Human Scale Part IV - Rational Ignorance and irrationality
This is a review of Kirkpatrick Sale's Human Scale, continuing from Part I, Planned Obsolescence and Part II, Mass Production = Expensive and Low Quality, and Human Scale Part III - Self Sufficiency. So far, these have all been critical, but next I plan discuss what I liked about the book and its ideas.
Rational ignorance and irrationality
As someone who believes that the value created by private property and free markets is vastly underrated, I am frequently confronted with claims about the psychological biases and failures that prevent capitalism from behaving as efficiently as the atomistic competitive environment of freshmen microeconomic theory (see Failure Part I: Market Failure). However, I am amazed at how infrequently such people turn this analytical technique on their own preferred solutions. It should be - but is not - well known that biases and failures also pervade political systems with similar results (see Failure Part II: Government Failure).
The similarity between libertarians and socialists (especially of the Marxist variety, though they frequently fail to appreciate the differences within their own ranks) is that both find fault at the nexus between corporations and government. The difference is that libertarians believe the solution lies in limiting government power while the socialists believe in limiting corporate power. I take the side I do because political power is force. Sam Walton cannot make you do anything in the true sense of that phrase; he can drive hard bargains, but only if he appeals to the legislature can he obtain the legitimate use of force against you.
Despite this, we have Kirkpatrick Sale advocating the same mechanisms for managing business as we currently do for managing the federal government (theoretically, at least). Democracy is a means of simultaneously economizing on decision-making transaction costs and externalities. We could eliminate externalities if we followed a rule whereby we only made decisions by unanimous consent, but we would rarely make a decision. A dictator has no decision-making transaction costs, so he can make a decision at the drop of a hat and create massive external costs to everyone else. Neither of those is satisfactory. It is also the case that none of them necessarily leads to efficient outcomes, nor does any of them honor the Nozickian side-constraints of recognizing moral principles like free speech. After all, Socrates was condemned for his exercise of free speech by the first democracy, one which Sale appears to admire.
Does anyone who has ever worked with a wide variety of people actually believe that all of them could be as effective as both supervisor and laborer? I have seen supervisors, engineers, and outspoken technicians who would be terrible managers because they lack the combination of technical and social skills, and I have seen terrible technicians who have been successful politicians. Who doubts that such problems would be manifest in worker-run companies? One of our greatest challenges at my workplace right now is to get the older workers to develop some interest in the newer, high-tech stuff. They would prefer to stick with the older equipment even as they can see its use dwindling and the writing on the wall. Yet they refuse to acknowledge reality. Who believes that such people would not abuse a democratic decision-making process to stall beneficial change because it would push them out of their comfort zone? What would become of them? If allowed to prevail, they would create stagnation everywhere. If not allowed to prevail, in a society such as Sale describes, they would essentially be condemned to death, since if kicked out of one commune/town, they and their reputation would not be easily accepted into another. In the current regime, in which authority relation dominates most organizations, they are either told what to do or asked to leave, where they easily make their way into another organization (anonymity is a feature of our larger-than-human-scale society; anonymity holds advantages as well as disadvantages). But why would they behave that way in Sale's envisioned society? The answer is simple: votes cost nothing - why wouldn't they act that way?
