George Soros’s reflexivity theory is quite compatible with second order cybernetics. Indeed his work shows how to apply ideas in second order cybernetics to economics, finance, and political science. This paper briefly reviews three theories of reflexivity in cybernetics. It provides an introduction to Soros’s version of reflexivity theory and reviews applications in economics and finance. Soros’s approach to economics is based on different assumptions about information and about human behavior. His approach to finance is more holistic than most current work in finance. He does not emphasize mathematical models but rather sees finance as a human player game with himself as a participant. The paper concludes that Soros’s work is a very important contribution to and expansion of contemporary social science.

Key words: equilibrium theory, reflexivity theory, causal influence diagrams

Key events in the history of cybernetics and the American Society for Cybernetics are discussed, among them the origin of cybernetics in the Macy Foundation conferences in the late 1940s and early 1950s; different interpretations of cybernetics by several professional societies; reasons why the U. S. government did or did not support cybernetics in the 1950s, 1960s, and 1970s; early experiments in cyberspace in the 1970s; conversations with Soviet scientists in the 1980s; the development of “second order” cybernetics; and increased interest in cybernetics in Europe and the United States in the 2000s, due at least in part to improved understanding of the assumptions underlying the cybernetics movement. The history of cybernetics in the United States is viewed from the perspective of the American Society for Cybernetics (ASC) and several questions are addressed as to its future.

In the 1950s and 1960s Ross Ashby created a general theory of adaptive systems. His work is well-known among cyberneticians and systems scientists, but not in other fields. This is somewhat surprising, because his theories are more general versions of the theories in many fields. Philosophy of science claims that more general theories are preferred because a small number of propositions can explain many phenomena. Why, then, are Ashby’s theories not widely known and praised? Do scientists really strive for more general, parsimonious theories? This paper reviews the content of Ashby’s theories, discusses what they reveal about how scientists work, and suggests what their role might be in the academic community in the future. Relevance: Since Ashby defines a system as a set of variables selected by an observer, his work is quite compatible with second order cybernetics even though Ashby never directly addressed the issue of the observer or second order cybernetics.

Key words: cybernetics, complexity, adaptation, self-organisation, requisite variety

Current research on complexity can be thought of as the working out of ideas related to self-organizing systems, which were developed about 1960. Much more advanced technical means are now available, and the great accomplishment of the recent research has been the involvement of people from a wide range of disciplines in using modeling methods, such as cellular automata and genetic algorithms, which are a significant departure from previous methods. Research in reflexivity is less well known. Its origins can be traced back at least to 1975. Several reflexive theories have been proposed, for example by Argyris and Schon, von Foerster, Lefebvre, and Soros. The literatures in second order cybernetics and constructivism are very close to reflexivity, but the term “reflexivity” might attract wider interest. This presentation will describe the basic features of the theories of complexity and reflexivity, their early history, their evolution, and reactions to date. Although complexity is a major change from previous modeling methods, it does not violate any informal fallacies or any assumptions underlying the philosophy of science. Reflexivity does. Accepting reflexivity as a legitimate movement in science will require an expansion of the conception of science which still prevails in most fields. A shift from Science One to Science Two is now being discussed. This presentation will explain what is being proposed.

Heinz von Foerster proposed that the observer should be included in the domain of observation. He suggested that this approach to cybernetics be called second-order cybernetics. Heinz was primarily interested in understanding cognition, based on neurophysiology and mathematics. But there has also been strong interest in cybernetics as a theory of social systems. Using the “second order” idea for existing social science fields would focus attention on the role of the observer and on reflexive phenomena such as the effect of theories on what is being studied. This article considers how the field of economics might adopt the second order idea. Relevance: Second-order cybernetics, by interpreting self-reference as occurring in time, can serve as a guide to the social sciences for how to include reflexive phenomena in their theories.

Context: The term “second-order cybernetics” was introduced by von Foerster in 1974 as the “cybernetics of observing systems,” both the act of observing systems and systems that observe. Since then, the term has been used by many authors in articles and books and has been the subject of many conference panels and symposia. Problem: The term is still not widely known outside the fields of cybernetics and systems science and the importance and implications of the work associated with second-order cybernetics is not yet widely discussed. I claim that the transition from (first-order) cybernetics to second-order cybernetics is a fundamental scientific revolution that is not restricted to cybernetics or systems science. Second-order cybernetics can be regarded as a scientific revolution for the general methodology of science and for many disciplines as well. Method: I first review the history of cybernetics and second-order cybernetics. Then I analyze the major contents of von Foerster’s fundamental revolution in science and present it as a general model for an alternative methodology of science. Subsequently, I present an example of practicing second-order socio-cybernetics from within. I describe some consequences of doing science from within, and I suggest some new horizons for second-order cybernetics. Results: Second-order cybernetics leads to a new foundation for conducting science and offers important contributions for a new way of organizing science. It expands the conception of science so that it can more adequately deal with living systems. Implications: Second-order cybernetics extends the traditional scientific approach by bringing scientists within the domain of what is described and analyzed. It provides models of research processes for when the scientist is within the system being studied. In this way it offers a new foundation for research in the social sciences, in management science, and in other fields such as the environmental sciences or the life sciences. Keywords: Epistemology, general scientific methodology, cybernetics, social sciences, action research, Heinz von Foerster.

Key words: Epistemology, general scientific methodology, cybernetics, social sciences, action research, Heinz von Foerster

The article has been divided into three sections and proceeds from general insights and observations in innovation research across firms and scientific institutes to a narrower focus on radical innovations in science and their organizational environments and concludes with a specific example, namely Heinz von Foerster’s Biological Computer Laboratory at the University of Illinois in Urbana which in the short period of its existence between 1958 and 1975 exhibited a large number of essential characteristics for radically innovative research. In fact, it is astonishing in retrospect that Heinz von Foerster shaped the organizational design of the BCL in a way which nowadays seems to be the most promising and most fruitful configuration for a permanent proliferation of highly innovative and, at times, also highly implausible and counter-intuitive ideas, theories, mechanisms or instruments.

An extension of the calculus of indications (of G. Spencer Brown) is presented to encompass all occurrences of self-referential situations. This is done through the introduction of a third state in the form of indication, a state seen to arise autonomously by self-indication. The new extended calculus is fully developed, and some of its consequences for systems, logic and epistemology are discussed.

Key words: self-reference, self-referential systems, calculus of indications, paradoxes, autonomy