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Created: Wed Dec 8 16:12:12 1999
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Leverage Points
Places to Intervene in a
System
by Donella Meadows
© The Sustainability Institute, 1999.
A shorter version of this paper appeared in Whole Earth, winter 1997.
Published by The Sustainability Institute · 3 Linden Road · Hartland VT 05048
Phone 802-436-1277 · FAX 802-436-1281 · Email: info@sustainer.org
For additional copies of this report, send US$10 to The Sustainability Institute.
Leverage Points:
Places to Intervene in a System
by Donella H. Meadows
Folks who do systems analysis have a great The classic example of that backward
belief in "leverage points." These are places intuition was my own introduction to sys-
within a complex system (a corporation, an tems analysis, Forrester's world model.
economy, a living body, a city, an ecosys- Asked by the Club of Rome to show how
tem) where a small shift in one thing can major global problems--poverty and hun-
produce big changes in everything. ger, environmental destruction, resource
This idea is not unique to systems analy- depletion, urban deterioration, unemploy-
sis--it's embedded in legend. The silver bul- ment--are related and how they might be
let, the trimtab, the miracle cure, the secret solved, Forrester made a computer model
passage, the magic password, the single hero and came out with a clear leverage point:
or villain who turns the tide of history. The Growth.1 Not only population growth, but
nearly effortless way to cut through or leap economic growth. Growth has costs as well
over huge obstacles. We not only want to as benefits, but we typically don't count the
believe that there are leverage points, we costs--among which are poverty and hun-
want to know where they are and how to ger, environmental destruction, and so on--
get our hands on them. Leverage points are the whole list of problems we are trying to
points of power. solve with growth! What is needed is much
The systems analysis community has a slower growth, and in some cases no growth
lot of lore about leverage points. Those of us or negative growth.
who were trained by the great Jay Forrester The world's leaders are correctly fixated
at MIT have all absorbed one of his favorite on economic growth as the answer to virtu-
stories. "People know intuitively where ally all problems, but they're pushing with
leverage points are," he says. "Time after time all their might in the wrong direction.
I've done an analysis of a company, and I've Another of Forrester's classics was his
figured out a leverage point--in inventory urban dynamics study, published in 1969,
policy, maybe, or in the relationship between which demonstrated that subsidized low- 1 J.W. Forrester, World
Dynamics. Portland,
sales force and productive force, or in per- income housing is a leverage point.2 The Oreg.: Productivity Press,
sonnel policy. Then I've gone to the com- less of it there is, the better off the city is-- 1971.
pany and discovered that there's already a lot even the low-income folks in the city. That 2 J.W. Forrester, Urban
of attention to that point. Everyone is trying is because subsidized housing without Dynamics. Portland,
Oreg.: Productivity Press,
very hard to push it in the wrong direction!" equivalent effort at job creation for the 1969.
1
Leverage Points: Places to Intervene in a System
inhabitants severely disrupts a city's employ- the slightest idea how this complex struc-
ment/housing ratio, effectively increasing ture will behave," myself said back to me.
unemployment and welfare costs and "It's almost certainly an example of crank-
despair. This model came out at a time when ing the system in the wrong direction--it's
national policy dictated massive low-income aimed at growth, growth at any price!! And
housing projects. Forrester was derided. the control measures these nice, liberal folks
Now those projects are being torn down in are talking about to combat it--small
city after city. Forrester was right. parameter adjustments, weak negative feed-
Counterintuitive. That's Forrester's word back loops--are way too puny!!!"
to describe complex systems. Leverage
points are not intuitive. Or if they are, we Suddenly, without quite knowing what
intuitively use them backward, systemati- was happening, I got up, marched to the flip
cally worsening whatever problems we are chart, tossed over to a clean page, and wrote:
trying to solve.
The systems analysts I know have come
up with no quick or easy formulas for find-
ing leverage points. When we study a sys- Places to Intervene in a System
tem, we usually learn where leverage points (in increasing order of effectiveness)
are. But a new system we've never encoun-
9. Constants, parameters, numbers (subsi-
tered? Well, our counterintuitions aren't that
dies, taxes, standards)
well developed. Give us a few months or
years to do some computer modeling and 8. Regulating negative feedback loops
we'll figure it out. And we know from bitter
7. Driving positive feedback loops
experience that, because of counter-
intuitiveness, when we do discover the 6. Material flows and nodes of material
system's leverage points, hardly anybody will intersection
believe us.
