Designing better lives: An economist’s appreciation of design

Herewith a paper about my encounter with design, on taking up the Chairmanship of the Australian Centre for Social Innovation and encountering the Family by Family program. The site where it’s been published has no comments facility, so I’m opening up discussion here should anyone wish.

Designing better lives: An economist’s appreciation of design

Design is often described as making things not only useable but useful and desirable/delightful. We’d agree this is important – but what is even more fundamental (and rare) is making things that prompt change. – Sarah Schulman and Chris Vanstone 1


Design is on the march. Apple teeters on being the most highly valued company in the world – its core competitive strength lying in design and systems integration, not technology. ‘Design thinking’ is becoming increasingly prominent not only in the development of products and processes, but also in the delivery of services. So much so that Deloitte has recently begun investing heavily in its own ability to provide its clients with design knowhow as a crucial engine of its innovation and competitiveness. As I write this, a prominent article on Australia’s Deloitte Online’s homepage 2 is titled “Design thinking demystified”. So what is the core contribution of design and what is behind its rise?

Adam Smith’s invocation of the benefits of self-interest – or as he called it self-love – is famously encapsulated in this aphorism:

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

Smith’s point is not that self-interest is good in itself, but that the self-interest of one person in a market brings them into relation with others’ self-interest. Note that Smith’s injunction (implicitly to both parties) is for each to seek their own interest by addressing themselves to the other’sinterest. Since Smith founded it, the discipline of economics has focused on the incentives facing each of the parties to a bargain and on their relative bargaining strength.

But there are more things in heaven and earth. For the butchers, bakers and brewers of Smith’s time there was no great mystery as to what constituted the customer’s wants or needs. Today’s world is much more complex. If you’re making computers or even cars, customers have specific wants that are not so easily divined by producers. Thus, part of Japan’s auto-producers’ recipe for competitive success was meticulous attention to consumer needs.3

This process has now gone much further. A great transformation occurred at the outset of the personal computer era when the Apple Macintosh showed that consumers didn’t just want more technical capability from their software and hardware – something that could be captured well enough in standard disclosures of those technical capabilities. They wanted user-friendliness – a very different thing and something inherently difficult to ‘disclose’ in specifications.

It turns out you can’t really make a car or a computer useable without a lot of work, almost invariably involving the users themselves. And indeed there is a discipline that has grown up under our noses which has been all but ignored by economists and policy makers but which nevertheless addresses itself to this issue. That discipline is design.


Design is often thought of as an essentially aesthetic overlay on products. We know it contributes to usefulness – indeed, particularly since functionalism, usefulness is part of the aesthetic. Yet, as Steve Jobs is famous for insisting, good design is not fundamentally about how something looks but rather how it works. Intriguingly, Adam Smith would have agreed. He quoted his friend and fellow philosopher David Hume to the effect that utility was one of the principal sources of the beauty of things. Indeed, Smith went further, arguing that people were often more strongly motivated by the beauty of all the complex parts of some mechanical or social artefact working felicitously together than they were by the utility to which it gave rise.4

Smith was particularly proud of this gloss on Hume, and I suspect it explains much of Steve Jobs’ commercial success too. Jobs’ genius also helps illustrate something else of great significance in modern design. Consumers may not have sufficient information or expertise to know what they themselves want. In such circumstances good design often requires creative leaps beyond simple functionality. Jobs was celebrated for his intuitive leaps in anticipating the way new technology might be used to make new kinds of products before consumers could tell market researchers how much they might like them.

These developments have been a source of great renewal within the discipline of design and have underpinned the increased attention and prestige it is receiving. The revolution Apple started with the ‘user-friendliness’ of the graphical user interface has morphed into a preoccupation with actively designing ‘user-experience’ – or UX among the cognoscenti – to the point that, for Web 2.0, useability (including the pleasure of use) has become a precondition of competitive success.


And, as I learned on taking up the chairmanship of the Australian Centre for Social Innovation (TACSI) in late 2010, in some places these ideas are being taken further still. If design principles matter when considering the interface between humans and their increasingly indispensible gadgets, or when considering the design of bank branches and airport executive departure lounges, how much more important might they be when considering the interactions within more complex social institutions in health, education and social support?

TACSI established a Radical Redesign team to explore and extend these ideas. We recruited Sarah Schulman, a social scientist, and Chris Vanstone, a designer, who together form a professional partnership from the UK with some exciting projects behind them, and Carolyn Curtis, an Australian social worker on secondment from the South Australian Department of Families and Communities (now renamed Communities and Social Inclusion). The cross-disciplinary nature of the team draws attention to another critical feature of design. Despite endless exhortations for academics and professionals to be more cross-disciplinary, a variety of institutional imperatives in most disciplines appear to push towards ever-increasing specialisation. (Again, it was Smith, the apostle of the division of labour who warned us of its capacity to so narrow our focus as to dehumanise workers in a factory.) Yet the usual practice early in any design project is the search for insights from any number of divergent perspectives. To achieve this, design is usually built around small, cross-disciplinary teams. If there is a discipline of the cross-disciplinary, it is design.

