Reinforcing feedback loops

In thinking systematically about life, we often come across a common pattern where something just seems to build and build.  We call this a reinforcing feedback loop.

Reinforcing feedback loops are everywhere.  They can be very subtle or incredibly powerful.

According to Donella Meadows in her book, Thinking in Systems, A Primer, “The second type of feedback loop is amplifying, reinforcing, self-multiplying, snowballing – a vicious circle that can cause healthy growth or runaway destruction.  It is called a reinforcing feedback loop.”

We see these all the time.  Meadows uses the example of two children pushing each other.  Child one pushes child two.  Then the more child one pushes, the more child two pushes back.  But that increases how much child one pushes and on and on.

Another example that Meadows gives is, “The more soil is eroded from the land, the less plants are able to grow, so the fewer roots there are to hold the soil, so more soil is eroded, so less plants can grow.”

In these examples we see that an action leads to another which action which reinforces the first action.  Meadows also points out that this can cause healthy growth or runaway destruction.

Imagine that you start to get stressed about your decreasing health.  If your response is to turn to overeating or smoking then this will amplify how fast your health decreases.  The more it decreases the more stress you have which causes you to overeat or smoke more frequently causing health to deteriorate, which causes more stress.

You can see that we can quickly go in the opposite direction of where we want to go.  We make a choice that amplifies the direction we are heading.  In this case, it leads towards deteriorating health and increased stress. 

Let’s make a slight change to the scenario above.  Imagine you start to get stressed about your decreasing health.  You change your response to be a newfound focus on healthier eating and exercising each day.  The more you do those the healthier you get.  The healthier you get the less stress you will get from your health.  Then the less stress you have the more likely you will be to exercise and eat right.  That causes an increase in your health and a decrease in stress.

So reinforcing feedback loops can be very helpful to our improvement program or detrimental.  It is all about how we respond.  Do we continuously make decisions that amplify negative feedback loops, or do we continuously make decisions that amplify positive feedback loops?  Do we act as soon as possible so we can attack the pattern before it amplifies and gets more powerful?

The same structure exists everywhere in life if you look carefully enough.  Let’s look at another common area of struggle for people, finances.

Let’s say that you are having a hard time each month paying all of your expenses without adding to your credit card debt.  This causes a great deal of stress.  You could try to spend away the stress by buying something you have always wanted.  This will likely give you a short-term spike in happiness but quickly turn to added stress because you are adding more debt to your credit card.

As you credit card balance builds, you will pay significant interest on that debt.  This makes it harder to pay the balance.  The less you pay, the more accrues interest.  Each month you don’t pay enough to start paying the debt off so it keeps growing, faster than you can pay it off. 

In this example there are two reinforcing feedback loops happening.  The first is the response to financial stress by spending more money causing additional financial stress.  The second is the balance of a credit card growing instead of shrinking due to the high interest rates and inability to pay off the debt. 

But we could use the same structure to get out of debt.  Let’s say we take a poor financial situation and growing credit card balance and stop all spending that isn’t absolutely essential.  This may mean selling our expensive car that has a large monthly payment for an inexpensive model. 

Most people would assume that this would mean more car problems and eat up more money.  This may be the case but most people grossly over-exaggerate this.  They would be willing to pay $400 per month for a car payment rather than have an older car that might need $1200 in a year to get something fixed.  But even if they pay $1200 per year it is still much better than the $4,800 they pay by having the nice new car.

Let’s assume this person was able to change their spending habits and was able to get rid of all of their debt.  Now the money they make seems to have grown because they aren’t paying a ridiculously high interest rate for debt. 

Now they have a couple options.  They can keep going with this feedback loop by investing the money.  If they invest responsibly they can see the same principles that were working against them now working in their favor. 

The more they invest the more money they make from the investment.  Then the more money they make the more they can then invest.  Then the more they make from that larger investment, the more they can invest. 

While it may not seem like too much of a difference between the person who finds a way to pay a little more this month or cut back somewhere over time it can become substantial. 

The $4 coffee you saved seems like $4.  But looking at through the reinforcing feedback loop perspective, that could snowball into much, much more.  If every day for a year you saved $4 on coffee and did this for 10 years, using Dave Ramsey’s Investment calculator, you could have over $20,000 extra (assuming a 6% rate, or over $25,000 using 10%). 

So when you start to see feedback loops, it changes how you make decisions.  Instead of a $4 coffee that you like but will be gone in hours, you see a coffee habit that costs $20,000 of wasted money over 10 years.  It doesn’t mean you don’t ever get a $4 coffee.  Instead it means you avoid the coffee habit and use this as a nice treat for yourself instead of a daily need.

Reinforcing feedback loops are powerful.  They can help you improve if you understand how they work and know the crucial leverage points in the system.  Whatever you are trying to tackle, see if you can find feedback loops present that can help you overcome obstacles and reach your goals.  While changes may be subtle now, they may just become substantial over time.