5. Information flows
Very frustrating, especially for those of us
who yearn not just to understand complex 4. The rules of the system (incentives,
systems, but to make the world work better. punishments, constraints)
So one day, I was sitting in a meeting
3. The distribution of power over the rules of
about how to make the world work better--
the system
actually it was a meeting about how the new
global trade regime, NAFTA and GATT 2. The goals of the system
and the World Trade Organization, is likely
1. The mindset or paradigm out of which the
to make the world work worse. The more I
system--its goals, power structure, rules,
listened, the more I began to simmer in-
its culture--arises.
side. "This is a huge new system people are
inventing!" I said to myself. "They haven't
2
Sustainability Institute, December, 1999
Everyone in the meeting blinked in sur-
prise, including me. "That's brilliant!" some- Places to Intervene in a System
one breathed. "Huh?" said someone else. (in increasing order of effectiveness)
I realized that I had a lot of explaining
12. Constants, parameters, numbers (such as
to do.
subsidies, taxes, standards)
I also had a lot of thinking to do. As
with most of the stuff that comes to me in 11. The sizes of buffers and other stabilizing
boil-over mode, this list was not exactly stocks, relative to their flows.
tightly reasoned. As I began to share it with
10. The structure of material stocks and flows
others, especially with systems analysts who
(such as transport networks, population
had their own lists, and with activists who
age structures)
wanted to put the list to immediate use,
questions and comments came back that 9. The lengths of delays, relative to the rate
caused me to rethink, add and delete items, of system change
change the order, add caveats.
8. The strength of negative feedback loops,
In a minute I'll go through the list that
relative to the impacts they are trying to
I ended up with, explain the jargon, and
correct against
give examples and exceptions. The reason
for this introduction is to place the list in a 7. The gain around driving positive feedback
context of humility and to leave room for loops
evolution. What bubbled up in me that day
6. The structure of information flows (who
was distilled from decades of rigorous analy-
does and does not have access to what
sis of many different kinds of systems done
kinds of information)
by many smart people. But complex systems
are, well, complex. It's dangerous to gener- 5. The rules of the system (such as incen-
alize about them. tives, punishments, constraints)
So, what you are about to read is a work
4. The power to add, change, evolve, or self-
in progress. It's not a simple, sure-fire recipe
organize system structure
for finding leverage points. Rather, it's an
invitation to think more broadly about the 3. The goals of the system
many ways there might be to get systems to
2. The mindset or paradigm out of which the
change.
system--its goals, structure,rules, delays,
Here, in the light of a cooler dawn, is a
parameters--arises
revised list:
1. The power to transcend paradigms
3
Leverage Points: Places to Intervene in a System
To explain parameters, stocks, delays, understand a bathtub with some water in it
flows, feedback, and so forth, I need to start (the stock, the state of the system) and an
with a basic diagram. inflowing faucet and outflowing drain. If
the inflow rate is higher than the outflow
rate, the water gradually rises. If the out-
state of
inflows the system outflows flow rate is higher than the inflow, the wa-
ter gradually goes down. The sluggish
perceived response of the water level to what could be
state sudden twists in the input and output valves
is typical; it takes time for flows to accumu-
discrepancy
late in stocks, just as it takes time for water
goal
to fill up or drain out of the tub. Policy
changes take time to accumulate their
The "state of the system" is whatever effects.
standing stock is of importance: amount of The rest of the diagram shows the in-
water behind the dam, amount of harvest formation that causes the flows to change,
able wood in the forest, number of people which then cause the stock to change. If
in the population, amount of money in the you're about to take a bath, you have a de-
bank, whatever. System states are usually sired water level in mind (your goal). You
physical stocks, but they could be nonma- plug the drain, turn on the faucet, and watch
terial ones as well: self-confidence, degree until the water rises to your chosen level (un-
of trust in public officials, perceived safety til the discrepancy between the goal and the
of a neighborhood. perceived state of the system is zero). Then
There are usually inflows that increase you turn the water off.
the stock and outflows that decrease it. If you start to get into the bath and
Deposits increase the money in the bank; discover that you've underestimated your
withdrawals decrease it. River inflow and volume and are about to produce an over-
rain raise the water behind the dam; evapo- flow, you can open the drain for awhile, until
ration and discharge through the spillway the water goes down to your desired level.
lower it. Births and immigrations increase Those are two negative feedback loops,
the population, deaths and emigrations re- or correcting loops, one controlling the
duce it. Political corruption decreases trust inflow, one controlling the outflow, either
in public officials; experience of a well- or both of which you can use to bring the
functioning government increases it. water level to your goal. Notice that the goal
Insofar as this part of the system con- and the feedback connections are not visible
sists of physical stocks and flows--and they in the system. If you were an extraterres-
are the bedrock of any system--it obeys laws trial trying to figure out why the tub fills
of conservation and accumulation. You can and empties, it would take awhile to figure
understand its dynamics readily, if you can out that there's an invisible goal and a
4
Sustainability Institute, December, 1999
discrepancy-measuring process going on in awhile to get the water flowing or to turn
the head of the creature manipulating the it off. Maybe the drain is blocked and can
faucets. But if you watched long enough, allow only a small flow, no matter how
you could figure that out. open it is. Maybe the faucet can deliver
Very simple so far. Now let's take into with the force of a fire hose. These con-
account that you have two taps, a hot and a siderations are a matter of numbers, some
cold, and that you're also adjusting for an- of which are physically locked in and
other system state: temperature. Suppose the unchangeable, but most of which are
hot inflow is connected to a boiler way down popular intervention points.