Here, Sale suffers from the time at which his book was written, as the late 1970s were indeed a time of disillusionment. Jimmy Carter, the technocrat whom Sale rightly sees through, may have been a brilliant individual, but that brilliance perhaps also led to his determination that one man or cabinet could micromanage incredibly complex bureaucratic operations. Carter was not elected, though, on the basis of his vision, but rather because he wasn't the man who pardoned Richard Nixon. Nixon may have been the man who got us out of Johnson's SE Asian quagmire, but Johnson's other quagmires - the War on Poverty and Medicare - were proving to be just as disastrous and more expensive at the time Sale was writing. The fact that Nixon withdrew from Viet Nam also did not erase the cynicism with which he and Henry Kissinger ran foreign policy, or with which he ran domestic policy. The feminist movement was beginning to founder and split at the time. Large cities were crumbling as they wavered between the old method of iron-handed crackdown on crime and the new method of throwing money at underlying social problems. New regulatory agencies were forcing factories to close faster than the results of new technologies solved environmental problems. The Japanese automobile industry was taking market share; people were beginning to believe that maybe Soviet Communism wasn't evil, perhaps it was just different, and that thought was depressing to everyone else. Everywhere you looked, the American system was being declared dead. Thankfully, until just recently, things haven't been as depressing. The Sagebrush revolution that was rolling at the time Sale wrote brought Reagan and his "get government off our backs" rhetoric, but also more expansion in federal power. Personally, I would credit the end of the malaise to the economic expansion that came about in both the 80s and 90s, and to the extent the government helped that expansion, to the deregulation measures signed by Carter.
From our perspective, many of the predictions Sale made in that era seem silly, even laughable. Solar power was then and is again today said to be inches away from achieving the breakthrough necessary to make it economically viable. Even today, people make claims that show they haven't even begun to understand the issues with making solar competitive (see, for example, the debate in the comments to this post at environmental economics blog). Communes grew out of the 60s, but collapsed in the 70s and 80s as the Boomers grew up and got jobs. The Zionist kibbutzim movement collapsed when Israel was secured. Sale mentions the success of Amish and Mennonite societies as indicators that his democratic communities could thrive, but largely ignores them. Why shouldn't he? After all, few people receptive to his core argument are going to be enthusiastic about joining a strict religion, eschewing all modern conveniences, and living on rural farms. And, ironically, Wal-Mart is today one of the favorite Amish places to shop.
All of these provide adequate evidence to me that simply allowing people to vote on everything under the sun is never going to be sufficient to bring about everything claimed by proponents of this approach. People remain ignorant of things that do not interest them or they do not understand, but that does not prevent them from voting on those very issues. Further, people are beset with all manner of biases and irrational motivations. When they apply these to personal decisions with economic consequences, they either learn a lesson or they don't, but they alone pay the price. When they apply these biases and irrational choices to political consequences, they may pay little or no price to make the decision, and may see only the problematic outcome without being forced to recognize the problematic system that led to it.
The workers may all vote that everyone gets the same pay. The vote costs nothing to most. The outcome costs some a little in the short run. The fact that everybody prefers to be the dispatcher and nobody wants to learn to do the hard skills (engineering, welding) matters very little at first. Later, when the older skilled workers leave and they can't hire any replacements, and they gradually falter in competition with the fabrication house in the next town over that didn't go democratic, it dawns on them that something is wrong, but the vote is by now long forgotten and the practice of equal pay is tantamount to a commandment from The Deity. And this competitive problem is attributed not to the logical outcome, but to the evil and greed of the factory that didn't succumb to such hyper-democracy, and to the system in which it was created.
When some worker is unsatisfied with the manner in which his factory is being run, he may still retain the freedom in Sale's world to go away and start his own business. But in a small community where people are allowed to vote both on workplace issues and community issues, how will he be able to acquire the materials, land, buildings, and machines necessary to start this new workplace? Perhaps he wants to try a new technology, one which the Saleists believe is not "Human Scale". After all, Sale himself is all over the map on the issue, having recently reveled in the destruction of the personal computer (Wired, Interview with the Luddite), but having endorsed photovoltaic cells which benefit from the same semiconductor technology. How does he determine which is good and which is bad? If allowed to vote on the allocation of resources within a community as he advocates, it seems that the choices would not be based on technical considerations, but largely on the force of rhetoric and personality.
Voting your way to freedom without considerable side-constraints on the process is a chimera. While Sale makes a nod in the direction of consensus instead of simple majoritarian voting, he does not emphasize it, but that seems to me to be the obvious first step. A second would be to acknowledge a new Bill of Rights, similar to that embodied in the Constitution, but with greater emphasis on the articles that seem to be forgotten (like the Takings Clause in the Fifth Amendment). I'm not sure Sale would endorse it, since he seems to be no great fan of private property. Democracy is a means, not an end. It sometimes works toward poor ends, as the darker inhabitants of The South before 1863 could confirm.
