Why do we have such weak and poorly performing institutions and leaders in the West, even by the standards of recent history? Big developments are almost never mono-causal, so forgive me for not having a theory of everything on this critically important topic. Today we’ll focus on the hollowing out of operational capabilities, aka crapification on an institutional level, as one major contributor. This is a very large topic, so forgive this first stab as incomplete.
The norm for humanity is to lurch from crisis to crisis and too often merely surviving disasters as opposed to responding well. We’ve had the modern era luxury of believing otherwise. The nearly 100 years of absence of large-scale wars in Europe from 1815 to 1914 was a historical anomaly, as has been the period from 1945 until Covid, where despite many regional conflicts (with the US too often precipitating the war), rich economies have enjoyed the boon of stability. And speaking of Covid, industrial-revolution generated increases in income led to better diet and sanitation, and then seminal medical advances, namely antibiotics and vaccines. Plague and pestilence seemed things of the past for large swathes of the world.
Now the Four Horsemen have saddled up, with overarching “end of life as we know it” threats in the form of the US looking way too likely to consider using tactical nukes to bolster its weak position in Great Power conflicts it is bizarrely fomenting, along with of climate change. Yet despite the apparent sophistication of our systems, such as greater speed and ease of execution of all manner of knowledge work, from record keeping to document preparation to communication to our magic Internet making some types of information acquisition trivially easy, many of us experience symptoms of breakdown in our daily lives and as we and others have chronicled, on a macro level now, painfully visible in such fiascoes as haphazard and halfhearted responses to climate change to the US rapidly accelerating the loss of its hegemonic position through hare-brained strategies towards Russia and China.
Aurelien described significant pathology in recent post: institutional inertia. Organizations find it very difficult to change even when circumstances demand just that. Worse, doubling down on comfortable, established behaviors is often counterproductive. Aurelien used NATO as an example: it simply could not stop existing when the USSR fell because it was too useful for other purposes, like face time with US officials. But it remained adapted both to defense against an invasion (witness German tanks that presupposed operating on nice German roads and having access to dense German maintenance facilities) and regional conflicts against insurgents, as in weak opponents.
But the current rot goes well beyond institutions stuck in very big ruts. That problem is compounded by astonishingly weak leadership almost everywhere you look…another big topic I hope to address separately.
A different pathology seems to be a lack of comprehension of the scale of problems. It’s hard to know if this comes about due to a lack of imagination or pervasive acculturation to superficial takes. Climate change is a dramatic example. Readers may have noticed I take great umbrage at Green New Deal hopium, which makes it seem as if all we need to do is transition to new energy sources and not much will have to change.
I have to wonder if this blinkered vision results from what Peter Drucker described in the early 1980s as the the symbol economy. Drucker is unlikely to have originated the idea but he was early to be worried about its implications. He noticed that managers preferred to focus on symbol economy artifacts, particularly financial markets, which were not tightly tied to the real economy and he intuited would become less so in the future.1
Bear in mind that experts and commentators outside major institutions regularly exhibit these failures of imagination, so it’s not as if this behavior comes from institutional rigidity.
Inability to appreciate the magnitude of challenges leads to wishful thinking. Consider the 2015 Greece bailout negotiations. Here the already-basket-case nation was facing the maturing of some IMF and EU financings, meaning they’d need to replace them with new loans.
But it was clear by then that the IMF/neoliberal austerity regime had produced a depression-level contraction, with the result that Greece’s debt-to-GDP ratio had risen.2 So many were calling for the new Syriza government to throw off its Trokia3 shackles and leave the Eurozone.
But that was not going to solve any of Greece’s problems and would in fact make them worse.
The supposed big benefit of a Grexit was that Greece would be able to have its own currency. The idea then was that the new currency, say the drachma, would fall in value, giving Greece a competitive advantage. Greece could also theoretically redenominate its Euro debts as drachma debts, again lowering their cost.
This line of thinking was all wet. Even though Greece does have a large tourism sector, analyses of the rest of its economy showed that it would actually be on balance harmed by having its own, cheaper currency. One reason was that Greece was an importer of energy, food and pharmaceuticals.
Even more important, most of Greece’s external debt was English law debt, meaning the government could not redenominate it. So a weaker currency would make repayment even more expensive. And Greece’s banks were on European Central Bank life support. Cutting that cord would lead to a banking system collapse. That’s before getting to the fact that word of a Grexit getting out would lead to massive runs on Greek banks. Everyone who could would pull their deposits out to put them in a non-Greek bank so as not to be exposed to having their Euro deposits force-converted to worth-less drachma.
That’s before what it would take to issue a new currency. Merely designing, printing, fitting out ATMs to take the new currency along with Euros and distributing the currency is easily a year. The IT work for banks in Greece and payments players and banks outside Greece to make the changes is at the very very very best three years, and more realistically, five or six. Recall it took three years of planning and eight years of execution to launch the Euro with no hitches, and bank codebases were much smaller back then.
As Nathan Tankus, then writing on Naked Capitalism, pointed out:
Being shut out from the payments system (on any level ranging from having ELA4 being cut off from the banking system to Iran or de facto Iran-style financial sanctions) and essentially forced to exit will need mobilization of the society on total war levels.
These days, telling people they can’t have their policy pony produces the worst sort of “shoot the messenger” behavior. We were early to describe how, despite Greece having the right economic analysis in terms of the counterproductiveness of austerity, as well as the moral high ground, the Troika held all the cards. Greece would be forced to swallow another painful bailout. But we received the worst sort of vitriol in the comments section, to the degree we had to implement a comments holiday. That was an early example of the sort of partisan close-mindedness we see now.
Because Greece managed the difficult feat of uniting the entire EU against it, the bailout it eventually received, in July 2015, was on worse terms than the one initially on offer, in February.
Similarly, with Brexit, there was a shocking dearth of analysis of what a Brexit would mean in practice. For starters, what about a hard border for trade and services don’t you understand? As the separation date approached, the UK government failed to provide shippers and truckers with guidance about new forms and procedures, giving the strong impression they hadn’t thought about it much.
There were plenty of warning signs during the protracted negotiations. European officials telling the UK it could not have certain things once it was outside the EU, yet the UK repeatedly asking for them (which came to be called “cakeism”). Poorly written official documents (you may not be a fan of the EU, but it can still manage bureaucratic spit and polish. Too bad for every Michel Barnier there seems to be a host of Ursuala von der Leyens).
We had argued, with Brexit, that the UK still could get through it with only an interim period of cost and dislocation if it engaged in what we called war level mobilization. But aside from the fact that the Tories thought that belief in a glorious Brexit would carry the day, the badly hollowed out civil service was not remotely up to the task. Insiders report that the high performing old guard has been replaced by far less capable and motived staffers, as the finance industry hoovered up more and more of what passed for talent.
A recent Der Spiegel article described the mess the UK is in, and Brexit is a major contributor. The IMF projects the UK will have the lowest growth in 2023 of any large country, falling below that of sanctions-pummeled Russia:
Now we have the stunning example of the so-called Collective West refusing to accept, after months of growing evidence, that it’s being outgunned by one country that it dismissed as being an economic and military pipsqueak except for its nukes. And despite more and more reporting of the fact that it would take the US and NATO a decade to catch up on artillery production, there’s no sense of urgency about doing anything despite that. Consider this April 29 Wall Street Journal story, U.S. Struggles to Replenish Munitions Stockpiles as Ukraine War Drags On. The headline makes it sound as if the US is merely having trouble keeping up with the pace of Ukraine shelling. It does not acknowledge that typically Russian artillery fire has been 20,000 rounds a day versus 6,000 to 7,000 rounds on average for Ukraine earlier in the war. The article ‘fesses up that Ukraine is now down to a maximum of 3,000 rounds a day without comparing that to Russian levels:
The Ukrainians have been firing as many as 3,000 shells a day at Russian positions, and stocks are low in both the U.S. and its North Atlantic Treaty Organization allies, especially in 155mm howitzer shells, an ammunition that has been crucial to repelling Russian forces.
The Journal similarly depicts the US as straining to increase output, yet falling well short:
More than a year after Russia’s full-scale invasion of Ukraine, U.S. plans to increase production of key munitions have fallen short due to shortages of chips, machinery and skilled workers.
Note also the porcine maquillage on bad facts. The Royal United Services paper by Alex Vershinin on The Return of Industrial Warfare estimated it would take the West 10 years to catch up to Russia. Below we have more optimistic Pentagon forecasts, followed by a defense contractor discussing even shorter timetables:
Years of stop-start Pentagon funding for munitions led companies to close production lines or quit the industry, while output of many components and raw materials moved overseas. Defense Department chiefs estimate the decline will take five or six years to reverse.
“We want to get the fragility out of the system, so if this ever happens again, it’s six months instead of three years to get a meaningful improvement in capacity,” said Jim Taiclet, chief executive officer of Lockheed Martin Corp.
Consider this, again from the Journal:
Making even basic artillery shells is a complex, multistage process carried out in far-flung locations with aging machinery. Casings aren’t just lumps of steel, but highly engineered objects to ensure shells are the same size and can be fired reliably. Some also have sensors and electronic systems to improve range and accuracy.
It takes around a month from ordering the steel to make shell casings for the metal to arrive. The Army facility in Scranton takes about three days to machine the parts. The finished casings are shipped to Iowa, where it takes another three days to load and pack them with propellant and explosives.
Alexander Mercouris, in a recent video, described that making artillery shells was a technically daunting task and took highly skilled workers. I must confess to not recalling exactly why but I believe everything had to be made to very high tolerances, including temperature and humidity control.
The US is not big on investing in and retaining factory labor. And the manufacturing process described above, with machining separate from packing, sees less than idea.
By contrast, in terms of urgency, I was born right around the Sputnik launch. Even as a wee child, I knew that the US had been galvanized into meeting the Soviet challenge.
Even worse, the US officialdom and press seem unwilling to even contemplate that Russia is ahead of us in many weapons categories: anti-aircraft, signal jamming, counter-battery (note its Penicillin system), hypersonic missiles.
Despite the evidence of Russian prowess, and high odds of Ukraine defeat, the officialdom has not retreated from the increasingly-dubious Ukraine counteroffensive plan and is not even doing much to prepare expectations for bad outcomes.
We will avert our eyes from the massively self-destructive act of pushing Russia and China into a tight alliance and making them look far better than the Western powers by virtue o being less obviously power-mad and belligerent.
Why are we seeing this epochal collapse in execution capability? These examples, while important due to their impact, only scratch the surface. Other critically important systems in astonishing decline are education, including higher education, health care (gains in some advanced technologies are more than offset by looting and rationing), and infrastructure. In a time of resource scarcity, policymakers are doing nothing to combat waste by design in the forms of planned obsolescence and blocking the right to repair.
Due to the space required to introduce this topic, we’ll introduce some ideas now, hopefully to expand on them and add other ideas later.
One major contributor is the rise of neoliberalism and with it, the war on labor. I am not convinced that neoliberalism leads to financialization, but that a financialized economy (witness the UK as first movers) can move its economy and elite thinking must faster into a neoliberal model due to the pre-existing lower importance of labor. Recall that Michael Hudson depicts the competition between the industrial and financial models of capitalism dating to the early Industrial Revolution. Hudson does not think the domination of financial capitalism was at all a given; like Marx, he thinks it would, absent other circumstances, been more likely for the industrial model to become more widespread. He attributes the apparent success of financial capital to the defeat of Germany in World War I.
Ironically, the rise of Russia and China may represent the overdue resurgence of the primacy of industrial capitalism.
When I went to business school (graduating 1981), about 40% of the class was engineers (and not computer engineers but engineers in disciplines that were much less bug tolerant) and a significant proportion had worked for manufacturers in other functions, like sales or procurement. Having gone from seeing the tail end of America’s manufacturing era (my father had been a manufacturing manager, later executive) to finance gave me a sense of the difference between operating in a world of physical constraints versus ones that were more arbitrary (at Goldman, a typo was a career-limiting event; at McKinsey, it was seen as tolerable in a client document if the ideas and analysis were sound). You see that deal models are malleable and contacts aren’t set in stone (you can often cure a breach or pay for a waiver).
