04/01/2013 03:27 pm ET Updated Jun 01, 2013

The Collapse of Complex Societies: Review

"The Roman Empire is paradoxically one of history's greatest successes and one of its greatest failures," said Joseph A. Tainter.

The author seeks to find out what happened to Rome and many civilizations that declined after long periods of splendor in his book, The Collapse of Complex Societies.

There is discussion of natural disasters, the depletion of natural resources, invasions, or government mismanagement as the causes of the decline of many outstanding civilizations. Theories on the collapse of the Mayan civilization come to mind, for example, in which a simple Google search provides us with multiple results.

But it is hard to imagine a complex society with skills to resolve big problems, not being able to reverse challenges.

Tainter explores how humanity has gone from living in simple societies, with little division of labor and ephemeral political leaders, to complex societies with a population that has many and quite varied occupations, a defined territory and a government that exercises a monopoly in the use of force to avoid internal conflicts.

In this evolution toward complexity, which in principle aims to solve the problems that are posed to humanity and improve the population's standard of living, a serious situation has emerged. It is increasingly necessary to invest more in activities that generate lower yields, and it is possible that this is where societies may collapse -- that is, they become simpler again.

A complex society involves:

  1. The processing of increasing amounts of information, which implies difficulties in handling data and a considerable quantity of interrelated and, at times, redundant information.
  2. The consumption of a large amount of scarce natural resources, which are obtained with increasingly greater effort.
  3. Having a greater number of bureaucrats to organize and regulate the varied amount of human activities, which, in turn, requires proportionately more taxes.
Thus, the economy has to divert increasing amounts of resources directly related to its very complexity. This translates into increasingly lower growth in the production of goods.

We have a clear example of this in the United States, with huge expenditures on national security -- fighting even in countries that are literally on the other side of the world -- or strategies and programs to contain the financial crisis, without this enabling the population to improve its standard of living.

Today, Europe also provides us with a variety of clear examples of public finances totally out of control, from Greece to Italy, to Spain, Ireland and the United Kingdom. Some analysts believe that this situation will again lead the global economy into a recession.

Another example is Mexico, where we have created large bureaucratic structures that ultimately slow economic activity and then require more taxes to sustain them.

At the same time, today we see that the so-called welfare state has failed and if we do not prevent its collapse we will generate social costs of incalculable dimensions.

The book helps to understand our history and extrapolate lessons to the delicate global situation of public finances, especially since governments that claim to be the solution to the global crisis often represent the problem.

Our quick and simple value refers precisely to the need to avoid needless complexity. It means doing without redundant functions and processes and bureaucracies.

Simple things are taught and learned quickly and can be handled more efficiently. These are essential ingredients of the competitiveness and growth of any company that does not want to collapse under the weight of its own complexity. I hope that those in power understand these principles to avoid the collapse of our societies.