A Tough Trick: Giving People a Sense of Autonomy When Their Work is So Defined by Systems

Political turmoil always comes with economic progress because identity and the work we do is so intertwined.

I think that one of the tricks of the next economy that will be hardest to pull off is this: give people a sense of agency even though their productivity is defined by systems.

Right now almost no one I knows thinks that their salary has anything to do with dozens, hundreds of systems they have nothing to do with and yet what we make is 95% defined by systems rather than our own effort.

Machines automate more and more manual work every year. Algorithms are going to automate more and knowledge work every year.

Factory workers thought that their productivity was about them and not the factories they worked in. Knowledge workers think their productivity has something to do with them and not the educational and information systems they work in. It has been - and will be - tough to realize that's not the case.
We haven't evolved biologically in the last few thousands years but our productivity has gone up enormously. And continues to rise.

What are the systems that let the exact same animals be so much more productive?

Roads and highways and railroads and airports that let us send and get products and services from a broader region.

Educational institutions, unions, companies that have processes that make people more productive.

Information systems that let knowledge workers work more efficiently.

Laws and law enforcement that protect property and extend those principles to things like patents so that investors and innovators will invest in new products and technologies with the hope of returns.

The electrical grid and the appliances that work off it.

The fossil fuels and engines that require(d) thousands of innovators and inventors and that let a guy with a chain saw cut down more trees in one day than his great grandpa could in a month.

The social norms of employer and employee (Between 1800 and 2000, the percentage of workers employed by someone else rose from 20 to 90. By 2000, over half of employees worked for organizations with 500 or more employees; in 1800, none had.)

Language. Writing. Email. Software.

And so on, and so on, and so on.

The systems that most fascinate me appear at the level of economies. An agricultural economy has its own set of principles, practices, beliefs, and technologies. An industrial economy another. Those evolve and change and farmers and factory workers and knowledge workers in an information economy think that is who they are rather than just who people become in order to be productive. That identity, that definition of what it means to be productive, evolves and changes over time as the systems we live and work in evolve and change.

This is a big reason why social invention fascinates me. It means stepping outside of systems to shape them rather than let them shape us. (Okay. That's absurd. Our systems will always shape us.) 

Everything is made up and everything matters. Polygamy or monogamy? Made up. But it matters. The 10 most violent nations in the world practice polygamy which means lots of young men without partners wandering around angry. Dictatorship or democracy? Totally made up. But it matters. The 10 richest nations in the world are democracies.

One big obstacle to progress is that people defend the systems that define them even when those systems - like an agricultural economy for instance - are gradually made obsolete.

Progress comes from challenging and improving and inventing systems. That's tough work. Particularly when people define themselves by those systems. But here's the trick. Here is how you give people agency when their productivity is defined by the systems they live in and work with. You make them systems  thinkers and social inventors. You make their work the work of defining and shaping those systems.

Popularizing Systems Thinking

Models of complex behavior increasingly sit at the background of vital political discussions like global warming and pandemics. It is time to make them a more integral part of our political discussion. Until voters can understand and participate developing models to predict the behavior of systems, we will have unstable politics, particularly in a country like ours that puts so much stock in the opinion of everyone. This country was defined by a way of thinking. It’s time to expand that.

Our founding fathers did not pioneer Enlightenment thinking but they were the first to create a community organized around it. The Enlightenment shifted people from a reliance on authority and tradition (church and king) to reason and debate (science and democracy). Our founding fathers popularized education – most notably, Thomas Jefferson founded the University of Virginia – with an emphasis on rhetoric and analysis as essential to creating smart voters. They generally believed that education was necessary to freedom and democracy. But as it turns out, rhetoric is a poor way to understand or communicate complexity. We need to update what constitutes a good education.

Today we have expert systems thinkers but we haven’t popularized systems thinking, made it a part of the way we organize and act or even a part of what we include in education. Analysis focuses on parts at one point in time; systems thinking focuses on interactions over time, like how viruses spread at different rates depending on how we behave or how CO₂ builds in the atmosphere depending on our technology. Systems thinking is as important to an effective democracy in this 21^st century as Enlightenment philosophy was to an effective democracy in the 19^th and 20^th centuries. We can’t coherently debate systems as varied and crucial as our financial, environmental, education, and healthcare systems with fluency in systems thinking.

Hearing Bill Gates talk about a pandemic in 2015 and how serious it will be, he mentions what "our models told us." Listening to California governor Gavin Newsom in press conferences, he, too, references "our models." Models have the potential to explain futures we haven't yet experienced. Models will never be perfect; they can, however, be sufficient to inform good policy.  Once you understand compound interest, you may not be able to predict how much wealth you’ll have in 30 years but you know what to do: invest early and often to maximize that wealth. Once you understand how rapidly the coronavirus can spread, it informs policies like shelter-in-place. Even though models are sensitive to changes in assumptions and inputs, they can still point us in the right direction. The better people understand them, both their limits and the insights they provide, the more credible and helpful these models.

I work with really bright scientists and engineers to plan – or model – their projects to develop new products like drugs, medical devices and computer chips. Two benefits inevitably follow. One, each person gets insights into what others are doing and how that impacts them. Good models are key to coordination. Two, they learn more of what is possible as they play with the model, play a game of “what if” to see how they might accelerate launch. “What if we hired one more circuit engineer?” “What if we doubled the number of clinical trial sites so that we could enroll patients more quickly?” The models let them answer what-if questions and become tools for making really smart people even smarter, in the same way that a spreadsheet can help a financial planner to get and communicate insights. Models that a group jointly creates and maintains could be used to inform an entire populace about their policy options on issues like economic stimulus, global warming, or the spread of a pandemic. Even very simple models can help to illustrate important dynamics more clearly than rhetoric.

Democracy depends on education. Change is accelerating. We’re increasingly dependent on systems. Education needs to include system thinking. In a crisis like a pandemic, we have to react to what the models predict about consequences because if we wait to react to actual consequences or rely on our intuition (intuition informed by completely different circumstances) our actions will be tragically late. Models let us learn from the past and from possible futures. The AI that recently beat the world champion Go player Ke Jie was able to make a move no one had ever before seen, a move learned from millions of game simulations it had simulated play even before playing its “first” game with Ke Jie. When a community encounters something like the coronavirus, it would be nice to be at least as prepared as one might be for a game of Go.

There are a variety of ways to popularize systems thinking. One way might look like video games. Imagine kids learning about global warming or economic development by getting exposed to simple models that play out over time. They first learn to turn the knob on this variable and then that variable. They see which variables are akin to the butterfly's wings in Brazil that causes a snowstorm in Minneapolis and which are akin to a hundred moths beating their wings uselessly against a light bulb. Over time they begin to introduce their own data, their own variables, or even change the structure of the model. The class as a whole could build a model that represents their collective insights and predicts outcomes few – if any – minds are sophisticated enough to foresee.