Rational ignorance and irrationality
As someone who believes that the value created by private property and free markets is vastly underrated, I am frequently confronted with claims about the psychological biases and failures that prevent capitalism from behaving as efficiently as the atomistic competitive environment of freshmen microeconomic theory (see Failure Part I: Market Failure). However, I am amazed at how infrequently such people turn this analytical technique on their own preferred solutions. It should be - but is not - well known that biases and failures also pervade political systems with similar results (see Failure Part II: Government Failure).
The similarity between libertarians and socialists (especially of the Marxist variety, though they frequently fail to appreciate the differences within their own ranks) is that both find fault at the nexus between corporations and government. The difference is that libertarians believe the solution lies in limiting government power while the socialists believe in limiting corporate power. I take the side I do because political power is force. Sam Walton cannot make you do anything in the true sense of that phrase; he can drive hard bargains, but only if he appeals to the legislature can he obtain the legitimate use of force against you.
Despite this, we have Kirkpatrick Sale advocating the same mechanisms for managing business as we currently do for managing the federal government (theoretically, at least). Democracy is a means of simultaneously economizing on decision-making transaction costs and externalities. We could eliminate externalities if we followed a rule whereby we only made decisions by unanimous consent, but we would rarely make a decision. A dictator has no decision-making transaction costs, so he can make a decision at the drop of a hat and create massive external costs to everyone else. Neither of those is satisfactory. It is also the case that none of them necessarily leads to efficient outcomes, nor does any of them honor the Nozickian side-constraints of recognizing moral principles like free speech. After all, Socrates was condemned for his exercise of free speech by the first democracy, one which Sale appears to admire.
Does anyone who has ever worked with a wide variety of people actually believe that all of them could be as effective as both supervisor and laborer? I have seen supervisors, engineers, and outspoken technicians who would be terrible managers because they lack the combination of technical and social skills, and I have seen terrible technicians who have been successful politicians. Who doubts that such problems would be manifest in worker-run companies? One of our greatest challenges at my workplace right now is to get the older workers to develop some interest in the newer, high-tech stuff. They would prefer to stick with the older equipment even as they can see its use dwindling and the writing on the wall. Yet they refuse to acknowledge reality. Who believes that such people would not abuse a democratic decision-making process to stall beneficial change because it would push them out of their comfort zone? What would become of them? If allowed to prevail, they would create stagnation everywhere. If not allowed to prevail, in a society such as Sale describes, they would essentially be condemned to death, since if kicked out of one commune/town, they and their reputation would not be easily accepted into another. In the current regime, in which authority relation dominates most organizations, they are either told what to do or asked to leave, where they easily make their way into another organization (anonymity is a feature of our larger-than-human-scale society; anonymity holds advantages as well as disadvantages). But why would they behave that way in Sale's envisioned society? The answer is simple: votes cost nothing - why wouldn't they act that way?
Here, Sale suffers from the time at which his book was written, as the late 1970s were indeed a time of disillusionment. Jimmy Carter, the technocrat whom Sale rightly sees through, may have been a brilliant individual, but that brilliance perhaps also led to his determination that one man or cabinet could micromanage incredibly complex bureaucratic operations. Carter was not elected, though, on the basis of his vision, but rather because he wasn't the man who pardoned Richard Nixon. Nixon may have been the man who got us out of Johnson's SE Asian quagmire, but Johnson's other quagmires - the War on Poverty and Medicare - were proving to be just as disastrous and more expensive at the time Sale was writing. The fact that Nixon withdrew from Viet Nam also did not erase the cynicism with which he and Henry Kissinger ran foreign policy, or with which he ran domestic policy. The feminist movement was beginning to founder and split at the time. Large cities were crumbling as they wavered between the old method of iron-handed crackdown on crime and the new method of throwing money at underlying social problems. New regulatory agencies were forcing factories to close faster than the results of new technologies solved environmental problems. The Japanese automobile industry was taking market share; people were beginning to believe that maybe Soviet Communism wasn't evil, perhaps it was just different, and that thought was depressing to everyone else. Everywhere you looked, the American system was being declared dead. Thankfully, until just recently, things haven't been as depressing. The Sagebrush revolution that was rolling at the time Sale wrote brought Reagan and his "get government off our backs" rhetoric, but also more expansion in federal power. Personally, I would credit the end of the malaise to the economic expansion that came about in both the 80s and 90s, and to the extent the government helped that expansion, to the deregulation measures signed by Carter.
