Rising Complexity, Diminishing Returns, Shrinking Slack: Revisiting the Evidence

Abstract

This paper extends its author's earlier use of Joseph Tainter's theory that a tendency toward diminishing returns on investments in complexity is the source of the collapse of complex societies to analyze the current trend of international economic life, and its implications for international security. Specifically it contends that the post-World War II international economic order, particularly from the 1970s on, has grown increasingly complex (as the level of integration, information flows and the structure of economic activities indicate), while offering diminishing returns on that complexity, and with it, shrinking slack making for a system that is both more stressed and more fragile (evident in slowing growth and increasing indebtedness). The paper also identifies some of the possible causes for this trend (like technological stagnation and natural resource depletion). It also considers recent events, like the 2008 economic crisis, the upsurge in economic nationalism, and increasing great power conflict in light of this finding. Finally it turns to the prospects for ameliorating the trend, specifically focusing on the economic possibilities of potentially revolutionary new technologies (particularly artificial intelligence and renewable energy).