Prosperity, Productivity and the Contest of Ideas

Blog_GreenShootIn his latest book: The Smartest Places on Earth: Why Rustbelts Are the Emerging Hotspots of Global Innovation economist and investor Antoine Van Agtmael highlights signs of unexpected competitive resilience in developed economies. As the guy who coined the term Emerging Markets and a leader in revealing the value to found in those markets it seems Van Agtmael was somewhat surprised at the signs of metamorphosis in developed economies. The author points to the role of both individual agency and institutions in a possible reemergence of highly competitive value creating enterprise.

Individuals lead and individuals bleed. A society’s prosperity depends on its productivity – that is to say, for value to be shared it must at first be created. Individuals create value big and small. Wheels occasionally emerge, and teams peacefully collaborating toward shared ends catch everyday miracles. In this way, for the last 200 years all around the world we have lifted ourselves out of poverty. Why are there smartest places? Why have some people prospered and others are yet to do so? Why have some places forgotten how? What does and does not depend on us? Unless one has an extraordinary belief in coincidence, individual freedom and property rights matter.

Investigating bright green shoots of growth in former industrial wasteland, Van Agtmael identifies the classic role of enterprising individuals in value creation. He also sees the role of individuals forging bridges between universities, labs, industrial incumbents and startups. There are so very many layers of economic capital implicitly being leveraged in his examples. Individuals motivated by incentive striving for success and not crushed by social or economic oppression. Educational and research institutions that are not entirely hidebound to orthodoxy and the will of power. Rather that they enable human capital and the generation of ideas. Whether your economy is emerging, newly emergent, or reemerging from the rustbelt, institutions of law and exchange that are transparent and dependable seem now to be more important than ever.

Perhaps not surprisingly, after 8 long years of the Great Stagnation there are many seemingly willing to accept the false promises of one political P.T. Branum or another. And, so we see salesmen and suckers giving oxygen to Socialism, restrictions on free speech and thought in universities, and the zero sum logic of xenophobia and protectionism. Somehow it seems appropriate to misquote Mao Tse Tung saying 百鳞翅齊放, 百家爭鳴 ‘let a hundred butterflies bloom, let a hundred schools of thought contend’. Did Mao make a mistake that setback the Chinese people’s emergence from death and squalor by two generations? Or was it a cynical way of tricking a generation of a people’s best and brightest so that they could be eradicated like pests? Perhaps it doesn’t matter, for what depends on us is in the present.

Mao was right the first time, if you want a hundred flowers to bloom you need to allow for the contest of ideas. At a time when almost all emergent economies are struggling to deliver persistent growth and prosperity to their people the role of antifragile institutions just can’t be underestimated. So today of all days there appear to be lessons on the extraordinary value of institutional order if you are struggling to emerge, reemerging after a post industrial winter, or simply emergent.

Accidental Success in the Market


I remember going to the road safety centre when I was in primary school and learning about safe driving. They said,

“There’s no such thing as an accident. We call them car crashes because they are always a result of someone’s mistake. Car crashes don’t just happen by accident.”

In a recent discussion, it was suggested to me that a particular brand had done well in  China “by accident”. The considerable success of the brand in question was not due to the actions taken by the brand team and the rest of the company in executing a focused plan to enter that marketplace. Rather, the brand and its team had been successful purely because consumers had come to the producer’s home region and pulled the product through.

It was clearly my colleague’s position that the brand’s team could not take the credit for their own success; that somehow the credit belonged to clever resourceful intermediaries recognising an opportunity in the market and playing the arbitrage. In this theory clever and resourceful micro entrepreneurs sought the brand out and resolved its effective distribution.

To say it was a point of contention would be an understatement.

You know what I say? Bravo!

Their brand and product clearly offered a solution to a consumer problem so effectively that the consumer sought them out and went to lengths to place them in a market where the company had limited access or distribution. In this instance the success was so great that it created a supply challenge.

Brand success doesn’t happen by accident. Success happens when intent, purpose and value all work together consistently and authentically to meet a need. Brand success is the result of clear messaging, which occurs through trustworthy, reliable and consistent behavior.

Sure, sometimes aligning of consumer trends with product offers can help boost profile, but the original offer has to resonate to have any chance of achieving this brand’s level of success.

In the same way, brand failure is often the result of not watching the road, or focusing too much effort racing the guy in the next lane, while tuning the radio, eating a hamburger, and checking your makeup in the mirror all at the same time. It’s no surprise – and no accident – when it all ends in a crash.

Suboptimal Systemic Design is a Moral Challenge


To be human is to be a moral agent. To be a designer is to be everywhere and always a moral agent. Design is an act of nontrivial choice. That is to say it holds the prospect of nontrivial impact on others. In absolute terms consequence is beyond knowing. It may be a harsh and uncomfortable truth to face, but as a designer there is no butterfly defense. As a designer you own both your success and the chaos you cause. How then to find a legitimacy for action?

