David Brin offers a usefully concise means for distinguishing liberalism from what liberalism became within just a few years from Adam Smith’s death – the worship of private property or as Brin puts it “today’s idolatry of personal and family wealth as the fundamental sacrament of economics”. He contrasts that with “the Enlightenment’s principal tool Reciprocal Accountability. But it really is just another way to say ‘get everybody competing'”.
I don’t think ‘get everyone competing’ is quite right, but what sparked this post was Brin’s generalisation of this idea, his assertion that this ‘decentralise and compete’ formula isn’t just descriptive of the way markets have evolved. It’s also descriptive of their correlative in Western modernisation – government. And it’s also descriptive of another transformational system – science.
Ever since civilization began, nearly all societies were dominated by centralized oligarchies, priesthoods or hierarchies who ruled on policy, resource-allocation and Truth for 4,000 years of general incompetence mixed with brutal oppression.
Today, by sharp contrast, all three of the Enlightenment’s great arenas — democracy, markets and science — feature a revolutionary structure that broke with the oligarchic past. The old, arrogant, top-down approach was replaced with something else. Something that great Pericles described 2,000 years earlier, during the brief Athenian Renaissance.
I have several related responses beyond agreeing with Brin’s suggestion that this way of seeing the world it’s a big deal. It is indeed thrilling once you ‘get’ the way in which systems can work, and can indeed work much better, once they’re no longer directed. This was the big message of Smith, that markets provided order without design and provided the stimulus for Darwin’s ideas (via Thomas Malthus). As former Coalition leader John Hewson put it as soon as you get it “suddenly you realise that a lot of what you’d thought was wrong.”
It’s this sense of ‘aha’ that, I think lies behind a lot of the instinct that economic policy makers have to make ‘markets’ of things, because they’ve seen the power, indeed the beauty, of decentralised decision making when it works well – and the comparative dumbness of so much decision making by centralised bureaucracies. (As the Chief Economist and Chief Scientist of Google said to us when we went to visit them to discuss Kaggle with them, “In Google we spend a lot of time wondering why, if crowds can be so wise, committees can be so dumb”.)
Still, the instinct that it’s only markets that can do this is an exercise in intellectual impatience I think. And I also think that Brin’s reduction of it all to ‘competition’ is likewise too impatient. Take the separation of powers. This limits the power of any officer or branch of government and that’s well and good. And at the limits of their power, different parts and arms of government ‘compete’ in some sense. They certainly test each other’s limits. But they also co-operate. Local, state and federal governments, departments of state all cooperate with each other. They may not do so very effectively in all sorts of ways, they may serve their own interests too intently, but they are supposed to cooperate in many respects and in many respects they do.
Likewise in science, there’s competition, but it’s within an ethos of norms which consciously make calls on the greater good. So much so that, in a favourite quote of mine John Dewey associates science with cooperation, and indeed that with democracy:
No scientific inquirer can keep what he finds to himself or turn it to merely private account without losing his scientific standing. Everything discovered belongs to the community of workers. Every new idea and theory has to be submitted to this community for confirmation and test. There is an expanding community of cooperative effort and of truth. . . . [T]hese traits are now limited to small groups . . . . But the[ir] existence reveals a possibility of the present. . . . The general adoption of the scientific attitude in human affairs would mean nothing less than a revolutionary change in morals, religion, politics and industry.
So in many areas, a precondition of an open, decentralised order operating well is that, while it creates the prospect of competition (which except in well functioning markets will generally impose costs as well as benefits), it also has resources representing collective interests – through norms and/or coercion to keep competition stable and within the bounds that make it productive rather than harmful to the collective interest.
This leads me to my third point on Brin’s piece. The future lies in finding ways of expanding this realm of decentralised decision making. And it won’t always be competition that we appeal to. Indeed I’d say that our experience on this journey so far is that the prime value we appeal to is cooperation not competition. The establishment of the Toyota production system devolved decision making on many things down from the managers and engineers. And it’s ethos wasn’t competition, but the intrinsic motivation of people operating in teams given all sorts of support from sophisticated statistical control information to ten times as much training as their American counterparts to master and then improve a range of tasks which it was their collective responsibility to optimise.
Our experience of the internet is showing us something similar. As Eric S. Raymond stresses, open source code is typically better than proprietary code because it embodies the efforts of free individuals doing something for its own, rather than the boss’s sake. Of course it’s also true that such people, although they may valorise collaboration, may nevertheless be motivated by ‘glory’, by the esteem of their fellows. And that esteem is to some extent, but only some extent, a competitive thing. Esteem is often positional, and so if people seek it, by definition they compete with others with similar aims. But the ‘market’ for open source coding is not especially competitive. It’s decentralised.
Elsewhere firms have tried to improvise some embrace of these ideas. Intrinsic motivation is something that managers understand (even if government policy makers economics textbooks writers rarely do). And something like Google, 3M’s and Atlassian’s “20 percent time” seeks to dilute the command and control of those at the top and suffuse the organisation with greater capacity for open, decentralised decision making. You can also argue, as I’ve done, that in some ways, we need to find our way back to older craft based approaches to work.
And there’s another crucial way in which we need to pursue decentralised decision making, though we probably know even less of the theory and the practice of it than we do of decentralising decisions within organisations. This is in the area of social services and the rebuilding of social capital where we need to tap into the knowledge of people on the ground and of their communities as for instance with this program. But there are difficulties, because we’re giving stuff away – not selling it. So we have the classic public good problem of valuation. How do we know how much something is wanted if it’s not paid for, how do we tap into the knowledge of those the programs are trying to help, how do we put them in charge and yet ration the program to a level that’s acceptable from the perspective of economics and democratic accountability? We can work up local solutions to these problems, but it’s difficult to do what markets like, which is to roll out solutions at scale.