October 30, 2006 (1): The Final Steingart Installment

Today's SPIEGEL ONLINE provided the final installment in the translations of excerpts from Gabor Steingart's Weltkrieg um Wohlstand ("war for wealth") book. Once again the title is as provocative as it is relevant: "Twisting the Knife: Consumers Are Killing the Welfare State." This one actually makes an excellent companion piece to the Book TV broadcast of a lecture that Joseph Stiglitz recently gave to the World Bank to discuss his new book, Making Globalization Work. Stiglitz is the perfect antidote to anyone who has had too much over Tom Friedman's cheerleading, and he even took Friedman on by using the guy's own language. I cannot duplicate the words exactly; but what Stiglitz said went something like "Not only is the world not flat, but it is getting less flatter every day." This then gave him an opportunity to discuss the unpleasant consequences that may ensue from a Digital Divide which is growing larger, rather than smaller.

Unlike Friedman, Steingart is not concerned with the mission of making us feel good. He writes about German consumers; but he could just as well be writing about consumers in any industrialized and Internet-rich country:

The normal shopper at a German department store like Karstadt, wholesale retailer Metro or grocery discounter Lidl is a downright globalization fanatic. He compares prices and services but not nationalities or their social security systems. He wants his rebates and does not want additional charges. He is interested in the good deal, not in the dirty business already going on elsewhere in the world.

Even if he considers himself a romantic, he is actually a materialist by the book. It is only outside of business hours that he occasionally entertains idealistic doubts. And only then does he start to ask himself how it can be that he can obtain such large carpets so cheaply or why the prices on computers and mobile phones these days are so low.

This eventually leads him to a punch line that is not unfamiliar but still bears repeating at every opportunity:

What is important at this juncture is simply the realization that the global labor market, as we have invented it up to now, has created a unified sovereign territory for goods producers. The demand for labor now moves from one land to another, and naturally prefers those states with the lowest possible supplementary social costs.

Many who considered the social market economy to be the final stage of history are now being forced to admit they made a colossal error. Capitalism has, thanks to a global labor and finance market, increased its range, while the social safety net has lost ground. The market has gained power, speed and apparently also inevitability. But the social triumph of yesteryear has faded. Indeed, capitalism is going back to its roots.

I suppose I have enjoyed reading these essays because Steingart follows a path that I have tried to advocate for some time, the path of reasoning about consequences. In all fairness to the average consumer, it is not easy to reason about consequences when your finances demand that you get the best price for every purchase you make. So perhaps Steingart has been a bit extreme in picking on those consumers, but whom should he target? It is all very well and good to say that governments ought to deal with long-term questions of economic viability; but what are any of us to do when a government shirks that responsibility? Passionate talk of revolution is no solution, since the odds are not good that the resulting system will be any more conducive to long-term thinking. Unpleasant as it may sound, we may all have to face up to being responsible for our own assets and apply those assets towards building a safety net that can withstand future abuses from the movers and shakers of the global economy.

June 13, 2006: Control and Consequences

I want to get back on the theme of the "half life of technical education" and why I am concerned about it. I suppose it all has to do with why I am trying to tilt at the windmills of technical education (and probably just about any other form of specialized education) in the first place. My concern is basically one of objectives, because it seems to me that the focus of such educational programs always comes down to some approach to controlling the world. Now that seems like a perfectly reasonable way to go, particularly in the mind-set of post-Enlightenment Western civilization; but, as we need to become more aware of our role in the world at large, we must not fool ourselves into believing that it is the only way to go or that "control solves everything." What is often overlooked when we focus to intently on control is that the world is a complex case; and, whatever control we may have, it will never be a handle on all that complexity. Thus, at the very least, we need to live by the motto that control has consequences.

This is particularly important when we try to reduce everything we do to making decisions and acting on the results of those decisions. In this regard I need to draw attention to (and recommend) the book Thinking in Time: The Uses of History for Decision Makers, by Richard Neustadt and Ernest May. This book is basically a series of case studies, each of which involves an act of presidential decision making in a time of crisis. The theme behind the entire book involves the way in which Neustadt and May characterize what they mean by "thinking in time." Basically, it involves asking two fundamental questions:

1. How did we get into this situation?
2. Given a course of action to consider, what will be the consequences of following that course?

In other words "thinking in time" involves more than analyzing a "state" in isolation: You have to understand that path through past states that led up to the present state; and, on the basis of your understanding that (and other) paths, you need to make a well-informed guess as to where the path out of that state (determined by the course of action) will lead (and, to invoke chess language, you have to look ahead more than a single move).

This also brings in an important reflection of decision support technology that goes all the way back to the pioneers of that technology: Peter Keen and Michael Scott Morton. Their first book on the subject, Decision Support Systems, begins by drawing the distinction between efficient and effective decision making. The punch line, of course, is that it is always necessary to strive for the latter, rather than the former. I believe that one of the hazards of the way in which specialized education is taught (if not of the subject-matter itself) is that efficiency tends to get the upper hand over effectiveness, simply because it is easier to evaluate efficiency, while evaluating effectiveness demands all the subtleties of "thinking in time." (We are back in the world of looking for your keys where the light is better, even if you know you did not lose them there.)

So perhaps there should be some corner of our educational process that makes sure we do not forget that it can be all right to just live in the world, without necessarily controlling (or feeling you can control) it. I do not mean this as a granola-based go-with-the-flow philosophy. Rather, to reflect on the quote in my Blast, you should be able to live in the world without "fear, superstition and pettiness," because the world throws so much at that stuff in our path that we should delude ourselves into believing the the only way to deal with it is to control it!