Good education changes life outside the classroom. Eventually democracy might mean that we have collective, online models that represent our best knowledge and are as widely understood as an op-ed or debate. Policy could come out of millions of simulations that are largely transparent and contributed to and understood by millions of citizens. Perhaps working on models will become as much a part of citizenship as working on campaigns or reading and arguing about op-eds. In the same way that a car lets us travel further than we could on foot, good models can let us create better policy than we can with debates.

Ron Davison lives in San Diego County, wrote The Fourth Economy: Inventing Western Civilization and works with teams in Fortune 500 firms and startups to accelerate product launch. @iamrondavison

Rise of Entrepreneurial Economy and Fal(tering) of the Information Economy

Here is the table from The Fourth Economy. One of the central arguments is that we're living through a shift from the information economy to an entrepreneurial economy.

Google Ngram is an interesting way to track the usage of various words and terms.

Here you can see the steady rise in the use of the term "entrepreneurial economy."

And here you can see how the use of "information economy" has begun to fall (even though it is still used considerably more than the term "entrepreneurial economy").

So apparently a long way to go but the fourth economy does indeed seem to be (oh so slowly) gaining on the third, information economy in terms of mention in writing. My argument is that it is emerging but we're still not quite attuned to it so it is becoming harder to ignore but still not completely appreciated.

Oh, and for bonus points, here are the three most recent intellectual revolutions. Given we build on each previous stage, and given that we've had centuries to become aware of the importance of the Enlightenment and Pragmatism, it makes sense that systems thinking is only now beginning to rise in general use and awareness relative to those.

How Systems Thinking Will Define the Evolution of Democracy Within Your Lifetime

There is still a popular myth that our founding fathers fought a revolution in the late 18th century that - by the time they'd ratified a constitution in 1789 - culminated in democracy for all.

It was a much slower process than that. And understanding this process can give us a sense of how democracy will evolve.

Aristocracy were landowners. They inherited land and with it titles, privileges and power. Land was the basis of wealth during the emergence of nation-states and given that nation-states had borders it made sense that you'd look to the owners of the land within those borders (the king was often the chief landholder) and give political power to them.

In 1776 Adam Smith wrote Wealth of Nations and James Watt perfected the steam engine for use outside of mines. This birth of capitalism coincided with the birth of democracy across the Atlantic and what they represented was a shift in the basis of wealth from land to capital. The British had already seen a broadening of political power from landholders to capitalists even before the Americans designed a government that did away with royalty (the ultimate aristocrats) altogether.

At first, the vote in the United States was limited to landowning, Protestant, white men. It took nearly 200 years to guarantee the vote to minority, atheist, 18-year old women who rented. (A timeline for how democracy progressed from KQED is here.)

Commoners were allowed into the legislature throughout the West by about 1850. This dimension of democracy had to do not just with who could vote but who could craft legislation. About a century later, California gave voters even more power when the proposition allowed voters to completely bypass the legislature with a popular vote. By the time of Roosevelt's New Deal, voters weren't just able to vote for the folks who would craft their legislation but could actually craft their own legislation and put it before their fellow citizens for a vote.

Just like your car or computer, democracy has continued to evolve. And just like your car or computer, it has not yet reached its ultimate state. It will continue to evolve and I think that systems thinking will be a big part of what happens next.

Thomas Jefferson and our founding fathers understood how important education was to democracy. (Jefferson was apparently about as (more?) proud of founding the University of Virginia as he was in helping to found the United States.) Education still matters enormously to a functioning democracy but now it needs a new dimension.

Our lives are wildly dependent on systems. Ecosystems, financial systems, economies, healthcare systems, information systems, education systems, etc. If we get these wrong we get terrible outcomes; if we get these systems right we get wonderful outcomes. The most important political policy defines variables within systems and even the creation or change of systems. We can't make intelligent decisions about how to change or impact these systems without understanding their dynamics.

Systems often have lags and some causes explode to become a big deal and some causes dissipate into little or no consequence. Cause and effect in systems is complicated to understand and our systems thinking can be enhanced with the right kinds of simulations.

Cocaine makes you feel great but apparently isn't that good for your health longer term. Right now the American economy is phenomenal; 96 months in a row of uninterrupted job creation has doubled the old record (since records were kept in the late 1930s), unemployment at 3.7% is its lowest since 1969. Oh, and Republicans have doubled the deficit to one trillion dollars, its highest since the worst year of the Great Recession. We have a huge stimulus with unemployment under 4%. That makes for an interesting experiment but it also could be like cocaine binges that Trump's Economic Council Director Larry Kudlow was famous for in the 1980s. We may end up in rehab once the longer term consequences of this play out.

Even folks who study economies cannot say with certainty whether we're now creating a bad bubble (one like the bubble leading up to 2008 that raised home prices but didn't really create more economic capacity) or a good bubble (like one leading up to 2000 that actually created lots of new internet knowledge and capacity that would change what was possible). But we expect the average voter to make a judgement on policies and the politicians who support them without any real chance to play with simulations that would help them to understand dynamics.

Simulations can help to create new understanding. I think smart communities will tap into this.

Democracy will evolve to include massive online participatory simulations of the systems we depend on. One of the reasons I love history is that it lets us quickly - in the course of a book, chapter or even turn of the page - see how dominoes fall, even if those dominoes took a generation or two to fall. Like history, simulations don't require us to actually spend years or lifetimes to learn outcomes.

Simulations are not perfect but they do let you learn about dynamics in ways that you would not from prose. You can set up a model to capture what data and / or common sense tell you about cause and effect (e.g., raising interest rates will lower borrowing but increase the value of your currency on foreign exchange markets) for lots of variables and then run simulations to see what range of effects are possible as you tweak the knob on those variables. You're obviously hoping for a good model for predicting the future but almost as important as prediction (which is always hard and is at best probable, not precise), is learning more about dynamics that none of us are smart enough to keep track of ourselves. Simulations can sensitize us to cause and effect that isn't instantaneous and can be mitigated or exacerbated by other variables.

As democracy evolves to include simulations we participate in, it will make us smarter. Very few of us can calculate mortgage rate changes to reflect 20 vs. 30 year mortgages or a 3.2% vs. 4.1% rate but with a computer we can all easily discern that ourselves without reliance on an expert. Very few people can get across town in 15 minutes by running but with a car most of us can. Tools enhance our capabilities. Systems simulations seem like the most important tool one can imagine for any democracy that needs to navigate and manage the systems that so define our lives.

Whether it be tax rates or emission levels or research funding, in the future such important decisions will be accompanied by systems models that simulate these phenomenon. Will these simulations be perfect or even great? Definitely not and probably not. Will they be immeasurably better than reliance on prose and statistics to make the same determinations? Undoubtedly. And will future generations wonder how we could pretend to vote on such issues in the past without the aid of simulations, in the same way that we wonder at how people got around without cars? Definitely.

Progress isn't done yet. Democracy will continue to evolve, just as it has for centuries. The popularization of systems thinking will be a big part of that.