in the basement, four floors below, so it Consider the national debt. It's a nega-
doesn't respond quickly. And you're mak- tive bathtub, a money hole. The annual rate
ing faces at yourself in the mirror and not at which it sinks is called the deficit. Tax
paying close attention to the water level. The income makes it rise, government expendi-
system begins to get complex, and realistic, tures make it fall. Congress and the Presi-
and interesting. dent spend most of their time arguing about
Mentally change the bathtub into your the many, many parameters that open and
checking account. Write checks, make close tax faucets and spending drains. Since
deposits, add a faucet that keeps dribbling in those faucets and drains are connected to
a little interest and a special drain that sucks us, the voters, these are politically charged
your balance even drier if it ever goes dry. parameters. But, despite all the fireworks,
Attach your account to a thousand others and and no matter which party is in charge, the
let the bank create loans as a function of your money hole keeps getting deeper, just at
combined and fluctuating deposits. Link a different rates (and even when, as in 1999,
thousand of those banks into a federal re- the parties are arguing about how to spend
serve system. You begin to see how simple a nonexistent "surplus").
stocks and flows, plumbed together, make To adjust the dirtiness of the air we
up systems way too complex to figure out. breathe, the government sets parameters
That's why leverage points are not in- called "ambient air quality standards." To
tuitive. And that's enough systems theory assure some standing stock of forest (or
to proceed to the list. some flow of money to logging companies)
it sets "allowed annual cuts." Corporations
adjust parameters such as wage rates and
12. Constants, parameters, product prices, with an eye on the level in
numbers their profit bathtub--the bottom line.
The amount of land we set aside for
"Parameters" in systems jargon are the conservation. The minimum wage. How
numbers that determine how much of a much we spend on AIDS research or Stealth
discrepancy turns which faucet how fast. bombers. The service charge the bank ex-
Maybe the faucet turns hard, so it takes tracts from your account. All these are pa-
5
Leverage Points: Places to Intervene in a System
rameters, adjustments to faucets. So, by the Since I'm about to get into some ex-
way, is the act of firing people and hiring amples where parameters are leverage points,
new ones, including politicians. Putting dif- let me insert a big caveat here. Parameters
ferent hands on the faucets may change the become leverage points when they go into
rate at which the faucets turn, but if they're ranges that kick off one of the items later
the same old faucets, plumbed into the same on this list. Interest rates, for example, or
old system, turned according to the same birth rates, control the gains around posi-
old information and goals and rules, the tive feedback loops. System goals are param-
system isn't going to change much. Elect- eters that can make big differences.
ing Bill Clinton was definitely different from Sometimes a system gets onto a chaotic
electing Bob Dole, but not all that differ- edge, where the tiniest change in a number
ent, given that every President is plugged can drive it from order to what appears to
into the same political system. be wild disorder.
Parameters are the points of least lever- These critical numbers are not nearly as
age on my list of interventions. Diddling with common as people seem to think they are.
the details, arranging the deck chairs on the Most systems have evolved or are designed
Titanic. Probably 90--no 95--no 99 per- to stay far out of critical parameter ranges.
cent of our attention goes to parameters, but Mostly, the numbers are not worth the sweat
there's not a lot of leverage in them. put into them.
Not that parameters aren't important. Here's a story a friend sent me over the
They can be, especially in the short term Internet to make that point:
and to the individual who's standing directly
in the flow. People care deeply about pa- When I became a landlord, I spent a lot of
rameters and fight fierce battles over them. time and energy trying to figure out what
But they rarely change behavior. If the sys- would be a "fair" rent to charge.
tem is chronically stagnant, parameter
changes rarely kick-start it. If it's wildly vari- I tried to consider all the variables, including
able, they don't usually stabilize it. If it's the relative incomes of my tenants, my own
growing out of control, they don't brake it. income and cash flow needs, which expenses
Whatever cap we put on campaign con- were for upkeep and which were capital
tributions, it doesn't clean up politics. The expenses, the equity versus the interest
Feds fiddling with the interest rate haven't portion of the mortgage payments, how much
made business cycles go away. (We always my labor on the house was worth and so on.
