Determinants of Diversity in an Ecological Economy

Determinants of diversity in an ecological economy. What in the heck does that mean?

If we look at a wide variety of ecosystems, some are much more diverse in the number of species than are others. If we look at economic systems in the world today, some are very diverse in the number of “economic species” — sets of similar corporations. Economies vary from a low number of economic species, and a low number of individual corporations or entrepreneurs, to high levels of diversity and individual entrepreneurial entities. On the face of it the determining factors to create these four extremes seem simple enough. The greater the energy source(s) and the more abundant the raw materials, the easier it should be to have both high levels of individuals and economic species within any system. In actual biological examples this simple equation holds up for “simple” ecosystems.

Oh, and I should comment that ecosystems and economic systems as I use the terms are fundamentally in geographically defined regions. On a very broad scale, of course, both the economies of the world and the ecosystems of the world are global in scope, but the two ecol and econ systems are regional, even the current largest economic systems are based on based in a geographical region.

So in biological and economic terms the abundance of energy is important. In biological systems, the greater number of hours of sunlight and the more direct the angle, the greater the net energy (in this case the tropics). The same is true for economic systems. For the primary producers in agriculture, sunlight is an important determining factor. However for all other producers and consumers, alternative energy sources such as fossil fuels, hydro-electric power, nuclear energy, and others provide the main energy sources.

In both biological and economic terms, the abundance of raw materials is also a critical factor determining levels of diversity and numbers of individual entrepreneurial entities. In both cases it is important that the raw materials be close by or be constantly transported to the producers and consumers. Importing raw materials in biological systems is common in aquatic ecosystems where the water currents move nutrients and small organisms (plankton) to a fixed ecosystem such as a coral reef or the Humboldt current along the east coast of South America. Local supplies are helpful in economic systems as well, but importing raw materials is also a common part of these systems.

In biological ecosystems diversity and population size can be increased quickly by increasing the complexity of the local physical environment, providing more hidey-holes for individuals. In fact, fishermen know about this phenomenon and use it to good advantage. Old ships are often sunk in areas close to shore to encourage fish to congregate nearby. A logical conclusion would be that natural selective forces of evolution can also work with complex physical environments to allow the development of species better suited for the small interstices of complex rocky shores for example. And of course we see this in biological systems. Is this also true of economic systems? Is there an equivalent of a “naturally” occurring complexity of environment that allows for greater diversity of economic species both to evolve and on a shorter time scale to inhabit? One example might be a shopping mall. A shopping mall is a physical structure that allows a large number of very small businesses to exist with a physical equivalent of the biological hidy-hole in a rocky shore (evolutionary effects) or the artificial reef (encourage congregations of existing pre-adapted species and individuals).

Years ago, I published a paper on the determinants of diversity. In that paper, I defined an extension of the physically complex environment to an organic matrix. In an organic matrix, the physical complexity is made more complex because the infrastructure is not rocks and mud, but is itself living organisms. These living organisms, unlike the rocks, both interact on an immediate ecological time scale, but also interact over long periods of time in an evolutionary manner so that the interacting species (two or more) adapt to each other and can become dependent on each others existence in the system, or they react by developing defensive mechanisms. Needless to say any biological defense mechanism is met by ratcheting up the offensive species attack techniques over long periods of evolutionary time as they continue to adapt to each other. We see this expressed in the range of relationships ranging from symbiosis and commensalism, to highly toxic tissues of plants or animals, heavy spines, and so on to thwart competition and predation.

I should hasten to add that while these are excellent examples of how an organic matrix can encourage defense/offense or strategic alliances in biological organisms, such mechanisms often develop in ecosystems without an extensive organic matrix.

In economic systems we do see many examples of defense/offense systems developing. Copyright laws, economic espionage / elaborate security systems are designed to prevent competitors from having access to proprietary information, the loss of which would allow the competitors to be more effective competitors. We also see examples of interdependent relationships where one company depends on the inventions of a second or third to supply something they themselves could not or could not afford to produce. The degree of this interdependence varies from convenience to survival. The same is true in biological systems and in biology, these are characterized as commensal (convenient) to survival (symbiotic).

But just as in biological systems, these inter-dependencies do not require an organic matrix in which to develop.

So, is there an analogous matrix in economic systems? The most obvious biological matrix systems include the coral reef (corals and calcareous algae are the organic matrix), the great kelp forests (kelp are the living organisms that form the matrix), and all terrestrial forests (trees are the living organisms of the matrix).

In nature the places where these organic matrices are most obvious is where diversity and population sizes are the highest. Where in economic systems do both diversity and populations of entrepreneurial entities peak? In those locations is there anything to indicate the diversity and high population of entrepreneurial entities is more than just optimum distribution of raw materials and energy?

See the next blog on this subject

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