Video Games, Systems, Consequences and the Afterlife

I'm a fan of video games. I think that the world will get better as we build more effective simulators to teach systems dynamics that include the behavior of nations at war, ecosystems, financial and labor markets, popularity, and the change in social norms. Different dynamics are tough to understand as prose or equations; sometimes the patterns become easier to see when they play out in video simulations that let us see causality that simulates centuries within an hour. I don't think that we've really understood how powerful this potential technology is for teaching systems dynamics that so define our world.

There is one lesson that these video games gloss over, though. And it may be the most important lesson of all.

What we enjoy or suffer today rarely has anything to do with today.

Mark Zuckerberg made $1.5 billion today. I'm not even sure he went into the office today. He may have stayed home with a cold or may have had a really important strategic meeting. I don't know what he did today but I guarantee you that it does not explain his gain in wealth today. That is the consequence of things he did years ago.

Probably 99.9% of what we enjoy or suffer from today is the consequence of something done in the past. Little of it even done by us. Today my portfolio is up. It is the result of investments and sacrifices I made in the past, but that's the least of it. It's also the result of the Dutch who came over to New Amsterdam and recreated the stock market they'd first established in Amsterdam. It's the result of countless employees and entrepreneurs who have created equity out of thin air. It's the result of laws that protect private property. And so on.

That lesson that evolutionary biologists and religious teachers would both teach you is that causality does not stop at death. There is an afterlife. The lives of people in the future will be diminished or enhanced based on what you do in your lifetime. I suppose it is a kind of evil to believe that your life has no consequence and a sort of good to believe that it does.

If you are looking for cause and effect that can be experienced within a day or even a year, it is easy to get discouraged. Little of consequence plays out that rapidly and if you are measuring the impact of yesterday or last month's efforts on today, you'll conclude that there's not much that can be done. But the stories that inspire are those of the immigrant mom who worked two jobs to get her kids through college. There is generational causality and it doesn't end with her grandkids. One of the reasons I love history is that it explains so much of what defines today. We are the product of decisions made centuries earlier.

The community you live in is the product of the despair or hope of past generations, their action or inaction, their creativity or conformity. One definition of foolishness might be to believe that nothing we do has any consequence; one definition of wisdom might be to believe that what we do has consequences for generations. (Even if that consequence is to have made no difference because even not making a difference makes a difference.)

Finally, I leave you these words of advice from one of my favorite people.

The Buddhists have a good piece of advice: “Act always as if the future of the universe depended on what you did, while laughing at yourself for thinking that whatever you do makes any difference.” It is this serious playfulness, a combination of concern and humility, that makes it possible to be both engaged and carefree at the same time. One does not need to win to feel content; helping to maintain order in the universe becomes its own reward, regardless of the consequences. - Mihaly Csikszentmihalyi

What To Do About the Immaturity of Systems Modeling

Sam Harris recently had a conversation with Scott Adams (Dilbert creator and author of How to Fail at Everything and Still Win Big) about Trump. Adams predicted Trump's victory because he sees Trump as a master persuader. There's a lot to say about that but Adams made a really useful distinction about what he saw as the three stages of climate change policy. He distinguishes between:
1) The reality of climate change as an ongoing phenomenon that seems to be man made;
2) The ability to simulate future climate change with good models; and,
3) An appreciation of the economic policy implications of the above.

A decade or three ago, it was fashionable to dismiss climate change. This has become problematic for at least two reasons. One, the science is not that sophisticated. Certain industrial activity releases greenhouse gases. These gases - as the name suggests - work like a greenhouse and trap heat. That science is not exactly quantum entanglement and the data for greenhouse gas emissions and resultant warming seems to track pretty well to the theory. So Adams cedes this point and allows that climate change is probably real and ongoing.

Adams worked as a financial analyst at a bank, though, and challenges the second point: the ability to simulate future climate change. He said that it reminds him of the financial models he ran as an analyst that - should they reveal something his boss didn't like - could readily be changed with just a tweak of a few variables. Given we can't really forecast accurately what might happen, it is good to be skeptical, he says.

In this he has sort of put his finger on something really important and is sort of missing the point (probably intentionally).

What is really important is that systems define so much about what does or does not go well in our world - systems as varied as the economy and financial markets, energy systems, ecosystems and school systems - and yet we really don't understand system dynamics that well. Systems are tough to model and our models are not great. This is reason to be skeptical about any predictions but it also suggests that systems modeling deserves a massive infusion of research money. A crowd was gathered to watch a hot air balloon ascend and some woman said, "What is the use of all this new technology." Benjamin Franklin answered, "Madam, what is the use of a new born infant?" Systems simulation matters a great deal and is not that mature. Better to invest more heavily in it than to walk away from it. (And I think that computers' ability to simulate systems is maturing just when that capability is most needed for shaping policy dependent on such systems.)

And even with admitted limitations of models for any systems, it is worth asking whether even the models Adams was tweaking for his boss were all that bad. Once you understand a model for an economy or business, you articulate risks, a range of outcomes, and important variables. With good models you learn what factors they are most sensitive to (housing mortgages are sensitive to widespread economic downturns or refinancing from a drop in interest rates, for instance) and even spotty historical data can give you some sense of the probability of those events. (Yes. Nassim Taleb has rightfully pointed out that markets can be rocked by unpredictable events but risk mitigation can protect you from some of these rare events. A person who has saved three years of salary is better prepared for an event "they never could have predicted" than is someone with only three months of salary.)  Financial models are a little sketchy in prediction but there are ways to gauge their efficacy in spite of a large margin of error. (For instance, only about 20% of businesses succeed past 5 years. If your bank lending model assumes that is going to raise to 50%, it will probably be wrong; if it assumes that it will raise to 25% or drop to 15%, it could be right but done properly even that should require a coherent explanation that tracks to the numbers rather than arbitrary tweaks.) Further, to the extent that Adam's boss was unique in cheating the models so that they showed what he wanted, his bank would suffer. There is a drive to make models more accurate and - within the financial world at least - big rewards for such accuracy.

Models force questions and conversations about what variables matter and they bound reasonable outcomes. It is true that climate change models will be wrong but the simplest truth is pretty easy to predict: we will emit more greenhouse gases and temperatures will be higher than they would have been without these emissions. There are a host of unknowns that come with that (will particular regions benefit or lose, will changes in wind or sea currents result in unexpected cooling in certain regions, might unforeseen natural phenomenon or new technology absorb these gases, etc.) but the general story is known. If you invest in stocks over a 25 year period you can't be sure of when your portfolio will drop by half or raise 20% a year for successive years but you can reasonably guess that over your lifetime you'll be a better shape for having saved 10% of your income than not. Same with greenhouse gases; reducing emissions will drive less uncertainty, disruption and climate change.

Denying climate change is in a long tradition of denying scientific results like the health hazards of tobacco or the notion that we orbit the sun. Climate change deniers are traditionalists who conflate market economies with oil and gas and see an admission of climate change as a threat to those forces. (It does seem like climate change will threaten oil and gas. The possibility of oil and gas being displaced by alternative energy is not a refutation of markets that periodically unleash gales of creative destruction, though, but is instead an affirmation. Markets are no more dependent on oil than horses and markets don't treat fossil fuel industries as sacred.)

