Techno-utopianism is a dead end, and so is TED

Umair Haque suggests that ‘TED thinking’ — the sort that underlies the techno-utopianism behind the TED conference and much of the triumphalist ‘we can do anything’ discourse on the web — does an injustice to the power of ideas, and trivializes the issues we are confronted with.

Umair Haque, Let’s Save Great Ideas from the Ideas Industry 

TED thinking assumes complex social problems are essentially engineering challenges, and that short nuggets of Technology, Edutainment, and Design can fix everything, fast and cheap.TED thinking assumes complex social problems are essentially engineering challenges, and that short nuggets of Technology, Edutainment, and Design can fix everything, fast and cheap. TED thinking’s got a hard determinism to it; a kind of technological hyperrationalism. It ignores institutions and society almost completely. We’ve come to look at these quick, easy “solutions” as the very point of “ideas worth spreading.”

But this seems to me to miss the point and power of ideas entirely. Einstein’s great equation is not a “solution”; it is a theory — whose explanations unravel only greater mysteries and questions. It offers no immediate easy, quick “application” in the “real world,” but challenges us to reimagine what the “real world” is; it is a Great Idea because it offers us something bigger, more lasting, and more vital than a painless, disposable “solution.”

Yet in the eyes of TED thinking, it is of limited, perhaps little, value. One can imagine Einstein being invited to give a TED talk on E=MC2 — and the audience wondering “Well, what’s the point of this? What can we use it to do? How can we make megabucks from this, next year?” When ideas are reduced to engineering challenges, the focus naturally becomes near-term utility in the so-called real world. We focus on implementation without ever stopping to question our assumptions. But Great Ideas don’t resound because they have “utility” in the real world — they are Great for the very reason that they challenge us to redefine the reality of our worlds; and hence, the “utility” of our lives.

So Great Ideas aren’t just “solutions”. Indeed, many of the Greatest Ideas are problems.

[…]

Great Ideas, then, don’t merely easily please us with their immediate utility — often, they break our hearts with desperate futility; with both the aching impossibility and sure inevitability of the trials and tests of human life. But that’s precisely what makes them Great.

[…]

That is precisely how Great Ideas change us: not merely by pleasing us, but by challenging us. That is precisely how they elevate us: not merely by pandering to us, or by provoking us, but by enlightening the whole of us. That is precisely what makes Great Ideas truly worthy — not just easily palatable, and commercially profitable.

We have moved into a time where our biggest challenges are not problems to be solved, but dilemmas that cannot even be explained in 18 minutes, let alone ‘solved’ in human lifetimes

We had great success in the industrial age by seeing the world in terms of engineering problems, and finding scientific means to solve them. (So long as you carefully avoided looking into the externalities that were mounting along with the slag heaps, C02, and income inequity.)

However, we have slipped into the postnormal, and out of the postmodern (more or less synonymous with late industrialism). And now, we have moved into a time where our biggest challenges are not problems to be solved, but dilemmas that cannot even be explained in 18 minutes, let alone ‘solved’ in human lifetimes.

Consider this example: How will we govern the Earth so that its resources and posterity are held in common for all people, and not exploited by a few to the detriment of all? 

We are polarized around these issues, because the machinery that has brought us — unwillingly — into the postnormal is based on growth. TED thinking is tied inexorably to new ways to make growth work, in a time when we need to stop growing. 

As Umair points out in another part of his essay, TED thinking is all mind and no heart, all heroes and no villains, good but no evil. 

And there is the quick fix illusion that 18 minutes of glitter, rhetoric, and simplistic parsing of ‘problems and solutions’ makes us part of the illuminariat: that we are joined in a movement of the awakened. 

But this is just another kind of sleeping, another way of pulling the blanket over our heads, merely a soporific to deaden the pain, and avoid wrenching open our hearts and minds to the realities that confront us. 

Source: blogs.hbr.org

6 March 2013 75 Permalink

Welcome To The Postnormal: Globalization In Decline?

In a recent McKinsey report, Financial globalization: Retreat or reset?, we can see that cross-border capital flows have collapsed since 2008, and remain more than 60% below the 2007 peak.

As the report states:

Western Europe accounts for some 70 percent of this drop, as the continent’s financial integration has gone into reverse. Eurozone banks have reduced cross-border lending and other claims by $3.7 trillion since 2007, and central banks now account for more than 50 percent of capital flows within the region.

