SYSTEM DYNAMICS: A tool to understand our world
Nipawin - Sunday - December 15, 2002 - by: Mario deSantis
models	I have just finished the first assignment of a course in System Dynamics and I am going to provide now some related educative explanations. In a few words, System Dynamics is the discipline which helps us understand our world as we develop models of our perceived realities.
actions and effects	These models use the capabilities of computers so that we can study their behaviour by contracting time and space. Associated to the discipline of System Dynamics is the understanding of Systems Thinking, that is the ability to understand that we are all parts of a given system, that our actions have effects throughout the system and that such effects can be distant in time and space.
straight shooters	At this point, I sadly think about our conventional search for rich and possible charismatic leaders who are straight trouble shooters. One such rich leader is President Bush who wants to attack Iraq because it is supposedly hiding its nuclear capabilities; however, this president has no willingness to attack North Korea and Iran when these latter countries have explicitly advertised their nuclear programs. So we must be aware of the shortcomings of our straight shooters as these leaders are only good to hide their ignorance behind their power and take straight shots against us common people.
conceptual tools	Systems Thinking and System Dynamics are very powerful conceptual tools to help us uncover the straight shooters of this world and this is why I am going to provide some understanding of systems as developed in my first assignment of my course in System Dynamics.
WHAT IS A SYSTEM AND EXAMPLES OF SYSTEMS
component interactions	A system is a collection of parts which interact with each other to function as a whole. Therefore, systems have a purpose as a whole and the whole is not the pure sum of the parts of the system. From systems we have also the concept of synergy, that is the mutual interaction of the parts is more worth than the sum of the individual parts. Another definition of system is the one provided by Gene Bellinger
	"A system is an entity that maintains its existence through the mutual interaction of its parts"
bread,butter, slice of meat lettuce - sandwich	An example of systems can be the educational delivery of a university course, where the components would be the instructor, the students, the resource facilities. Another example of a system would be the accounting/bookkeeping functions of a small business. In this case we would have the accounting employees who would be using their separate accounting responsibilities, the computer information system, clients, suppliers. Still another example of a system would be my saving account with the Nipawin Credit Union in Saskatchewan. The elements of this system would include the interest rate, deposits and withdrawals.
EXAMPLE OF A SYSTEM THAT AIMS TOWARD A GOAL
complex coordination	An example of a system that aims toward a goal is the launching of a guided missile against a moving target just like the one launched by a CIA drone in Yemen to hit a car whose passengers were alleged Al Queda terrorists. [re: U.S. missile strike kills al Qaeda chief:CIA drone launched missile, CNN
EXAMPLES OF SYSTEMS THAT ERODE THEIR GOALS
mistake	Goal is economic growth and lower taxes: Recent American tax cuts for the rich, at a time of governmental deficit, will translate with higher taxes in the future. I hope that higher taxes will affect corporations and the rich as the financial wealth of the top one percent of households now exceeds the combined wealth of the bottom 95 percent. [re: Shared Capitalism Institute,]
counter productivity	Goal is justice: For every one (American) criminal conviction that comes after a trial, 19 other cases are settled by plea bargain. When, as part of a plea bargain, innocent people confess to a crime they did not commit, that isn't a breakdown of the system. It is the (American) system working exactly as it is supposed to. [re: Why Innocent People Confess, by Michael Kinsley] With the plea bargaining system, the administration of justice becomes the administration of lower jail times for possible innocent victims in exchange of possible manufactured confessions.
oops!	Goal is fair economic international trade: The American policy of ever increasing chronic trade deficits is becoming unsustainable and not compatible with the policy of maintaining a strong dollar. [re: The Strong Dollar and the U.S. Trade Deficit. (pdf) Statement by Dean Baker, ]
EXAMPLE OF BALANCING SYSTEMS WITH DELAY
balance	Any system really has a stabilizing behaviour, after all, if systems are composed of interacting parts functioning as a whole, then it is a logical consequence to have balancing systems. Therefore, most systems have a balanced behaviour. Also, such systems include corrective actions to achieve a dynamic balance or equilibrium as they function for an established purpose or goal. The corrective actions are sometime exercised only after some delays and therefore the behavior of the system may be affected by oscillations as the system try to achieve its goal.
timing is everything	One example of a balancing system with delay is the cyclical performance of an economic system. This economic cycle may be due to multiple and overlapping causes along with the failure to take timed appropriate corrective actions do to the intrinsic delays of the system. For instance, the marginal controlling of the economy by playing with the interest rate set by the United States Federal Reserve Board (central bank) would only have an economic effect after some time and maybe few months. A root cause affecting an economic cycle could be attributed to the capacity to overproduce, another root cause could be the lack of demand for consumer goods, and still another root cause could be too much inventory held by businesses.
EXAMPLE OF SYSTEMS THAT SHOWS ADDICTION TO EXTERNAL HELP (SHIFTING THE BURDEN)
imported experise destroys local development develop local	The Government of Saskatchewan has the understanding that it lacks sophisticated IT (IT - information technology) solutions and that such solutions cannot be provided by local provincial IT businesses. As a consequence, this government has the propensity to contract out IT solutions from big corporations such as SAIC, SAP and now EDS. This situation will provide the government with supposed ready sophisticated solutions, but in the long run the local provincial IT businesses would be undermined. A corrective action for the government would be to enhance the technical capabilities of the local provincial and governmental IT capabilities, and reduce the outsourcing of IT solutions. [Re: This is not the time for backroom deal, Canadian Taxpayers Federation, October 29, 2002 ]
EXAMPLES OF FIXES THAT FAIL
	Reference: directly from The Ouroboros Effect: The Revenge Effects of Unintended Consequences. A compilation by David X. Swenson Ph.D.
failed to understand cause of problem	In England, livestock that contracted "mad cow " disease during the mid-1990s led many farmers to sell their livestock before it demonstrated symptoms. In the cattle food production business, cattle parts are often ground up, dried, and added to livestock feed for protein. Unfortunately, the disease is passed on in the cattle protein and the disease was spread widely to previously uninfected cattle.
save pennies and waste dollars	Organizations conscientiously cut costs where ever possible--including toilet paper. Thick, soft and more expensive toilet paper is often replaced with paper of much lower quality. Paradoxically, many users find the cheap paper unreliable and therefore use twice as much. The high volume use not only counteracts the intended savings, but the mass can clog drains, users are annoyed, and rolls must be changed more often.
SYSTEMS HAVE LIMITS
confusion over values	Our world cannot sustain itself with our own social and economic system based on continuous growth of the Gross Domestic Product (GDP) and on the growth of the so-called productivity gains through new technologies. The GDP and related productivity gains are artificial numbers which don't tell the story of our humanity and our world. We have limits to growth and such limits are defined by the natural finite limits of our resources and the consequences of an economic driven world on our population, industrial capital, food production and pollution. [Re: Beyond The Limits To Growth. A new update to The Limits to Growth reveals that we are closer to "overshoot and collapse" - yet sustainability is still an achievable goal by Donella H. Meadows, Dennis L. Meadows, and Jørgen]
	Mario deSantis
Reference:
	García, Juan Martín, Director del Area de Dinámica de Sistemas de la Cátedra UNESCO de Desarrollo Sostenible de la UPC Course on System Dynamics, http://www.ct.upc.es/catedraunesco/ads/adse.htm
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