In other words, more and more organizations are less and less required to worry about pesky hard realities like maintaining equipment and being not too mean to highly skilled labor. US management has increasingly come to treat labor as disposable, even when the time to replace workers comes at a cost.
I can’t yet connect the dots as to how this has come about, but this change in the nature of the job of being a boss in many parts of the economy, combined with the rise in perceived importance of talking to Wall Street (as in preferring celebrity CEOs to less showy “keep the trains running on time” types) has contributed to an elite tendency toward magical thinking. Before you depict that as an exaggeration, I challenge you to depict US policy towards Russia and China (and increasingly the Global South) as anything but that.
Indeed, faith-based foreign policy dates at least to the Bush era, when a senior adviser allegedly declared, “We make our own reality.” That’s arguably the lodestar of the Project for the New American Century.
But it’s not just neocons who think they can push reality around. This sort of thinking has also been popular in the New Age (the oft-preached idea that you can manifest anything you want) and Christian prosperity touts. Even casual mentions of “positivity” and “negativity” come out of New Age manifestation right-thinking.
Related is the increased complexity of many organizations, if nothing else due to scale and scope. Decades of consolidation and globalization has made the biggest companies more sprawling. Yet I don’t detect that management has improved sufficiently to meet these challenges. Indeed, the supposed model of a leader for a big multi-industry operation, Jack Welch of General Electric, celebrated for decades in the business press, has finally been revealed as a fraud.
As companies and competitive settings have become harder to contend with, many business chiefs have fallen back on simple guidelines like “Maximize shareholder value.” But the principle of obliquity finds that in highly complex systems, we can’t get enough of a grasp of their behavior to chart a simple course. A brief introduction of this idea, from former Financial Times columnist John Kay, who stressed that when companies try to “maximize shareholder value,” they don’t succeed:
Oblique approaches are most effective in difficult terrain, or where outcomes depend on interactions with other people. Obliquity is the idea that goals are often best achieved when pursued indirectly.
Obliquity is characteristic of systems that are complex, imperfectly understood, and change their nature as we engage with them…
Obliquity gives rise to the profit-seeking paradox: the most profitable companies are not the most profit-oriented. ICI and Boeing illustrate how a greater focus on shareholder returns was self-defeating in its own narrow terms. Comparisons of the same companies over time are mirrored in contrasts between different companies in the same industries. In their 2002 book, Built to Last: Successful Habits of Visionary Companies, Jim Collins and Jerry Porras compared outstanding companies with adequate but less remarkable companies with similar operations…in each case: the company that put more emphasis on profit in its declaration of objectives was the less profitable in its financial statements.
Sorry to pause now, but hopefully that gives some grist for thought and discussion.
1 Mind you, use of models isn’t a bad thing. Technology expert Michael Schrage, in his book Serious Play, looked at how model making and modeling media affected product design and development. He found that the most seasoned model users would regularly rely on multiple modeling approaches, recognizing that any one had shortcomings. Schrage however did notice and discuss the potential downsides of financial modeling, particularly since it, unlike product modeling, was removed from the reality of the investment or deal. As we’ve pointed out, there’s a strong tendency for the model to be treated as reality. In fact, for any financial forecast, 5 or 6 variable dictate results (after tax cash flow). Making assumptions at the bottom versus the top end of a reasonable range will produce results ranging easily from X to 10X. Most professionals recognize how arbitrary this process is; I’ve had M&A department heads say, because it’s obvious, that they can make a deal worth pretty much what anyone wants it to be worth.
2 New IMF research published around this time confirmed that so-called fiscal consolidation, aka neoliberal sack cloth and ashes, made debt burdens worse in weak economies. But the “program” side of the house is independent from the research wing and ignored these findings.
3 The European Central Bank, EU member states (as lenders) and the IMF. Simplifying a long story, the ECB had violated its own rules to make substantial short-term advances to Greece’s banks, which were buying Greek government debt, as in playing a big role in funding its operations.
4 Emergency Lending Authority. A program to provide short term support to supposedly solvent banks. Greece’s banks were not solvent and the program authorizations had to be reapproved
The rest if your post seems to be in a black hole.
Likely a timer tripped before the text was finalized.
There was a note warning it was posting before complete. Done now.
Western leaders suffer from a serious case of the Dunning-Kruger effect. They don’t know enough to know that they don’t know enough. This generates excessive arrogance and hubris, and in Ukraine we see the result.
Yes, but the question is how did they get that way? I think the problem stems from creating too much money all the time. Having money to burn is apt to cause a lot of fires.
I blame television and the subsequent barrages of TV into lives, leading people not to recognize the difference between Jeb Bartlett and Jeb! Bush. The noise just became too much to filter.
Then there is the problem of congressional districts and US federal-state-local responsibility and accountability. Structures, distant, and obfuscation about responsibility make it difficult for anyone to be held accountable. It’s absurd Diane Feinstein is a Senator from CALIFORNIA ignoring her health at this point. This kind of thing was produced in places like South Carolina where the Old South power structure ran strong. She like so many of our modern elected caste is an unaccomplished professional seat warmer. It’s not like we are waiting on her policy shop or moral leadership. She’s a nothing. The scale is so big and the TV addicted boomers no one will risk challenging her. The situation is very much a national embarrassment with slightly younger Team Blue electeds shouting sexism because they are the same zeroes as Feinstein.
Television, the persistent underfunding of US education (esp. primary education, my friend who works at a school says they literally only have a part time nurse (3 or 2 days a week!!!), and offshoring all manufacturing. I agree with Yves that industrial capital, regardless of whether in the end it was/is usually mastered by financiers who loan you the money to build the factory, is what builds true power (and because it relies on labor, does benefit the working class more). But we have to reimagine our political-economic system entirely to one that is truly sustainable, degrowrth into a steady-state post/pre-industrial if we want to survive the megahurricanes and droughts of climate change
I once checked stories about a girl in remote Siberia (by Siberian standards) who got lost in taiga for 10 days at the age of 4. Details how she survived and how she was found is a separate stor. In filming the happy end, there is a scene with her in elementary school taking ballet lessons. Low income school districts in USA are cutting music education.
Absolutely Robert, the root of the entire problem (not news to NC readers) is that when dumb people get too much money, it makes them dumb AND dangerous. The problems of the world might go away overnight if you put a 95% wealth tax on all wealthy people, and used the money to fix problems that capitalism has wrought.
That could actually work, if government didn’t have to do it. But it’s government, so it would spawn generations of new grifters rising up from the pollution.
That’s (one of) my greatest despair(s), that way too much money already multiplies itself to our great cost, but removing the money would become the next great racket.
Big developments are almost never mono-causal
Naomi Klein’s answer to your question bears repeating. Systemic shifts arise from shocks to the whole system rather than from conditions, like built-in inflation, that are endemic to it.
The Trillbillies kid always comes back to “what are the levers that a resistance movement can focus on to initiate real change?” and can never find an answer. Mono-causal explanations imply that a single element like inflation, health-care, class, race, media or monopolies can be pressured in a way to right a system that self-organizes around any localized resistance to stay its course — for now that’s transferring wealth and power downhill towards “leadership” from the cesspool.
My money (if I really had any skin in this game) would be, like Klein suggests, on organizing around possible (inevitable if you’re Taleb) systemic crises. Science says another pandemic is on the way. It will touch all parts of the system. How can the left position itself now to lever that opportunity for systemic change? What are we learning from COVID about what does and doesn’t work?
Same questions should be pointedly asked about the next financial shock, the next natural disaster, the next terrorist incident, the next proto-fascist popular candidate, the next war, the thing we forgot to imagine. They are all on the way. For each, there’s an unfathomable amount of capital power already poised to respond in a way that grows itself and crushes conditions for those not invested.
The other option: organize around a ground-up shock to the system. Aggressive violence is out of the question for me and so many like souls. But the window for an effective general strike is closing as quickly as AI crappification makes labor superfluous. Meanwhile workers are too atomized to move forward at pace. Where are the answers?
Pacifism as Pathology is a great work on why the large section of the US left that abhors violence is counterproductive, and if you understand structural violence, COVID & climate policy being good examples, you can see that the class war is already killing millions, and will intensify until the working class really starts putting fear into elite hearts & minds.
Pacifism is not the rejection of resistance, and certainly not of struggle, but in the American Pacifism as Pathology it becomes this. It is supposed to a rejection of violence. Blocking roads and freeways as well as occupying buildings are nonviolent, but they are a means of resistance.
Just look at the Montgomery Boycott as one example or read MLK’s Letter from the Birmingham Jail
Like most of the government and business organizations have become performative with members looking for anyway to not do or take responsibility for anything, so has those organizations that are labeled as liberal or even leftist. To do anything constructive means risking being responsible for something, which many people do not want to be.
In my neck of the woods we just reminisced last week over the 180+ that have died at work or due to work in the previous year.
Many other things contribute also to the lower life expectation of hoi polloi…
As such, a random decimation of the elite coupled with yearly public tarring and feathering of one representative would bring a positive change to this class strugle.
Exactly. The old system persists. In which one’s rewarded for an innovation, but only an innovation that fits in a steady state industrial milieu that’s reached some kind of miraculous John Galt homeostasis. Like your Huawei phone needs a battery, and no one’s set up a bunch of idiotic sanctions (or in real world where some brainchild’s dreamed up a factory, but there’s no needed water where he plans to put it).
How position? OK, ask how to get current hospital staff up to par [just so “the system” re-learns what sanity in that dept is]. Forget Powell, create jobs. Ask how to prepare to quickly set up adequate field hospitals (like the USNS Hope wasn’t?). Ask how NOT to wind up dumping positive patients in unprepared nursing homes. IOW deal with private equity.
The impact of many corporations constitute net negatives as far as the overall economy is concerned. As far as I can observe possibly one of the biggest mind games our species goes through is being stuck in one of these corporations and nevertheless earnestly trying to “produce” in an honest positive manner. Try as you may, you may end up only judged by a pedantic scapegoating group think wafting around in the air (for all are aware it’s absurd to attempt to excel in an organization that produces enough negatives such that its basic function is more or less cancelled).
We will have to do some Vandana Shiva type thinking to winnow out what really necessary functions amount to in this era of so many absurd failures.
It’s because you no longer have to have any expertise or experience, just the right credentials.
We had a city councilor a few years back that I could not stand, and I let her know my displeasure publicly on many occasions. Among other things, she has a daughter in real estate who was the beneficiary of any number of zoning decisions the council made. She eventually left the council and at first I was quite happy about that.
Recently we elected a brand new councilor who beat an experienced incumbent and very good councilor who had run afoul of the local cranky old ladies brigade over the years for various reasons. The new councilor had no political experience and had just moved the the town 6 months prior, so also knew relatively little about the town to boot. What she did have though were plenty of Diversity, Inclusion and Equity (aka DIE – hat tip lambert) credentials, so while she knows nothing about zoning, she does know that the Juneteenth flag on display by the city better be designed and made by a certified official black person or it’s not legit. That councilor stopped what should have been a merely procedural and non-controversial vote on displaying this flag that everyone already agreed to in order to make this complaint, only to find out the flag was actually made and designed by a black person, which she would have known had she done any preparation for the meeting rather than just showing up to grandstand, and she wound up looking pretty foolish.
The first councilor who I didn’t like recently ran again for council and won. Prior to being on the council, she had worked as the city clerk for the largest city in the state for decades, and lived in the town her whole life, so not only does she have a lot of government experience, she knows the history of the town. Lesson learned for me – this time I supported her campaign and told her so privately that I was glad to she had won re-election after a couple year break.
While I may not agree with her on a lot of things, I strongly prefer her running my town than the inexperienced clowns who got elected because they have no experience but the right “feels”.
The problem isn’t creating the money, it’s how it’s distributed.
I have another hypothesis. As Yves states there is a problem with complexity. IMO they focus on a question (Ukraine war) because they perceive it is simpler as a task to focus in than, lets say, messing around with the complexities of pensions, labour, modern societies in which it is easier to see how useless they are.
