I tried tackling this on the weekend, spent all day Sunday and ended up with a 2000 word manure pile of pretentiousness. I even disgusted myself — not that what I was saying was at all wrong, but in that form it was just way too obvious that I think very highly of myself: making grand pronouncements when I’m really nobody. So instead, I decided to break it up into smaller pieces so my pretensions aren’t so blatant.
I’ve already touched a little on these general notions. While economists talk about the crisis in terms of employment, monetary policy, asset bubbles, inflation, etc, there’s also a side to the crisis (and its causes) that concerns things like consumer psychology and organizational behaviour — psychology and behaviour that seems to be persisting unaddressed, even as the crisis deepens. This is different from the kind of specific causes identified by Joseph Stiglitz in January’s Vanity Fair.
Anyways, here’s some of what keeps me up at night:
- Our Culture of Overachievement — I’ve already dealt with this here. The nut: appearance has wrongly trumped substance:
Our society has spent more time and energy on trophies that are totally dependent on demand than on stuff that generates and sustains value independently.
- Trying to Stretch Growth – Directly related to the culture of overachievement. It hasn’t been enough just to grow, investors have effectively demanded that even the rate of growth should grow. Managers might be smart enough to know that 7% growth year-over-year is great, but if other companies are growing at 10%, shareholders get jumpy. So organizations are ruining opportunities for substantive and sustainable growth for the sake of showing they can kick ass on a quarterly basis. I don’t have the math to make a compelling case of this, but intuitively it just seems like the effort to stretch for the highest possible growth rate will eventually collapse on itself.
- Training Customers to be Stupid — I think we’ll hear more about this after the holiday season. I read somewhere last week that retailers have taught customers to “play chicken” and wait for the bargains at the very last minute, as companies try to meet their sales targets (not profit targets, mind you). This notion hit home to me when I was selling cell phones: we’d give someone a $250 phone for “free” with a plan, then they’d drop it in the toilet a month later and come back expecting a free replacement — not just asking for another free phone, but aggressively demanding that we owe it to them, yelling absurdities like, ”I didn’t pay anything for my phone so why should I have to pay for another one?!” Of course they should be confused after we fooled them into signing an 3 year X $80/month contract. Advertising and incentives can corrupt the market, making it unclear what people really want and where the real value is. And when companies prey and play on customers like this, giving them little respect or loyalty, customers return the gesture.
- Too Many of the Wrong Responsibilities – This one’s a little counterintuitive. I’ve already discussed it here. My basic case is that there are two kinds of responsibility: ‘responsibility to‘ and ‘responsibility for.’ They’re both essential but it seems too many people have taken refuge from the latter in the former. By being responsibility to too many rules, conventions, and expectations, people aren’t really capable of taking responsibility for things anymore: people aren’t able to exercise the judgement (or even learn the good judgement) necessary to keep our ideas and institutions adaptive and alive.
- Too Much of the Wrong Progress — Continued from the last point. Incapable of taking responsibility for improving the structures we work, learn, and live in, we’ve been seeking achievement, or expression, or gratification, or whatever you want to call it, by running up the quantitative measure of our accomplishments within the existing (and aging) structures. Pick your metaphor: more weight than the system can manage, going too fast, too much friction — the machine metaphors are misleading but they help demonstrate my point: the economy isn’t a machine, it’s an ecology, but we don’t have adequate metaphors for to help us understand its complexities better.
- Machine Metaphors — I might as well add this too. Stop using these dumb metaphors. Our economy, our society, is not a machine. It’s alive. It doesn’t break down but it can die. It keeps working while we fix it, we can never turn it off, nor can we separate it into different parts — or at least we can’t really separate it into different parts. We can think and talk about different parts (as I sort of am now) but eventually we have to conceive everything functioning as a whole — everything connected, interacting and alive — which means overcoming words and ideas: putting them into active practice.
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