As to Adams' third point about evaluating the economics of climate change policy, I'll just say this. If it is inevitable that we'll adapt new energy technologies, there is less likely to be a penalty for rushing into creating and then converting to alternative energies than there is to be a penalty for delaying that change.

How Gaming Is Shaping a New Worldview

Mary Meeker delivered her annual Internet report Sunday. One of the points she made was about gaming.

• Entrepreneurs are often fans of gaming, Meeker said, quoting Elon Musk, Reid Hoffman and Mark Zuckerberg. Global interactive gaming is becoming mainstream, with 2.6 billion gamers in 2017 versus 100 million in 1995. Global gaming revenue is estimated to be around $100 billion in 2016, and China is now the top market for interactive gaming.

One question she and the team at Kleiner Perkins asked was what does gaming prepare us for? I think it is teaching simulation to a generation who will need to become more adept at systems thinking.

The more one can play with the variables of a system, the better one understands it. To use a simple example, our company has software that lets a business unit forecast project completion dates based on shared resources and project priority. As you change the number of resources, project priorities, and how you model the use of resources within projects, the projected launch dates for these product development projects changes. One of the senior managers I once set up with this capability drove from Philadelphia down to Delaware each day for work. He told me that on his commute he would think about variables to change in order to explore what was possible to accelerate product launches. "I always sort of understood my business unit," he says, "but doing these simulations I came to understand it far better than I ever had. I learned what happened when I changed this variable or that one, what made a surprisingly big difference and what made hardly any difference and in what conditions. I understood the dynamics of the system in ways I never had before."

A great deal of what we see today shows graphs and numbers. "India is growing at 8% a year." "Smart phone sales are growing by 10% a year." What we have less experience with is simulations that allow us to change recent trends. "What might happen to its growth if India's move away from paper currency results in more theft from hackers?" "What happens to smart phone sales if they become a replacement for credit cards?" 

A simulation lets us do a few things. One, it lets us play with policy ideas. Two, it lets us explore the implications of entrepreneurial initiatives. Three, it helps us to better understand the way variables might interact to create emergent behavior that is the result of a the interaction of the variables in the system rather than the actions of any one variable in the system. Simulations will never be accurate. They can, however, be informative.

We are at the infancy of systems thinking in the same way that Europeans in 1700 were in the infancy of Enlightenment thinking. We will get better at simulating and thus understanding systems, systems as varied as ecosystems, financial systems, and educational systems - the variety of systems on which we're so dependent for our quality of life.

What is gaming prepare us for? It gives people practice with countless simulations, learning how changing one thing can change another, how this strategy results in an early death and this one lets you conquer the kingdom. Gaming teaches us that systems never depend on just one variable and that outcomes can never be determined even though probabilities can be changed. Gaming will make systems thinking and systems simulation intuitive to a new generation. That's pretty cool.

Why We Have No Experience with Policy

The biggest problem with modern politics is that people never experience good policy. Or bad for that matter.

If you go out to eat this evening, you’ll have a clear experience. You might love your dinner and think it’s reasonably priced. You’ll decide to go back the next day or next month but you will act on what you’ve learned. In theory, politics is similar but in practice it’s not.  When it comes to policy, you don’t actually experience it.

To take an obvious example, let’s say that you fund development and education in a poor neighborhood. Let’s say that you sustain this investment long enough – at least a decade or two – that it actually impacts the kids growing up in that neighborhood. So much, in fact, that those kids end up making double what their parents made – even adjusted for inflation. This policy is a raging success.

But what does it really mean to say that you’ve increased the earnings of a 7 year old? Their peak earning years will probably be about 40 years away. Worse, if you just look, say, 15 years out you might actually see lower earnings because these kids – unlike their parents – are still in school in their early 20s and not making any money. Even worse (yes, it gets worse) given they’ve followed jobs for young professionals, there is a very good chance that they won’t be living in that same neighborhood when they do hit their peak earning years. How would voters in an area ever “experience” that return on investment?

And of course it gets even more complicated. Education initiatives can change a dozen times in the dozen years that kids are in K-12. It’s tough to see the impact of programs that are discontinued before teachers have even adapted their curriculum to the initiative. The introduction of new technology like personal computers or nanotech can cause productivity and wages to rise regardless of education policy and the proliferation of outsourcing can cause wages to fall. There’s never just one thing going on and that makes it difficult for the average person to know what difference policies made.

It's only policy wonks who've teased through the data to isolate causes who can - with lots of caveats and uncertainty - say that - all else being equal - this policy is likely to raise wages and this one to depress them, etc. Again, your average voter won't experience that. Meanwhile, your average American is distrustful of experts so they won't listen to these experts and even if they did, the experts who express lots of honest uncertainty will seem less convincing than the politician who speaks with great confidence.

There’s an old quip about the guy who didn’t have 20 years of experience but instead had one year experience 20 times. In politics, it is worse. Whether the policy is economic development, education, environmental, or urban or family planning, the long-term effects of policy rarely are clearly experienced. 

For me, that's just one more reason that systems thinking and systems simulation has to be popularized and taught. It's not enough to let the experts benefit from running models that simulate reality. We could "experience" policy but it would take far better and easier to navigate simulations than anything we have now. Perhaps in a generation people play policy simulations the way that  simulate policies the way that Millennials played video games. 

Why Cities Keep Growing, Corporations And People Always Die, And Life Gets Faster | Conversation | Edge

Why Cities Keep Growing, Corporations And People Always Die, And Life Gets Faster | Conversation | Edge

Geoffrey West shares some fascinating things that he and his team have learned about systems dynamics. (Click through on the subtitle to see his talk or scroll down to read the transcript.)

One, growth in cities provides some economies of scale. Give him the number of people in a city and he can give you the number of gas stations, miles of roads, etc. The good news is that these kinds of things grow more slowly than the population.

Economic activity, however, grows faster than the number of people. Incomes and innovation within a city grow faster than the population. This, too, is a good thing.

His team has recently analyzed data on companies and he's found a few odd things. One, the profits to sales ratio shrinks as a company gets larger. Two, the rate of innovation also slows. Three, the volatility of sales each year actually becomes greater than the profit percentage. (For instance, at a particular stage, volatility in annual sales of 10% might accompany a profit rate of only 5%.) Companies die as they become less tolerant of crazy ideas and crazy people (their rate of innovation, consequently, slows).

Oddly, as cities become larger they foster more innovation yet as companies become larger they become less innovative. This - it seems to me - has to do with how citizens are "managed" less than employees.

One of the things that makes this so fascinating to me is that it suggests that these dynamics explain more about rates of growth and life expectancies (yes, even of companies) than more traditional explanations like culture, history, and conscious policies. For me, it is further confirmation that an understanding of systems is not just going to be nice in this new economy: it will be necessary.