Firstly, design is an act of imagination. Imagination has horizons far beyond the possible. The borders of human imagination include both the best of all outcomes and failure. Design then is an act of extraordinary optimism or arrogance. To design is to imply that the outcome will be better than what would have emerged without your action. History is literally a record of our successes and failures. At least on average over the last 200 years our successes have outweighed our failures. In a period unmatched in history human well-being has improved at 2% per annum. Albert Hirschman made the observation that humans appeared to have two powerful attributes. The near universal ability to underestimate the scale and complexity of a problem matched by the human’s extraordinary capacity to solve problems once we assumed them. This though does not provide an ethical foundation for the reckless juggler of fate. What would have been the achievements in overcoming poverty and disease if our design failures had not cost almost as much as our successes?

Despite the best intentions of our undergraduates, for success, it is not enough to simply reject the heavy stepping design of our industrial past. Passive resistance is not an ethically resilient response to that brutal insensitivity. Two wrongs do not make a right. Pious intellectually limp environmentalism doesn’t heal the earth. It is not what you say that matters, it is your choices. An empty bus driver doesn’t have a green job. As a designer your intentions are important, just like good aim is important to an archer, but it is the arrow that fells the foe. G.L.S. Shackle and Ludwig Lachmann aren’t on the regular reading lists of your undergraduate design degree. However just like Aristotle, they wrote and our ignorance is no defense. Radical uncertainty fractures our design decisions from future consequence. Consequence matters, but in this world design intention alone does not determine success. There lies a design limit of the consequentialist ethic on which action rests. Design determines the very boundaries of the future world, what should guide the hand of the designer?

Exceptionalism is the dominant faith of design history. The hero shots of architects and engineers stare with unnerving certainty from every designer’s collection of coffee table references. Self assured assertive modernism marks both the successes and abject failures of Le Corbusier. Despite our faith in swaggering genius this the most prosperous point in human history is barely decorated with their artifacts. Yet our world is now almost utterly the product of design decisions. Every house everywhere is the product of design and not just jewels of glossy heavy stock magazines. Design success clearly isn’t a product of any particular cult.

The choices of designers determine the very speed limit of societies progress. Ethical design must be successful design. Neither design by precedence nor supplication to a superstar offers assurance of success. Everything that stands between mind and mud is the object of design. That has never been more important than at our moment in history. As we stumble beyond the first years of the 21st century our fears of failure seem matched by the scale and prospect that lies before humanity. If those challenges are beyond recourse to 19th century Consequentialism and 20th century hero fetishism what allows us to act?

At the time of writing, we watch as the very systemic design of The Organization for Security and Co-operation in Europe (OSCE) is failing our future. The border of peaceful democratic and prosperous Europe is being smashed family-by-family, town-by-town, and dream-by-dream. Totalitarianism in democratic drag has used missiles, tanks, nationalism, and lies to suppress its neighbors in Ukraine as well as Russia’s own citizens.

This is very much a question for our time. It isn’t abstract and it isn’t lying for lack of attention in unvisited stacks of academia. Nicholas Nassim Taleb has pushed rich and deep ideas onto the edge of common consciousness. Taleb has increasingly gained collaborators in engineering, systems design, mathematics, physics, economics and philosophy. As the speed and magnitude of design decisions increase, it is an imperative that an effective ethic of design choice be established. That ethic clearly needs to be independent of ends. That is it cannot seek its justification it what may be, rather it must be rooted in justifiable means. Fortunately, the enlightenment philosopher David Hume provided a starting point for such an ethic with his concept of Just Rules. The great 20th Century economist and philosopher Friedrich Hayek recognized the application of Just Rules to meet the challenges of a modern social order. The current work on the Precautionary Principle by Taleb and his colleagues is a significant down payment; there remains much to be done.

Certainly bureaucrats and diplomats have already enjoyed the careers and cocktail parties that were the design consequence of the OSCE’s establishment. Right now though, who would suggest that a veto for the aggressor was a feature of successful design? Who west of the Volga would proudly stand and own that choice? The design flaw was there to be seen on the day it was signed. So who owns the dead? Certainly the aggressor remains responsible, but what of the designers who knew the wall would collapse? Where are they now? What consequence for bureaucrat and politician whose fine speeches marked the ceremony that brought the OSCE to being? Neville Chamberlain notoriously claimed to have designed “Peace in our times.” Perhaps his everlasting shame is consequence enough. I doubt the 10s of millions of dead who paid the price in World War II would think so. The price for the right to continue lifting billions from poverty is the establishment of a universal design ethic that is fit for purpose. Is that too much to ask?