I have to agree about the focus on simple tasks. In my community college career and in observing the academic library landscape in Ontario, it never ceased to amaze me that administrators and managers loved to choose new furniture and/or get heavily involved in small renovation or big building projects. Absolutely nothing to do with their areas of expertise but swatches and samples could often be seen in many bigwig offices. I will never forget the last newsletter of a University Librarian (he was moving on to another job) in which he touted his greatest achievement as the renovation of the campus science library, which mostly consisted of adding more seating, electrical outlets and charging stations! Eventually I decided that they chose to work on these projects because their own work was overly complicated (for them) or unsatisfying in some way.
It is really eerie to read this. Because universities have eliminated/degraded most of the actual traditional work that would occur in them, I switched from adjuncting (finished a PhD in a humanities discipline a couple years ago) to the only other stable work I could find, in academic libraries. I moved from one place I thought was the dumbest place on earth to another one which proved even worse. I only lasted four months in the latter, which was at a midmajor state flagship, in significant part because we would have about 3-5 hours of meeting time per week solely about moving some chairs around and buying office furniture. The library seemed to have no real purpose–I ran circulation, and we would circulate maybe an average of 8 books a day going in and out, total–but had 5 full-time employees and about 15 student employees, where what little actual work there was to do was all done by the part-time undergraduate assistants. Meanwhile, the $80k/year faculty librarians spent almost all day every day fighting with each other about how to label staff mailboxes, what wording or clipart to put on a sign about the building hours, or, again, how to arrange some light furniture while insisting that we order even more of it. At one point, and I am not exaggerating whatsoever, my supervisor suggested we author a research article about moving the chairs around or what color we made the circulation desk. I’ve come to realize this is probably just a “nerfed” version of the idiocy and dysfunction inside pretty much every institution you actually rely on to make things work in North America, but it definitely drove me completely insane, especially after having been told as an adjunct that “there’s no money!” to give me health insurance or pay me more than $20k to teach six classes a year.
It was not quite that bad for me, my main job as faculty was teaching research skills and maintaining the online resources. But yeah, there are a lot of bored front line academic library workers out there, no doubt about it. In most instances retirees are just not replaced. And my comments were also about college administrators outside the library too – they all loved picking new furniture whether it was for staff offices, or student spaces. Lots of misplaced spending (on salaries) indeed. It is like everyone has forgotten that the main purpose of a college or university is educate people, certainly the teachers and professors are undervalued.
Understood and very much agreed. My sense is that whatever one sees inside one academic administrative unit is very likely present elsewhere, probably just with a little different flavor.
Re the misplaced spending, too: what really sickened me was the sense of “ownership” you noted above with regard to things purchased using money extracted from students. And not just money, but money borrowed at interest, such that those kids are going to be paying for the chairs–and the time and calories burned fighting about them–for probably the rest of their working lives.
Yeps. Like I said, lost awareness of the purpose of the SCHOOL. And in the private sector, well, it is all about shareholder wealth and stock buy backs. Any sense of making something very secondary to the profiteering
But the war in Ukraine is not simple. Why is it any more amenable to sloganeering than pension reform? For some reason, people think that an army of angels would descend and make all complecities of foreign policy, diplomacy, military strategy and tactics, war planning, industrial planning, and myriad other things go away…but the same people don’t seem to believe that pensions, labor, infrastructure, and public health can be made to disappear if they just pray hard enough. Why this difference? (Serious question.)
The Dunning-Kruger effect is seriously underestimated as a source of many of the leadership problems in every facet of our economy and society. A key part of that is incompetent performance assessment systems, which run deeper than just our hopeless education systems.
In business and in politics, there is no correlation between competent performance and success, because in large complex systems it is simply impossible to measure any individual’s performance reliably. So we use arbitrary and surrogate measures to assess performance, the systems are seriously gamed by ruthless win-at-all-costs players, and we get incompetent leaders, promoted by election or selection as a result.
The book The Corporation describes corporations as creatures designed to be psychopathic, and many, many political and business leaders make pathological decisions because that’s often what’s measured and what’s rewarded. When the actions of organizations and governments are based on leaders’ arrogant, incompetent thinking, and as that system gets larger and larger, the result is inevitably increasing dysfunction, and ultimately collapse. That is what we’re seeing now.
My provincial government has a Work Satisfaction Survey every two years. There are questions allowing for identifying how satisfied are the worker bees of their mid management and senior management. While analyses are deidentified, the source data is not and the bad apples are easy to get too. The only thing that might happen thou is that bonuses are not given to bad performers….
There is an incestuous relationship between bureaucracy and politicians (bench warmers as well as those with some executive functions) that makes any reform much harder than cleaning the Augean stables…
Actually the Dunning-Kruger effect turned out to be bad statistics. A shame as it seemed to explain so much.
The fact that the study was flawed does not prove that the syndrome is not real.
My experience with my former child genius buddies is that they understood abstractly but not viscerally how much smarter they are. DK by itself is not the full syndrome. It’s more that people think they are closer to the average than they really are.
People who are 1 in 100 think they are 1 in 10.
People who are 1 in 100,000 think they are 1 in 1,000.
Everybody wants to be normal, because you get kicked out of the tribe for being unusual in any way.
The reduction in societal competency, at all levels, is due to the current reality that we can steal or borrow our wealth instead of actually creating it.
Is that not the recurring theme of Empires? Exhaustion by hollowing out from within, and then finally the collapse from a relative pin-prick from without?
The U.S. “current reality” has persisted and intensified since WWII, and the most glaring evidence of it is the debt levels and the divergence of the stock market prices from actual wealth creation. Speculation isn’t creation, but who really wants to look closely?
If you can swipe what others create, why bother with all the awkwardness, risk and effort of actual creation?
Until you can’t.
Yes, certainly there’s societal and therefore institutional inertia. Why is that inertia present?
Because there are not yet sufficient penalties – the dis-incentives haven’t arrived yet.
Borrowing continues, speculation continues, asset-price support continues, war-profiteering (at all levels, not just the oligarchs are involved). No real penalties are being levied upon the core beneficiaries and their supporters for the current policies.
The wars, the provocations, etc. are simply tools to persist the current social order and spoils distribution allocations.
So we wait some more. How much longer? I just don’t know. It might be a while, because there certainly is a great deal of inertia, and the aware among us who see these trends have been heralding the “collapse” for … a very long time. Many decades, right?
While I’m waiting, I’m investing time and energy to restore my own creative powers, to enable myself to produce something of value. That’s a relatively sure path forward; each day makes a step forward toward creation and ownership of productive capacity that will serve my household well.
==== on the other side of the world, there exists this reality:
A Chinese sales-person from whom I purchased LED grow lights reported that her day is all production all the time. Intense focus, with short breaks for eating, sleeping and exercise.
Her little company produces the most efficient, lowest-cost, most flexible, most-customized LED lighting I could find anywhere. I paid 40% of the total purchase price for shipping, and it was still worth it.
This is what some parts of the rest of the world is doing, and for them, it’s working. Am I advocating for an all-work life? No, and neither is that Chinese sales-person. She’d like a better life, too.
But we’re on the other side of that trend-line, aren’t we? Her society is a block-buster of creativity and wealth-creation, and ours is trending toward an exhausted festival of borrowing, expropriation and consumption.
If we’re going to have a viable U.S. economy, we’re going to have to re-discover the arts of creativity. Our power to take what others create seems to be rapidly diminishing.
If you’re not advocating for a more-vicious war to re-assert our hegemony over others, what is your alternative plan to maintain our current standard of living?
One of many)reasons is an (anti-)survivorship bias of the current US-EU Establishment.
every time there was a financial crisis (LTCM, dot-com, 2007-9, 2018 growth/repo scare, Covid) the Establishment’s skin was saved by dropping real interest rates to negative territory.
creating money out of electrons, then smugly patting each other’s back re. fixing a crisis that they created/exacerbated.
You can’t recreate 155 mm shells or de-CO2 the economy via manipulating electrons.
The biggest point you highlight is the sheer inertia and the acceptance of what our ancestors would call ridiculous timelines.
A decade to ramp up shell production? In WW1 there was a shell crisis in Britain in 1915 but production then quickly ramped up to levels far higher than anything being talked about today.
Ok we might say that not being an industrial economy today is a large part of that problem. But the malaise is seen everywhere. Compare how quickly trials, convictions and sentencing took place in the early twentieth century. Timelines were measured in weeks. Elizabeth Holmes is still appealing a case that is circa half a decade old by now. Unheard of in the early 1900s.
Capability is one aspect of all this but sheer self created complexity seems another. Maybe it is linked to the growth of an increasingly rent seeking economy: there is money to be made from complexity for lawyers, consultants, accountants, executives and governments. So they automatically seek to create it and this has the by product of seizing up the system so that nothing real ever gets done, as opposed to reports, studies and PowerPoint decks of which we have far too many. The complexity also makes it increasingly difficult to see the wood for the trees and cut to the chase on realty.
Not claiming this is the full answer but individual capability may still exist: it is just misapplied.
I’m reading – and recommend – Clara Mattei’s ‘The Capital Order’. Her thesis is that WW1 found capitalism wholly unfit for purpose. Ensuring profits did not result in increased production of munitions but to profiteering. The rapid ramp up of production you describe required state take-over and worker control, both of which set the stage for revolutionary pressure after the war.
Today, I suspect work has been so atomized, mechanized, and trivialized that workers no longer have the means or knowledge to push managers out of the way and get the job done. As well, it seems to me that every big job – whether it’s building a highway, bridge, or factory is outsourced to a contractor or consortium. In other words, neither state take-over or worker control is any longer feasible.
That said, infrastructure projects still happen, although, mostly these days, in China not the west. There is a huge range of capabilities that are critical to any modern economy – mining, materials processing, production, energy, logistics – I’m not even sure finance is a worthy addition yet it seems to be all we ever think about. An inventory of these capabilities and who controls them is possibly overdue (has someone done it?). But the illusion these capabilities are ‘out there’ somewhere in the economy, ready for the state (even the US) to harness them to its ends is possibly just that – an illusion.
In his “Cry Havoc: The Arms Race and the Second World War” John Maiolo writes how US congress did an inquiry in 1934 to find out if the international ammunition industry was promoting wars to sell more ammunition.
Turned out it was not, and that the inquiry has meant to hide the fact that US government was introducing some control over the domestic ammunition production, because it was too serious business to trust on the invisible hand of markets.
At the same in in UK the fascists (yes), ‘economic planning’ wing of Labour and many Liberals were demanding the government to take over the war industry to ensure Britain would have arms and ammunition whence the war begins. The industry pleaded to Chamberlain to prevent this, and he told them to either self-organize or accept ‘planned production’ in some form. The industry quickly self-organized.
I think you are right.
If you look at the cluster that is UK railways today then your comment on atomisation is very pertinent. The whole process of construction and repair seems to be a merry go round with very little of the money actually paying for physical work as opposed to advisers and lawyers.
Conversely, the Russian munitions industry seems to be very much controlled by the state and by and large responds as directed.
A funny thing is that what’s going on in the West sounds a lot like what was attributed to Brezhnev’s USSR: lethargic, overbureaucratized process where everyone was “working hard” to produce “reports” (that I am sure were all technically true, but irrelevant) while very little actual work that produced the useful stuff was done.
So much for capitalism-communism difference.
Yes, the timelines have gotten totally absurd. Part of it (but only part) is our overly-cumbersome regulatory environment. This article on the 15-year approval process for a transmission line carrying mostly renewable power makes for a depressing read: https://reason.com/2023/04/17/it-took-15-years-for-the-feds-to-approve-a-700-mile-electric-line/.
And I’ve commented before on the painfully slow approval process for the Eagle Mountain pumped storage facility in California. They starting the permitting process in 2007 and still haven’t broken ground. Perhaps 2024 will be the magic year? https://www.hydroreview.com/hydro-industry-news/who-will-build-the-first-new-pumped-storage-hydro-in-the-u-s/.
But DFWCom’s comment on work being “so atomized, mechanized, and trivialized” is very much true. I’ve personally witnessed how a highly-distributed supply chain can go wrong. Delays happen all the time for all sorts of reasons. And when you sub-contract out a good chunk of your manufacturing process, you shouldn’t be surprised when your sub-contractors start taking their own interests into account and don’t do exactly what you want when you want.