The brief of Radical Redesign’s cross-disciplinary team was to find a way to reduce the likelihood of families falling into crisis and so requiring the services of the state. It began by consulting various relevant literatures. It also embraced ‘ethnographic methods’ – an exotic name for a very ordinary process that is nevertheless (astonishingly enough) rare in social welfare agencies. The team visited families but with purposes different to the ones social workers might have had. The team spent time with them in order get to know them, their environment, values, routines and aspirations. Its objective was not to advise, instruct or assess in accordance with agency procedures, but to engage the families in a search for what might improve their lives.

The result, after a substantial period of prototyping, trial, error and refinement, was the Family-by-Family program. It is a hybrid between a mentoring or peer support and a behaviour change program. In traditional programs, social workers might work directly with individuals or (unusually) with families on specific issues. In Family by Family, ‘sharing’ families, who have been through difficult times but who seem to have made their way through them, are paired with ‘seeking’ families, who are seeking something better in their lives and may be at risk of falling into crisis. As my colleague on the TACSI board, Martin Stewart Weeks, puts it:

Instead of assuming people, in this case families, need a service in the traditional sense, it suggests that to a large extent they are the service. The real subversion of the design method is that it assumes the best way to learn is to look and listen. Hard, for a long time, with some humility and always from the perspective of the people who want to improve their lives, thrive or whatever other positive outcome they yearn for. For all its obsession with focus groups and customer surveys, this is something the public sector often finds extraordinarily hard. This is why people always react so positively to Family by Family for all its simplicity and old-fashioned ordinariness. It’s so far removed from the often rigid and contrived rhythms of ‘consultation’ and ‘co-production’ that consume the professionals.5


These thoughts conjure up one of Friedrick Hayek’s central motivating ideas. In a series of essays in the 1940s, Hayek critiqued the way in which the intelligentsia increasingly privileged some kinds of knowledge over others. They were privileging their own kind of knowledge – of systematic inquiry and knowhow such as engineering. By contrast, unsystematic knowledge of the everyday – knowledge pertaining to some local time, place or context, or to the idiosyncratic preferences of individuals – was given short shrift.

When applied outside its proper sphere – for instance to government – this mindset spelled hubris. It failed to appreciate the extent to which the governed would make their own decisions. Indeed, one of the central motifs of Hayek’s denunciation of Soviet-style central planning is its under-appreciation of the local (unsystematic) knowledge of those on the ground. For the “marvel” of the price system was that it acted as “a system of telecommunications” to distribute the sum of information about local trading conditions and opportunities throughout the economy.

Today it is almost heresy to suggest that scientific knowledge is not the sum of all knowledge. But a little reflection will show that there is . . . a body of very important but unorganized knowledge: . . . the knowledge of the particular circumstances of time and place. In this respect . . . practically every individual has some advantage over all others because he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active coöperation. We need to remember only how much we have to learn in any occupation after we have completed our theoretical training, how big a part of our working life we spend learning particular jobs, and how valuable an asset in all walks of life is knowledge of people, of local conditions, and of special circumstances.6

Hayek’s concern here was knowledge of market conditions, and so he juxtaposed the knowledge of scientists and engineers with the knowledge of traders. It is unfortunate that Hayek’s preoccupation with prosecuting his case – now thankfully won – against central planning so comprehensively diverted him from exploring the wider relevance of his ideas. In this context those ideas enable us to better understand the potential of design and ‘design thinking’. For the ‘scientific’ knowledge from systematic inquiries into psychology, sociology and even economics give us far less purchase on the human world than the disciplines of natural science and engineering give us over the natural world. Moreover, the point of any social action is to influence the experience of those ‘on the ground’.

Introducing design thinking on the homepage of Australia’s Deloitte Online website, Zaana Howard extracts the following “generally agreed upon” characteristics of design thinking:

Empathy: development of a deep understanding of the needs of people for whom the solution is being designed; seeing and ‘feeling’ the world through their lens in order to develop a rich understanding of the problem context.

Human centredness: design thinking considers the needs of all people affected by the problem – customers, employees, business partners, suppliers – and solutions are designed accordingly.

Holistic view: it locates the problem within its wider context and understands its interrelationships and interdependencies with other systems.