And Sometimes the Butterflies' Wings Carry it Over to Pollinate the Tree of the Knowledge of Good and Evil

I got introduced to systems thinking by the management guru W. Edwards Deming. He made the point that when assessing a team made up of three people, it is easy to think that we’ll know how the group would perform simply by looking at the performance of each individual. The team performance of Tom, Carmen, and Jin could look like this:

Tom’s performance [T] + Carmen’s performance [C] + Jin’s performance [J] = team performance [x]

In fact, that might well be the least of the equation. The team’s performance is also a function of

Tom’s working relationship with Carmen [T~C] + Carmen’s working relationship with Jin [C~J] + Jin’s working relationship with Tom [J~T] + the dynamic that emerges between all three [T~C~J]

An equation that at first blush looks like:

T + C + J = x

Is actually

T + C + J + [T~C] + [C~J] + [J~T] + [T~C~J] = x

This is not a problem of simple addition. This is a problem of relationships and emergent phenomenon. Jin could be a great guy but cause the other two team members to perform poorly. Carmen may be a poor performer on her own but might make the team perform better. The symbol ~ sometimes adds and sometimes multiplies as team members bring out what is better in each other; it sometimes subtracts and sometimes divides as they, at other times, undermine each other or leave each other feeling like less. What emerges out of relationship is not simple and cannot be reduced to the parts. Systems are defined by emergent properties, not just their parts.

“In an avalanche, each snowflake pleads its innocence.”

-         - Proverb

And of course, the world in which we live is defined by system dynamics, by the interaction of systems and even the performance of systems within systems. Cultures and societies are not the product of just one person, they emerge out of a dynamic between people and their times and circumstances. Your work place, your town, your portfolio, your marriage… these are defined by not just by emergent properties but how they, as systems, fit within the larger system we call the environment. Like Russian dolls, our world is not only composed of systems but has layers of systems. Your respiratory system can perform in ways that allow you to run a marathon or be unable to rise out of bed; if you are king, this difference can ripple across a kingdom to shatter a fragile peace. 

Sometimes the butterfly stirs up a storm and sometimes it gets pinned inertly into the collection. It’s hard to predict which it will do by just looking at the butterfly. 

Contemplating a New Worldview? Excerpt from Mindwalk

Sadly, the movie Mindwalk, based on Fritjof Capra's writing, is not yet available on DVD. Here are some excerpts that you could watch if you're interested in a world view that might be more effective for our times than the Cartesian model from centuries ago.

The (Un)Health(y We Don't) Care Summit: Or, What's Really Wrong with Washington

I watched about ten minutes of today's bipartisan health care summit, catching some of Lamar Alexander and Nancy Pelosi. Two things struck me as terribly wrong about the summit and convinced me that nothing useful would come from it.

One, they need a facilitator who is truly non-denominational, who can cut them off when they talk too long, and keep moving towards something actionable. The biggest problem with this, of course, is that the folks in Washington seem convinced that there is no one worthy of such a task because they've got the monopoly on wisdom.

Two, they need to move from talking to modeling their assumptions. If a congressperson wants to plan lunch, he talks. If he wants to plan a campaign trip for next month, he talks. If he wants to change health care for the biggest economy in the world, he talks. Compare communication with transportation. If that same congressperson wants to go to lunch, he walks. If he wants to go to a function across town, he drives. If he wants to go back to his district, he flies. He uses different technologies for travel but not for communication and planning. It's no wonder that Congress doesn't get anywhere - it is still doing the planning equivalent of walking everywhere.

Imagine a session in which a facilitator (or two) captures the assumptions that these politicians are making. "You are saying that liability insurance drives doctors out of rural areas. Okay, what is the causation and what is weighting? Liability of more than what triggers an exodus from rural areas?" And bit by bit, the model could be constructed. Then, the causation could be tested. Data that exists could be used. Data could be collected. Assumptions could be tested and collected into a network of causality and then simulated. Technologies exist for this. As the group works on this, a few things would happen. Leverage points would emerge. It may well be that the objectives of covering everyone and holding down costs could be met with a far less comprehensive plan. And the group would gradually be brought together over a model that is grounded in data.

Finally, such an approach might just do something to disarm the ideological who resist practical solutions because of principles. And on that note, an excerpt from Dietrich Dorner's wonderful book, The Logic of Failure: Recognizing and Avoiding Error in Complex Situations, in which he's talking about the success people have with systems simulations.

“The good and bad participants did not differ … in the frequency with which they developed hypotheses about the interrelation of variables in Greenvale. [That is - we all develop our theories about how the world works.] Both the good and bad participants proposed with the same frequency hypotheses on what effects higher taxes, say, or an advertising campaign to promote tourism in Greenvale would have. The good participants differed from the bad ones, however, in how often they tested their hypotheses. The bad participants failed to do this. For them, to propose a hypothesis was to understand reality; testing that hypothesis was unnecessary. Instead of generating hypotheses, they generated ‘truths.’”

The Essential Difference Between Liberals and Conservatives?

I wonder if one of the biggest differences between conservatives and liberals is how they view systems. Conservatives seem to believe that systems - whether economic or ecological - are self correcting, whereas liberals seem to believe that systems sometimes require intervention.

I'm talking politics with my buddy Daryl - who is essentially a libertarian. He is intrigued as to why I'm a liberal and decides that we ought to argue climate change to explore why we reach different conclusions.

Daryl is skeptical about the fact of climate change but allows that even if it is happening it's threat to life is much less than even malaria. His argument is essentially that of Bjorn Lomborg's, who says that scientists and politicians warning of climate change are overly emotional about the issue and would divert their resources elsewhere if they were conducting rational analysis of different threats.

I can cede this point, but think that it misses a larger point. The habitat is not really a marginal cost kind of issue. We need it in roughly its current condition in order to survive. If the price of gold goes up and we run out, oh well. If the price of habitat goes up and we run out, oh hell.

Even this Daryl counters to say that no marginal analysis of a habitat is ever going to accept a future value of zero. No calculation would allow that such a price was worth it. Instead, Daryl says, the environment might change and so would behavior. If coastal cities get flooded, people move. All this takes time and the analysis of the cost assumes that human behavior does not change in response.

This conversation took place as I was already puzzling over what cluster of beliefs make conservatives' world view different from liberals. And in this case, I mean conservatives as people who believe in minimal government action because they trust in individual response, as opposed to liberal beliefs' that individuals don't always do what is best for the larger system.

Let's look at the economy, for instance. A conservative says that if unemployment jumps up, wages will drop and eventually people will be hired again. There may be pain for time as people re-train or accept lower wages, but prices will drop and the sooner people accept this new reality the better.

A liberal, by contrast, will argue for intervention. When people lose their jobs, they buy fewer products. As companies sell fewer products, they layoff more workers. As more people lose their jobs, they buy fewer products. Liberals argue that economies do not always self correct and can actually fall into a spiral of worsening conditions. At this point, government intervention to raise spending, lower taxes, or lower interest rates can reverse the downward spiral and get the economy going again.