And the process of establishing certifications with third-party certifications bodies (like UL, CSA, TUV, Intertek, etc.) has gotten worse and worse with time, mainly because the standards grow larger and more cumbersome with each new revision. This has been a joint effort between governments (of which the EU is by far the worst) and big industry players (who are trying to keep potential competitors out of the market). I spend much more time on certification efforts than I did earlier in my career, and I do not like it.
Here’s another article describing the slowdowns caused by permitting delays: https://www.cnet.com/science/the-green-revolution-is-being-held-back-by-red-tape/
We only have a shell problem because we have a “let’s start a proxy war with Russia in Ukraine problem.” Before that the pace of production was perfectly logical.
And I have to take slight issue with the above assumption that the US military, at least, didn’t know what they would be up against. Years before 2022 I recall reading that the Pentagon had war gamed a ground war with Russia and lost badly. They were indeed aware of the logistic problems and also the repercussions as Europe lost access to Russian resources.
IMO the United States has a giant political problem that overshadows everything else. Perhaps that will be discussed in the next installment.
This isn’t really a hard malady to diagnose. What we see is a long-wave cyclic pattern of rise and fall of organizational effectiveness driven by two fundamental weaknesses in the characteristics of Homo Sapiens:
1. Latching behavior, the phenomenon of holding fast to a destructive simplification (e.g., simple slogan, religious affiliation, charismatic leader, political ideology) despite contrary evidence. This behavior is intensified when manipulated by professional technicians of irrationality.
2. Myopic local optimization – seeking personal comfort for a small circle on a short time horizon, irrespective of consequences for the larger group in the long run. The “best and the brightest” overwhelmingly choose personal comfort in favor of societal benefit. As an infamous German dictator said, “Everyone has their price, and you would be surprised at how low it is.”
In short, we are not built to optimize and sustain complex, large-scale social structures. The AIs will do a much better job.
“The AIs will do a much better job.”
AI will not do a better job because as long as a political process creates winners and losers, people will have incentives to push those outcomes to favor their pet interests via people inserting their biases into AI code—no different than lobbying Congress today.
You already see that with not-AI ChatGPT….when working with politically sensitive/politically incorrect topics.
But ChatGPT is great at writing dad jokes!
Another manifestation of our innate tendencies is to take the easiest short-term solution. Thinking, especially forward-radar type abstract thinking is hard work, and pays low wages, in terms of cash-flow.
I just saw a PBS show (Kelly Corrigan, Tell Me More) wherein a brain-architecture and brain-function researcher asserted that Uncertainty Causes Stress, and continuous stress enervates the body as well as the mind.
Thinking and reading appears to cause stress. Too many variables, too little control.
Have any of you NC readers experienced the phenomenon of long-term fatigue and despondency, and noted that when you turn off the news / doom-loop feed, through circumstance or intentional act … you seem to feel better?
I owe a great deal to a psychology teacher who told his high-schools class, ‘The only real security is learning to live with insecurity.” I was 14 when I heard him say that, and for whatever reason it sank deep into my psyche.
We can continue grasping after certainty, or we can accept that the certainties of one moment inevitably give way to the changing perspectives of the next. This does not devalue rigor or effort; it’s just a reminder that we live in the flow of time.
There used to be a name for this slow-motion malaise — decadence …
You do realize what data the AIs were “trained” on….?
What makes you think the tendencies in human nature have been magically filtered away?
Thank you, do think the bs security leak was an admission the neo-liberals are losing?
I don’t know enough to have a sound idea. If this was a serious leak, why did the docs languish on gamer servers for so long?
Having said that, it seems to be more a symptom of splits among parties with at least a good window on the action and maybe even a seat at the table. Recall Mark Milley, who Douglas Macgregor regards as a hopeless careerist, nevertheless saying last fall that Ukraine should negotiate soon while it was in a good position and he was made to walk that back more than 100%. So at a minimum Milley wanted to distance himself from the coming train wreck and was beaten up a bit for trying.
My pet theory, but I have little to back it up, is that someone was hoping they could preposition material with Teixeira to dump when desirable. But Teixeira was not controllable enough.
The kid wanted an internet dopamine hit from his peers, in my opinion.
I know nearly everyone wants to conflate the leaks into a giant arching plan—-but, in my opinion, the leak was a mix of a 21 y.o. with the emotional maturity of a 15 y.o. and terminal US imperial institutional rot (leaker’s job used to be done by mid-level enlisted personnel, his “Top Secret orientation” clearly did not imprint the gravity of violating leaking laws, accused should never have passed the Top Secret screening process in the first place).
Of course, if the accused (innocent until proven guilty beyond reasonable doubt) gets a pardon from Biden or gets a very light sentence, there is a reasonable suspicion that someone is protecting accused.
Or accused is acquitted by shocking revelation.
The problem with that is that some of the docs he had required clearances way way above what he could have conceivably had. There isn’t just “Top Secret”. There are MANY clearances above that and many are for access to narrow sets of information. Ex CIA types (as in not Larry Johnson who tends to overstate his evidence, multiple others with more recent and current contacts) say it isn’t credible that the kid got everything he had w/o someone or someones with those very high level clearances feeding him. His base was not even remotely central, so big meetings where records left out extremely unlikely.
Yves S: Ex CIA types … say it isn’t credible that the kid got everything he had w/o someone or someones with those very high level clearances feeding him.
Quite. Your ‘pet theory’ is the only theory that makes much sense: someone planted the material for its controlled release to be triggered at a chosen moment, much as the bombs to destroy the Nordstream 2 pipeline were planted for their detonation to be triggered later.
There’s corroborating evidence that some at CIA are deeply unhappy about the Biden administration’s conduct of its Ukraine project. Not just whoever there is leaking to S. Hersh, but also former top CIA honchos sticking their heads above the parapets, like this guy —
Bank of America cuts short conference after outrage at comments on Ukraine war
‘ …Two people on the call said Daniel Sheehan, BofA Securities’ senior vice-president for international relations, was critical of Ukrainian president Volodymyr Zelenskyy, describing him as “a master manipulator and mimic” about whom there were “serious concerns” in the US administration…
Sheehan was as high up in CIA as you can get without becoming director —
When you can’t tell the truth because you will lose favor or reputation, things will fall apart. Lack of character and glib self-promotion have taken over almost everywhere due to being a fat and lazy west for so long. Sincerity, integrity — these have no place in any institution I’ve had contact with in the last couple decades. I do think this is really quite simple and clearly visible for all to see: we went from a serious society that debated and understood complexity to one where the guy with the fastest quip wins. Character is what matters and its in short supply. Having a huge class of billionaires, who by definition are out of touch with reality and whose whims determine far more than we care to admit, hasn’t helped either.
I started to write a longer comment, but Narrative Messanger’s comment is so spot -on that I had to reply. My last job was a Sr Accountant/Financial Analyst for a mid-sized publicly traded aerospace manufacturer. I worked there for 11 years until last year. When I was first there no one would raise a hand during a meeting to ask a question. I started doing so because I can’t keep my big mouth shut. The management changed and all of a sudden my questions, opinions etc were listened to even if management didn’t agree. I was valued for my systems expertise, research skills etc.
Those managers (up thru the VP/CFO) started retiring and the last two years I was there. I was “counseled” about keeping my opinions to myself unless I was specifically asked a question.
This was one (but not the only) of the reasons I retired a little early.
I heard an interview with an employee at Fukushima, who recounted a contractor who told him, before the catastrophe, that he was worried about all the diesel generators being in an underground gallery, and that he was certain it would become flooded and useless if a tsunami struck. The employee exhorted him to discuss this with management, but his interlocutor refused, citing fear of losing his job.
It’s not so much that there are clearances above Top Secret (not in my experience, anyway) but rather that having a TS clearance does not by itself entitle you to see just anything. Most countries have “special handling” or “special access” rules for sensitive information, where to read a document you have to be explicitly “read on” to a list, and sign your name. (You can see this in some of the Snowden documents.) In some systems , you used to have to sign each time you accessed a document. And to access a document you have to have a proven Need To Know, not just be interested. So if there are three of you working in an “anti-terrorism” office, all with TS clearances, one on the Sahel, one on Syria and one on Latin America, it’s quite possible that each will be on lists, and have access to documents, that the others don’t. So to access a document you have to have both the security clearance relevant to the contents, and the special clearance determined by the way the information was acquired, as well as a need to Know. Access to such information is thus very siloed, and even very senior people might not have access to all of it, which makes this leak even stranger if accounts of it are true.
Indeed. I remember the amusement my dad got at one point of his career in foreign ministry, when the document storage system did not allow him to see some reports he had written himself. He had to get his boss to accept his request for a clearance to check them out (usually for reference).
It was a great annoyance to his boss, too, but there was nothing either of them could do about it. The computer said no, signatures had to be signed, trail of evidence had to be created.
In the US Top Secret (TS) is a general class. A person with a TS clearance gains no right to see all TS documents. The system compartmentalizes TS documents. My understanding is that the usual form is “TS” followed by a two letter designator, something like “TS-XX”, which identifies who can see or handle the document. There are I’m fairly sure classes of information so sensitive that they are above and outside the TS system.
One public comment says the idiot who released the documents worked at a site which coordinated the flow of drone strike intel, which would explain why the information went through his hands. In the old days the coding clerk was a favorite spying target. Many reserve units have full-time reservist doing technical things. The classic example is Air National Guard and jet engine mechanics.
Quite right, Aurelian. As an Army intelligence analyst in the mid-1970s, I had a top secret/SCI security clearance (sensitive compartmentalized information), but never saw anything remotely like was in this leak. Most of what I got was about battlefield weapons systems, not much more detailed than what could be found in Janes. Information was power; the more powerful you were, the more information you got from the top down. I used to grumble that if our unit ever went to war, we’d be denied information that could save the lives of our infantry. Which may be among the many reasons that when my three-year enlistment was ending, there wasn’t the slightest pressure to re-up.
Aaack! Above comment was in reply to Aurelien. Apologies.
The level of classification on the documents I saw posted online really wasn’t that high – given that they dealt with details of a war we are in. The other thing that struck me was the number that were marked ‘NOFORN’ – meaning they couldn’t be shared, even with fellow NATO members. As someone who used to work with classified documents, I was a bit surprised.
One of the promises of democracy is accountability of empowered individuals. Top secret removes that accountability which is a requirement for good government. There may temporary needs for top secret, but a million clearances (too small for accountability on the US scale and too large to organize without clear, direct communication which classified negates by its nature) and researchers finding dated information being suddenly classified is just going to lead to a mess.
Since there is nothing new under the sun, qui custodiet ipsos custodes explained the problem. The specifics are up in the air. My guess is the over classifying mania made official operations unworkable.
It’s a sort of compounding of interest in the Iron Law of Institutions.
For governance, secrecy eliminates accountability, for bureaucracy, credentialism does the same thing, where eventually the title supplants the function and empowers blame deflection somewhere downstream. Corruption and industry consolidation have done the same thing for economic institutions, eliminating market feedbacks. The only feedback still functioning is the positive feedback for looting which all the above breakdowns in accountability have facilitated.
Also interesting in Yves text is a clarification of the current top competing political economic systems: Western Financial NeoLiberal Capitalism; Russian Industrial NeoLiberal Capitalism; Chinese State Industrial Capitalism. And I suspect the NeoLiberal element in Russia is on the ropes. We’ll see, I hope!
Aurelien, Aurelien it’s not Aurelian!!! It’s pretentiously French.
Autocorrecting rejected Aurelien. Fixing. Sorry!
@ spc: Yes, living in Quebec in a very french language community, I too appreciate the French touch!
Speaking of Goldman – I was asked by a recent Goldman MBA what an “org chart” was….
Everyone has their own ideas of the cause of our malaise but every day I am constantly struck by the “narrative” people. A good story is really the most important quality for “success” these days. Spin a good yarn and that takes you a long way. Many of the “elites” move from job to job often so if you fail just make up a story and have fellow travelers confirm the nonsense. You’ll return the favor soon enough. “Failing upward” is all too real.
This is an astute comment from inside the machine. My evil firm actually has “storytelling” training (many hours long sessions over a few days, with breakouts, a real nightmare) for junior analysts and managers with potential to be key MDs in the future. This to me was highly organized training in making stuff up and keeping it looking real until it either falls apart due to encroaching reality or the storyteller moved up and left the damage to a clean up crew or they sold the mess to a competitor.