Collaboration: collaborating with people from multidisciplinary backgrounds enables radical innovation through the bringing together of diverse skills, knowledge and experiences.

Design doing: despite its cognitive connotations, design thinking is action oriented, valuing doing and making things over thinking and meeting.

Visualisation: visualisation may take many forms – sketches, prototypes, mind maps or stories – all of which allow for interaction with ideas and solutions, and act as conversation starters to develop shared understanding and iterative design.

Future orientation: design thinking is focused on creating better results for the future, not just on resolving problems for short term gain.7

In contrast to scientific knowledge, the elements of ‘design thinking’ as expounded here are from the lifeworld.8 Thus described, design thinking stands as a counter-narrative or foil to systematic and scientific knowledge offering an antidote to the hubris that Hayek warned us against so presciently.

One might even go so far as to argue that the current dominance of scientific over local, contextual knowledge of life as experienced, of theory over practical wisdom,is precisely the wrong way around. Of course systematic, scientific knowledge is of great importance – and is a central reason for our species’ progress in recent centuries. Yet, if the preeminent value of science is its contribution to our lives, the skills of practical wisdom should surely guide our appreciation and application of systematic knowledge. In Family by Family, organised disciplinary knowledge is consulted wherever useful in designing the program and rolling it out to families. But it remains in the background, mediated by and subordinated to the practical commonsense of those on the ground. The professional knowledge of the social worker is reintroduced and recast.


With the model having completed its initial proving up and now being rolled out to other suburbs, the program is receiving some media attention. Presenters on the 7 pm project commented on how old-fashioned it was – like neighbourhoods of old with people helping one another out. These observations point to the essential simplicity of Family by Family and its goals. And they illustrate something else. As with much good design, it is unobtrusive to the point of invisibility.9 Yet, despite its informal ‘feel’ and mode of operation, the program has been painstakingly designed from the ground up. Throughout the program a range of routines, events and materials have been scrupulously co-designed by the team and the users through endless prototyping, testing, feedback and iteration. Here are Schulman and Vanstone on the design input to the program:

The Family by Family Blueprint runs to nearly 100 ‘scenes’ each scene being ‘designed’ and each scene calling on at least one designed ‘touchpoint’ (e.g. a brochure or work book or manual) that is itself designed.  We estimate the documentation of this to run to over 200 pages and the number of designed ‘touchpoints’ to exceed 150. We’ve detailed to this level because we’re designing for scale.10

Specific designed aspects of the program include:

  • recruitment materials;
  • events;
  • training camps;
  • the professional ‘coach’ role;
  • websites;
  • promotional materials;
  • the visual identity of Family by Family;
  • measurement systems and
  • backend systems such as customer relationship management systems.


Unlike most design, Family by Family seeks not to facilitate some end state, but to facilitate change. But where Steve Jobs might have had the uncanny knack of divining what people had not yet realised they wanted, Family by Family is built to assist its participants to come to understand and articulate the change they want and to help them realise it. Thus, at the outset and throughout the program, coaches take families through a process of reflecting on and refining their goals and then working to achieve them.

This is not just a program in which families mentor other families. It recasts the role of each of the players. The family members are no longer simply getting ‘counselling’ from a social worker – they’re much more active in the process. And the external influence on the seeking families is not a social worker but rather sharing families, who are coached by outsiders. The training of the coaches is an integral part of the design of the program only now being fully worked out as the program is being scaled up. Those coaches may, but need not, be qualified social workers, but their training shows them how to maintain a balance between being informal and focusing families on setting goals and monitoring their progress towards them.

I think of all this when I’m discussing the program with politicians and administrators who often assume that replicating our achievements will be straightforward. If only! We know only one means to effect the requisite transformations in these multiple social roles – Family by Family.

It is too early to pronounce the program a success as there is insufficient data to evaluate it rigorously. However, the signs are extremely positive. Virtually everyone associated with the program has been very enthusiastic, from its sponsors in government and the third sector to the families themselves, many of whom describe their involvement with the program with great excitement.11


Family by Family is at the forefront of contemporary experimentation with social forms. But it is built upon the kind of perennial insight that somehow became marginalised in many of the workings of modern government and society. Within a community, our own health and happiness is ultimately bound up with the health and happiness of others’ lives. That was something that Adam Smith pondered deeply. His 1759 book Theory of Moral Sentiments sought to delineate the social preconditions of a healthy society and economy. It begins: “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it”.12 In fact in most cases, as Smith understood only too well, we gain more than the pleasure of seeing others’ happiness. But given that human freedom and human happiness is found within a social context, Family by Family tries for a new synthesis of local and generalised professional knowledge.

