Open Systems

Karl Popper – On Open Systems vs Closed


What may you ask has totalitarianism got to do with digital banking and systems? In terms of the way systems are procured and experiments run, it turns out there is quite a bit. The learnings are between the ideas of open versus closed systems, open versus closed play.

The Spartans overturned democracy

During the rise of Totalitarianism, whilst some took to arms, a group of thinkers took on the war of ideas. Amongst these thinkers was Karl Popper who wrote The Open Society and its Enemies. He sought to understand the grounds upon which people sought to justify fascism or totalitarianism based upon some of the oldest political theory.

This is highly relevant today when we are subjected to so much doom and disaster in front of us, increasing nationalism, questions surrounding the future of western democracy and what’s gone wrong with it.  How we adapt to so much change and uncertainty from pandemics and the seismic shift in economic power becomes top of mind. As we transitioned from the closed tribal societies lead by individuals and families of the past, to those open to us all, as originally construed of by the Greeks , Popper wanted to understand why totalitarianism became and remains such a constant and legitimate threat to our democracies

As we go back to the Greeks, the authors of democracies, we can see where ideas of openness came under threat. After throwing the tribal leaders under the bus for a more open system, one where everyone gets toa say and to be heard, it wasn’t long before the old ways returned, the Spartans overthrew the government by way of military coup and convicted Socrates of corrupting the youth of Athens and introducing strange gods and sentenced him to death.

Living in an open society is more complicated than living in a closed society. In an open society we must bear the constant burden of being an individual. Nobody is going to tell you what to do that will benefit society. You must figure that out. You then must go about the work to become an informed citizen, making educated decisions about how we might adjust to things going forward. That is going to lead to some doubt around your current beliefs, forcing you to be willing to change your mind about some of them. To survive, as Charles Darwin would point out, we must be adaptive, constantly open to being wrong about things to improve your understanding of things and change. This brings a level of anxiety. This anxiety caused the Spartans much concern. They preferred an orderly society where everyone knew what they were doing. It wasn’t until the Persians came along posing a much grander threat that the Spartans eventually conceded.

However, if you live in a more closed, dogmatic society, it’s much easier to feel confident because you are closed off from the reality of the large number of options that are available to you. Popper called this anxiety of living within an open system the strain of civilisation. But also said that doing the work of participating in an open system whilst hard is worth it. It’s worth it because you are in the driver seat as opposed to being driven around by someone else’s fascist totalitarian narrative of the time. He also pointed out that just because a system broke down doesn’t mean to say it didn’t work. Everything eventually breaks down. It’s a law of nature. The exciting part is that as it fails, we learn, we adjust the system and we grow, rather than cave in and return to some previous dinosaur form of ourselves.

To live effectively within an open society, Popper advised that our best approach was through the adoption of Scientific method. Under such a method, and that which makes it robust, is not that it sets out prove that things are true, but rather that things are not true. This is why scientists build null hypotheses. What makes science great is not that we are trying to be right with our theory, but rather to be less wrong, to have a closer approximation of the truth than we had yesterday, a constant narrowing down. 

When the political system fails, as it did in Germany at the turn of the 20th Century, the question should not have been “who should rule?” but rather, “How should the system be re-constituted?” Perhaps Australia could learn from this today? Is the constitution up for a redraw that is more inclusive, more effective for dealing with global pandemics the likes of which are likely to become more common not less and more efficient than the one where we have enormous inefficiencies operating between the states and the federal government?

Democracies aren’t perfect, nothing is. What information and skills does the average citizen have to be making decisions about who should be making decisions? It’s a tough philosophical question that has befuddled many. No democracy can exist without making some big mistakes. The reason democracies are important to protect is not because they are perfect and that everyone deserves to be heard but simply that they avoid tyranny. There are times like in Germany at the turn of 20th century and again now in various parts of the world, that we need to remember what makes a democracy so much more dynamic, so much more considerate of the individual than a closed society ever could be. 

As change accelerates corporate survival rates decline

As we reflect on the history of open systems of politics and closed ones we are brought to the political system of the corporation. There has been much written about the survivability of corporations. Tracking corporate longevity of S&P 500 firms shows a steady churn rate of companies dropping off the index as new entrants join the list and corporate lifespans continue their downward trajectory. The full impacts of this global pandemic are not yet known and will play out over the next few years. But signs point to ongoing changes in consumer and market behaviour that were previously underway and which the pandemic sharply accelerated. Corporate longevity remains in long-term decline. The 30- to 35-year average tenure of S&P 500 companies in the late 1970s is forecast to shrink to 15-20 years this decade (Chart 1).

The biggest-ever new entrant to the S&P 500, Tesla Inc., is the gorilla in this space, joining the list with a market value that’s now bigger than the rest of the U.S.-headquartered automakers combined.

As change accelerates the demand for innovation and innovation processes increases

In 2022, computers turn 200 years old. The first mechanical computer, The Babbage Difference Engine, was designed by Charles Babbage in 1822. The first digital programmable computer was the Colossus, designed and built by the British in World War II to break German ciphers.  For about another hundred years, ease of use and automation as design paradigms have served us well; Speed up processes by replacing people with robots and connect the people and the machines togetehr through an easy to use interface. Remove the friction!

As the pace of change increases and the duration over which we have used this idea mean that we are rapidly nearing the end of the utility of the idea, at least in order to make us competitive. Computing will almost certainly be involved in getting us further into space and that will serve some companies and governments well enough. But for everyone else competitiveness will be born of a creative open process.

Childhood learning shows us the way

Whilst many parents and schools are lowering the age at which children start building their resumes, there remains a lot of wisdom in allowing children a lot of free open play. Left to daydream, role play, tell stories, children benefit from discovering the world, failing and learning. With room for creativity, mess, and imaginative play, children can really get lost in their own little world with this kind of play. As adults we spend a lot of time in the frontal cortex region of our brains trying to problem solve. This is useful when there is a well-defined problem with past experiences and systems to draw on but less useful when the problem is less so. Spending so much time in the prefrontal cortex is tiring, if operated for too long can led to burnout and rarely leads to creative insights. In one study only 16% of respondents reported getting creative insights while at work. Most creative insights occur when we’re doing other activities and our minds are wandering, permitting the brain to make distant and distinct connections to problems we’re trying to solve.

The Moroku GameSystem Design Sprint

The Moroku GameSystem Design Sprint is Moroku’s proprietary creative process. The first week is spent discussing what defines game and why we enjoy it as we explore examples of how making activities fun can deliver engagement. From this we then move on to exploring new ways of thinking about the problem using game frameworks such as Flow. Rather than thinking about the problem and how we solve it, the process builds empathy with the customer, the challenges they may have and various options and game mechanics and dynamics that can be used to help them build the skills to solve the challenges they have.

The Design Sprint is available as a fixed price engagement delivered via video conference and online collaboration tools.

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Digital is rapidly commoditising banking around the world, forcing participants to compete on margin erosion and funding. In the new engagement economy, there is an alternative: Harness the power of game to build digital experiences that deepen customer relationships, provide value and are relevant by supporting customers to thrive with their money.