forget that reality during upturns, and are
shocked, shocked by the downturns.) After I got absolutely nowhere. Finally, I went to
decades of the strictest air pollution stan- someone who specializes in giving money
dards in the world, Los Angeles air is less advice. She said, "You're acting as though
dirty, but it isn't clean. Spending more on there is a fine line at which the rent is fair, and
police doesn't make crime go away. at any point above that point the tenant is
6
Sustainability Institute, December, 1999
being screwed and at any point below that you Businesses invented just-in-time invento-
are being screwed. In fact, there is a large grey ries, because they figured that vulnerability
area in which both you and the tenant are to occasional fluctuations or screw-ups is
getting a good, or at least a fair, deal. cheaper than certain, constant inventory
costs--and because small-to-vanishing
Stop worrying and get on with your life." 3 inventories allow more flexible response to
shifting demand. It's quite likely that many
businesses making small-inventory decisions
11. The sizes of buffers and in their own rational best interests add up
other stabilizing stocks, to a much more unstable economy.
relative to their flows There's leverage, sometimes magical, in
changing the size of buffers. But buffers are
Consider a huge bathtub with slow in- and usually physical entities, not easy to change.
outflows. Now think about a small one with The acid absorption capacity of eastern soils
very fast flows. That's the difference between is not a leverage point for alleviating acid
a lake and a river. You hear about catastrophic rain damage. The storage capacity of a dam
river floods much more often than cata- is literally cast in concrete. So I have put
strophic lake floods, because stocks that are buffers at the less influential end of the list
big, relative to their flows, are more stable of leverage points.
than small ones. In chemistry and other fields,
a big, stabilizing stock is known as a buffer.
The stabilizing power of buffers is why 10. The structure of material
you keep money in the bank rather than stocks and flows and nodes
living from the flow of change through your of intersection
pocket. It's why stores hold inventory
instead of calling for new stock just as The plumbing structure, the stocks and
customers carry the old stock out the door. flows and their physical arrangement, can
It's why we need to maintain more than the have an enormous effect on how the sys-
minimum breeding population of an endan- tem operates. When the Hungarian road
gered species. Soils in the eastern U.S. are system was laid out so all traffic from one
more sensitive to acid rain than soils in the side of the nation to the other has to pass
west, because they haven't got big buffers of through central Budapest, that determined 3 Thanks to David
Holmstrom of Santiago,
calcium to neutralize acid. a lot about air pollution and commuting Chile.
Often you can stabilize a system by delays that are not easily fixed by pollution
4 For an example, see
increasing the capacity of a buffer.4 But if a control devices, traffic lights, or speed lim- Dennis Meadows's model
buffer is too big, the system becomes its. The only way to fix a system that is laid of commodity price
fluctuations: D.L.
inflexible. It reacts too slowly. And big buff- out wrong is to rebuild it, if you can. Meadows, Dynamics of
ers of some sorts, such as water reservoirs or Often you can't, because physical build- Commodity Production
Cycles. Portland, Oreg.:
inventories, cost a lot to build or maintain. ing is usually the slowest and most expen- Productivity Press, 1970.
7
Leverage Points: Places to Intervene in a System
sive kind of change to make in a system. Right, oscillations from hot to cold and
Some stock-and-flow structures are just back to hot, punctuated with expletives.
plain unchangeable. The baby-boom swell Delays in feedback loops are common
in the U.S. population first caused pressure causes of oscillations. If you're trying to
on the elementary school system, then high adjust a system state to your goal, but you
schools, then colleges, then jobs and hous- only receive delayed information about what
ing, and now we're looking forward to the system state is, you will overshoot and
supporting its retirement. There is not much undershoot. Same if your information is
we can do about it, because five-year-olds timely, but your response isn't. For example,
become six-year-olds, and sixty-four-year- it takes several years to build an electric
olds become sixty-five-year-olds predictably power plant, and then that plant lasts, say,
and unstoppably. The same can be said for thirty years. Those delays make it impos-
the lifetime of destructive CFC molecules sible to build exactly the right number of
in the ozone layer, for the rate at which con- plants to supply a rapidly changing demand.
taminants get washed out of aquifers, for Even with immense effort at forecasting,
the fact that an inefficient car fleet takes 10 almost every centralized electricity indus-
to 20 years to turn over. try in the world experiences long oscillations
Physical structure is crucial in a system, between overcapacity and undercapacity. A
but rarely a leverage point, because chang- system just can't respond to short-term
ing it is rarely simple. The leverage point is changes when it has long-term delays. That's
in proper design in the first place. After the why a massive central-planning system, such
structure is built, the leverage is in under- as the Soviet Union or General Motors,
standing its limitations and bottlenecks and necessarily functions poorly.
refraining from fluctuations or expansions Because we know they are important,
that strain its capacity. we systems folks see delays wherever we
look. The delay between the time when a
pollutant is dumped on the land and when
9. The lengths of delays, it trickles down to the groundwater. The
relative to the rate of system delay between the birth of a child and the
changes time when that child is ready to have a child.
