Markets are complex social systems

People love certainty and they care for security but, usually, they do not get it. Individuals may be promised these aspects, and/or they may be convinced to have it, but it has actually only been assumed. Hence, one can perceive such conditions, but reality does differ. In many cases, however, parents make promises to their children, board members do the same to the firm’s employees, and by politicians bring civilians alike messages. Nevertheless, it is pretty much nonsense. Perception is often not what it seems. As soon as an individual discovers that the assumed certainty or the perceived security has just been imaginary, a feeling of disappointment may appear. Moreover, in many cases, anxiety comes into effect. Acceptance of uncertainty and insecurity seems quite a challenge. However, they are part of live itself.

In this world many things are complicated, while quite some others are complex. People often apply wording like ‘complex’ and ‘complicated’, as if these are synonyms. However, this is absolutely not true; complex and complicated are no equivalents.

Complexity and complication actually have little in common. The difference between the two concepts is as follows: complicated refers to things that face default settings or a standard setup. In such a case, relationships are known and stable. This makes the use and the outcome of complicated systems very predictable.

Machines and tools may function in a very complicated manner, but are typically anything but complex. After all, complexity involves unpredictable outcomes, whereas complicated equipment may not be easy to unravel, but it is likely to always follow the same steps and way of working, while always resulting in the same outcome.

The similarity between complicated and complex systems is their sophistication, whereby both consist of many particles. The level of complexity or complication increases with the number of particles.

An automated system can look very compounded, especially for non-experts. The apparatus, machine or other type of equipment may look sophisticated, for instance, because it consists of many components. Despite this fact, is is not a complex system, but a complicated system. The reason being that every time an identical performance (or execution) takes place and the same outcome is realised. The movement, for instance, is the same at every repetition. It could concern a large robotic arm that grabs a product and moves it to an assembly line above which the product is dropped. The exercise and the results are identical time after time. This brings certainty. Complexity, however, embeds uncertainty by definition. Moreover, the future outcome in those situations is never sure.