Bigger or more dynamic doesn’t mean more resilient

Consider two settlements. The first is a small metropolitan area called Barnstable Town. The second is Rochester, a large area with a rapidly growing economy. Which do you think would be more resilient? This may sound unnatural, but the answer is the smaller area of Barnstable.

Various resilience rankings of US regions reveal many such surprising observations. Apparently, slower-growing cities and regions have a greater capacity to withstand shocks than more dynamically developing areas. Why is this? For a number of reasons. First, these areas tend to be stable and much more affordable. Second, home ownership rates are higher and income equality is better. Third, their communities are much stronger because there are residents who have lived there for a long time and have therefore formed more ties. Finally, these areas tend to have a more diversified business climate.

For example, an area that grows slowly is likely to be more resilient than one that develops rapidly. The point is that a system that develops rapidly in one of its components does so at the expense of other parts or at the expense of future imbalances. The consequences of such development are not always known and are often delayed. Take, for example, a government where each agency works on separate issues (land, air, water, economy, finance, technology, health, etc.) as if these issues were unrelated. As a result, one agency strives to achieve tremendous growth while the other struggles to clean up the mess the first agency has created. The result is often inefficient, expensive and sometimes harmful.

I would attribute this phenomenon to Jay W. Forrester’s counterintuitive social systems. Forrester was one of the first to study this in a systematic way. His work in the 1960s and 1970s showed how systems modelling could help to understand failures in business management, government, politics and economics. An important concept he and other systems scientists used was feedback loops, borrowed from engineering. A feedback loop can be thought of as a chain of causal relationships. Forrester believed that virtually all decisions were made in the context of feedback loops. When operating in a system as complex as society, it was inevitable that unanticipated and delayed effects would occur. Any attempt to balance the system could eventually lead to a serious imbalance in the system. Indeed, this has been observed by philosophers and writers of the past. Machiavelli, for example, wrote

“… when a problem arises either from within a republic or outside it, one brought about either by internal or external reasons, one that has become so great that it begins to make everyone afraid, the safest policy is to delay dealing with it rather than trying to do away with it, because those who try to do away with it almost always increase its strength and accelerate the harm which they feared might come from it.”

Charles Marohn, in his book “Strong Towns: a Bottom-Up Revolution to Rebuild American Prosperity”, points out how large investments in infrastructure in the past have increased the burden on cities in the present. Those who invested in infrastructure in times of abundance did not consider that the situation might change in the future and that it might not be possible to afford the costs of maintenance. Earlier in history, the pace of growth was linked to the affordability of change, and with the option of bouncing back if things went wrong. Now we live by accumulating debt, as if we were as careless as Louis XV of France in his words après nous le déluge (after us the deluge).

In complex systems, cause and effect are often distant in time and space, and the consequences of a delayed response are difficult to understand. For this reason, smaller and less dynamic areas tend to be more resilient. They are predictable, stable and better prepared for sudden shocks.

References

• Forrester, J. (1971). Fundamentals of Cybernetics of the Enterprise (Industrial Dynamics). J. Forrester.–M.: Progress.
• Marohn Jr, C. L. (2019). Strong Towns: A Bottom-up Revolution to Rebuild American Prosperity. John Wiley & Sons.
• Ranking the ‘resilience’ of hundreds of U.S. cities. How well will metros manage shocks, such as earthquakes and economic meltdowns? URL: https://www.zdnet.com/article/ranking-the-resilience-of-hundreds-of-us-cities/