And Yves, this is a fantastic post. With Aurelien’s recent piece, this is touching on reliable social norms failing in the West and that looks like a turning point in history.
Yves used the term “magical thinking” in her post which is what people use all the time to prop up their stories. The most recent ones that come to mind are the “stories” around electric cars. A commenter in the past few days brought up the marginal efficiency gained vs. ICE vehicles. There are concerns about grid capacity, total electricity generation capacity, cold weather, lack of redundancy, etc but none of that matters to the story.
Kind of like “assume a can opener” in the famous economic joke.
Great analogy. What exactly do electric cars do beyond ICE cars? For the capital caste, oil all over again with new gadgets and widgets, across the land. The upside for the prole is the ability, if you can eke it out, to maintain a simple vehicle and energy storage point, using those batteries with cheap solar to last a very long time and mitigate exposure to wage labor exploitation. Sounds very hippie but where are we.
Great post on a really interesting topic. I noticed that the companies that most loudly proclaim their commitment to their customers/clients usually have the worst customer service. A lot has to do with monopolization, the bigger a company gets the smaller their incentive to spend even a fraction more than the bare minimum on customer support (remember when Verizon was actually a good company?) because after all, where are they going to turn to for options. And with the businessification of government, I think that same attitude is leaching into our public institutions (The Post Office which should be killing it with all the shipping troubles of UPS and FedEx).
Another interesting development that may have some relevance to this topic is the lack of common sense and the inability to critically think about a problem or situation. A lot of people blame this on a lack of education or a product of ‘bad education’. Our schools aren’t as good as they used to be. The teachers aren’t as competent, the kids too distracted with their phones and social media. And while there’s aspects of all of those that are true, I also think about people of my parents and grandparents generation. They had MUCH less formal schooling than either my generation or the ones following and yet all of them seemed way more competent and level headed about life in general. They held no preconceived notions that life was fair or that the government was going to help. You had to figure stuff out in your own. There were no experts or resources beyond the people in your neighborhood or family to call on. I’m not sure what a real-world definition of critical thinking is but I’m pretty sure that understanding possible downstream effects of actions is near the top. Also the ability to prioritize. A lot of this comes from understanding things as a hole, not just one part of anything.
Some of this may be due to the increase in specialization that grew out the the assembly line mentality with Taylor and his search for efficiency. When you only know one thing it’s hard to understand the whole. Being just a cog isn’t a good way to understand why the wheel is turning or what the purpose of the wheel is even for. From sports, where kids who show an aptitude for a sport and are fast-tracked to only playing that sport to doctors who may treat the symptom but not the cause of a disease, to engineers who can make amazing devices that do amazing things but not the things that actually need to get done we’ve all encountered people who seem to have gaping holes in their knowledge outside of their specialty. The cliche of the blinkered academic is now our whole society.
But of course I could totally be talking out of my ass.
Made me think of studies showing that wolves demonstrate problem solving skills superior to domesticated dogs.
“They held no preconceived notions …. that the government was going to help.”
That our ancestors did it all themselves, as individuals, with no government help, seems to be a hard and fast belief among certain groups. But, we live within a ‘Government’ framework, starting with the Constitution. (I am using US examples here, commenters resident in other nations may have different experiences.)
After the initial spate of local militia killings of the native inhabitants (and the bounties paid were financed by a ‘government,’) the US Army made the midwest and then the west coast ‘safe’ for the European settlers and colonizers.
Land rights were sold by the government, then registered and kept safe in courthouses, financed and run by county governments. And backed up by the might of the US Government.
The US Government doled out land to the railroad barons, then, when these barons ‘overcharged’ farmers for shipping grain and livestock, reined them in. After, of course, being lobbied by the agricultural Grange movement.
The US Postal system was organized and run by the Government. Roads were built by the Government(s.). Industrial Policy was promulgated by the Government. Land Grant universities, supporting essential agriculture and industry, were paid for by the Government.
Laws, insuring justice and fairness, are enforced by Government -run systems. (OK, some pigs are more equal than others, under these systems. But, the intent is there. I think.)
I could go on and on. Every aspect of our lives is influenced by the Government. Without it, we would devolve into an unruly group of ‘self-reliant’ individuals, each out for themself, armed to the teeth and prone to shoot anyone who disagrees with them. Or who runs a noisy leaf blower next door. Or who is not heterosexual, or goes to a ‘non-christian’ place to worship, or has a darker skin tone.
I was with you right up until the bitter end. Your prejudices show through the last sentence (not whataboutism, but simply the alleged shooters viewpoints)
There’s something stereotypical that calls stereotypes into being.
They are poor guides to judging individuals.
They are, however, good stereotypes for the typical.
I read that last paragraph as a sarcastic comment on recent events in the U.S. We may not know the shooters’ motivations, but their actions speak clearly enough.
The underlying question: Do we actually have a functioning government?
With a culture of “me”, not “we”, a functional society is difficult to govern. There simply isn’t enough police;)
Yes, thank you, anahuna, for correctly ‘interpreting’ my final few sentences. I should have added the ‘/s’ indicator.
Yves S: When I went to business school (graduating 1981), about 40% of the class was engineers … a significant proportion had worked for manufacturers in other functions, like sales or procurement. Having gone from seeing the tail end of America’s manufacturing era … gave me a sense of the difference between operating in a world of physical constraints versus ones that were more arbitrary.
…more and more organizations are less and less required to worry about pesky hard realities like maintaining equipment and being not too mean to highly skilled labor. US management has increasingly come to treat labor as disposable, even when the time to replace workers comes at a cost.
… this change in the nature of the job of being a boss … combined with the rise in perceived importance of talking to Wall Street (as in preferring celebrity CEOs … has contributed to an elite tendency toward magical thinking.
You’re correct to point to this as the root cause of American failure, I think. Obviously so, when American management could treat labor — and actual manufacturing — as so disposable and trivial that it eagerly shipped it off to China to raise their company profiles on Wall Street.
There’s a story from 1973 called ‘Hour of Trust’ by the SF writer Gene Wolfe — a former professional engineer — that you might find worth a look. “Hour of Trust” predicted a US where basic operational capability has collapsed as the corporations have taken over the government (and the Pentagon), and the top executives are all Harvard Business School graduates and the like with no knowledge of any hard, specific domain. A particularly nasty civil war has broken out — with the rebels launching waves of suicide bombers (all broadcast continually on video a la Ukraine 2023) — but because warfighting and the military are hard, specific domains the corporates are losing but are too incompetent to understand it.
The story is literally a half-century old. The only bit of it that feels dated is the presentation of the rebels, who Wolfe depicts as resembling the 1960s-70s era radical resistance to the Vietnam war. But that’s inescapable in a story from 1973 and, besides, US conduct in Vietnam was very much determined by Harvard Business School graduate Robert McNamara.
A Chinese VC once told me that he thought, after first meeting American businessmen, that he had never met people so naive and so greedy. Naive is the polite word. Future historians may consider the American empire — anyway, in its later stages — possibly the stupidest empire in world history.
“Hour of Trust” is in The Best of Gene Wolfe at https://archive.org/
I have borrowed it for the next hour using my free membership.
I knew someone who worked in philanthropy, and he met a lot of very wealthy people. He said 90% of them had been born on third base, but they all wanted to act like they hit a triple.
Wealth and success do not automatically make people smart, as Mr. Musk amply demonstrates.
I think this is definitely a big part of it. Senior executives can’t get down into the detail most of the time, so they paint in broad strokes and assume the details will work themselves out. How well that happens, or doesn’t happen, comes down to a lot of little factors, but most importantly the company culture. Boeing was able to deliver such a high level of engineering quality because all employees, from the top to the bottom, recognized it as a key company value and were empowered to deliver on it.
Executives used to understand this, because they typically rose from within the company (or at least within the industry) and had a good grasp of the factors that led to success. With everything becoming more financialized, this capability has largely been lost, and the ability to manage the markets and optimize returns is seen as more important. Instead of being fundamental to the success of the organization, all the little cultural things are seen as an unnecessary cost burden. Leaders no longer understand why things ‘just work’ and how to ensure they continue to do so, but just assume that because it’s worked in the past, it will continue. That can be true, sometimes for quite long periods – culture doesn’t change quickly, and experience and capability at middle and lower levels can count for a lot. But bereft of upper management support, all of this will eventually wither away, little by little, over time. Often nobody notices, or those that do notice get ignored, until there is some dramatic event like the 737 MAX that brings it into relief. When you look closely, you see that things have been gradually degrading for years or decades, and it’s too late to do much about it.
This is just a theory, but there’s evidence of it playing out in exactly that way in multiple settings (I used Boeing as an example because I watched the Netflix documentary on it, which describes exactly this process taking place). I wouldn’t be surprised if it’s pervasive in society, business and government by now.
The “symbolic analyst” part seems a fruitful path of inquiry — because when the map no longer represents the territory, errors rapidly metastasize.
I am thinking here in particular of how “spreadsheet land” increasingly ceases to correlate very well with “real resource land.” Yet so much reward is given to those who work exclusively in the former that it becomes difficult to force decision makers to pay more attention to the latter.
Alfred North Whitehead calls this the fallacy of misplaced concreteness. It’s like going to a restaurant and devouring the paper menu rather than the food. I’d suggest the Bible calls it “Idolatry.”
…”Midas disease” is another way to describe it.
All the gripes above about money printing are this same point.
The symbol manipulators would all have lost their jobs if market mechanisms weren’t all defeated at scale by the Fed.
Of course market rules still hold if your too small to qualify as “financial.”
Sometimes i’ll see a modern building being erected and nothing whatsoever about the structure is meant for longevity, they’re essentially throwaways not considered for the long haul, whereas everything about our leadership is constructed for the long haul-making them all rich, leaving us with inept inertia to go forward doing things constructive for the citizenry.
Everything is short term thinking with an emphasis on easy money.
The whole austerity thing has both a tremendous momentum and an obvious fatal flaw, if you consider agility a valuable tool.
Because the war on labor is tightly intertwined with our county’s de-industrialization, we find ourselves unable to supply the arms necessary to actually engage the enemy, let alone win.
The post-war prosperity we enjoyed was, in hindsight, probably in great part due to the follow-on effects of total mobilization of labor to support the war effort resulting in a robust and highly skilled labor force.
Rather than acknowledging the value, and importance of this resource, and protecting it at all cost, we decided, against all logic, to declare American labor an over-priced nuisance, and done everything possible to not only lower wages, but eliminate the jobs entirely.
They can’t help themselves, they’re addicted to their own BS, hard to believe but true, they insist on more tax-cuts for them, and lower wages for us, long years after it became apparent that this was, and is a ridiculous recipe.
Now they complain “No body wants to work”
The cheer-leaders who thought they could win the game without the team, are backed in a corner now, and with virtually no ability to actually produce, are attempting shift the blame, as they simultaneously double down on their other front, the war on labor.
I have sometimes thought that the post-war prosperity we enjoyed was not only because of war-time mobilization, but also the movement into the labor force of people from farms. They knew how to use tools, make things, etc, because they had to, and brought that knowledge and skill base with them. They were also accustomed to hard work. Quite a change from now.
The feedback loops between physical reality, people’s daily lived lives, and our institutions and leadership are broken. The post and comments touch upon the organizational, ideological, and psychological causes, but I want add two observations:
1. Changing things when the benefits are concentrated, but the harms diffuse.
2. Disposable mindset for things and people. Maintaining things, capabilities, nature/ecosystems, people, etc. is undervalued.
Lots to chew over. This problem has been a long time coming so I will try to take a 20,000 foot view here and say that it is a fault in western if not our world culture. The problem, as I see it, is that our culture is being more and more dominated by a business culture. Back in the early 1800s, there was complaints in Great Britain that as mercantile interests rose to power, that this was reflected in the decision of the British Parliament leading to harsher policies. Say what you will of the landed gentry that dominated Parliament previously, at least they were familiar with the principals of the Enlightenment. It is really only with the rise of neoliberalism in the 70s that this process has been intensified and all the problems noted in this post like an inability to manufacture ammunition, de-industrialization, Brexit, etc. can all find their roots into a business philosophy taking the lead in how decisions are made – or not. As an example of how far this process has come along, can anybody imagine a German leader of the 60s or 70s agreeing to cut off their cheap energy supplies and to be industrialized as a consequence? And even the present NATO-Russia war. At heart the root cause is a business decision to defeat and break up Russia so that it could be looted. That is the core reality. Only thing is that, like a lot of countries, Russia still retains enough civilizational traits to resist and fight back against this going ahead. And finally one last point. It has been noted the pathetic level of competency of so many leaders in the world so I am going with the idea that the business/financial interests that actually running those countries have no interest in any strong, independent leaders. They only want compliant figureheads like a Biden or a Macron or a Schulz.
