Sunday, December 1, 2013

Flexibility for Me But Not for Thee

I'm not sure I'll finish Virginia Postrel's The Future and Its Enemies: The Growing Conflict over Creativity, Enterprise, and Progress (The Free Press, 1998).  I'm not even sure now how I happened on it -- I know it was on Amazon, probably while I was looking for something else.  (There's another book with the same title but different politics.)  Postrel is a former editor of Reason magazine, and since then has written for The Atlantic, The Wall Street Journal, Bloomberg News, and other media.  She's evidently a Libertarian, and from what I've read in this book so far she's trying hard to extricate herself and her readers from the toils of conventional political categories.  But so far she's not trying hard enough.

Her organizing master categories are stasis and dynamism: one side wants everything to stay the same in society, the other is excited by change.  These categories are found everywhere on the political spectrum, making for strange bedfellows at times.  So, for example, she points out gleefully that the radical environmentalist Jeremy Rifkin and the falangist reactionary Pat Buchanan unexpectedly found themselves in agreement when they met on an episode of CNN's Crossfire program in 1995: "Rifkin answered Buchanan's opening question of 'this new global high-tech economy" as a cruel destroyer of jobs.  "You sound like a Pat Buchanan column,' replied his interrogator. 'I agree'" (2).

In retrospect, no informed person should have been surprised by this strange accord, but many are still surprised, and think it's a new development when Pope Francis attacks rapacious global capitalism, though his predecessors did so too.

Postrel continues:
Economic and cultural dynamism get similar treatment.  The [Weekly] Standard praises cultural critic Tom Frank, an anticommerce leftist, for promoting the idea that "both free speech and a free market did much to democratize values and attitudes that previous generations would have largely dismissed as pernicious or infantile."  Attacking management guru Tom Peters for emphasis on change, flexibility, and innovation, Frank himself waxes conservative.  He denounces markets for disrupting the social order: "Capitalism is no longer said [by management thinkers] to be a matter of enforcing order, but of destroying it.  This new commercial ethos, not a few movies and rap albums, is the root cause of the unease many Americans feel about the culture around them.  Former Clinton aide William Galston praises Republican Bill Bennett for his attacks on market-driven popular culture: "The invisible hand," says Galston, "no more reliably produces a sound cultural environment than it does a sound natural environment."

What all these left-right alliances have in common is a sense of anguish over an open-ended future: a future that no  Galston, Bennett, Frank, or Buchanan can control or predict, a future too diverse for critics to comprehend.  Their anguish is not always coherent, nor is it expected to be.  If stasist criticisms are impossibly vague, they seem all the more profound.  What matters is the general message: The world has gone terribly wrong, and someone needs to take control and make things right [4-5].
And again:
"The enemies of the market are ... not the socialists," wrote the economist John Kenneth Galbraith in his influential 1967 book, The New Industrial State. ... "With the rise of the modern corporation," wrote Galbraith, "the emergence of the organization required by modern technology and planning and the divorce of the owner of the capital from control of the enterprise, the entrepreneur no longer exists as an individual person in the mature industrial enterprise."

In the era of Bill Gates, Ted Turner, and Andy Grove, no one much believes this any more.  The efficient capital markets that Galbraith consigned to the crazed imagination of free-market ideologues are all too real and disruptive.  Contrary to his confident claims, technology generates change, not predictability, and corporations cherish flexibility, leanness, and just-in-time management.  The small and adaptable flourish [6-7].
It has been a while since I read The New Industrial State, but I think Postrel has misread Galbraith.  He was right to point out that, contrary to corporate and free-market propaganda, American industry did its best to evade market forces.  If the propaganda has changed, not much about the practice has.  It doesn't really matter, though, because she's wrong about everything else, largely because she has mistaken management gurus' fantasies and corporate propaganda for fact.  First, it's absurd to claim that "the small and adaptable flourish" when you're talking about Bill Gates and Ted Turner: they run behemoths, and that hasn't changed in the decade and a half since The Future and Its Enemies was published.  The "leanness" myth was disposed of by David M. Gordon in his Fat and Mean: The Corporate Squeeze of Working Americans and the Myth of Managerial "Downsizing" (The Free Press, 1996), published a couple of years before Postrel's book.  Managerial fads come and go, but management abideth forever.