Even beyond Europe, global banking is in flux. Cross-border lending has fallen from $5.6 trillion in 2007 to an estimated $1.7 trillion in 2012. In light of new capital and regulatory requirements, many banks are winnowing down the geographies in which they operate. Commercial banks have sold more than $722 billion in assets and operations since the start of 2007; foreign operations make up almost half of this total. Expanding the debt and equity capital markets will take on greater urgency as banks scale back their activities.

Takeaways:

Commercial banks and sovereign investors are drawing back from globalist investments, and looking closer to home for investment opportunities. Also, there is a major transition in international capital flows to old school foreign direct investment — owning all or part of foreign businesses — which is a much less volatile form of capital flow.

The authors suggest two scenarios, one which lines up with my theories of the postnormal economy we are careening into. That is a return to more domestic capital formation: glocalization, where nations and regional economies reject the high risks and volatility of globalized capital.

McKinsey is more sanguine about a second scenario, which is a lala-land ‘sustainable approach to financial-market development and global integration’ which would support high growth but sidestep the excesses of the past. Yeah, sure.

We should expect a continued disintegration of the globalist money machine, as distrust and discord divide even the advanced economies of the West. The message to us in business is clear, perhaps even stark: the high flying globalism of the late postmodern era — from the ’70s to the ’00s — has crashed. We’ve seen peak globalism, and the world is becoming a more divided place.

2 March 2013 23 Permalink

The Biggest If Of All, Part II

Scott Rafer riffs on my recent post, The Biggest If Of All, where I suggest that this time it might be different, this time we may have moved into a new era, a new economy: the postnormal. Rafer says it’s just the same old same old:

@stoweboyd This purely academic question gets asked every business cycle. It was being asked on the upside in the late 90s if you recall. In this (not very) regulated financial environment, investment managers figure out how to play new conditions which makes the answer to your question “No” +/- 20%. 

Well, logically, just because someone said X would happen 15 years ago and it didn’t doesn’t mean that someone saying X now is wrong. Those are independent events, at least in principle.

My point is something else entirely. We are living in a time where uncertainty is so great that businesses and investors are finding it increasingly impossible to make judgments about where things are headed. Andrew Ross Sorkin recently wrote about this:

The Election Won’t Solve All Puzzles - Andrew Ross Sorkin via NYTimes.com

“Uncertainty” has become the watchword over the last several years for many chief executives, politicians and economists as an explanation — or perhaps an excuse — for the economy’s slow growth, for the lack of hiring by business and for the volatility in the stock market.

“The claim is that businesses and households are uncertain about future taxes, spending levels, regulations, health care reform and interest rates. In turn, this uncertainty leads them to postpone spending on investment and consumption goods and to slow hiring, impeding the recovery,” a group of professors from Stanford University and the University of Chicago wrote in a study that found “current levels of economic policy uncertainty are at extremely elevated levels compared to recent history.” (The professors have created a Web site, policyuncertainty.com, where you can track the “uncertainty” levels.)

If you go look at the other charts — like the European Policy Uncertainty Index — economic uncertainty has been steadily rising since 2007.

We are moving from a world of problems, which demand speed, analysis, and elimination of uncertainty to solve, to a world of dilemmas, which demand patience, sense-making, and an engagement of uncertainty. - Denise CaronSo my point is different. Investors and other business people will find it harder to reason about possible futures because we have moved onto shifting ground. It’s a VUCA world, characterized as increased volatility, uncertainty, complexity, and ambiguity.

As I wrote in July, regarding our blindness regarding the postnormal climate we’ve made for ourselves,

The biggest problem is that people’s thinking patterns are stuck in the old days, and I don’t just mean their expectations about ‘normal’ weather. No, even worse is that people can’t accept the reality that in the post-normal we will never have the luxury of time to assess and then adapt. Linear problem-solving approaches will simply not work anymore.

But this is not a call for more old world leadership, characterized by moving fast, and looking for permanent ‘solutions’ to well-defined and researched ‘problems’. Instead, we need leaders demonstrating the ‘VUCA Prime’ characteristics, as Bob Johansen has styled it.

Denise Caron makes the break between the old world and the new one very clear:

We are moving from a world of problems, which demand speed, analysis, and elimination of uncertainty to solve, to a world of dilemmas, which demand patience, sense-making, and an engagement of uncertainty.

So, in this context, there is no ‘solution’ to infrastructure stress and failure based on more violent weather. We are stuck in a problem space which is fundamentally unsolvable, but we have to try to make sense of this in the context of the larger world.

For example: the financial constraints of our weakened economy mean that we may not be able to repair the interstate highway system, but we might extend and maintain the train system for people moving. Do we have the foresight to disinvest in the highway system? Can we shift from a truck-based logistics system to boats, trains, and airships for long-distance hauling?