Anxiously observing the French Revolution at the end of his life in 1790, Smith looked with foreboding on the emerging triumph of what today we would call ideology, and what Hayek called the hubris of ‘scientistism’. That was the conceit that those with sufficient expertise can (and therefore ought to) make better decisions about people’s lives than they can make themselves. In the last, revised edition of the Theory of Moral Sentiments he warned against “the man of system” enraptured with the beauty of some ideal for government.

He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess–board. He does not consider that the pieces upon the chess–board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess–board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it.

Smith went on to point out that if those two principles oppose each other, “the game will go on miserably.” Certainly it has for some families in crisis. By contrast, as Smith puts it:

If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful.

Family by Family deploys the discipline of design in an attempt to bring that integration about – intellectually between systematic knowledge and the lifeworld of families, and in practice between the world of state-funded services and the intended beneficiaries of those services.

Time will tell how successful we have been.

13Nicholas Gruen is CEO of Lateral Economics and Chairman of the Australian Centre for Social Innovation. He is grateful to Martin Stewart-Weeks, Anne Edwards and Matthew Silva for comments on an earlier drafts.

1Personal correspondence.

2 Accessed on 25th Nov.

3There was more to it than that. The Japanese production system was not just better at integrating the perspectives of producer and consumer. It decentralised the process of decision-making within the production system by actively involving suppliers and employees in endlessly optimising the entire production process.

4See Smith, The Theory of Moral Sentiments, Part IV, Chapter I. “Of the beauty which the appearance of Utility bestows upon all the productions of art, and of the extensive influence of this species of Beauty” at or

5Personal correspondence – slightly edited.

6Hayek, Friedrich A., 1945. “The Use of Knowledge in Society”, American Economic Review. XXXV, No. 4. pp. 519-30 viewed at

7Howard, Zaana, 2011. “Design Thinking Demystified” at accessed on 27th Nov, 2011.

8My use of the term ‘lifeworld’ is commonsensical, rather than a term of art, and I would content myself with this dictionary definition: “the sum total of physical surroundings and everyday experiences that make up an individual’s world.” accessed on 17th Dec, 2011.

9Rule 5 of Deiter Ram’s 10 rules of good design is that good design beunobtrusive.

10Personal correspondence.

11See for instance Many other resources can be found here: accessed on 17th Dec, 2011.

  1. 2[][]
  2. 3[][]
  3. 4[][]
  4. 5[][]
  5. 6[][]
  6. 7[][]
  7. 8[][]
  8. 9[][]
  9. 10[][]
  10. 11[][]
  11. 12[][]
  12. 13[][]
  13. 1[]
This entry was posted in Economics and public policy, Philosophy, Political theory, Web and Government 2.0. Bookmark the permalink.
Notify of

1 Comment
Newest Most Voted
Inline Feedbacks
View all comments
12 years ago

A little ramble of my own thoughts.

If we look at how designs usually develop in engineering and science, the path is usually that the scientists develop their theories – with a passion and argumentativeness that would do the various schools of economics proud. Then when the hue and cry dies down, and some sort of consensus is reached, the engineers take that theory and its models, and simplify it to something workable and add some safety factors to provide design rules and working models (physical or computer). The scientists look at the engineers’ simplifications with horror, and expand scientific knowledge to improve the models. By iterating this process, the science and engineering converge and the outcomes become more efficient.

Now, it seems to me that this relationship between the high theoretical and real world practical does not exist in such definition in economics. So, for example, rather than have the theoretical schools battle it out, reach some sort of consensus based on modelling before implementing policy, it seems that the various theoretical schools are trying to implement policy without the corresponding simplification/safety factoring that is the feature of engineers translating science into useful design. As an example, one would not design a water supply or power supply for a city without having not only steady state models of supply, flows and demand, but also analyses of water hammer and surge and reliability which would predict unstable high and low flows, critical points in the system where surge and water hammer protection and emergency storage were required.

However, to get to this stage, the engineering and scientific types had to work out the symbiotic relationship I described above. In fact in the late 1800s there are examples where various different schools went their own ways and just built stuff without this relationship. The classic example is that of the DC power supply vs the AC power supply promoters of that time. Each thought their system superior (differing schools of economics anyone?) and went away building systems…until one prevailed, and there was a lot of ‘creative destruction’ of those who followed the ‘losing’ system. It was this (and railed vehicle issues another) type of very expensive real world ‘creative destruction’ that lead to the symbiotic relationships between engineers and scientists, as well as the realisation that realistic modelling (dynamic and static) were essential before inflicting anything on the unsuspecting public.

Of course this is sad for scientists and engineers to the extent that if power or water goes off for a long time, or there is a building failure, no-one will accept that it is just ‘creative destruction’…but it is I tell yer.