We may not be less operationally competent than in the past. I think that managing decline and contraction is just much much harder than managing expansion. A low level of competence is tolerable when your civilization is on the rise. Think about the numerous defeats suffered by the Romans during their imperial expansion. All the ambushes they just walked right into. Or all the waste and incompetence of the US effort in WW2. Yet it didn’t matter. We still looked like geniuses. But now, uhoh, organizations based on mediocrity and which have a high tolerance for individual failure (think Westomorland), cannot cope in a world without buffers.
The US specifically has had no significant enemies on our doorstep to exploit our weaknesses and keep us honest. No cunning opponent waiting to pounce and take our lunch money. Our success has been far too easy and without any of the painful reality checks that other societies have faced.
As a woman who has been observing for most of my life, “If he weren’t a white man, he would never even have gotten a job, let alone be in a responsible position,” I find your comment, Clark Landwehr, rings very true to me.
And the misogyny and racism that are once again surging add fuel to the fire of how much harder it is for mediocre humans (most of us, face it) to function in a society that is becoming smaller and meaner than in one that is growing and expanding its influence.
A personal anecdote about water heaters – one of the few applications still made in North America. Mine just rusted out after five years, they used to last a lifetime. To be fair, it’s in the instructions, which I didn’t read. I have a water softener – it replaces Ca ions in the water with Na, which are reactive – so there’s an anode rod in the heater you have to replace annually.
You’d think the company that installed the softener would have mentioned it – No. Or the store that sold the water heater – No – and, “sorry, we don’t stock anode rods”. And that the manufacturer would make them easy to replace – No – the insulating styrofoam jacket covers it so you have to take off a plastic cap, cut away the styrofoam through a 3” hole, and buy a special tool to remove the rod, then replace it. Of course, you have to drain the tank and turn off the power too.
I’m talking about a small corner of our economy where practical operational knowledge – from plumbers to suppliers to manufacturers – seems to have been lost. Much easier – and more financially rewarding – to simply replace a water heater every five years.
Open the cold water at the top. Close the hot water out spigot. Attach a garden hose to the spigot at the bottom and open it. send the water into a bucket and when it is full turn off the tap. Wait a minute until the water settles and note the crud collecting at the bottom. Dump the water in the toilet. Repeat 3-4 times until there is little crud. Close the bottom spigot, turn on the hot water spigot, then disconnect the hose and store it behind the hot water tank. Repeat every spring.
It is called maintainance; water heaters will last 15-20 years under normal conditions. Water softeners knock the PH out of whack. Buy a package of PH strips on-line for five dollars/lifetime supply. Store with the hose.
Ten years ago, my gas water heater was 20 years old. It needed a new thermostat, which as I recall cost $28. My plumber said that with the age of the heater, it wasn’t worth it for me to have him buy the part and install it. I said “How much, total?” He said “About $65.” I chose to repair rather than replace.
Dang thing is still working fine, knock wood. Replacing it would be at least $700-$800 now. (It was $600 to replace a decade ago.)
I just. keep. trying. to. keep. things. out. of. landfills.
Exhibit #8429 of terminal US institutional imperial rot, anything to do w/unsexy world of logistics:
for all the DC-London-Brussels hyper-ventilating about Russia, the US/NATO has literally a handful of icebreaking ships for arctic missions, the Trans-Atlantic arctic capabilities are nowhere near Russia’s. Thank you Canadian defence spending free-riding off of the USA.
for all of the Trans-Atlantic hyperventilating about the PRC, the Europeans have zero trans-oceanic maritime logistics capabilities and the US has only a handful of active logistics ships in the entire world (relying on tapping a civilian reserve like in 1990-1).
Exhibit #8429a: …and the US has almost no Civilian Reserve. The percentage of international shipping done by ships built, owned, flagged, operated, and/OR crewed by USAmericans is trivial.
Exjibit #8429b: …and Neoliberal propagandists (shilling for corporate interests) are trying to gut what’s left of the Jones Act, passed a century ago (after WWI) to make sure the USA had a “civilian reserve” Merchant Marine, if/when the next war happened.
(source note: I usually prefer reading to video, but I find Sal Mercogliano’s YouTube reports (“What is Going on With Shipping?”) to be an informative, interesting, and fair source. Good dry sense of humor, too.)
Loss of operational competence is illustrated by today’s class 1 railroads. They embraced Carter’s deregulation with zeal, resulting in a 50% reduction in track mileage, simultaneously with a war on labor. What happened in the late 2010s was the culmination of 40 years of dumbing down the workforce, gilded executive compensation and the industry’s own version of Jack Welch’s Lean Six Sigma, PSR (different name, same kool-aid).
When I left Conrail in 1982, technology wasn’t much of a thing; our car reporting system had a 1978 oven-sized IBM disk drive that could hold records on 400 cars represented by two 80 character punch cards. There was hardcopy representation of everything with more detail. Twenty years before that almost everything paper, data systems rudimentary. Radio communications with enroute trains was very limited. Most merchandise freight moved in single carloads and containers didn’t exist, and virtually every industry of any size had a rail siding.
Imagine the complexity of the railroad industry 60 or 75 years ago, operating without the “benefit” of computing technology! Was it perfect? No. Did carloads get delayed? Occasionally. Derailments and severe weather happened, but disruptions lasted days, not weeks. It all worked with a very large, mission-dedicated workforce. Senior executives, made perhaps 8-10x of union employees, line supervision maybe 1.25x, but with longer hours. 75 or 100 car trains operated with 4-5 crew members. When recessions hit, cuts were made, but almost everyone returned on recall. There was no sick pay for most people, but time off was granted freely (except for hunting season or Christmas).
Fast forward to today… railroads have mostly abandoned merchandise carload freight, most goes by trucks. Containers of imports and long blocks of cars with commodities dominate. PSR cut over 1/3 of the workforce, locomotives and facilities. There is virtually no redundancy or resilience, which isn’t a problem most days. But “unexpected” traffic volumes or weather cause disruptions that take weeks or months to unravel.
Executive compensation is 8 figures. Workforce harassment is endemic. After the pandemic peak, tens of thousands ignored call back. Service quality has tanked, but management doesn’t care because they are defacto monopolies. Light-touch bipartisan regulation allows the free had of the marketplace to poison East Palestine.
The rot is pervasive. It will not be easy to fix, even if there was the will to do so. Won’t happen until kool-aid is banned at places like HBS and McKinsey and Goldman shut down under RICO prosecutions.
My experience is very similar to yours. The highly trained and disciplined work force that was the core of the company’s factories has been destroyed. It took twenty years of effort by company leadership and at the end a pandemic to make it a reality, but management finally succeeded beyond their wildest expectations. But fixing this has gone beyond the company.
I don’t see this getting better until American elites decide and make changes so that America once again has a thriving, well educated, (for lack of a better way to phrase it) blue collar middle class. It took forty years to wreck it so I’d guess you’re looking at forty years to resurrect it. And this assumes you are also able to get the complete rot out of what we now call the PMC. But really, it all start with the elites – as long as they continue to profit while essentially wrecking the country, then the wrecking of the country will continue.
“American elites decide and make changes . . .”
If only. The American Way of Life as currently construed is no different than the Road Runner that has left solid ground but keeps running on air. It’s not until he looks down does he realize what’s going on. Our politicians, business overlords and the PMC are the Road Runner – they just haven’t looked down yet.
I fear when they do, that’s when the nukes will be flying overhead.
“The nukes will be flying overhead”. Perhaps at the speed incompetence is currently spreading everywhere, the nukes will get stuck at the silos and explode, that’s actually a better scenario than nukes flying overhead.
Your reference to the Road Runner made me chuckle. The Road Runner never falls because he/she/it never looks down. Wile E Coyote always looks down so he always falls. So, is our path forward that of the Road Runner, trust that we’ll never fail as long as we stay ignorant and keep faith? (Not taking you to task, just that this is something that always gnawed at me)
Another thing to consider, is the lack of any sort of consequences, legal or otherwise, for the people in these elite corporate or political positions. As repeated failures usually result in a slap on the wrist or finger-wag for the CEO or politician in question rather than any sort of legal trouble or punishment the same problems keep arising. The elite class looks out for its own no matter how egregious the corruption or crimes committed, so nobody is held responsible and this same elite class also gets to decide who does and who does not get investigated or prosecuted…and they are certainly never going to convict each other. Yet, if somebody beneath their station did the same thing, the average person would get the book thrown at them as a result.
Decades of regulatory capture along with a legal system that is designed to ignore corruption or ignore people above a certain income level has led to corruption and incompetence becoming baked-in at all levels of government and companies large enough to send lobbyists to Washington D.C. Neoliberalism has only made this worse, but the root cause of the problem is that there is now no practical way for elites to actually be punished for their depravity and irresponsibility as they now control all of the mechanisms that were used in the past to do so.
re:”It took forty years to wreck it so I’d guess you’re looking at forty years to resurrect it”
IMO forty years will not suffice; forming adequate cadres of skilled craftspeople-say tool and die makers, nuclear-qualified welders, etc.,-is non-trivial. Their skills arequite beyond the comprehension of your “elites”. Think of Bloomberg and his (2016) comments:
Paraphrasing an old saying: One “elite” can drop a (small) rock in a well in one second; forty elites cannot get it out in forty millennia.
Retired (finish) Carpenter
Actually it was roughly 170-180 years under the American System to build up what has been lost starting in the 1960. First to Japan, then Korea, Mexico, China, and finally everyone else.
The only reason I see rebuilding the United States’ is a possibility is that there are still people with the general knowledge, specific skills, even still with the actual experience as well as plenty of Americans wanting to do something besides fast food, drugs, and games. Something real.
However, this is all buried under the rotting detritus of our society and its political economy; the rot has to either be destroyed or brush aside by the possible shoots created despite the assault that will be done on it by the elites. It will be something new to pillage if nothing else.
The creation of these green shoots will have to start at the local and community level and will not be really political, but social.
Mrs. Meadows and I have coined a new word to describe current leadership in the West…
A combination of oblivious and belligerent:
I like the term “ignarogant” !!
Thanks for the shout-out, Yves, and sorry about the French version of the name. I’ve lived here a long time and speak French all the time, and besides it’s the title of a favourite novel of mine by Louis Aragon.
My other point, in that essay you kindly mention, is that where many interests are involved, apparently irrational behaviour continues because it’s impossible to get a consensus about an alternative. In the case of Brexit, which you cite, all that really mattered was a minimal consensus within the Tory Party and with the Ulster Unionists. As some of us suggested at the time, the content, let alone the realism, of that agreement hardly mattered, so long as everybody could more or less accept it. The NATO example is also interesting for the lack of a coherent alternative: for many of the smaller European powers, the question was how to find a counterbalance to the historic French and German domination of Europe and, in particular, how to balance a stronger united and more assertive Germany. Historically, this had been accomplished by the US presence, and by direct NATO (and hence US) control of the German military. Even if NATO was now obviously an anomaly, it wasn’t clear what else would achieve this result, still less what would also be acceptable to everyone. So a lot of smaller NATO states were happy to see the alliance continue for want of an alternative that everyone could agree to. Thus, inertia.
Thank you for pointing to the source for your pen name. I confess great curiosity about such things.