From our perspective, many of the predictions Sale made in that era seem silly, even laughable. Solar power was then and is again today said to be inches away from achieving the breakthrough necessary to make it economically viable. Even today, people make claims that show they haven't even begun to understand the issues with making solar competitive (see, for example, the debate in the comments to this post at environmental economics blog). Communes grew out of the 60s, but collapsed in the 70s and 80s as the Boomers grew up and got jobs. The Zionist kibbutzim movement collapsed when Israel was secured. Sale mentions the success of Amish and Mennonite societies as indicators that his democratic communities could thrive, but largely ignores them. Why shouldn't he? After all, few people receptive to his core argument are going to be enthusiastic about joining a strict religion, eschewing all modern conveniences, and living on rural farms. And, ironically, Wal-Mart is today one of the favorite Amish places to shop.
All of these provide adequate evidence to me that simply allowing people to vote on everything under the sun is never going to be sufficient to bring about everything claimed by proponents of this approach. People remain ignorant of things that do not interest them or they do not understand, but that does not prevent them from voting on those very issues. Further, people are beset with all manner of biases and irrational motivations. When they apply these to personal decisions with economic consequences, they either learn a lesson or they don't, but they alone pay the price. When they apply these biases and irrational choices to political consequences, they may pay little or no price to make the decision, and may see only the problematic outcome without being forced to recognize the problematic system that led to it.
The workers may all vote that everyone gets the same pay. The vote costs nothing to most. The outcome costs some a little in the short run. The fact that everybody prefers to be the dispatcher and nobody wants to learn to do the hard skills (engineering, welding) matters very little at first. Later, when the older skilled workers leave and they can't hire any replacements, and they gradually falter in competition with the fabrication house in the next town over that didn't go democratic, it dawns on them that something is wrong, but the vote is by now long forgotten and the practice of equal pay is tantamount to a commandment from The Deity. And this competitive problem is attributed not to the logical outcome, but to the evil and greed of the factory that didn't succumb to such hyper-democracy, and to the system in which it was created.
When some worker is unsatisfied with the manner in which his factory is being run, he may still retain the freedom in Sale's world to go away and start his own business. But in a small community where people are allowed to vote both on workplace issues and community issues, how will he be able to acquire the materials, land, buildings, and machines necessary to start this new workplace? Perhaps he wants to try a new technology, one which the Saleists believe is not "Human Scale". After all, Sale himself is all over the map on the issue, having recently reveled in the destruction of the personal computer (Wired, Interview with the Luddite), but having endorsed photovoltaic cells which benefit from the same semiconductor technology. How does he determine which is good and which is bad? If allowed to vote on the allocation of resources within a community as he advocates, it seems that the choices would not be based on technical considerations, but largely on the force of rhetoric and personality.
Voting your way to freedom without considerable side-constraints on the process is a chimera. While Sale makes a nod in the direction of consensus instead of simple majoritarian voting, he does not emphasize it, but that seems to me to be the obvious first step. A second would be to acknowledge a new Bill of Rights, similar to that embodied in the Constitution, but with greater emphasis on the articles that seem to be forgotten (like the Takings Clause in the Fifth Amendment). I'm not sure Sale would endorse it, since he seems to be no great fan of private property. Democracy is a means, not an end. It sometimes works toward poor ends, as the darker inhabitants of The South before 1863 could confirm.
Labels: book, decentralization
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