Friday, January 21, 2011

Time to be What Matters

Practice is important in every aspect of work, not just the technical. Need to practice finding meaning; if you don't, you won't.

If you're always doing work you believe in, you don't have to worry about ending doing work you don't believe in. Start now.

Primacy of meaning over technical capability as vital for nations as for individuals. Technique has no allegiance. Meaning sticks.

The United States has since its inception been a global leader in openness and experimentation. Leadership in innovation followed.

The Next America will not be built from technique, any more than the last. It will arise from a positive insurgency of value

Time to be what matters.

Wednesday, January 19, 2011

Chaos in the Streets

In my last post (motivated by an exchange with @keithkall on the topic of complexity theory), I noted that the observations of actual changemakers held real insights that we students of change do well to heed. Here's an example that wonderfully illustrates the notion of extreme sensitivity to initial conditions in complex systems:
The critical hour of contact between the pushing crowd and the soldiers who bar their way has its critical minute. That is when the gray barrier has not given way, still holds together shoulder to shoulder, but already wavers, and the officer, gathering his last strength of will, gives the command: "Fire!" The cry of the crowd, the yell of terror and threat, drowns the command, but not wholly. The rifles waver. The crowd pushes. Then the officer points the barrel of his revolver at the most suspicious soldier. 
From the decisive minute now stands the decisive second. The death of the boldest soldier, to whom the others have involuntarily looked for guidance, a shot into the crowd by a corporal from the dead man's rifle, and the barrier closes, the guns go off themselves, scattering the crowd into the alleys and backyards. But how many times since 1905 it has happened otherwise! At the critical moment, when the officer is ready to pull the trigger, a shot from the crowd--which has its Kayurovs and Chugurins--forestalls him. This decides not only the fate of the street skirmish, but perhaps the whole day, the whole insurrection.
The author is Leon Trotsky, certainly one of the 20th century's great changemakers (and one who, coincidentally, also bears a striking resemblance to @bill_easterly) writing in his book The History of the Russian Revolution.

Now, what is the point of this reference to chaos in the streets, beyond its connection to deterministic chaos and the dynamics of complex systems? Two points, actually:

1) The actions of changemakers don't always turn out so well in the long run. (USSR? No.) Indeed, as Paul Polak  (a.k.a. @outofpoverty, founder of IDE, an organization whose treadle pumps have dramatically increased the productivity and incomes of over 17 million smallholder farmers worldwide) has recently and insightfully written, "institutions" are nothing but "radical ideas cast in concrete." Furthermore, "The failure of development is closely tied to the ossification of big institutional structures." (Read the post. It's great. He's a guy to pay attention to.)

2) Emergence in real (as opposed to theorized) human societies does not arise as a consequence of some pseudo-mystical force called "spontaneous order." It arises out of the choices and decisions made by actual human beings on a daily basis. Many of those decisions are routine; most occur within the context of existing institutions (a.k.a. radical ideas set in concrete). But, every once in a while, an individual or group of people organizes to challenge powerful incumbents. (#sidbouzid) The process may look chaotic from the outside. But it has its own internal logic, planning, agency, decisive minutes, and decisive seconds.

Development in human societies is nothing but the process by which novelty is created, reinforced, and then challenged. People with initiative and vision make that process happen. The study of development without reference to, and understanding of, the people who make development happen is ultimately the study of nothing.

Monday, January 17, 2011

Kalling All Development Economists: Cut the Crap

Keith Kall (@keithkall) gets to the heart of the matter with this comment re. my last post about complexity:
...Very interesting post. I was left with the thought that a lot of this rhetoric and hyperbole could be easily be dashed, if those who write about entrepreneurship would walk out on the limb and engage in an entrepreneurial venture in order to balance some experience with success and failure with their beloved theory; rather than simply nest in the comfort of observation, supposition and mathematical formulas. But then, again, that's not how economists seem to do things....
About a decade ago--having at long-last completed my doctoral dissertation involving an application of complexity theory to the economics of production and innovation--I came to pretty much exactly the same conclusion that Keith does here: since change in human societies is, indeed, increasingly fast-paced and unpredictable, maybe the best way to find out what's going on is to ask those people who spend all day making change happen themselves.

This conclusion motivated me to join forces with GrameemPhone founder Iqbal Quadir to start Innovations journal (@innovationsjrnl) an academic publication whose core mission is to feature the insights of such changemakers, a.k.a. entrepreneurs. As we wrote in the editors' introduction to the inaugural issue:
Existing institutions and incentive structures may or may not be adequate to address [21st century global] challenges. If the past is any guide, continued progress in addressing public challenges will require continued innovations—the efforts of individuals, groups, and communities who creatively employ new organizational forms, and in many cases new technology, to effect discontinuous change. This journal is about such innovations and the changes that they bring about. It is less about what needs to be done, and more about what people are doing...
Academic journals addressing public challenges typically are structured to address the general characteristics of problems rather than particulars of solutions... Important insights with potentially broad application are often lost simply for lack of a common space where they can be found. By focusing on the particulars of practice, Innovations is intended to complement existing journals, providing a common space that cuts across academic disciplines, bridges theory and practice, and links human action with global impact.
In its first five years of publication Innovations has featured the insights of a remarkable group of entrepreneurs, including Mo Ibrahim (CelTel & Mo Ibrahim Foundation), Fazle Abed (BRAC), Nick Hughes & Susie Lonie (M-PESA), Rory Stear & Kristine Pearson (Freeplay Energy), Matt Flannery  (1 & 2,, Kathryn Hall-Trujillo (Birthing Project), Catherine F. LainĂ© (AIDG), Martin Fisher (KickStart),  R. D. Thulasiraj (Aravind Eye Hospitals), Karen Tse (International Bridges to Justice), and Ibrahim Abouleish (SEKEM).