Listening to Daryl, I realized why it is that so many conservatives are against measures to combat climate change. Such measures are expensive. (Conservatives are more honest about this than liberals, as one would expect from a group arguing that intervention is not worth doing.) And they don't really believe that these systems need intervention. As the climate changes, there will be winners and losers and people will adjust; farmers in Canada and Norway will benefit while farmers in Bengal and Guatemala do worse. Life never was fair. Intervention is likely to be too expensive, the problem is likely to change, and any intervention is bound to have unexpected consequences.

I guess I might agree if it were not for the fact that climate change already seems like an intervention on a process that has evolved over billions of years. And I don't doubt that the planet and even some people will do well on a globe that potentially has more storms and runs 3 to 7 degrees warmer. But I do doubt that the cost for this adjustment will be less than the "intervention" that would lessen the current intervention into the ecosystem that is the product of carbon emissions.

To the extent that conservatives argue for letting systems naturally adjust, theirs will more often be the policy we use. Liberals who want to intervene in systems have more obstacles to enacting their policy: from gaining agreement that intervention is needed to assessing and gaining agreement over exactly what kind of intervention is needed. In order to get their way, conservatives merely have to wait for the rest of the population to reach a stalemate on what to do.

I think that it's true that our knowledge of systems is in its infancy. The language of systems dynamics is not even a century old and still gets little attention. Because ultimately, the battle between conservatives who argue doing nothing and liberals who want to implement policy is a battle between people with simulation models and people with faith in the self-correcting nature of systems. History suggests that systems do not always correct, as studies of the Great Depression and select ecosystems suggest (see, for instance, Jared Diamond's Collapse).

The option is not to cling to faith. Given the importance of systems to life and civilization, our only option seems to radically improve our ability to model, understand, and predict systems' behaviors.

I sympathize with the conservatives' contention that many interventions actually worsen systems or - at best - simply squander resources to change what cannot be changed. And I know that politicians and governments with the power to intervene in economies and financial markets can become the instruments of abuse. But I don't have conservatives' calm faith in systems' ability to self correct before things get worse. I guess that makes me a reluctant liberal.

And it suggests one other thing. We should aggressively invest in the study of systems' dynamics - systems as varied as ecosystems, economies, financial markets, the Internet, international labor markets, the spread of terrorist ideologies, and social progress. We can't afford to be dependant on systems we so poorly understand.

Teachers' Behavior Management Tax

"I have yet to see any problem, however complicated, which, when you looked at it in the right way, did not become still more complicated."- Poul Anderson

The math of relationships is one big reason that teachers dread large classrooms. While the number of students might rise gradually, the number of relationships in a classroom rises exponentially. This means that as classes get larger, teachers pay a higher "behavior management" tax and lose time they could otherwise use teaching.

If you have 15 children in a class, you have 105 relationships, any one of which could become an issue as simple as too much whispering and talking to something as complex as inappropriate affection or violence.

If you increase the number of children from 15 to 25 in the class (an increase of only 66%), the number of relationships triples. The math behind this is one reason that policy makers do so poorly with any kind of complex system: they tend to count the nodes (in this case, dynamic children) and ignore the connections (in this case the relationships).

This odd dynamic is true because when you add one child to a classroom of 15, you are not just adding 1/15th. You are adding 15 new relationships to the 105 already there. Each new child has a relationship to all the others.

The math looks like this



Adding another student is not just a matter of adding ONE more student. It is a matter of throwing the dice on, say, 20-some new relationships hoping that even one of these does not become a problem that adds to the behavior management tax. And if you throw the dice enough times, you are nearly guaranteed to have problems.

Pragmatism is No Longer Pragmatic

Pragmatism is no longer pragmatic. Generating solutions in a way that depends on focusing on specific problems in a specific context is no longer enough in a world of massive interdependency. If you focus on creating an optimal financial derivative without concern for the larger system of which it’s a part, you might actually trigger a collapse in mortgage markets or the entire banking system. What works best in isolation is increasingly irrelevant or even dangerous: the pragmatic, heads-down solution may have become the problem.

Pragmatism emerged when the same thing happened to Enlightenment thinking. Enlightenment thinking was about universal truths, or principles. Pragmatists discarded the search for the universal and south instead for specific solutions. The birth of pragmatism in the late 19th century was coincident with the birth of the knowledge worker – engineers, marketing professionals, managers, etc. who had to discover or create specific solutions for the specific technological or market problems they faced.

But no one works in a vacuum. We never have. But in today’s world, inter connectivity, connections, the ripples of dependencies, and environment or context are more important than they’ve ever been. What goes on within a nation-state is rarely isolated to that nation-state, for instance; technology in the US can contribute to flooding in India and economic policy in Mexico can contribute to population growth and wage stagnation in the US.

To focus on the particulars of a problem is to miss the context, the larger system of which it’s a part. Pragmatism is no longer pragmatic because solutions cannot simply ignore the context.

Systems thinking begs the question of vision: what larger system do you see yourself as part of? And this is a matter of choice – to a degree – and vision. Obviously, issues of sustainability and systems limits impose constraints on any problem set.

But beyond that, one chooses the history he’s a part of by the choice of context.
Leadership creates a credible narrative that puts specific actions into a larger context. It gives meaning. It provides boundaries for problems. And it suggests goals. It does not dictate choices, it simply provides a context for them.

The most pressing need today may be the need to create a credible context for individual choices. What is the future we’re creating? What do we see as the future of humanity and this planet? How will life be better and different in 10 years? 100? I don’t suppose anyone can impose such a vision – but properly articulated, such a vision could compel behaviors.

Pragmatism that assumes uncoordinated autonomy will no longer work. It's time for leadership that assumes a shared fate rather than individual fatalism.

Maddie Explains Systems Thinking. And Women

I’d been traveling a lot and it’d been too long since I’d lunched with Bernard and Maddie. Maddie came to our table with a hat – a small, foppish affair that coerced a dopey grin from me. Of course, with the political sensibility of a place setting and a casual kind of emotional awareness, she was the closest thing I knew to an autistic savant and an odd foil to Bernard who had seemed to reverse this equation, as if these aged siblings were the ying and yang of emotional and social intelligence. Or maybe it was just my judgment that was skewed. In any case, I had missed our conversations. I had missed them.

Bernard was fretting about his granddaughter. “She doesn’t seem capable of just deciding who she wants to be outside of a relationship,” he said. “I worry about her. It’s almost like everything is up for grabs – from career to belief system – until she finds the right guy.”

“I know what you mean,” I chimed in. “How does she even know who the right guy is until she knows who she wants to be?”

Maddie cocked her head. “You boys have no clue, do you?”

“What?” I was baffled twice. Once that she’d actually called us boys and again with her accusation of cluelessness.

“I’ve been reading that stuff about systems thinking you suggested I read, Ron.”

“You have?”

“Yes. You suggested it but you don’t really understand it, do you?” She looked at me innocently but it felt like a strong accusation.

