lots of things. There is one behavior which we want. So we measure the behavior we have and represent the behavior we want, and use the difference to adjust the system. This is the “closed loop”.

Closed loop systems are uncannily more powerful than open loop systems. Capitalism triumphed over soviet communism because individual actors in capitalist systems can compare their own situation to a situation they want and act on the difference, while in Soviet communism everything was centralized via ponderous and crudely measured five year plans.

But closed loop systems work only if we have a good model of what we want and a good measure of what is happening. If the system has a behavior mode which is not measured or controlled, it will wander off that way and break. Sometimes this happens in uncontrolled vibrations. Sometimes the system just drives itself out of spec. You must measure what you want to control.

The economy as it is structured has no measure of sustainability – to the contrary the future is systematically discounted. It is consequently not surprising that the system is going off the rails in exactly that way.

The Laplace domain is an extension of the Fourier domain. If you’re familiar with the Fourier transform, you may be able to follow the follow-up lecture. This moves back to the “time domain” where we live, and shows briefly how feedback can grossly alter the behavior of a system.

By the way, it would be great if someone could do this kind of thing with real production values, wouldn’t it?

Here’s a comparable lecture. Honestly if I had my life to live over I think I’d do my undergrad in Bangalore. I just love the Hindu accent. And if you persist all the way to minute 34, you will understand the nature of the very basic step (please pronounce this in Hindi-inflected English) that I suspect economists somehow always neglect. Every time you use a model, you must constantly be aware of its limits, is it not?




  1. mt --- "gorssly" is a wonderful word reminding one of acting like gorse bushes, but I think you meant "grossly".

    And by the way, even if the system is nonlinear one can often make progress in the LaPlace domain. There are handbooks with many LaPlace transforms and anti-transforms which were thoroughly worked out for engineers to use in the days before computers.

  2. Thread-hijacking to ask a different cybernetics-related question. After a recent talk by CAT's Paul Allen, synthetic methane was mentioned, able to fix co2. For some reason, I was suddenly struck by the notion that, if we get through the next 50 years, we'll then be faced with a much more massive cybernetic problem: managing net carbon flows through our energy systems globally in order to keep them at zero. (Though the methane example, I guess, isn't a problem: grab carbon, burn it: net zero right there.)

    That's so far ahead it's really only science fiction. But connecting to things like California's methods for entering carbon schemes into the calculation... How can we increase confidence that the emerging global carbon count is going to keep to net zero?

    Part of my problem there is, I don't really understand what impact the last few thousand year's deforestation has had, net-carbon wise. Is it little overall since, until only recently, population was relatively tiny?

    But yes: imagining some sci-fi future where we need to keep to net zero, given a world where some things pump carbon and some sink it... how???

  3. Just throwing these thoughts in Nature by Simon Lewis into the mix, while we're thinking about steering things.

    I'd say economics does have some pretty good ideas on managing common pool resources, as well as privatised ones. Most mainstream analyses deal with the latter, if only because they'll argue that currently external costs must be internalised/privatised to make them manageable. It needs a fuller response, though: I'll get back to you. I doubt I know much more about this than you, though...!

    [ Even a hint would be useful. I don't really know where to start. A key question is whether internalization/privitization actually suffices and how we can be sure that it does. Here's a place where a precautionary principle attitude makes perfect sense. Yet I have not seen any economic mechanisms that address the fact that caps, and not taxes, what the physical world responds to. -mt ]

  4. It is not a big problem because the answer is to stop burning fossil fuels. In another 50 years, if the fossil fuel consumption continues to increase exponentially (in other words economic growth continues), then there will be no fossil fuels left. The problem then is where will we get the fuel to power the growing industry need for a growing population? Economics does not have an answer to that problem.

    Cheers, Alastair.

  5. This description of feedback control is not really relevant to economics or earth science. It is a mathematical formulation of a simple negative feedback system. The mathematics is used to determine whether the system is stable, but the real world is not stable. Hurricanes and economic crashes are regular features in the real world.

    Moreover, the system described is designed to control a plant. But the real world does not have an intelligent creator. Its control mechanism include positive feedback loops, and it just flip flops about until it gets into a stable state and remains there until it is disturbed into another stable state.

    Cheers, Alastair.

  6. The closest thread here I can readily locate for the following recommended reading. The copied (from where I wrote the paragraph on another blog) text contains html tags for bold and italics, so I'm unsure (withoout a previewer) just how (or even whether) this will appear:

    In the 2012 Jun 18 issue of The Nation Stephen Mihm's Paper Chase is a review of and commentary on Phillip Coggan"s Paper Promises: Debt, Money and the New World Order. Both the bookand the commentary are among the more discouraging of readings. All is far from well in the realm of political economy.

  7. The answer is not to just stop burning fossil fuel. Already now (cf. Hansen's 350ppm) we should start drawing down and sequestering carbon, i.e. go carbon negative. Carbon neutral was last century - shallow ecology of yesteryear we can no longer afford.

    Our future depends on the will to do carbon negative agriculture. Just building up carbon rich soil would not be that reliable and stable - climate change might outpace the process and "burn" out the soil carbon again. But it would be a start: Allow 3 billion folks do small scale organic farming and achieve food sovereignty.

    Reliable/stable carbon sequestration would be so simple technically that Homo Sapiens Colossus stands insulted: Compost char coal. You just forgo 20% of the energy content of wood and keep the char coal. Here in Germany that would still be cheaper than using heating oil: Second last winter I estimated the fossil fool's cost of 1 ton of superb gardening char coal made from wood pellets as -343€/t. Forget anything your economist tells you about the price of char coal! If Homo Sapiens Colossus insists on a high tech solution, I suggest constructing a micro gas turbine powered wood gas hybrid car that produces char coal. Weight and space wise such a gadget could be competitive with current E-vehicle batteries: a 15kg bag of wood pellets can produce 17kWh of electricity plus the char coal.

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