The Self-Organized Economy

By Tom Wessels, Core Faculty at Antioch University New England

I stand atop New Hampshire’s Mount Pisgah looking east toward Mount Monadnock and see what appears to be an expansive wilderness. Within the hundreds of square miles that stretch before me there is only one thing suggesting the presence of people—a lone, white farmhouse nestled near the top of a ridge a few miles north of Monadnock. Otherwise, all other human structures are lacking—no roads, no electric wires, no towers, no buildings, not  even any farm fields.

Within the many square miles encompassed by that view are a myriad of species too numerous to count. Each of those organisms has their own specific way of living and somehow without anything directing it, through all their interactions, resilient ecosystems result. How does this happen? The very foundation for how those ecosystems thrive lies in the principle of self-organization.

Having come to light with the development of complex systems science in the late 20th century, self-organization is a relatively young concept to science, but one, as we will see, which was clearly understood long before western science identified it.

Self-organization, the observation that as a system grows, it gets not only bigger, but also more complex, is the hallmark of all biological, ecological, and healthy human systems. The increasing complexity of a self-organized system results from the parts becoming ever more specialized and at the same time more and more tightly integrated. As each part does what it needs to do to sustain itself, it creates conditions that sustain the whole. As a result self-organized systems become increasingly resilient, stable, and energy efficient.

All of us are perfect examples of self-organization. We each started life as a single, microscopic cell. As we developed to adulthood each of our single cells multiplied itself into more than 30 trillion cells. However, not only did the number of cells geometrically increase, they also differentiated into 254 different cell types—including skin, muscle, bone, and nerve cells. Yet the specialization didn’t stop there. Some nerve cells connect to muscle cells, others to sensory cells, and yet others connect motor neurons to sensory neurons. As each highly specialized cell functions to support itself, it creates conditions that serve the whole body. As a result the internal environment of our bodies is stable and resilient.

Self-organization also occurs in ecosystems through evolutionary time. In nature, the fundamental currency is energy. Since energy is finite, any individual or population that wastes energy has a reduced chance of survival, while populations that are energy efficient can increase their numbers as a finite amount of energy can support more individuals. Natural selection continually pushes species to become ever more energy efficient through a process called coevolution. As we will see cooperative interactions between species are far more energy efficient and integrative than are harmful or competitive ones.

Whenever two species first begin to interact, the nature of their relationship is often very negative for both parties. A dramatic example of this is seen in the accidental introduction of the chestnut blight fungus into North America in 1904. The fungus was present in oriental chestnut trees planted at the Bronx Zoo and Botanical Garden. The oriental chestnuts looked fine because they had coevolved with their fungus for tens of thousands, possibly millions, of years. However, the American chestnut had no such relationship with the fungus.

At the time the fungus entered the new world American chestnut was the most common forest tree east of the Mississippi River. In the heart of the species’ range— forests of Tennessee and Kentucky—one out of every two trees were American chestnut. Within thirty years of the introduction of the fungus, the American chestnut was almost completely wiped out. This was obviously a highly negative outcome for the chestnut. Although people don’t often consider it, this was not good for the fungus either. If an organism is a parasite, the worst thing it can do is to kill off its host. That is an incredibly energy wasteful, and potentially lethal, outcome.

If two species survive their initial encounters, natural selection will force them to interact in less energy-wasteful, harmful ways. Over long periods of time through coevolution, relationships that begin disastrously like that between the American chestnut and the chestnut fungus can eventually develop into a mutualism where both species not only benefit but also need one another to survive.

My favorite example of mutualism involves the bull’s horn acacia tree and its resident acacia ant. Both species exist in Mexico and Central America. The acacia has evolved three features to service its ants. These include: huge, pliable, swollen thorns that no longer serve to ward off herbivores, but instead are first hollowed out by the ants and then used as cavities within which the ants can live and raise young; open sap wells on the leaf stems where ants get their water and carbohydrates, and Beltian bodies that are packed with protein and lipids which the ants harvest from the Acacia’s leaf margins. If acacia ants are removed from their host tree they will die since they can only survive on acacia sap and Beltian bodies.

In return the acacia ants give their host tree the most advanced, plant defense system in the world. Acacia ants have very potent stings that will drive off all herbivores. Additionally if vines attempt to grow up an acacia tree, the ants will chop them down. Or if a neighboring tree attempts to encroach on the acacia’s space the ants will climb that tree and defoliate it. Acacia trees lacking ants will perish within a month.

The most intriguing thing about this relationship is that acacia ants are derived from leaf-cutter ants. When these tropical ants first encountered the ancestral acacia trees they probably defoliated and killed them. That was a very energy-wasteful thing to do, so natural selection forced the ants and the acacia to adjust their ecologies and the eventual result is witnessed in the tight mutualism they exhibit today.

Competition between species is another interaction that coevolves. During competition, individuals lose energy making these struggles inherently inefficient. If species can specialize to reduce the nature of their competition, then all will benefit through energy gains.

In the forest adjacent to my home I frequently encounter Black-capped Chickadees and White-breasted Nuthatches. Each bird species feeds on the same insects that live on the bark of trees, but due to specialization in the way they feed they avoid competition. The chickadees are specialized to forage on branches while the nuthatches have evolved to walk down the steep trunks of trees and only feed there. In this way competition forces innovation, allowing species to coexist without wasteful energy losses.

