The Big Idea behind this blog, perhaps not always apparent, is that (a) given government’s role in tipping the scales of society more toward life, liberty, and the pursuit of happiness, and (b) the apparent and undoubted increases in the nature and complexity of the challenges of the 21st century, then (c) government should take full advantage of ALL of the science and technology available when intervening in society’s workings.
My hope here is to light the occasional candle, even if that means cursing the darkness. I bring a passing acquaintance with the new sciences and technology, as well as a broader exposure to the Federal government than anyone living. See the “About” section above.
Of the sciences overlooked, first and foremost are the sciences of complexity and the systems sciences developed around the time of WWII. Norbert Weiner and cybernetics come immediately to mind. There are many others, from game theory to highly reliable organizations. As historian William H. MacNeill observes in The Pursuit of Power, science and technology always advance in time of war. The casual reader of this blog and observer of the US Congress will note that our legislative process is several wars behind.
The philosopher George Santayana famously said in 1905, “Those who do not learn from history are doomed to repeat it.” Given just the threats to the world economy from unstable economic systems and the threat to the planet from global climate change, ‘repeating history’ is totally UNSAT.
As Justice Oliver Wendell Holmes, Jr., (1841 – 1935) once remarked, “In the law, an ounce of history is worth a pound of logic.” In lawmaking, the ounce of history is often diluted, and a pound of logic is insufficient to foresee the unintended consequences of legislation in an increasingly complex society. Jay Forrester devoted a chapter of his 1969 book, Urban Dynamics, to the ‘counterintuitive behavior of social systems’, which is also the title of a paper he wrote in 1971, based on testimony to the Congress in 1970 – almost forty years ago.
A recent article in the Economist points out that India’s monsoon rains are becoming “even more compacted and unpredictable,” leading both to drought and flooding. At the same time, groundwater extraction, subsidized by free and below-cost electricity to farmers and city dwellers alike, is already curtailing agriculture: “The World Bank reckons that 15% of India’s food is produced by “mining”—or unrenewable extraction of—groundwater, including in 18 of Punjab’s 20 districts.” Some politicians have been punished for proposing charging for electricity, and others have learned their lesson.
India invested in big dams and canal projects in the 1950s – 1970s, thus “paving the way” for India’s Green Revolution. Sadly, little to no resources are spent on maintenance. According to the article, India’s primary response to the water problems is to build more large dams (390 are under construction), rather than repair the existing infrastructure or reform its use. There’s no mention of money for maintaining the new dams, either.
If this sounds familiar, it is. America is also keen on building infrastructure, but not as ready to maintain it. There are few photo opportunities for road repair projects. The American Society of Civil Engineers publishes an annual Infrastructure Report Card that this year gives America a grade of D and estimates that our five year investment need stands at $2.2 trillion. This year’s stimulus bill is, so to speak, a drop in the bucket.
Even though the Dow passed 10,000 this week, no one seems to think that the American economy is out of the woods, or much less that we’ve learned enough or taken action to prevent the Wall Street wolves from getting Little Red Ridinghood again. The fabled “stress tests” on the 19 “systemically important” institutions were done assuming an unemployment rate of just 8.5%, and we’re now at 9.8% — and aiming for at least 10%.
So we’re still in uncharted territory. Might the new sciences provide us a GPS (Growth Producing System) or at least be our Mapquest out of the woods??
Two recent articles in the Economist, “Rearranging the Towers of Gold” and “Unnatural Selection” do an excellent job of describing the problem(s), but are not as clear about how to address the (hopefully) unintended consequence of the tax-payer-funded “recovery” — that the institutions “too big to fail” last year are even bigger now!
After the Great Depression, the eponymous Pecora Commission proposed legislation, including the Glass-Steagall Act, and the Securities Exchange Act of 1934, that created the Securities and Exchange Commission. Together they led us down a sometimes rocky road, but one without landslides.
Many are now calling for the reinstatement of the Glass-Steagall Act, repealed in 1999 in an effort led by Senator Phil Gramm (R, TX), now a Vice President of the Investment Bank division of UBS AG. Although at first glance separating the investment and commercial bank interests in the industry would seem necessary, it may be far from sufficient to avoid another meltdown like this one. The world – especially the world of finance – has gotten much more complex and interdependent in the years since 1932. We’ve added computers with worldwide telecommunication, f’rinstance. Faster feedback loops are not always better.
Our jigger of history has brought us the Financial Crisis Inquiry Commission, headed by Phil Angelides, a former California state treasurer. As expected, neither Common Dreams’ comments nor those of the Huffington Post hold out much hope for this panel. Sadly even the New York Times, in a recent editorial, offers at best faint praise.
My concern is that in hearkening back to the Pecora Commission, even friends of the “Angelides Commission” (which already has “about 1800 hits” on Google) are taking aim at the problems of the 1930’s. I see nothing in Mr. Angelides’ bio that gives me confidence that he knows much about the counterintuitive behavior of social systems, cybernetic feedback, system dynamics, high reliability organizations, game theory, chaos theory, or the new discipline of complexity, to name just a few of the disciplines needed for diagnosing, much less prescribing for, our ailing financial system. A quick look at the other members does not offer much hope, either. And we know little about the commission’s staffing.
The new commission would be miles ahead by convening a few of the people that I know, such as George Richardson and Paul Pangaro. Just these two, and their immediate contacts, would be able to frame a 21st century conversation bringing new insights to a search for how to stabilize our economy. There are many other knowledgeable people out there, in business, in universities, and in associations such as the American Society for Cybernetics and the System Dynamics Society. We need their help to do even half as well as the Pecora Commission.
Or, we can do as the Egyptian government did recently – take action even after being told what the unintended consequences would likely be. As recounted in the New York Times, Cairo ordered the slaughter of all the pigs in the city, even after being told that (a) it would have no effect on “swine flu,” and (b) the pigs were responsible for eating tons of the organic waste discarded in the streets by its residents. So now Cairo’s streets are worse than ever.
From the Times: “The state is troubled; as a result the system of decision making is disintegrating,” said Galal Amin, an economist, writer and social critic. “They are ill-considered decisions taken in a bit of a hurry, either because you’re trying to please the president or because you are a weak government that is anxious to please somebody.”
Let’s hope the Angelides Commission can do better.
It IS “rocket surgery,” but it’s not impossible.