The delay between the first successful test
Remember that bathtub on the fourth floor of a new technology and the time when that
I mentioned, with the water heater in the technology is installed throughout the
basement? I actually experienced one of economy. The time it takes for a price to
those once, in an old hotel in London. It adjust to a supply-demand imbalance.
wasn't even a bathtub, it was a shower--no A delay in a feedback process is critical
buffering capacity. The water temperature relative to rates of change in the system state
took at least a minute to respond to my fau- that the feedback loop is trying to control.
cet twists. Guess what my shower was like. Delays that are too short cause overreaction,
8
Sustainability Institute, December, 1999
"chasing your tail," oscillations amplified by big effects. Watch out! Be sure you change
the jumpiness of the response. Delays that it in the right direction! (For example, the
are too long cause damped, sustained, or great push to reduce information and
exploding oscillations, depending on how money transfer delays in financial markets
much too long. At the extreme, they cause is just asking for wild gyrations.)
chaos. Overlong delays in a system with a
threshold, a danger point, a range past which
irreversible damage can occur, cause over- 8. The strength of negative
shoot and collapse. feedback loops, relative to
I would list delay length as a high lever- the impacts they are trying to
age point, except for the fact that delays are correct against
not often easily changeable. Things take as
long as they take. You can't do a lot about Now we're beginning to move from the
the construction time of a major piece of physical part of the system to the informa-
capital, or the maturation time of a child, tion and control parts, where more lever-
or the growth rate of a forest. It's usually age can be found.
easier to slow down the change rate, so that Negative feedback loops are ubiquitous
inevitable feedback delays won't cause so in systems. Nature evolves them and
much trouble. That's why growth rates are humans invent them as controls to keep
higher up on the leverage-point list than important system states within safe bounds.
delay times. A thermostat loop is the classic example.
And that's why slowing economic Its purpose is to keep the system state called
growth is a greater leverage point in "room temperature" fairly constant at a de-
Forrester's world model than faster techno- sired level. Any negative feedback loop needs
logical development or freer market prices. a goal (the thermostat setting), a monitor-
Those are attempts to speed up the rate of ing and signaling device to detect excursions
adjustment. But the world's physical capi- from the goal (the thermostat), and a
tal plant, its factories and boilers, the con- response mechanism (the furnace and/or air
crete manifestations of its working conditioner, fans, heat pipes, fuel, etc.).
technologies, can only change so fast, even A complex system usually has numerous
in the face of new prices or new ideas--and negative feedback loops that it can bring into
prices and ideas don't change instanta- play, so it can self-correct under different con-
neously either, not through a whole global ditions and impacts. Some of those loops may
culture. There's more leverage in slowing be inactive much of the time, like the emer-
down the growth of the system so technolo- gency cooling system in a nuclear power
gies and prices can keep up with it, than plant, or your ability to sweat or shiver to
there is in wishing the delays away. maintain your body temperature. They may
But if there is a delay in your system not be very visible. But their presence is criti-
that can be changed, changing it can have cal to the long-term welfare of the system.
9
Leverage Points: Places to Intervene in a System
One of the big mistakes we make is to These folks are trying to weaken the
strip away these "emergency" response feedback power of market signals by twist-
mechanisms because they aren't used often ing information in their favor. The real le-
and they appear to be costly. In the short verage here is to keep them from doing it.
term, we see no effect from doing this. In Hence the necessity of anti-trust laws, truth-
the long term, we drastically narrow the in-advertising laws, attempts to internalize
range of conditions over which the system costs (such as pollution taxes), the removal
can survive. One of the most heartbreaking of perverse subsidies, and other ways to level
ways we do this is in encroaching on the market playing fields.
habitats of endangered species. Another is None of which get far these days, be-
in encroaching on our own time for rest, cause of the weakening of another set of
recreation, socialization, and meditation. negative feedback loops: those of democ-
The "strength" of a negative loop--its racy. This great system was invented to put
ability to keep its appointed stock at or near self-correcting feedback between the people
its goal--depends on the combination of and their government. The people, in-
all its parameters and links--the accuracy formed about what their elected represen-
and rapidity of monitoring, the quickness tatives do, respond by voting those
and power of response, the directness and representatives in or out of office. The pro-
size of corrective flows. Sometimes there are cess depends upon the free, full, unbiased
leverage points here. flow of information back and forth between
Take markets, for example, the negative electorate and leaders. Billions of dollars are
feedback systems that are all but worshipped spent by leaders to limit and bias that flow.
by economists--and they can indeed be Give the people who want to distort mar-
marvels of self-correction, as prices vary to ket price signals the power to pay off those
moderate supply and demand and keep leaders, get the channels of communication
them in balance. The more the price--the to be self-interested corporate partners
central piece of information signaling both themselves, and none of the necessary nega-
producers and consumers--is kept clear, un- tive feedbacks work well. Market and de-
ambiguous, timely, and truthful, the more mocracy help each other erode.
smoothly markets will operate. Prices that The strength of a negative feedback loop
reflect full costs will tell consumers how is important relative to the impact it is de-
much they can actually afford and will re- signed to correct. If the impact increases in
ward efficient producers. strength, the feedbacks have to be strength-
Companies and governments are fatally ened too. A thermostat system may work
attracted to the price leverage point, of fine on a cold winter day, but open all the
course, all of them determinedly pushing windows and its corrective power will fail.
