The State of Everything

I have been mightily diverted by technological and personal matters recently and so am struggling to catch up. As I do so one theme has stood out: exhaustion. We are exhausted. Morally, intellectually, politically, and every other way. We seem to have fought our way into a state of enforced lassitude within which we can no longer even imagine progress. We are suffering from a form of trench warfare. Our leaders are exposed as inept. Brilliantly educated, earnest, well informed, and well intentioned. They are inept. So much for all those advanced degrees and professional qualifications. In our hour of need they amount to not much more than paper. Those achievements are nice to hang on walls to remind us of the hours spent poring over books in the library, or yawning through interminable, and marginal, classes on subjects no one but the professors were interested in, but they don’t appear to guarantee solutions to actual economic problems.

The state of everything is a mess.

We have become a society of bureaucrats. Big business is hardly distinguishable from big government. The leaders of both attended the same classes. They read the same economics books. They listened earnestly to organizational theory. To organizational ethics. To statistics. To international relations. To all sorts of clever things. Their heads were stuffed with the right way to do things in an orderly and sensible way. They learned how to minimize risks. And to maximize returns. They all spent the requisite weeks as interns in the appropriately important institution – investment banks, law firms, accounting firms, corporations, or government departments. They then returned to school to finish studying the essential techniques of management, law, accounting, or other profession. More importantly they returned to school to start the search for a high paying prestigious job.

So that they could begin the trek to big salaries, bonuses, and influence.

Our best and brightest became bureaucrats.

The state of everything is a mess.

I wouldn’t mind this, I suppose, were I not tainted by this same process. Nor would I care so much had the arts and culture escaped. But they didn’t. Our artistic worlds are stifled by the need to show a return on investment. Everything is for sale. We are all commodities. Everything is monetized – how I hate that word. And nowhere is there a place for genuine creativity focused on itself rather than on making a buck.

This is all well and good when the waters ahead are smooth. The limited, risk averse, and sequential minds churned out by our top schools are well adapted to calm waters. They are adept at smooth. They fail to cope with choppy.

So it was no surprise that our brainiest folks diligently created the economic disaster. They were simply executing the text book they had absorbed so well. Shareholder value was supreme, not because of any moral superiority or because of any ideological commitment. No. It was because that was what was taught. To everyone. Our elite became homogenous.

And, as anyone who studies evolution will tell you, homogeneity is both a curse and a blessing. It works well in smooth. Not so much in choppy.

I have my own pet theory of knowledge. I divide it into two broad categories. I am simple minded, so I call one category primary knowledge and the other secondary. I apply it to business, but it has broader application.

Primary knowledge is that which is hard wired. It is encoded. It is written down. It is thus easily replicated. It is routine. It is by far the most prevalent form of knowledge – DNA is an example. In the corporate world primary knowledge is the holy grail. It forms the backbone of all production and sales processes. It allows a standard response to be given to standard questions. So business likes to mold its environment into standard shapes in order to deploy primary knowledge in its solutions. The real beauty of this is that business can then attack the future: it cuts through uncertainty by assuming it will be closely related to the past, so past lessons learned will have value as solutions to future problems. Since primary knowledge is encoded it can be trusted to produce the same answer time after time. Replicability and predictability: two virtues of immense value. Indeed they are the source of all value. By adding predictable and replicable knowledge to available resources and energy we build, locate, and thus consume. Knowledge is value. Cheap knowledge is thus a source of profit. And primary knowledge, precisely because it is predictable and replicable, is the cheapest.

But stuff happens.

In evolution living things that depend only on encoded knowledge run into difficulty when their environment changes. The future is not always a continuation of the past. My part of Vermont used to be the south coast of a continent in the southern hemisphere. This is odd to contemplate now as the leaves change in a decidedly landlocked northeastern part of a northern hemispheric continent. Stuff happens. Adaptation is thus key to longevity. Encoded knowledge is never enough. This is where secondary knowledge enters the fray.

Secondary knowledge is more process than anything else. It is learning. It is the dynamic twin of the static primary knowledge. It is inefficient since it requires lots of wiring: senses have to import information that is then sorted, envisaged, and responded to. It is not easily controlled: who knows what response could emerge in a dynamic circumstance? So not only is secondary knowledge less predictable it is less replicable. It is contextual. It is spur of the moment.