[P.S.  Later Postrel refers to "the apparent efficiency of Galbraithean big business" (20), which confirms my sense that she gets him wrong.  To repeat, Galbraith was describing the reality of big industry, against its "free-market" propaganda misrepresentations; and I don't think he had any illusions about its efficiency.  But maybe I should reread The New Industrial State ... sometime.]

Second, corporations were always creatures of the State, as a Libertarian like Postrel should know, and their CEOs have no interest in facing instability and change themselves: that's for lower management and peons.  When a big corporation fails, it demands (and usually gets) rescue by the government.  This is true whether the government at the time is nominally Republican (see Reagan's savings and loan bailout) or nominally Democrat (see Obama's support for Bush's Wall Street bailout and his own bailout of the auto industry).  CEOs aren't accountable when they drive their company into the ground -- they still get their salaries and bonuses; they downsize the lower echelons not to achieve efficiency or flexibility but to show their toughness.  Big corporations generally become big through government largesse, which undercuts Postrel's thesis on a couple of counts.  The immediate post-WWII period was hardly a time of stasis, but whatever dynamism there was came about as a result of joint government-corporate planning.  High-tech industry, as David F. Noble showed in Forces of Production, depends on government support to fund innovation, which tends to be expensive and inefficient, even wasteful.  Elsewhere in the world at around the same time, the Asian "economic miracles" were marvels of central planning and government-business symbiosis, and (yes) highly disruptive for most people.  What kind of balance obtained between the disruption and destruction is hard to measure, but it's not certain that most people benefited over the long run.  As a dynamist, Postrel assumes that they did, because it's self-evident that change and disruption are good for us.  Or at least, for those who matter.

In addition, Postrel's characterizations of critics of unfettered capitalism and technological change as "anticommerce," anti-trade, anti-market, anti-technology, and so on are familiar caricatures but inaccurate.  As with management magical thinking, she takes for granted that if a policy is called "free trade" it must really be about free trade, and "free markets" are really free markets.  But "free trade" agreements are meant to control trade (Obama, for example, wants to limit South Korean auto imports to the US while increasing commerce in the reverse direction), and to subsidize US business interests at the expense of workers.  When Steve Jobs attacked Obama for not being "business-friendly" enough, he wanted the US to be more like China, whose government subsidized the supply chains and other amenities that made his obscene profits possible.  None of these guys really wants to face the free market naked.  But only people like Jobs, Gates, and their ilk can demand government protection against the market's dangers.

So, while Postrel is right to point out that many differences of position don't map well onto "left" and "right", "conservative" and "liberal" categories, her own "stasis" and "dynamism" categories don't work either.  Maybe she'll improve as the book proceeds, if I decide to follow.

P.S.  I've read a little farther.  In chapter 2 she tries to explain more, but just digs herself in deeper.  I have to admit, though, that I'm in sympathy with her definition of "dynamism," which sounds like anarchism to me.  She quotes approvingly the economist Herbert Simon ("like Hayek, a heterodox Nobel Prize economist" (37):
We have become accustomed to the idea that a natural system like the human body or an ecosystem regulates itself.  To explain the regulation, we look for feedback loops rather than a central planning and directing body.  But somehow our intuitions about self-regulation without central direction do not carry over to the artificial systems of human society.  I retain vivid memories of the astonishment and disbelief always expressed by the architecture students to whom I taught urban land economics many years ago when I pointed to medieval cities as marvelously patterned systems that had mostly just "grown" in response to myriads of individual decisions.  To my students a pattern implied a planner in whose mind it had been conceived and by whose fiat it had been implemented.  The idea that a city could acquire its pattern as "naturally" as a snowflake was foreign to them.  They reacted to it as many Christian fundamentalists responded to Darwin: no design without a Designer! [37-8]
I'll have to take Simon's word on the "natural" growth of medieval cities, but it's also true that medieval and ancient societies included projects that were designed and carried out through central planning: cathedrals, for example, didn't just grow, nor did pyramids or aqueducts or the Roman road system.  Probably medieval cities were a mixture of central control and organic, unplanned growth.  I'd also point to the inconvenient fact that "natural" organic evolution often produces very faulty design.  And cancer is dynamic "growth" and "change," but that doesn't make it desirable.