The name Aurélien appears to encompass a certain poignancy. I sincerely hope that aspect of the name is not a part of your choice of that name. Thank you for your comments and the essays on your website. I confess that I do not read all of them. I am a yank and we have more than enough problems in the u.s. leaving little residual concern for the complex issues confronting France and the EU. I suppose that blinkered view of Europe is yet another component of American willful ignorance. Congratulations on the success of your website
Spot on about artillery’s ammunition specification, very tricky stuff to make them perform exactly to the tables each time, the longer the throw, the tighter the specification. Having a drone to spot your artillery is meaningless if there is too much variance in the ammunition quality as replication of performance is gone. “Smart” guidance has made getting away with sloppy ammunition manufacturing much easier and more profitable, at the cost of a weapon that is expensive, shorter ranged for equivalent propellant & explosive force, and much easier to interfere with.
1. British naval shells in WW1 were flawed so that the fuses failed to detonate properly. This resulted in a tendency for the rounds to explode on the outside of a target instead of the inside. This is one reason that the Germans didn’t lose more ships at Jutland in 1916- the German battlecruisers (in particular) got hit by dozens of British 12″, 13.5″, and 15″ shells but they only took a fraction of the damage that should have been done. The British didn’t have any idea this was a problem until late in the war, because they ignored the experts warning about this and could see the the shells exploding (prematurely) on the targets.
2. The Italian Navy in WW2 had production inconsistencies in their shells which had the problem of making flight characteristics inconsistent. The Italians fought the British hard but rarely scored hits because the shells’ weight inconsistencies made the minute adjustments necessary to go from bracketing the target to hitting the target impossible to calculate. Even tight shot groupings from a salvo were rare for the Italian Navy. There are dozens of examples of Royal Navy vessels escaping from harrowing encounters with far superior Italian forces who could only almost hit their targets. Lots of “their shooting was splendid, fast and accurate, but we never got hit*” in the after action reports. This problem probably saved thousands of Royal Navy lives from 1940-43.
I’m ex-Army artillery (naval examples above not meant to stoke any rivalries), and have dealt with a few bad ammo situations firsthand. Oddly, never with the propellant charges, only with the rounds going down range. The things are complex systems with a surprising amount of dynamic components.
*- yes, it is possible to level fast and accurate fire, even effective fire, without scoring hits.
Obliquity. That’s an intriguing idea to superimpose on capitalism. Because stuff is simply too unpredictable you should always stalk it from an angle. Indirect capitalism. It defies a militant definition. Considering what a disaster hyper efficient capitalism is – having inevitably created a wasteland of reinvestment opportunities to the degree that private equity companies now prey on weak corporations like they were roadkill – having destroyed the environment and they think the solution is just do it faster, more efficiency, better productivity – which only makes the whole illogical thing implode more efficiently… so, yes, definitely try a bit more finesse. Take the time to analyze the harm capitalism causes and make “IBGYBG” a thought crime good for several social demerits.
Just in time logistics is a fine way to make money, but it is impossible to fight (not win, but merely fight) a war using that system. Looking more broadly, is impossible to successfully respond to a disaster with just in time logistics.
Just in time logistics is an inherently fragile system, where any kind of combat or disaster response requires a system to be anti-fragile (e.g. masks in 2020-21). This is where and how finance kills people.
I always found it amusing in a grim way that the Japanese pioneered just in time logistics, given how they ran things during World War 2. They were always short on all manner of stuff so everything had to be there at the right time, no more or no less. They didn’t do too badly the first year, with skilled and well trained staffs on their part and surprised and unprepared opponents (well, us). But once their “precision” started getting thrown off, for their reasons and ours, you had to have a lot of slack to compensate and they had none.
It is not natural. Nature has allowed through evolution for the storage of fat reserves…
In regards to the dots that Yves was referring to, it is because the Western ruling class is “short term greedy”. The rich in the Western world got destroyed by their own greed.
Whatever else you may criticize nations like China for, their leadership recognizes that they are in power because of performance legitimacy.
That means that a certain amount of institutional competence exists, along with a particular need to think long term. Hence, investment is extremely high into the future.
By contrast, the rich in the Western world are “short term thinkers”. Their outsourcing of jobs, cutting investment, etc, are all signs of this. They sent jobs to places like China specifically to break the unions and undo the New Deal. They lacked the foresight to recognize that they were accelerating the rise of a potential geopolitical competitor.
You can see this elsewhere. Note the obsession in quarterly earnings in corporations for example.
There isn’t the willingness to invest in research, infrastructure, education, a highly skilled workforce, etc. Those are long term investments that take time to pay off. Not to mention, the ruling class in the Western world wants to redistribute all of the productivity gains for themselves, so there is less incentive for workers to innovate and more to quiet quit, so to speak.
This may be one more manifestation of the first phase transition in the basic four-phase cycle identified by Ibn Khaldun etc: success leads to sloppiness, sloppiness leads to failure, failure leads to seriousness, seriousness leads to success. Things are seriously sloppy now, and failure is becoming impossible to ignore.
Societal decay is a cyclic phenomenon. In the neoliberal West, gangster capitalism is ascendant, and public welfare is suffering. When this suffering reaches a critical point, reform ensues, as it did at the end of the gilded age in the U.S. Unfortunately, the corporate sector in the U.S. is guarded by a powerful political and propaganda apparatus, so the turning point remains far off. As Adam Smith said, “There is a great deal of ruin in a nation.”
Lots of interesting comments here to an excellent piece.
I think financialization and short-termism definitely play a role – at first you outsource a manufacturing process, say, to save costs, later on you outsource something more abstract, real soon you are just playing with numbers to make the next quarterly report look good.
Given that the members of our political class in the West are now predominantly economists and lawyers, who often start their career as an assistant to a member of parliament, they have no clue how to run anything, but excel in magical thinking.
Mancur Olson (The Rise and Fall of Nations) has a thing or two to say about this. Old book, but I always find it worth going back.
Mancur Olson needs a comeback in academia and the TED talks/op-ed crowd.
Particularly Olson on the “collective action” problem, spun by Taleb as “the tyranny of the minority”
There was a nearly 100 years absence of continent wide wars, but claiming absence of large-scale wars in Europe at that period is incorrect. Take for example the Franco-Prussian war of 1870 with over a million combatants on each side. There were also a few notable others.
Among the notable others:
1. the brief Austro-Prussian war of 1866 (actually a war of two coalitions) with some 600000 on each side;
2. the Russo-Turkish war of 1877-1878, with 250-300000 on each side;
3. the first Balkan war of 1912 with some 500-800000 on each side;
4. and the second Balkan war of 1913 with belligerents fielding 600000, resp. 1000000.
5. the Crimean war 1853-1856, with about 700000+ on each side.
I still stand by the comment. They were all limited in territorial range and duration. A
I remember the Grexit discussions here well.
I don’t wish to relitigate them but I have always wondered, if it was a matter of wartime life or death, whether the requirements that Yves very clearly laid out of leaving the Euro were really so insuperable to a would-be-sovereign state. You could call this, “How would Stalin have left the Euro?”….
– complex IT connections extra-Greece: unplug the leads, you have left the Euro. See below re currency controls and “autarchy”.
– complex bank IT intra-Greece: change nothing or, if you still have it, swap the keyboard Drachma symbol for the Euro. Remember, you are plunging into capital controls and currency autarchy so the internal payment system simply has to keep score like it did before. All bank Euro are now Drachma. The value of those units in foreign currency terns will be different but that is not the job of the payment system
– forex. You now have capital controls. There will be a multi-day banking holiday. Forex will be handled by the Bank of Greece. Key industrial sectors will get priority. Private individuals can pound sand. What currency reserves remain can be directed to fuel and medicine.
– cash. Every Euro is either in private hands or in the custody of the banking system. Change nothing about the ATMs or the note design, it is a time sink. Simply require all Euro in banking custody chain to be over-stamped with an indelible an bleaching ink saying “Drachma, property of Greece” to function as Drachma (bleach means washing off the ink still defaces the Euro). Issue an order compelling overstamping of privately held cash Euro within seven days of banks’ reopening and thereafter seizure of unstamped private Euros (like FDR with gold). Close the borders for a period to departing traffic except to humanitarian travel and search everybody’s luggage to prevent Euro flight. Readmit tourists cautiously and search them thoroughly on departure and require them to reconvert leftover currency on departure.
– private assets. You could seize private Euro assets and replace them with Drachma claims but save this for phase 2 if things go badly.
– private and public debts. You could nationalise the private liabilities, making the private actors liable to Greece in Drachma. Then repudiate these new public debts and the old ones. You could then buy them all back at a discount with the proceeds of phase 2.
Obviously, your currency will plummet. The EU may kick you out of the single market. Imports will be hard. Domestic savings will be crushed in foreign currency terms. But your domestic payments and cash handling infrastructure will continue seamlessly, economic life will continue and exports will boom. The market will asses the economy as more viable than before and the currency will bounce back.
To my mind, the problem of Greece leaving the Euro was Greece, not the Euro. Syriza was trying to make an omelette without breaking eggs…. Cakeism avant la letter!
Greece is not even remotely an autarky. When the ECB did (July 2015) what amounted to only a partial shutdown of its banking system, in 20 days Greece was starting to have food, pharma, and fuel shortages. Fish hauls on the islands were similarly not making it to the mainland due to lack of enough petrol. Tourism crashed because you could not rent cars (no lessor will allow tourist to take a car w/o being able to penalize the lessor via the card if he absconds with the car. The alternative is a very big cash deposit which tourists won’t tolerate).
Businesses were taking the euros they had stashed (many anticipated a crisis and built up currency stockpiles) and trucking across the border or even flying them to London to pay for supplies. These emergency measures could not last long with a finite supply of euros in the country.
Over 70% of Greece’s debt was English law debt, which means the Greek government has no authority over it. It cannot be redenominated or nationalized.
We saw what happened with limited ECB support. No ECB support would mean a full failure of its banks, top to bottom.
There is no “domestic payments system”. It all runs on ECB/Eurozone or international (Visa/Mastercard) infrastructure.
I don’t understand how you don’t understand that.
And changing to the drachma would require banks and payment processors outside Greece to code for it and the FX conversion mechanism. Greece was not even remotely in control of its destiny.
Currency collapse is ugly but third world countries do it all the time. Similarly, debt default under English law debt happens all the time. Worst case for Stalinist-Syriza Greece would have been continual attempts by vulture funds to enforce judgments abroad against it but Greece would just have made friends with Russia and China and Dubai as its entrepots and suppliers, rather than creditor friendly US or EU countries.
The point I humbly accept is the payment mechanism point. I had forgotten that the original Target system (national settlement systems bodged together) was replaced in 2008 by Target2, a truly unified ECB platform. So Greece could not simply unplug the national cash till from the network and keep trading, as it were.
It could still go back a technology level and settle manually, though. The point of emergency bank holidays is exactly that, to allow time for settlement post-crisis. The domestic system could run manually but with a high level of true credit in the system between account holders and between banks. Ireland ran for weeks in the 1970’s without banks when they struck, relying on publicans to cash cheques and to accept them like discount houses by endorsing them.
If Syriza had really wanted to be free and poor – really poor, I have no illusions about the short term disruption and damage and wartime footing – then thinking what would Stalin do would have delivered. But they wanted credit cards and imports more than they wanted out of the Euro and the debts they had been stuffed with to rescue Western European banks.
Who knows if the fuel and pharma shortages would have been worse in the long run than the brutal austerity Syriza then imposed as reformed Europeans, which stifles Greece to this day…?
This post — this seminal essay — will go into my archives recording the Decline and Fall of the American Empire.
I am not sure what will be more difficult — living after the Collapse, or watching the Collapse as it evolves. The growing Climate Chaos and impending Depletion of Resources only add to my malaise and growing sense of horror. These are not times I hoped for when I fathered my children. I feel like a bad father.
The declines and their causes as sketched in this post are beyond my ability to comprehend. Their resolution — the resolution I feel and sense for the future — will be bleak, bloody, and chaotic. We live in interesting times, indeed.
I’m looking forward to reading all of the comments. From my perspective, Covid is the preeminent example of our problems. In that case, we had a long-established protocol for dealing with an emergency response. So long-established that it’s enshrined in federal behavior and required for everyone. Now the standards of an emergency response by the book do not apply directly to Covid or even an infectious disease, but the standards don’t apply directly to any particular type of emergency response but simply establish the structure for effective emergency response.