“Well, I would hope that I do,” I said hesitantly, unsure where she was going with this.

“Those systems thinkers use lots of fancy language, but isn’t the real message behind systems thinking that you cannot understand parts until you understand what they’re a part of?”

“Yeah,” I grudgingly acknowledged. “I guess that’s it, although that seems a little simple.”

“Or you can say that context is everything, right? If you don’t know the context, you don’t know the thing.”

“So what does this have to do with Emma?” Bernard inquired, insulted that Maddie would so quickly turn the conversation from his granddaughter.

“Well, guys don’t seem to take naturally to systems thinking. But I think that it is ingrained in us women. We know things intuitively that you simply don’t and we don’t need fancy language and models to know this.”

“Such as?” Bernard asked.

“Well, you are saying that your granddaughter should define her life without regard to her most important relationship,” she looked at Bernard and then turned to me. “And relationships are the whole point of systems thinking, right?”

“Yes,” I said, wondering how she had managed to so quickly get past the verbiage of systems thinking to its essence so quickly.

“Well, your granddaughter is much smarter than you, as women are, and that’s why men dominate in culture. It’s not just their brute strength that makes this a man’s world. Men make the choices and women, who understand that without relationships the world would fall apart, accommodate. They do this not because they are weaker. They do this because they are smarter. Of course your granddaughter is trying to figure out relationships first. If everyone acted like a marble in a pinball machine, the world would fall apart. The fact that you men are unaware of this doesn’t make you better – it just means that we women have to make adjustments that you won’t, that you are not even aware need to be made. “

I was more than impressed by Maddie’s uncharacteristically long speech. “So you are saying that women are naturally, intuitively, more aware of relationships? They’re the systems thinkers?”

“Well isn’t it obvious?”

“And because of this, a young woman starts with relationships and then fills in the parts, whereas men start with the part and then work to the relationship?”

“Yes.”

“Wait!” Bernard actually hollered. “Wait,” he said more softly, self-conscious about his outburst. “You are saying that a life is just a part? A life is a whole. It’s huge. And you are saying that a life is just a part?”

“It kind of makes sense, Bernard,” I agreed. “We get created by our culture, by our society, by our families. In that sense, a life is just a part.”

“But you can rise above that. Progress – even psychological health – depends on you being defined by something more. It is a terrible thought, that we’re determined by these things, these relationships that we just wake up in.”

“You don’t have to be so extreme,” Maddie said. “Women choose how they adapt to relationships, even what relationships to adapt to. But they start with relationships.”

“Well what about you,” Bernard queried. “You start with relationships?”

Maddie beamed. “No,” she said. “Not any more. Now I’m free. I know what it’s like to be a man. And it makes life so simple.”

“What?”

“My kids are grown up. My husband is gone. I don’t have to start with relationships anymore. I have so few variables to consider that I feel like my IQ has gone up by 30 points. Life is so simple now. I see now why you men seem to get so much done even when you spend so much time on the couch apparently doing nothing.”

“Ouch,” I said.

“Systems thinking is exhausting,” Maddie said. “It wore me out for 60-some years. Having to consider relationships and other people before I could figure what to do next. I’m so glad to be done with that. Now I even have enough intellectual energy left over to read books on systems thinking.” She reached over and patted Bernard’s hand. “Don’t worry about your Emma,” she said. “She’ll think like you do. Eventually.” And then Maddie got a faraway look in her eyes. “The real pity is that you men don’t know what this is like – what It’s like to think both ways. Just think what you could do if you did.”

I would have taken offense but Maddie’s foppish hat and smile completely disarmed me. I could, stupidly, only smile back and nod. “Too bad, indeed,” I agreed. “It’s like we’re missing a whole life.”

“That’s what you have us for,” she squeezed my hand. “We’re the life you’re missing.”

I could not contain myself. I leaned in and planted a kiss on her head, stylish hat and all.

Required Reading for the Obama Cabinet

Dietrich Dorner's The Logic of Failure makes points that escape some policy makers, lessons Dorner draws from systems simulations. Taken to heart, the following lessons might be enough to keep Obama's administration from the mistakes of Bush. Dorner's book - or at least these very succinct excerpts from it - ought to be required reading for Obama's Cabinet.



Wouldn't it be wonderful if we could move beyond the "policy as an article of faith" phase of politics?

Both the good and the bad participants proposed with the same frequency hypotheses on what effects high taxes, say, or an advertising campaign to promote tourism in Greenvale would have. The good participants differed from the bad ones, however, in how often they tested their hypotheses. The bad participants failed to do this. For them, to propose a hypothesis was to understand reality; testing that hypothesis was unnecessary. Instead of generating hypotheses, they generated truths.

Catastrophes of just the last few years include Katrina and the 2008 credit crisis.

One basic error accounts for all the catastrophes: none of the participants realized that they were dealing with a system in which, though not every element interacted with every other, many elements interacted with many others. The conceived of their task as dealing with a sequence of problems that had to be solved one at a time. They did not take into account the side effects and repercussions of certain measure. They dealt with the entire system, not as a system but as a bundle of independent minisystems. And dealing with systems this way breeds trouble: if we do not concern ourselves with the problems we do not have, we soon have them.
"Catastrophes" seem to hit suddenly, but in reality the way has been prepared for them. Unperceived forces gradually eat away at the supports necessary for favorable development until the system is finally unable to resist any longer and collapses.

A leader ought to provide a narrative that is bigger than the moment, that provides more context than the urgency or false calm of the immediate situation.

The information a newspaper-reading citizen receives about economic developments or the spread of epidemics, for example, lacks both continuity and constant correctives. Information comes in isolated fragments. We can assume that those conditions make it considerably more difficult to develop an adequate picture of developments over time.

No amount of planning can compensate for the dispersion of control with a shared goal. Bush's discipline to keep all staff on message was probably just one more thing that worked against him.

We would do better to follow the advice of Napoleon, whose motto for such situations was, "On s'engage et puis on voit!" (Freely translated, "One jumps into the fray, then figures out what to do next.")
In very complex and quickly changing situations the most reasonable strategy is to plan only in rough outlines and to delegate as many decisions as possible to subordinates. these subordinates will need considerable independence and a thorough understanding of the overall plan. Such strategies require a "redundancy of potential command," that is, many individuals who are all capable of carrying out leadership tasks within the context of the general directives.

It is not enough to state standard platitudes as goals. Meaningless might help with political speeches, but it makes policy formulation difficult.

Bad participants simply compiled laundry lists of goals without providing operative principles for achieving them, and they made no distinction between primary and secondary measures. The bad participants provided a "jumble," not an "organized set" or measures.

Remember how much grief the neo-cons managed to create for Kerry because he simply used nuanced language that suggested that he understood the complexity of a situation?

