Golden Rule Decision Criterion
...ns. Recognition that even the most mundane social and technical decisions involve a myriad of potential complications led Adam Smith to formulate the concept of the “Invisible Hand” (Currently in vogue as “Rational Self- Interest”). The Invisible Hand concept assumes that overall system welfare is maximized when each decision-maker attempts independently to maximize his/her self-interest without regard for the impact of such action on others. A corollary to this concept implies that the individual (and by association, organizations, nations, etc.) will actually suffer as the result of altruistic behavior. Garrett Hardin’s “Life-Boat Ethics” and similar proponents of this view seem to have widely influenced current “advanced” societies. System Dynamics provides a useful vehicle for understanding the inherent invalidity of Invisible Hand-oriented ethics/policies. Each system variable (such as population) possesses positive and negative feedback loops relationships with respect to all other system variables. Positive feedback mechanisms (e.g., births) are growth-generating functions. Because of the Conservation Law (First Law) an addition to one component of a system must be accounted for by a decrease in other components. Because of the Entropy Law (Second Law) such transactions have some degree of inherent inefficiency (I.e., irreversibility, which is reflected as “friction” loss or “cost” of making the transaction) that tends to increase at a rate greater than the actual transaction rate. In thermodynamics terms this inefficiency in entropy (waste or pollution) in the global “closed” system. Since the general consequence of the Invisible Hand policy criterion is the attempt by each practicing individual to maximize his consumption or accumulation, the criterion creates a highly entropic positive feedback mechanism that tends to cause the system to overshoot system limits or constraints. (Further, this phenomenon usually causes severe disparity between a few very “wealthy” and a large proportion of very poor.) In contrast to the inherently unstable positive feedback mechanisms, negative feedback loops tend to be stabilizing functions – to the degree they counterbalance excessive growth trends. (Unchecked negative feedback loops, such as deaths from wide-spread illness, can be equally destructive.) A difficulty in achieving an optimal steady-state world system is that a macro steady-state is required for optimal welfare of all members of the world system, but it cannot be achieved except as the culmination of achievement of local steady-state conditions by at least a statistically significant proportion of all subsystems, starting with the individual level. In ...