In Vermont, where I live, midsummer meadows host a huge array of pollinators. Multiple species of bees, bumblebees, wasps, hornets, moths, butterflies, flies, beetles and ants each pollinate flowers in their own specialized way. If any one species of pollinator should go extinct, the meadow will be fine since the other pollinators will fill the gap of service. Coevolution, by forcing species to become ever more specialized, allows all these many pollinators to coexist creating a high level of repetition with respect to pollination. It is exactly this repetition—that occurs in all functional roles within an ecosystem from numerous species of photosynthetic plants to untold numbers of decomposers—that gives ecosystems their resiliency. The extinction of any one species does not threaten the integrity of the whole ecosystem. Coevolution fosters specialization that gives rise to increasing repetition of function, creating resilient and stable ecosystems.

The principle of self-organization is apparent not only in ecosystems and the human body but also in successful non-living human systems such as an economy. Two centuries before western science recognized this principle, Adam Smith articulated how self-organization occurs through “the invisible hand” of the marketplace. In his 1776 classic, The Wealth of Nations, the kind of economic system Smith wrote about was a village economy with specialized merchants—butchers, bakers, blacksmiths, brewers. Being specialized, the merchants were not in competition with each other and were tightly integrated together. Each did what they did for reasons of self-interest and at the same time provided services that supported each other without anyone directing it. That was Smith’s “invisible hand.” The blacksmith made knives that he sold to the butcher. The butcher in turn used those knives in his business and sold meat to the blacksmith.

For more than a century our economic system has consistently moved away from the type of self-organization Smith described. Corporations have grown into huge, transnational giants that are no longer specialists integrated with others in their sector, but generalists that work to monopolize many sectors through competitive exclusion, mergers, and acquisitions. As a result the economy has lost repetition of function and resiliency. A look at any sector of the United States economy—finance, energy, agriculture, retail, media—will show that a large proportion of capital is concentrated in just a hand-full of extremely large corporations that have little interest integrating with others in their sector as they strive for dominance.

The critical reason for the collapse of the financial sector during the fall of 2008 was not risky investments—those were the catalysts—but the fact that it totally lacked self-organization. At that time 40 percent of the investment capital in the United States was held in just ten gargantuan banks. These firms were not specialists and were all invested in the same kinds of instruments. As soon as Lehman Brothers started to falter the whole sector, and the global economy as well, would have toppled in a chain reaction if the US government hadn’t stepped in to shore up the system. If in 2008 America had hundreds of more moderate-sized, specialized banks in place of the ten huge ones, then like the meadow the financial system would have been just fine. Those making risky investments would have failed but there would have been hundreds of other banks remaining solvent, keeping the financial system viable.

An ironic outcome of the 2008 collapse is that now 45 percent of investment capital is held in just eight banks making the financial system even less resilient then is was just a few years ago. As Janine Benyus writes in Biomimicry, “The more our world functions like the natural world, the more likely we are to endure.” I would add the more likely we are to prosper.

Given the political realities we face today I have little faith that the federal government will be able to do anything significant to create a more resilient economy. I also believe that if things continue as they presently are, a future economic meltdown is very likely— the next one potentially being far worse than 2008. If we wish to have a resilient and stable future our only choice is for citizens and municipalities at the local and regional level to recreate them. This will mean investing in smaller, specialized enterprises that can integrate in supportive ways with others in their sector as Smith described back in the 18th century. The support for these enterprises will come from individuals making the conscious choice to patronize them rather than the large corporate giants, and municipalities and states creating policies that are friendly to smaller, specialized businesses.

This process is already taking place in my region of New England, particularly within our regional food system. When my wife Marcia and I first moved to Putney, Vermont in 1976. There was just one food coop, one farmers market, and no community supported agriculture (CSA) farms in the entire region. Today we have 4 regional food coops, over a half-dozen, farmers markets, and various CSAs too numerous to count. Along with the blossoming of regional agricultural enterprises a number of the CSAs are linking up and working together. Rather than competing, some local vegetable growers are intentionally growing different crops and then combining their produce into a single CSA. Others are bringing in organic dairies, meat providers, and bakers to create CSAs that supply just about all their clients’ needs. Also waste products from one farm become valuable resources to another farm.

The food system in the lower Connecticut River valley of Vermont and New Hampshire is now maturing to the point where municipalities are trying to attract food processors to create a regional, year-round, food supply. Just a little over a decade ago agriculture in the region was a declining economic proposition, now it is becoming an important component of a resurging economy.

The effort to create a more resilient economy is also taking hold in other sectors. Our small regional banks and credit unions have seen a significant increase in new customers as people consciously make decisions to pull their finances out of the hands of large banks in favor of their local and regional institutions. The investments in big banks that used to support large corporations now shift to support local businesses fostering greater self-organization.

I am confident we will see the investment in local and regional enterprises continue to rise. As this occurs it is analogous to coevolution in ecosystems where like energy, capital will flow through more and more specialized, integrated, business creating a resilient and stable economy. One, I might add, that will be far more environmentally friendly and socially just than our current economic system.

Life has cloaked this planet for at least 3.8 billion years and during that time it has not only sustained itself, it has thrived. This enormous amount of time is a little easier to comprehend using an analogy of a stack of paper. Imagine that the thickness of a standard sheet of paper equals a century. Two sheets would represent the tenure of industrial culture. Two hundred sheets, or a one-inch thick stack of paper, would represent the time it is believed that humans have lived in the Americas. How tall would the stack need to be to represent the tenure of life on Earth? It would be a stack of paper approximately three miles in height, each sheet representing one hundred years.  Self-organization through coevolution is the foundation for that long tenure. It is a model to which we need to pay close attention, and one we should consciously weave into our local and regional economies.

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