it in the wrong direction with subsidies, Democracy worked better before the advent
fixes, externalities, taxes, and other forms of the brainwashing power of centralized
of confusion. mass communications. Traditional controls
10
Sustainability Institute, December, 1999
on fishing were sufficient until radar spot- earn, the more money you have in the bank.
ting and drift nets and other technologies The more the soil erodes, the less vegeta-
made it possible for a few actors to wipe tion it can support, the fewer roots and
out the fish. The power of big industry calls leaves to soften rain and run-off, the more
for the power of big government to hold it soil erodes. The more high-energy neutrons
in check; a global economy makes neces- in the critical mass, the more they knock
sary a global government. into nuclei and generate more.
Here are some examples of strengthen- Positive feedback loops are sources of
ing negative feedback controls to improve a growth, explosion, erosion, and collapse in
system's self-correcting abilities: systems. A system with an unchecked posi-
tive loop ultimately will destroy itself.
· preventive medicine, exercise, and good
That's why there are so few of them. Usu-
nutrition to bolster the body's ability to fight
ally a negative loop will kick in sooner or
disease;
later. The epidemic will r un out of
· integrated pest management to encour- infectable people--or people will take in-
age natural predators of crop pests; creasingly strong steps to avoid being in-
fected. The death rate will rise to equal the
· the Freedom of Information Act to reduce
birth rate--or people will see the conse-
government secrecy;
quences of unchecked population growth
· monitoring systems to report on environ- and have fewer babies. The soil will erode
mental damage; away to bedrock--or people will stop over-
grazing, put up check dams, plant trees,
· protection of whistleblowers;
and stop the erosion.
· impact fees, pollution taxes, and perfor- In all these examples, the first outcome
mance bonds to recapture the externalized is what will happen if the positive loop runs
public costs of private benefits. its course, the second is what will happen if
there is an intervention to reduce its self-
multiplying power. Reducing the gain
7. The gain around driving around a positive loop--slowing the
positive feedback loops growth--is usually a more powerful lever-
age point in systems than strengthening
A negative feedback loop is self-correcting; negative loops, and much preferable to
a positive feedback loop is self-reinforcing. letting the positive loop run.
The more it works, the more it gains power Population and economic growth rates
to work some more. The more people catch are leverage points, because slowing them
the flu, the more they infect other people. gives the many negative loops--technology
The more babies are born, the more people and markets and other forms of adaptation,
grow up to have babies. The more money all of which have limits and delays--time
you have in the bank, the more interest you to function. It's the same as slowing the car
11
Leverage Points: Places to Intervene in a System
when you're driving too fast, rather than I don't expect the world economy to
calling for more responsive brakes or tech- turn chaotic any time soon (not for that
nical advances in steering. reason, anyway). That behavior occurs only
Another example: Many positive feed- in unrealistic parameter ranges, equivalent
back loops in society reward the winners of to doubling the size of the economy within
a competition with the resources to win even a year. Real-world systems can turn chaotic,
bigger next time. Systems folks call them however, if something in them can grow or
"success to the successful" loops. Rich people decline very fast. Fast-replicating bacteria or
collect interest; poor people pay it. Rich insect populations, very infectious epidem-
people pay accountants and lean on politi- ics, wild speculative bubbles in money sys-
cians to reduce their taxes; poor people can't. tems, neutron fluxes in the guts of nuclear
Rich people give their kids inheritances and power plants; these systems can turn cha-
good educations; poor kids lose out. Anti- otic. Control must involve slowing down
poverty programs are weak negative loops the positive feedbacks.
that try to counter these strong positive In more ordinary systems, look for le-
ones. It would be much more effective to verage points around birth rates, interest
weaken the positive loops. That's what pro- rates, erosion rates, "success to the success-
gressive income tax, inheritance tax, and ful" loops, any place where the more you
universal high-quality public education pro- have of something, the more you have the
grams are meant to do. (If rich people can possibility of having more.
buy government and weaken, rather than
strengthen those of measures, the govern-
ment, instead of balancing "success to the 6. The structure of
successful" loops, becomes just another in- information flows
strument to reinforce them!)
The most interesting behavior that There was this subdivision of identical
rapidly turning positive loops can trigger is houses, the story goes, except that for some
chaos. This wild, unpredictable, reason the electric meter in some of the
unreplicable, and yet bounded behavior houses was installed in the basement and in
happens when a system starts changing others it was installed in the front hall, where
much, much faster than its negative loops the residents could see it constantly, going
can react to it. For example, if you keep rais- round faster or slower as they used more or
ing the capital growth rate in the world less electricity. With no other change, with
model, eventually you get to a point where identical prices, electricity consumption was
one tiny increase more will shift the 30 percent lower in the houses where the
economy from exponential growth to os- meter was in the front hall.
cillation. Another nudge upward gives the We systems-heads love that story be-
oscillation a double beat. And just the tiniest cause it's an example of a high leverage point
further nudge sends it into chaos. in the information structure of the system.