We are just as trapped in our thinking as we are in a rapidly changing global weather system, and without leaders with the mindset and skillset geared for the post-normal world, we will never find our way out.

The analysis about weather is paralleled by our inability to logically untangle the financial mess the world is in. And it’s not that we need to get smarter, do more analysis, put more brilliant minds on it: the system is so large, interconnected, and complex that it cannot be understood. It is a complex non-linear system, barreling along as fast as we can fuel it, and it cannot be neatly reduced to a set of smaller, more easily understood parts, unless we actually start disconnecting the parts.

But are we taking steps to disconnect the world’s financial markets? To raise trade barriers, and diminish global supply chains? To require companies to only do business in one country, and to only compete in a single marketplace? To break up vertically integrated multinationals? No. And leaving aside whether this would be a ‘good’ thing in some moral or ideological sense, we aren’t doing it. If anything, the world is growing more interconnected and complex. 

At the macroeconomic level, this poses astonishing policy issues, the first of which is seeing the forest for the trees: that we’ve moved into new territory and we have no map. At the microeconomic level, the investor or business leader has a set of tools that used to work, a map that used to show the way, a compass that found north. But they don’t work anymore. They no longer point the way, or suggest that all ways forward are equally uncertain of success.

Specifically with regard to investments in tech, David Lee at SV Angel recently said ‘It has never been easier to start a company, and never harder to build one’, regarding the structural issues in the tech funding world. VC’s don’t see a clear path for a real return on investments in commerce 2.0, games, or apps that rely on Facebook, Twitter, or other platforms. And the result of that uncertainty is being reflected in a decreased amount of later stage investments. This is an echo of the international fund managers I wrote about in the first installment of The Biggest If Of All, many of whom state that uncertainty has never been greater, or of more import in the investment world. So they, like tech VC’s, are holding back, and waiting for a return to normalcy.

But what if it never comes?

We know that the changes we’ve already made to our ecological world will take at least hundreds of years to reverse. Perhaps we’ve turned a similar curve in the economic and policy world. And we don’t know what the world will look like in a hundred years or so, and perhaps there is simply no way to figure out what is going to happen in the next five years, either.

14 January 2013 27 rafer Permalink

The Biggest If Of All

I continue to see the comforting myth of ‘returning to normal’ show up in all sorts of discussions. Today, in a NY Times piece on where investment fund managers are finding good opportunities to invest the central point was that fund managers can’t find good investment opportunities, because high uncertainty. But — don’t worry! — everything will be fine as soon as we get back to normal:

Managers of World Allocation Funds Are Finding Few Bargains - Carla Fried via NYTimes.com

It’s not just that many asset classes have already rebounded sharply from their financial-crisis lows and are no longer great values. What concerns Mr. [Dennis] Stattman [manager at BloackRock Global Allocation fund for more than 20 years] is that those asset prices have risen partly because of a protracted central-bank easing policy that is increasingly viewed as being closer to the end than the beginning.

“We’ve already had the beneficial effects of fiscal and monetary easing, so the question now is what happens when normal returns,” he says. “Never before in my investing experience has uncertainty been greater, or more important to the markets.”

My interest isn’t really where these finds are investing, or will in the near future. What I am interested in is the deep story, never examined or questioned: we are in a downturn like other downturns, and we will return to postmodern growth patterns: the typical boom/bust cycle that defined the past few hundred years of the modern and post modern economies.

But what if this is a new postnormal world? (It is.) A new sort of economy with a new hyperbolic logic? What if we’ve crossed over into a world we don’t have a handle on? What if we aren’t going back to the old boom/bust? What if volatility, uncertainty, complexity, and ambiguity are here to stay? What if it became impossible to apply old approaches to analyze the situation, or worse yet, analytic techniques in general couldn’t pierce the fog of this postnormal economy?

What if?

Well, one observation is that finding investment opportunities will involve abductive logic now: guessing and experimenting, instead of analytic number crunching. Maybe that what these fund managers are trying now, but they aren’t saying.

13 January 2013 27 Permalink

In a decade or two, we may watch Chinese sitcoms on Brazilian-invented streaming devices made in Africa - Adam Davidson buff.ly/Xc3Vae

— Stowe Boyd (@stoweboyd) January 6, 2013

6 January 2013 6 Permalink

Krugman Wonders ‘Is Growth Over?’