So business dislikes it intensely. It costs a lot. It may produce oddball responses. It requires thinking, and we all know that thinking can produce unpredictable outcomes. That expensively bought corporate brand depends upon predictable outcomes. Oddball won’t do. But adaptation is essential. So all big businesses need just enough secondary knowledge to be able to flex a little. Not too much though because of the cost. Even the brightest consultants sell primary knowledge. They wrap it up as if it were secondary, but it isn’t. Only a few truly operate in that secondary world. The locus of secondary knowledge in a typical business is in what I call roles – to distinguish them from the routines of primary knowledge. People who occupy roles make changes. They allow adaptation. They translate new responses into codes for the future. They are the conduit for building a store of primary knowledge for future replication. They learn in the now, and hope to make the future more predictable.

This is not a diatribe against business. It’s just that in my Popper infused sense of the world learning is what separates the living from the inanimate. Indeed animation is learning. Conversely, without an ability to learn things cannot be alive.

This is why the state of things is a mess.

We have exhausted our reservoirs of primary knowledge and we are not learning. We have ground to a halt.

Edward Fullbrook recently published a study of the digital footprint of the leading economics journals. There were 307 of them. Imagine that: 307. No on can credibly claim to have read all 307. Especially since each appears in several editions per year. So no one can claim to be a complete economist. No one. So what does all that publishing accomplish? Nothing. Absolutely nothing. We are filling the air with words no one can absorb. So we are all reduced to taking in only a very small part of the whole. We try to be efficient. But learning is inherently inefficient. It requires us to wander about and make connections. In a world of 307 journals there can be no connections. We are forced to stay within our existing network. Even then we are inundated. Learning stops. It grinds to a halt under the weight of its own output. It produces a cognitive freeze up. We cannot sort, envisage, and respond to it all. Not credibly. Not authoritatively. The conversation stops. We simply talk amongst ourselves. Gaps open up in our networks. Adaptation ends. Or at least slows down.

The state of everything gets messed up.

In a world of such vast information flows we rely on the knowledge of our neighbors. Professionalism rises to the fore. Expertise becomes valued. Primary knowledge infiltrates everywhere. Just as we depend on doctors to be up to date, we rely on all our bureaucrats to know their stuff. We are lost in something akin to a Borgian library where we meet people skilled in activities we never imagined existed. But we depend upon them to be expert. We arrive at a point where the intellectual world is so divided and so specialized that no one really is able to monitor its validity. So splintered are some fields that the problem of conflict of interest crops up: the only ones who can validate the knowledge are those within the field. They train the own followers. The tricks are passed along through generations. The relevance and use are not considered. Tradition and regularity take over. Predictable and replicable. Knowledge likes it that way.

And when, collectively, we stumble into a crisis. When stuff actually does happen. We look to these remote experts for help. They are, after all experts. We make a call on their ethical responsibility to the rest of us. Yes ethics intrudes even into the deep recesses of academia. We ask them to step up and prove that their corner of the library is indeed valuable. Fix this problem we ask. We have tolerated your arcane and dusty corner long enough. Now go and blow the dust off and get to work.

Economics, of course, has a hard time rising to this challenge. It cannot speak with a coherent voice. It is a cacophony. It is riven through with contradictions and oddities. It has many tongues. Its various factions each make claims that others deny. It is a rabble rather than a discipline.

I would like to think that this chaotic condition reflected an attempt to learn. But I cannot. Economics is still replaying the arguments of the 1930’s. It is still undecided about big issues that consumed whole screeds back then. And still do. It didn’t learn. It didn’t advance.

In many ways economics is a poster child for the malaise we find ourselves in. Well trained. Highly educated. Technically adroit. Brilliant. Extraordinary, hard working, genuine, gifted, and really, really clever. This is the moment when society turns to economics and calls in on that ethical commitment: the expertise is called for. Lives. Households. Jobs. All sorts of very real things depend upon economics rising to the challenge.

And the response? Well I think its been disappointing. Economics produces 307 journals but not a lot of useful knowledge. It stopped learning. It is encoded and unable to adapt. It became bureaucratic. It exists in response to its own impulses. It is sealed off like many other far too specialized fields. It is safe. It has forgotten to solve the problems it was started to solve. It regards itself as its own justification. It has exhausted itself on yesterday’s issues. Its leaders are tired and entrenched. When stuff happens it falters. Does extinction lie ahead? If it stays this way.

In its own way, then, economics demonstrates why the state of everything is a mess. The only problem being that it needs to escape the mess not exemplify it. Being an exemplar of contemporary failure, and contributing to the state of everything, is not a good place to be.

Not in my mind at least.

But I may be alone.

It won’t be the first time.