12
Sustainability Institute, December, 1999
It's not a parameter adjustment, not a It's important that the missing feedback
strengthening or weakening of an existing be restored to the right place and in compel-
loop. It's a new loop, delivering information ling form. To take another tragedy of the
to a place where it wasn't going before and commons, it's not enough to inform all the
therefore causing people to behave users of an aquifer that the groundwater level
differently. is dropping. That could initiate a race to the
A more recent example is the Toxic bottom. It would be more effective to set a
Release Inventory, the U.S. government's water price that rises steeply as the pumping
requirement, instituted in 1986, that every rate begins to exceed the recharge rate.
factory releasing hazardous air pollutants Compelling feedback. Suppose taxpay-
report those emissions publicly every year. ers could specify on their return forms what
Suddenly every community could find out government services their tax payments
precisely what was coming out of the smoke- must be spent on. (Radical democracy!)
stacks in town. There was no law against Suppose any town or company that puts a
those emissions, no fines, no determination water intake pipe in a river had to put it
of "safe" levels, just information. But by immediately downstream from its own out-
1990, emissions dropped 40 percent. They flow pipe. Suppose any public or private of-
have continued to go down since, not so ficial who made the decision to invest in a
much because of citizen outrage as because nuclear power plant got the waste from that
of corporate shame. One chemical company plant stored on his/her lawn. Suppose (this
that found itself on the Top Ten Polluters is an old one) that the politicians who de-
list reduced its emissions by 90 percent, just clare war were required to spend that war
to "get off that list." in the front lines.
Missing feedback is one of the most We humans have a systematic tendency
common causes of system malfunction. to avoid accountability for our own deci-
Adding or restoring information can be a sions. That's why so many feedback loops
powerful intervention, usually much easier are missing--and why this kind of leverage
and cheaper than rebuilding physical point is so often popular with the masses,
infrastructure. The tragedy of the commons unpopular with the powers that be, and ef-
that is crashing the world's commercial fish- fective, if you can get the powers that be to
eries occurs because there is no feedback permit it to happen (or go around them and
from the state of the fish population to the make it happen anyway).
decision to invest in fishing vessels. (Con-
trary to economic opinion, the price of fish
doesn't provide that feedback. As the fish 5. The rules of the system
get more scarce and hence more expensive,
it becomes all the more profitable to go out The rules of the system define its scope, its
and catch them. That's a perverse feedback, boundaries, its degrees of freedom. Thou
a positive loop that leads to collapse.) shalt not kill. Everyone has the right of free
13
Leverage Points: Places to Intervene in a System
speech. Contracts are to be honored. The If you want to understand the deepest mal-
President serves four-year terms and can- functions of systems, pay attention to the
not serve more than two of them. Nine rules, and to who has power over them.
people on a team, you have to touch every That's why my system intuition was send-
base, three strikes and you're out. If you get ing off alarm bells while the new world trade
caught robbing a bank, you go to jail. system was explained to me. It is a system
Mikhail Gorbachev came to power in with rules designed by corporations, run by
the USSR, opened information flows corporations, for the benefit of corporations.
(glasnost), changed the economic rules Its rules exclude almost any feedback from
(perestroika), and look what happened. any other sector of society. Most of its meet-
Constitutions are strong social rules. ings are closed even to the press (no infor-
Physical laws such as the second law of mation flow, no feedback). It forces nations
thermodynamics are absolute rules, whether into positive loops "racing to the bottom,"
we understand them or not, or like them or competing with each other to weaken envi-
not. Laws, punishments, incentives, and ronmental and social safeguards in order to
informal social agreements are progressively attract investment and trade. It's a recipe for
weaker rules. unleashing "success to the successful" loops,
To demonstrate the power of rules, I like until they generate enormous accumulations
to ask my students to imagine different ones of power and huge centralized planning sys-
for a college. Suppose the students graded tems that will destroy themselves, just as the
the teachers, or each other. Suppose there Soviet Union destroyed itself, and for simi-
were no degrees: you come to college when lar systemic reasons.
you want to learn something, and you leave
when you have learned it. Suppose tenure
were awarded to professors according to 4. The power to add, change,
their ability to solve real-world problems, evolve, or self-organize
rather than publishing academic papers. system structure
Suppose a class was graded as a group,
instead of as individuals. The most stunning thing living systems and
As we try to imagine restructured rules social systems can do is to change themselves
like these and what our behavior would be utterly by creating whole new structures and
under them, we come to understand the behaviors. In biological systems that power
power of rules. They are high leverage is called evolution. In human society it's
points. Power over the rules is real power. called technical advance or social revolution.