Thomas Roth used results from a planning game to identify characteristics of good problem solvers. Roth studied the language that good and bad participants used while engaged in a simulation game called "Tailor Shop." The task was to manage a small plant that manufactured clothing. Using records of what the participants said as they thought out loud during the experiment, Roth studied the nature of their problem-solving language.
Roth found that the bad problem solvers tended to use unqualified expressions: constantly, every time, all, without exception, absolutely, entirely, completely totally, unequivocally, undeniably, without question, certainly, solely, nothing, nothing further, only, neither ... nor, must, and have to.
The good problem solvers, on the other hand, tended more toward qualified expressions: now and then, in general, sometimes, ordinarily, often, a bit, in particular, somewhat, specifically, especially, to some degree, perhaps, conceivable, questionable, among other things, on the other hand, also, moreover, may, can, and be in a position to.
It is obvious from these two lists that the good problem solvers favored expressions that take circumstances and exceptions into account, that stress main points but don't ignore subordinate ones, and that suggest possibilities. By contrast, the bad problem solvers used "absolute" concepts that do not admit of other possibilities or circumstances.

"History will be my judge" is a wonderful punt on self reflection and trying to understand the consequences of choices.

The desire to check on efficacy seems to increase but never assumes major propositions. That is odd because we would expect that rational people faced with a system they cannot fully understand would seize every chance to learn more about it and would therefore behave "nonballistically." For the most part, however, the experiment participants did not do that. They shot off their decision like cannonballs and gave hardly a second thought to where those cannonballs might land.
Strange, we think. But an explanation is readily available. If we never look at the consequences of our behavior, we can always maintain the illusion of our competence. If we make a decision to correct a deficiency and then never check on the consequences of that decision, we can believe that the deficiency has been corrected. We can turn to new problems. Ballistic behavior has the great advantage of relieving us of all accountability.
The less clear a situation is, the more likely we are to prop up our illusion of competence with ballistic behavior. Such behavior reduces our sense of confusion and increases our faith in our own capabilities.

The Dynamics of Financial Immorality

Cause and effect are not closely related in time and space.
Underlying all of the above problems is a fundamental characteristic of complex human systems: "cause" and "effect" are not close in time and space. By "effects," I mean the obvious symptoms that indicate that there are problems - drug abuse, unemployment, starving children, falling orders, and sagging profits. By "cause" I mean the interaction of the underlying system that is most responsible for generating the symptoms, and which, if recognized, could lead to changes producing lasting improvement. Why is this a problem? Because most of us assume they are - most of us assume, most of the time, that cause and effect are close in time and space.
- Peter Senge, The Fifth Discipline

"The typical response is to blame whoever it closest to the problem."
[paraphrasing] W. Edwards Deming

Here is a potentially great column by James Boyce making his case for how we came into this financial crisis. The column could have been great but it so reeks of accusations of immorality as to miss the real point: questioning the dynamics of the financial system and the rules and behavior that might make it more stable.

Thousands of years ago, disease was obviously the product of sin. Why? We blame the one closest to the illness and we didn't understand illness - didn't understand germs or viruses.

Today, financial catastrophes are obviously the product of greed, of excess, of immorality by the players closest to financial markets - those in debt or those who created the instruments of debt.

There is probably no system more complex than a global financial system. No one completely understands it. And yet it is not obvious that accusations of sin make for good explanations or offer good solutions.

One of the more counter-intuitive conclusions of Keynes was that "good" behavior could actually hurt the financial system. When people chose to save during a down time, they merely exacerbated the down turn.

One of the more counter-intuitive conclusions of Copernicus is that those of us sitting around on planet earth are hurtling through space at thousands of miles per hour.

What seems obvious in systems is not always right.

If you hear someone struggling to explain the system dynamics of the global financial system, know two things: they are probably wrong and they are on the right track.

If you hear someone blaming immorality for the collapse of the financial system, ask them whether the outbreak of winter colds and influenza is a product of worsening morals in cold times or a form of penance for bad behavior during summer.

Raising Awareness of Awareness

Yesterday Rick and I were walking the boardwalk at Pacific Beach, talking about the kinds of things we talk about. Much of it fell into the category of awareness. He was talking about how little awareness we seem to have of how our life styles negatively impact the life expectancies of people in other countries. I was talking our lack of systems thinking means that we have little understanding of consequences and about how little awareness we seem to have of how much of our life style is unsustainable. Rick pointed out that one of the most basic goals of any religion is to raise awareness, to become self aware at least.

As we walked, we found ourselves among about 4,700 people - mostly women - who were on day two of a three day, 60 mile breast cancer awareness walk.

"Look at this," I said. "Look at how they're using this event to raise awareness of breast cancer. I wonder how we could do something like this."

Rick, always delighted to point out that I'm being absurd even on those odd occasions when I think that I am not, said, "So, you are saying that you want to raise awareness of awareness?"

Oddly enough, I do.

Bernard on Where Life Is

Bernard sighed.

“How is it going, Bernard?”

“I’ve been spending too much time alone,” he said.

“That’s not all bad, is it?” I asked, trying to point to the positive.

“Ha!” he said. “You and the tiresome optimism.”

“Well, alone can be restful,” I said.

“Left alone we’re animals,” Bernard muttered. “Our brains are too big for us to live alone, big enough that they become just an annoyance. When we’re made a part of a community, our brains have a place to be.”

“Yeah, but in community you can so easily feel outnumbered,” I protested.

“Sure. Sure,” Bernard surprised me by agreeing. “But that’s because we look at it all wrong. Everyone is made to feel ineffectual. Even the president, the leader of the free world.”

“Meaning?” I raised my eyebrows.

“Well, we don’t acknowledge that we only exist in relationships. All of our thinking about the world imagines the oddest thing – it imagines that we exist in isolation from each other. If your model of the world is wrong, you can't be very effective.”

“Why?”

“Well part of it is the issue of reductionist thinking – the tradition of analysis in Western thought that loves to pull apart things to understand them, as if communities and markets and people were watches. But it is more than that,” Bernard took a sip of his coffee. “We get alone to think and then we make that assumption – this matter of being alone – the default assumption about the context. There was a reason that Socrates did his work in conversations. He knew that philosophy outside of a community was meaningless.”

“But they killed him.”

“Sure. But that was because what he did impacted the community. They wouldn’t have executed him if not for the fact that he actually had an influence.”

“So, what truth do we miss when we’re thinking in isolation, Bernard?” I knew he had something more to say.

“A hermit has no opportunity for love or compassion. Life comes out of interaction – our own lives get defined by our relationships. The quality and intensity of our relationships determine the quality and intensity of our lives. Your relationship to people you love or hate, your work or your play, the ideas that swirl around you. This is what you you experience of life. When loathing or contempt or apathy comes creeping into your relationships, that is what you experience of life. If your relationships get defined by love or engagement, that too is what you experience of life.”

“Wow.” I shook my head. “What’s in your coffee?”

Bernard smiled as warmly as I’ve seen him smile. “It is not a question of what is in my drink but instead, who is at my table.” He reached out to squeeze my hand, a gesture that suddenly felt oddly intimate, and said, “Thanks for giving me a place to be today. I needed this.”

"We all need to be," I said stupidly.