The Collapse of Complex Business Models

by Clay Shirky, 2010

The Collapse of Complex Business Models

by Clay Shirky, 2010

is a develop of the ideas from…

The Collapse of Complex Societies

by Joseph Tainter, 1990

The Collapse of Complex Societies:In 1988, Joseph Tainter wrote a chilling book called The Collapse of Complex Societies. Tainter looked at several societies that gradually arrived at a level of remarkable sophistication then suddenly collapsed: the Romans, the Lowlands Maya, the inhabitants of Chaco canyon.

The Collapse of Complex Societies:Every one of those groups had rich traditions, complex social structures, advanced technology, but despite their sophistication, they collapsed, impoverishing and scattering their citizens and leaving little but future archeological sites as evidence of previous greatness.

The Collapse of Complex Societies:Tainter asked himself whether there was some explanation common to these sudden dissolutions.The answer he arrived at was that they hadn’t collapsed despite their cultural sophistication,

they’d collapsed because of it.

The Collapse of Complex Societies:Subject to violent compression, Tainter’s story goes like this: a group of people, through a combination of social organization and environmental luck, finds itself with a surplus of resources. Managing this surplus makes society more complex—agriculture rewards mathematical skill, granaries require new forms of construction, and so on.

The Collapse of Complex Societies:Early on, the marginal value of this complexity is positive—each additional bit of complexity more than pays for itself in improved output—but over time, the law of diminishing returns reduces the marginal value, until it disappears completely.

The Collapse of Complex Societies:At this point, any additional complexity is pure cost.Tainter’s thesis is that when society’s elite members add one layer of bureaucracy or demand one tribute too many, they end up extracting all the value from their environment it is possible to extract and then some.

The Collapse of Complex Societies:The ‘and them some’ is what causes the trouble. Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond.

Is Sydney a Complex Society?

mashed together by: peterhac

attribution: Clay Shirky and other stuff found on the web

image: Sydney Out and About 2009