That's why lobbyists congregate when Con- In systems lingo, it's called self-organization.
gress writes laws, and why the Supreme Self-organization means changing any
Court, which interprets and delineates the aspect of a system lower on this list: adding
Constitution--the rules for writing the completely new physical structures, such as
rules--has even more power than Congress. brains or wings or computers; adding new
14
Sustainability Institute, December, 1999
negative or positive loops: making new rules. and the rules for replicating and rearrang-
The ability to self-organize is the strongest ing it, has been constant for something like
form of system resilience. A system that can three billion years, during which it has
evolve can survive almost any change, by spewed out an unimaginable variety of failed
changing itself. The human immune sys- and successful self-evolved creatures.
tem has the power to develop new responses Self-organization is basically the combi-
to (some kinds of ) insults it has never be- nation of an evolutionary raw material--a
fore encountered. The human brain can take highly variable stock of information from
in new information and pop out completely which to select possible patterns--and a
new thoughts. means for experimentation, for selecting and
The power of self-organization seems so testing new patterns. For biological evolu-
wondrous that we tend to regard it as mys- tion the raw material is DNA, one source of
terious, miraculous, manna from heaven. variety is spontaneous mutation, and the test-
Economists often model technology as lit- ing mechanism is something like punctuated
eral manna, coming from nowhere, costing Darwinian selection. For technology, the raw
nothing, increasing the productivity of an material is the body of understanding people
economy by some steady percent each year. have accumulated and stored in libraries and
For centuries, people have regarded the spec- in brains. The source of variety is human cre-
tacular variety of nature with the same awe. ativity (whatever that is) and the selection
Only a divine creator could bring forth such mechanism can be whatever the market will
a creation. reward or whatever governments and foun-
Further investigation of self-organizing dations will fund or whatever meets human
systems reveals that the divine creator, if needs or solves an immediate problem.
there is one, did not have to produce evolu- When you understand the power of
tionary miracles. He, she, or it just had to system self-organization, you begin to un-
write marvelously clever rules for self- derstand why biologists worship biodiversity
organization. These rules basically govern even more than economists worship tech-
how, where, and what the system can add nology. The wildly varied stock of DNA,
onto or subtract from itself under what con- evolved and accumulated over billions of
ditions. As hundreds of self-organizing com- years, is the source of evolutionary poten-
puter models have demonstrated, complex tial, just as science libraries and labs and
and delightful patterns can evolve from universities where scientists are trained are
quite simple evolutionary algorithms. (That the source of technological potential. Allow-
need not mean that real-world algorithms ing species to go extinct is a systems crime,
are simple, only that they can be.) The just as randomly eliminating all copies of
genetic code within the DNA that is the particular science journals, or particular
basis of all biological evolution contains just kinds of scientists, would be.
four different "letters", combined into The same could be said of human
"words" of three letters each. That pattern, cultures, of course, which are the store of
15
Leverage Points: Places to Intervene in a System
behavioral repertoires, accumulated over goal. The only thing one can say is that if
not billions, but hundreds of thousands of corporations wield it for the purpose of gen-
years. They are a stock out of which social erating marketable products, that is a very
evolution can arise. Unfortunately, people different goal, a different selection mecha-
appreciate the precious evolutionary poten- nism, a different direction for evolution than
tial of cultures even less than they under- anything the planet has seen so far.
stand the preciousness of every genetic As my little single-loop examples have
variation in the world's ground squirrels. I shown, most negative feedback loops within
guess that's because one aspect of almost systems have their own goals: to keep the
every culture is the belief in the utter bathwater at the right level, to keep the
superiority of that culture. room temperature comfortable, to keep
Insistence on a single culture shuts down inventories stocked at sufficient levels, to
learning. Cuts back resilience. Any system, keep enough water behind the dam. Those
biological, economic, or social, that becomes goals are important leverage points for pieces
so encrusted that it cannot self-evolve, a of systems, and most people realize that. If
system that systematically scorns experimen- you want the room warmer, you know the
tation and wipes out the raw material of thermostat setting is the place to intervene.
innovation, is doomed over the long term But there are larger, less obvious, higher-
on this highly variable planet. leverage goals, those of the entire system.
Whole system goals are not what we
think of as goals in the human-motivational
3. The goals of the system sense. They are not so much deducible from
what anyone says as from what the system
The goal of a system is a leverage point su- does. Survival, resilience, differentiation,
perior to the self-organizing ability of a sys- evolution are system-level goals.
tem. For example, if the goal is to bring more Even people within systems don't often
and more of the world under the control of recognize what whole-system goal they are
one particular central planning system (the serving. To make profits, most corporations
empire of Genghis Khan, the world of Is- would say, but that's just a rule, a necessary
lam, the People's Republic of China, Wal- condition to stay in the game. What is the
Mart, Disney, whatever), then everything point of the game?