Disruptive technologies, often referred to as creative destruction in conversations regarding “edge of chaos”, can only exist in environments that do not impose absolute order.
The term “edge of chaos” is used to denote the transition space between order and disorder that is hypothesized to exist within a wide variety of systems – technology, economics, social systems, consciousness, evolution…This space is continuously shifting between stagnation and anarchy and is the one space where complex systems can be spontaneous, adaptive and alive.It is where new and innovative ideas (and innovative genotypes when considering evolution) are forever chipping away at edges of the present state of affairs where even the most established systems will eventually be overthrown.
The idea ofthe edge of chaos is expressed in the work of Joseph Schumpeter who formulated the idea of creative destruction as the driving force within a market economy. Schumpeter describes how new innovations are constantly being created by entrepreneurs in order to displace older ones in a continuous cyclical dynamic. He further states in his book The theory of economic developments that “circular flow which excludes any innovations and innovative activity feeds to a stationary state”. According to Schumpeter, this stationary state is described as the classic equilibrium of order and predictability. The entrepreneur is the one that disrupts this equilibrium and is thus the primary cause of economic development which proceeds in a cyclical fashion along several time scales.
“While macro social systems such as laws,religion, government and other institutions offer the potential for order and stability within the system they can also impose too much order on the individuals limiting their individual development in the name of conformity and group cohesion ultimately leading to stasis and lack of novelty with which to innovate and evolve the social structure."
A functioning society is seen as one that is able to maintain itself on the edge of chaos with both stable macro institutions that are capable of maintaining sufficient order but which can also maintain individual autonomy as much as necessary for the individuals to creatively develop.A creatively functioning democracy is one that allows its members to dynamically change the macro social systems to better respond to changes in the environment and support creative thought.
ASX and ASIC are examples of the macro institutions which provide rules and regulations which control publicly listed companies.ISX is one such company that has thrived at the “edge of chaos” and has continually built destructive technologies within that environment. The macro institutions (ASX and ASIC) need to adapt in order that creativity can thrive and our economy can grow and change through the ideas of entrepreneurs.
In my opinion, ASX has functioned in a manner that will, if allowed to continue in that manner, stamp out creativity. The ASX’s very public examination of ISX, which followed very closely the summary questions of the Ownership Matters’(OM) report is, in my opinion, a real example of this. It begs the question how subjecting ISX to ~5 query letters along with its answers in a very public forum can be anything but designed to destroy ISX and in the process destroy its creativity. Alternatively, could ASX just be so concerned with exhibiting its power by using its “absolute discretion” - which ASX in its defence says is not limited - that it is willing to stifle a company in order to prove its own power? Or is it that ASX did hear from individuals from other government institutions that ISX was planning to purchase shares in NSX and create competition in ASX’s settlement monopoly? What is the reason for its very strange and controlling behaviour?
I believe all of these have played a part. Simply put, nothing makes sense – especially when we have seen many large and small companies treated differently from ASX’s treatment of ISX.Is it because these other companies are not in competition, is it because they are somehow associated with ASX through board members or ASX self-interest, or are they being treated more fairly because ASX has learned a little too late that there is a limit to their power and that in our democracy those living in the “edge of chaos” do have the ability to affect change in our institutions?
I believe ISX will affect that change in both ASX and ASIC. Bring on both court cases. Now.