Of course I do this for a living, including emergency response. So throughout the initial Covid response I watched with dismay while literally every rule and/or guidance for managing emergency response was ignored by everyone at the federal and state level. It’s not that following the ER procedures would have made every decision easy or foolproof. But not following any of them was a surefire recipe for the response being as bad as it was. Some of that could be chalked up to it happening under Trump, but not all of it and it didn’t get better when Biden took office.
It has far less to do with what decisions were made than how decisions were made and how official communication happened. To me it indicates extreme rot in the system because there was a tried-and-true manual for the response. I know for a fact that the binders sit in every federal department. I know for a fact that the federal government is full of people who’ve completed the incident commander certification course. And yet nobody bothered to dust off those binders when they were needed.
should any of this surprise us. we are heading for a Ayn Rand capitalist utopia.
i should not have clipped so much, but what was done from 1993-2001 to destroy our civil society, cannot be emphasized enough, if you were not paying attention back then, you should be outraged now.
its very hard for me to revisit this, i predicted what the outcome would be quite correctly.
carter, reagan, the bush’s, they were pikers compared to clinton/gore.
“In fact, Clinton succeeded where Reagan and Bush failed. Writing in 1997, the Heritage Foundation’s Ron Utt (who had been Reagan’s “privatization czar”) praised Clinton for pursuing “the boldest privatization agenda put forth by any American president to date,” and noted that his proposals were “virtually all drawn from recommendations made in 1988 by President Reagan’s Commission on Privatization.” In 2006 Reason Foundation’s Robert Poole declared that “the Clinton administration’s privatization successes exceeded those of Reagan.”
In the first year of his administration Clinton assigned Vice President Gore to oversee a major initiative to “reinvent” government under the auspices of an intergovernmental task force, the National Performance Review (NPR).
Clinton embraced the ideas popularized by David Osborne and Ted Gaebler, in their 1992 bestseller Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector, and later on by a follow-up book by Osborne and Peter Plastrik, Banishing Bureaucracy.
The Gore initiative was about making the federal government more effective, but the idea of privatization was also baked in from the start, as it was in Osborne and Gaebler’s work.
Clinton’s 1992 campaign promises included a plan to cut 100,000 federal jobs. Downsizing was a significant part of the plan and further baked in pressure to contract out public services and functions that still needed to be performed.
In 1995 President Clinton asked Vice President Gore and the task force to identify programs that could be reinvented, terminated, privatized, or sold. Each agency identified potential functions to privatize including the Seafood Inspection Service, the OSHA and MSHA Accreditation Process, the Office of Personnel Management’s background investigations service (which became USIS, the company that performed background checks on contractors including Edward Snowden and was found to be “flushing” background checks to meet monthly quotas ), the DOL Penalty and Debt Collection, and the Federal Helium Program.
Perhaps Clinton’s most significant contribution to privatization was ideological. The NPR reports redefined government services in market terms – “citizens” became “customers” of public services and competition became a guiding management principle.
The NPR’s final recommendations (1995) called for “more competition, more privatization,” an idea first articulated by Friedman and Savas, who called in 1971 for “competition to reduce the monopolistic control many governments have over their customers.”
The NPR institutionalized downsizing and contracting out across federal government agencies. But the 1996 Welfare Reform law supercharged privatization. The law removed restrictions that prohibited states from contracting out welfare intake and eligibility in what the Washington Post described as potentially “the largest transfers of public sector operations into private hands.”
Large corporations including EDS, IBM, Lockheed, and a subsidiary of Arthur Anderson and Co. saw welfare reform as a lucrative new market that promised to become a “multi-billion dollar enterprise.”
The law represented a significant shift in the history of privatization. The contractors weren’t simply managing public services. They would make important public decisions – helping to determine which Americans received welfare and under what circumstances…”
In the early 2000’s when my kids were tweens, I remember remarking, that we were, as a nation, indulging in an uncontrolled experiment in child rearing. Unprecedented prosperity, at least in the college educated professional classes, the ” everyone is a winner” and other feel good idiocies, were my concerns. Learning, learning anything of practical value, is a process governed by both positive and negative reinforcement. We had systematically removed negative feedback. We were about to learn the consequences.
There is reality, and there is our perception of reality; they are not the same, ever. Generally, in stable functioning societies, the chasm is not wide. Especially wrt the always critical heuristics re human behavior/motivation. When the gap is large, reality rears up it ugly head and bites you in the ass.
Different people and different societies have varying levels of this chasm. The ones in a more marginal existence, have little buffer for delusions. Small errors in interrogating material physical reality lead to negatives relatively rapidly. Great wealth and power, can insulate one from material conditions for a very long time. A very long time is not infinity. The absence of negative consequences for failure, make the next failure inevitable and more disastrous.
And here we are. An elite class whose most prominent characteristic is magical thinking.
Magical thinking or “post-truth” are the real enablers of the problems we are facing in these times. Neoliberalism or financial capitalism are the results. Behavior of elites, e.g. failing upward, is the most visible symptom, but there is also a lot of magical thinking going on in the general population. The world is becoming more complex and most people don’t have abilities, dedication and the time required to filter the junk data.
Trying to parse this to get your meaning:
Are you indicating here that the shells had to be made to withstand high tolerances (as in, they have to be made in ways that resist extremes of humidity, operation, temperature, etc), or that the shell-fabrication process involves very low tolerances (as in, every piece needs to be created at very high levels of precision, with zero or very, very few defects allowed)? In engineering, generally, making something “to” a tolerance indicates the specifications for allowed error (with “high” tolerances meaning that more defects are acceptable), which seems unlikely given the context, so I figured the more plausible reason was my confusion with the wording.
This was about shell making, so yes, the shell process is fussy and requires very tight control of the conditions of manufacturing. The extract below support the use of language in the post. We have a similar problem in the technical use of positive feedback loop =ing an amplifying process, which usually produced bad outcomes, when a lot of lay writers incorrectly call tha a negative feedback loop. This confirms our usage but also complains about its lack of intuitiveness:
I see three things:
Corps used to spend a lot on research that drove long term growth. Selecting among competing research options is both hard and risky… get it wrong and get sacked.
Meanwhile Milton Friedman postulates the shareholder is all important; what do shareholders want? rapidly rising profits that drive up profits and share prices. Borrow to buy back shares at ever higher prices and, now, higher rates.
And rising share price importantly drives exec compensation… and when the corp becomes over-extended and collapses the execs just jump off with their golden parachutes.
So expertise is no longer important, any mba can follow the new recipe of short term profits and thinking.
B. The young.
Imo many of the young have become unwilling to work. I see it in my hobby, I play bridge. When I grew up everybody played cards and some played bridge, a game that has a high hurdle, it takes time to learn. The young are playing in China and eu, and compete in our tournaments with distinction, but very few under 50 here. The few new players at our club are new retires that might have played in college but are now looking for things to do.
Here young males play video games, many drop out. This seems to be buttressed by falling standards in many schools, not just colleges but k-12, too. Not many really good high schools, and their published results are anyway comparative.
C. Political leaders.
Imo msm is a large part of the explanation for our extremely weak leaders. Very little criticism of elite selected leaders is allowed, so most voters aren’t exposed to their warts. Similarly the current narrative can’t be questioned so again voters have no idea what is going on. Granted fewer are reading msm, but not enough are then seeking out alternative views, easier to sit on the couch, just vote for your team.
So the elite pick the leaders, and of course all picks must be acceptable to donors. And donors like things just as they are (granted, always ok to cut donor taxes), what they otherwise want is ‘no fundamental change’.
Trump seems to be an anomaly. But he’s now running on an anti war policy, which might be in part because there’s a faction of donors beginning to fret over ww3. Biden clearly hasn’t got that message, but not clear whether his donors aren’t worried or because hubris is so far managing to keep the deranged warmongers on track.
I supervise 20- and 30- something engineering techs, environmental engineers, and geologists. They are hard working, smart, and eager to learn. They also have little tolerance for bullshit and don’t want to (or simply won’t) work 60-80 hours a week if most of that is bullshit. They’re fine, and their bullshit intolerance gives me hope for the future.
Having grown up in/with the decline of the British Empire, what I’m seeing now here in the US is a repeat of the same on steroids. I attribute it to the blindness of the hegemon. Then of course, what Hegel/Marx said about the first time being a tragedy, the second time a farce…
I cannot remember where I found that article, but it argues that, in the case of Great Britain, the decline of skills and competencies both in the State apparatus and in the private sector has been going on for far longer than Thatcherism or post-WWII travails, that it results largely from historical and social circumstances very specific to the UK, and that deliquescence is now unstoppable: neither the will, nor the know-how, are present — or sufficiently available at scale — to redress things. Worst of all: elites had already diagnosed the problem over 120 years ago, but nothing was done to avoid the path to decadence.
We are having a pool removed from our backyard. The contractor who is working on it got about 3/4 done and just walked away. I was foolish enough to pay in advance.
My son who is an architect, tells me that this is a nationwide problem. Workers just walk away from jobs before they’re done. It’s becoming a process in construction to hold back a percentage of the pay until the job is complete.
I think this is part of the syndrome that yves is describing. In an Internet economy in which there are no jobs that are career or community based, building a reputation no longer has value.
When workers are treated as disposable widget, why would they care after they’ve got their money?
Competence in general has been going downhill since at least the middle 60s, I suspect complexity and corruption have much to do with it. If you know more than a couple people who have personal standards/values, you’re very lucky.
Fiscalization is definitely a symptom of the disease. Obsessiveness with unnecessary & useless complexity (cryptocurrency a stark example) and short-term trading/flipping/gambling. There’s no thought of longer term time horizons. Everyone wants the dopamine hit now (too much cocaine in the system?).
It may well be that Western society is lacking evolutionary pressure to keep fit. We’re (West) not experiencing the annealing processes that keep processes & thinking optimal. This is the problem with too much control (whether gov’t or big corporations). There is a tendency to spend too many resources on ‘smoothing things out’ than accepting the necessary failures that come with longer term investment/change. Instead we build ever more complex systems useful in the short term to band-aid problems or generate marginal gains which then become extremely costly in long term (EU). Where institutions get to the point where any change is a change for the worse until ultimately the absorbing barrier is hit.
Usually with these type of evolutionary processes/paths the outcome is an extinction event. This study of the Galápagos finches comes to mind. With the West being the larger-beaked birds arriving and dominating the indigenous medium-beaked birds during the good times and being wiped out when droughts get bad.
If this is the case, then for the West things are going to get very very ugly.
K isn’t just a text response in the affirmative…
Sub Boreal probably has something better, but this is the best the ggols had to offer this evening…
1)hmm, didn’t I notice a decline in life expectancy?
2) fertilizers,pesticides and gmo’s attempt to influence parts of the equation, finance is an obliquity (just to use the word of the day)
“I am not convinced that neoliberalism leads to financialization, but that a financialized economy (witness the UK as first movers) can moves its economy and elite thinking must faster into a neoliberal model due to the pre-existing lower importance of labor.”
I am having trouble parsing this sentence. Perhaps some typos or autocorrect errors here?
There is an error, but only “moves” as opposed to “move”. Structure is correct.
As far as I’m aware, the US breakdown occurred long ago. In 1970 having graduated college without any career in mind, I took the civil service exam and scored 99 percent. I had one job offer from that: customs inspector at JFK. Which I didn’t take.
It seems to me throughout life, it all depends on whom one knows and being in the right place at the right time, with the all-consuming fact that almost everyone is jealous of position and authority and will not risk losing either. Put that through all of society, and one has the present age.
Perhaps the movie that best sums this is “I’m All Right Jack.”
I am about the same age as Yves, so maybe similar experience in our age group. I was trained by people who were concerned with finding out what worked. Most of the people I work with now are concerned with knowing what things mean.
John Kay’s full essay on obliquity can be found at his website.
What an article and thread! Yves, you inspired such an amazing collection of thoughtful, well-informed responses.
One way of looking at this NC classic is as a process of myth making. I’m not saying that the article and people’s comments are not based on fact. Instead, we’re engaging in trying to answer the question, “How did things get so screwed up?” That’s the same question that Ezra and his merry band of scribes were trying to answer with the Adam and Eve story from their place in history as returned exiles living in a ruined city surrounded by people they considered enemies.
Coming up with that myth–or call it narrative if you like–is crucial in birthing the worldview capable of coping and maybe even improving that screwed up situation.