Paul Krugman begins to discuss our new economy — the Postnormal — but he doesn’t call it that, at least not yet. Mostly it seems like he is responding to an economic hand grenade thrown by Robert Gordon of Northwestern University, who suggests that the last era of industrialism — electrification — ran from 1890 to the 1960s, and since then we have been floundering, because the information technology revolution hasn’t had as big as an impact:

Is Growth Over? - Paul Krugman via NYTimes.com

Recently, Robert Gordon of Northwestern University created a stir by arguing that economic growth is likely to slow sharply — indeed, that the age of growth that began in the 18th century may well be drawing to an end.

Mr. Gordon points out that long-term economic growth hasn’t been a steady process; it has been driven by several discrete “industrial revolutions,” each based on a particular set of technologies. The first industrial revolution, based largely on the steam engine, drove growth in the late-18th and early-19th centuries. The second, made possible, in large part, by the application of science to technologies such as electrification, internal combustion and chemical engineering, began circa 1870 and drove growth into the 1960s. The third, centered around information technology, defines our current era.

And, as Mr. Gordon correctly notes, the payoffs so far to the third industrial revolution, while real, have been far smaller than those to the second. Electrification, for example, was a much bigger deal than the Internet.

It’s an interesting thesis, and a useful counterweight to all the gee-whiz glorification of the latest tech. And while I don’t think he’s right, the way in which he’s probably wrong has implications equally destructive of conventional wisdom. For the case against Mr. Gordon’s techno-pessimism rests largely on the assertion that the big payoff to information technology, which is just getting started, will come from the rise of smart machines.

[… a discussion of the state of AI… smart machines…]

So machines may soon be ready to perform many tasks that currently require large amounts of human labor. This will mean rapid productivity growth and, therefore, high overall economic growth.

But — and this is the crucial question — who will benefit from that growth? Unfortunately, it’s all too easy to make the case that most Americans will be left behind, because smart machines will end up devaluing the contribution of workers, including highly skilled workers whose skills suddenly become redundant. The point is that there’s good reason to believe that the conventional wisdom embodied in long-run budget projections — projections that shape almost every aspect of current policy discussion — is all wrong.

What Krugman doesn’t say — and perhaps doesn’t see — is that the ephemeralization of labor due to information technology has been going on for decades, and that may be it’s biggest impact: ending jobs. Remember all those jobs were people typed in data based on insurance, medical, and government forms sent through the mail? All those secretaries that used to manage people’s travel, appointments, and business meetings? Telephone operators? The expediters that would figure out the best route for a fleet of UPS trucks to make their deliveries? That’s all gone now, slurped up by information technology.

Consider only a few breakthroughs likely to have an impact in the near future. Autonomous vehicles are on the immediate horizon, and their biggest impact won’t be on hipsters in urban centers: it will be on truck transport. In 2010, there were 1,604,800 truck drivers in the US, making an average of $18.15/hour (Bureau Of Labor Statistics). The number of drivers is growing, and there is a unmet demand because the work is so awful: long hours, not great pay, and dangerous work.

So, imagine autonomous trucking systems taking over freight, at least long haul freight: 33% of those jobs. Bang. Gone.

239,900 taxi drivers and chauffers. Bang. Gone.

67,100 Train engineers and operators. Bang. Gone.

100,000 airplane pilots (another industry with a looming talent cliff, because more than half are over 50 and must retire at 65). Bang. Gone.

A couple of million semi-skilled workers on the street, with nowhere to work.

And that’s only one breakthrough. Imagine if there were 10 others, that each erased 10 million jobs. 

How many Blockbuster jobs were lost when Netflix and Redbox came along? 60,000, and innumerable other chains and mom-and-pop video stores likely tripled that.

What about a Redbox in a Subway? What if you walked in, typed what you wanted into a touchscreen, and swiped your credit card, and left? A store could be managed with one person per shift — to deal with the machinery — and Subway would save a fortune, and maybe drop the price a bit. And you’d still get a fresh, made to order sandwich. There are 4 million people working in the fast food industry, as of 2011.

I project that we will see over 25 million more people out of work because of these advances. Permanently.

It’s the Postnormal, and — among other activities — US and state policies should be directed toward shorter work week for the same pay, which would share the bounties of ephemeralization with the working people and not just to the folks that own the machinery. More important: If we share the work that is left, so that people worked, say, 25 hours a week, what are they supposed to do? 

Of course if things just keep on as is at present, these people will be shit-canned, and join a permanent underclass of people who cannot find work in a world where there isn’t enough to go around.

I will dig up more on Robert Gordon’s thesis, and await Krugman’s next piece with interest.

28 December 2012 34 Permalink