Postrel's trouble is that she isn't consistent or accurate in her classifications.  She condemns "urban planning and endangered species laws to keep out Wal-Mart and block new housing" (22).  But Wal-Mart isn't organic dynamism, it's a centrally controlled entity, organized from the top down, which requires massive organized systems (not to mention big government subsidies for its supply chains, not to mention food stamps and other subsidies for its underpaid workers).  New housing is also generally centrally planned by people from far outside the community, financed by big banking systems, and it also demands public subsidies of water and sewer systems, electricity, and so on.  Blocking such enterprises isn't necessarily stasist, it can just as easily be dynamist small-scale spontaneous resistance against centralized technocrats.

Her accusation of "antitechnology" is also dubious.  Noble showed in Forces of Production that opposition to automation on the shop floor wasn't opposed to technology: machinists were not only fond of machinery, they figured out how to reprogram automated machine tools, reverse-engineering the program tapes when the programming went awry.  In that book and in his later Progress without People (Charles H. Kerr, 1993) he points out that General Electric experimented with a decentralized shop system:
In the late 1960s the management of GE’s Lynn, Massachusetts plant was having technical difficulties with newly installed numerical control lathes and blamed it on worker sabotage. In reality, the workers were trying to correct for problematic equipment by manual intervention but were hampered by management’s insistence that machines could run by the themselves, and that the workers were only “button-pushers” or “monkeys.” After considerable conflict, GE introduced a quality of work life program (prototype of those later introduced in the auto industry) which gave workers much more control over the machines and the production process and eliminated foremen. Before long, by all indicators, the program was succeeding – machine use, output and product quality went up; scrap rate, machine downtime, worker absenteeism and turnover went down, and conflict on the floor dropped off considerably. Yet, little more than a year into the program – following a union demand that it be extended throughout the shop and into other GE locations – top management abolished the program out of fear of losing control over the workforce. Clearly, the company was willing to sacrifice gains in technical and economic efficiency in order to regain and insure management control [65].
It was the workforce that was "dynamist" in this and other cases, and technocratic management that was "stasist."  But Postrel can't see any resistance to technocratic control as anything but stasist.

Again, Postrel reports how,
When Hurricane Andrew swept through Miami in 1992, residents spontaneously took to the streets to clear fallen trees and help neighbors.  Some directed traffic at intersections where the lights were out.  Floridians north of the stricken area loaded their cars with supplies and headed down to help ... Such efforts, unplanned and uncoordinated, proved vital in reaching out-of-the-way towns missed by the Red Cross and government workers.  Like ants following a scent without direction from the queen, charitably minded individuals found places that needed supplies and took care of them.  Decentralized solutions worked even as centralized disaster authorities, specifically the head of Dade County's Emergency Management Office, were throwing tantrums on national television [38].
This is inspiring, and Rebecca Solnit would approve.  Postrel's summary shows what's wrong with her account, though: "For posthurricane Miamians and their benefactors, [decentralized decision making] meant cleaning up, providing ice, food, and gasoline, and getting life back to normal" (39).  Gasoline and ice (in Florida, at least) are the products of highly organized, centralized planning and production, to say nothing of electricity, cars, and the roads on which those benefactors drove them.

The same goes for her objection to "mass-transit subsidies and car-pool mandates to fight the automobile" (22f): "the automobile" isn't some scrappy little mutt that evolved spontaneously.  It could become a vital feature of American life only after it became mass-produced through central planning, with highly organized supply chains, and government-subsidized road systems (the Interstate Highway System didn't just grow either), plus conscious and deliberate programs to disadvantage mass transit.  Postrel's tunnel vision keeps her from seeing a full three-dimensional picture of her pet products and projects, and ends up a caricature.  It appears to me that if she likes a phenomenon, it's dynamist; if she dislikes it, it's stasist.  The world of human enterprise doesn't fit into her categories any more than it fits the conventional left-right, liberal-conservative categories.

Postrel's analysis is, I'd say, of a piece with the Tea Party slogan "Keep your government hands off my Medicare."  She doesn't seem to grasp the intricate connection between central and localized decision-making: you can't really have one without the other.  She comes close to recognizing it when she declares that "The Net not only managed to become big and important before big and important before any would-be regulator noticed, it evolved both software rules and social norms without official direction.  Its origins as a Defense Department program are far less significant than its bottom-up growth and development" (38).  It's possible for a centrally planned system to leave room for "bottom-up growth and development," but you couldn't have the latter without the former. If I manage to get through more of the book, maybe she'll explain how she hopes to get rid of all the stasists and give us a purely dynamist world.