Showing posts with label Markets. Show all posts
Showing posts with label Markets. Show all posts

Sunday, April 15, 2012

The Reef and the Market

Philosophy professors like asking students where their ideas come from. "I just think them," students are bound to retort. "Aha!" The professor pounces. "But where does the idea of 'I' come from?"  Silence.

Much of philosophy involves trying to explain where various ideas come from. Socrates and Aristotle understood the advance of thought as a process of dialogue which builds upon the ideas of the past. René Descartes argued that the idea of God was at the root of all true ideas. Karl Marx thought many of our ideas, such as religion, are ideology and a product of power relations. W.E.B. DuBois believed that we understand ourselves and others through the lens of race and that these ideas have a contingent history. William James thought our ideas were a product of 'what worked' for us and people like us in the past. Thomas Kuhn argued that scientific theories belong to a history of evolving paradigms.

Stephen Johnson is concerned with good ideas in his book, Where Do Good Ideas Come From? There are three images of innovation that orient his inquiry. Coral reefs, which make up 0.1% of the Earth's surface but have support 25% of all marine species. There is the city, which, as Geoffrey West has shown, increases in innovation in relation to population at a super-linear rate. And there is the web, which has decreased the time required for innovating and adopting new technologies from 20 years to 2.

By looking at innovation from a number of different scales, including at the level of brains, cities, and, ecosystems, Johnson comes up with a framework I summarize in the following way.  Good ideas are fostered by:
  • networks that can change
  • that have some stability
  • that favor chance encounters
  • that embrace error
  • that support re-use
  • that support building on other good ideas

More creativity per capita than any suburb
How can businesses foster innovation? Johnson shows that the majority of major inventions in the last two hundred years did not happen in R&D labs at major firms or in the garages of people who later struck it rich. They usually took place in colleges and universities, or organizations like CERN. This was surprising to me, given my experience in the academy, its silos of rival departments, and its distance from the real world. However, universities do allow people from very different backgrounds to work together and to circulate and build upon others' ideas freely. They allow for experiments to go wrong and let people research controversial things.

Many businesses today taut the importance of innovation, but few allow for failure, the open exchange of diverse ideas, change, or time for reflection. A recent survey of CEO's showed that they spend around 50 hours a week working but have little time to reflect, given the constant interruptions of BlackBerries. Google, on the other hand, requires employees to work on their own projects 20% of the time. Twitter built an open API and then built their services on top of that. Apple, while opaque to outsiders, has a very messy development process where everyone at each step of the development chain is involved with a new product at the very beginning.

Twitter or GM?
More personally, Johnson's book caused me to reflect on when I'm most creative. I'm best in my sleep or in writing after having a discussion with someone. I need time to let ideas simmer, but I'm lucky enough to have lots of smart people to discuss ideas with. Johnson concludes:

"Go for a walk; cultivate hunches; write everything down, but keep your folders messy; embrace serendipity; make generative mistakes; take on multiple hobbies; frequent coffeehouses and other liquid networks; follow the links; let others build or your ideas; borrow, recycle, reinvent.  Build a tangled bank."

Sunday, December 11, 2011

Technology and Collective Problem-Solving

"Technology" signifies all the intelligent techniques by which the energies of nature and man are directed and used in satisfaction of human needs; it cannot be limited to a few outer and comparatively mechanical forms.
--John Dewey
In a previous post, I explained how many philosophers, including Heidegger and Marcuse, see a rift between ethical reflection and technology. They worry that the means-ends thinking at the heart of technology can cause us to ignore other kinds of reflection--especially about who we want to be, what we hold to be just, and how we can lead more meaningful lives.

There is obviously a difference between painting a picture and developing a manufacturing plant to make paints and brushes, but what's wrong with solving problems? Is it really so dangerous as philosophers--who aren't typically known for being technologists--seem to think? John Dewey says no, arguing that all inquiry has a technological component insofar as it is meant to solve problems. If moral inquiry helps us solve problems, it's as technological as lasers and airplanes are. Theories are just tools for solving problems.

Understanding technology as problem-solving may seem impossibly vague, but it's actually very powerful. Whenever considering a new gadget, theory, or way of doing things, Dewey suggests we ask: what is the problem this is meant to solve? Remarkably, many new products don't seem aimed at solving any problems, or at least not any serious ones.

What about the problem of collective decision-making? Humans have created two lasting technologies for this purpose: representative governments and markets. Governments are good at ensuring certain behaviors that its people think should be ensured. They define and enforce justice, including the means of determining what justice is. This wasn't always the case and took many years of trial and error. Life used to be filled with a lot more anxiety, because the world was so much more unpredictable, and the means of determining fairness were uncertain.

Althingi, where Icelanders have solved problems since 930 CE

Governments, however, can only solve certain problems. They're bad at picking market winners, for example, and they're slow to react to change. They are good at prohibiting certain behaviors, but it's hard for them to make citizens moral, healthy, intelligent, or cultured. As Cass Sunstein argues in his book Nudge, the best governments may be able to do is incentivize certain behaviors so that people will make the right choices on their own.

Markets, on the other hand, provide a highly responsive way of determining what people value and what should be produced. As Friedrich Hayek recognized, markets aggregate people's individual choices and values and thus collectivize intelligence in a very efficient manner. Markets will always have the input of more people than governments as well as higher levels of participation. And, since people often know what they want better than 'experts,' markets can be more rational than governments.

Unfortunately, many things cannot be quantified in dollar values, such as the environment, health, or justice. We can adjust markets so that they take hidden costs into account, as cap-and-trade systems do, but these work best when you have a metric that can be easily tied to cost. Another criticism of markets is that people do not always act rationally, as Daniel Kahneman and other behavioral economists have shown. Even if we know what we want, we can't be sure to act accordingly.

Given the limitations of governments and markets, Deweyans turn to small groups for salvation. There are many interesting examples of small-scale collective problems solving, such as the rebirth of Pittsburgh or river management in Mexico, but it's hard to see how such solutions will scale. As our interactions become ever more global, we need globalized methods of collective decision making.


For these reasons, Clay Shirky and other technologists point to the internet as a possible third way of making intelligent choices collectively. It's not enough to say that the internet connects people. The idea of the internet as a 'Global Village' has become a joke, as new technologies help us filter each other out like never before. What Shirky points to is the way the internet lowers barriers to participation. Shirky's poster child is Wikipedia, which, like most internet phenomena, displays a long tail of participation. Many people work together, though the vast majority only contribute a little.

Lowering barriers is great, but it is probably not enough if we are to find a third way to compete with governments and markets. Can new technologies help us better solve collective problems? The question becomes ever more pressing as big players like Google, Microsoft, and Facebook become ever bigger and structure the ways we interact more and more. Not being evil is not the same thing as providing venues for increasing collective intelligence. What other problems should we be trying to solve?
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