Given all this, I appreciate Keith's redirection to what I consider to be the core practical implication that emerges from serious consideration of complexity and development economics (ref. also my previous posts re. Bill Easterly--1234,  5, and 6--as well as the inimitable Jeff Sachs): development economists should cut the crap, stop fixating on things that don't matter, and start paying more serious attention to the practical insights of entrepreneurs.

Friday, January 14, 2011

Complexity: It's Not as Simple as Bill Easterly Thinks It Is (It's Simpler)

Folks over at @aidwatch have been getting into writing about complex systems these days. I'm not sure I know what they're talking about. And I don't think they do either.

Here's Bill Easterly writing today in the Guardian's Poverty Matters blog:
A popular topic in the aid blogosphere this week was not about Haiti or Ivory Coast or south Sudan but about complex systems, i.e. systems that cannot be reduced to a simple mathematical or statistical model, where actions often have unintended effects. [Link included as in the post]
Now, admittedly, this is just one sentence. But still, it would be difficult to come up with a more poorly informed summary of the nature of "complex systems" than the one Easterly offers here. 

Why? The reason is that the core insight of the study of complexity--be it deterministic chaos, cellular automata (e.g. John Conway's marvelous "game of life") or agent-based modeling in general, to cite just a few of the many variants that loosely define this domain of study--is this: systems that are not just reduced to, but actually defined by, simple mathematical models, have the potential to generate extremely...well, complex behaviors. The classic example is the logistic map, an extremely simple function whose dynamics are highly complex:

Anyhow, the key point is that such complex systems, while entirely deterministic (that is, lacking any random element) generate behaviors that are indistinguishable from those of stochastic systems (systems driven by a random component). (When mapped in "state space" they also yield beautiful fractals...but that's another story.) Before the study of deterministic chaos (and with it "extreme sensitivity to initial conditions" a.k.a. the "butterfly effect"), determinism and randomness were understood to be opposites. So understanding that there were significants domains in which they were indistinguishable from one another was a pretty big deal.

The caricature of "complexity theory" that Easterly offers is in line with a body of work by Austrian economists that has sought, with greater and lesser desperation, to connect Friedrich Hayek's famous notion of "spontaneous order" in economics systems to that of "emergence" and "self-organization" in complex systems. This was a failed undertaking from the outset, nearly twenty years ago now. It is also one that I have some confidence Hayek himself would have judiciously avoided. The reason is that the problem that concerned Hayek (and von Mises before him) was not the emergence of  complexity in the absence of randomness, but rather the impossibility of calculation in the presence of randomness (and its siblings--noise, and informational decay). 

An illustration: In the "The Impossibility of Socialist Calculation," Hayek assails the now-forgotten Oskar Lange for making following assertion in an attempt at critiquing von Mises: "The administrators of the socialist economy will have exactly the same knowledge, or lack of knowledge, of the production functions as the capitalist entrepreneurs have." This is what Lange said; Hayek characterizes the claim, with his characteristic light touch, as "a blatant untruth, an assertion so absurd that it is difficult to understand how an intelligent person could ever honestly make it."

Now, let's pause to consider. If the essence of the problem faced by administrators of socialist economies was deterministic chaos as described above (the essence of unpredictability in complex systems) then Lange's statement would not be absurd. It would actually be correct: under circumstances of deterministic chaos there is no way the entrepreneur could have better information than the planner. But that's not Hayek's objection. He does not believe that Lange has failed to grasp the essence of extreme sensitivity to initial conditions. Indeed, his point is not fundamentally about dynamics at all. What Hayek is really talking about is the heterogeneity and localization of information. In other words, Lange is wrong because the entrepreneur has unique and specific information to which the planner does not have access:
The individual entrepreneur will not possess or require knowledge of general production functions, but he will currently learn from experience how at any given time variations in the qualities or the relative quantities of the different factors of production he uses will affect his output. This information relevant for and possessed by each entrepreneur will be very different from that possessed by others. To speak of the aggregate of such information dispersed among hundreds of different individuals as being available to the planning authority is pure fiction.
Given this, what do you think Hayek would say about a model of economic dynamics in which every economic actor not only possessed the same ability to observe local conditions, but followed the exact same deterministic rules? That is the essence of a complex system! But it is the opposite of a model built upon the heterogeneity of economic actors, and the impossibility of reducing their choices to simple models in the aggregate. In other words, a complex system is the opposite of "a system that cannot be reduced to a simple mathematical or statistical model, where actions often have unintended effects" (ref. above).

Now, since ours is a country in which liberty prevails, I suppose it's OK to employ the term "complex systems" to refer to things that are its opposite. Why not? It's all just silly science stuff anyway. So, henceforth, I am sure that Easterly will allow the same license to others who chose to reinvent technical terms--say "effectiveness," "confidence," "evidence"--in ways that similarly suit their fancy. Sound good?