[Paleopsych] Telegraph: The best-laid plans

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Mon May 16 20:21:38 UTC 2005

The best-laid plans

    Alasdair Palmer reviews Why Most Things Fail: Evolution, Extinction
    and Economics by Paul Ormerod.

    There is nothing quite like an election campaign for reminding you
    that governments do not achieve the goals they set out to accomplish.
    The relentless scrutiny to which every political party's promises are
    subject during a campaign demonstrates very clearly that politicians
    in power usually end up breaking whatever promises they make - and, if
    they don't, it is because what they promised to do in the first place
    was sufficiently nebulous to mean that no one could tell that they had
    failed, or was sufficiently insignificant to mean that keeping to it
    required almost no planned activity at all.

    Paul Ormerod has a novel explanation for this regrettable but constant
    feature of political life. Its cause, he says, is not the incurable
    mendacity of politicians. It is that everyone who sets out on a
    large-scale enterprise usually ends up failing to do what they
    promised. Politicians are no worse than the executives of private
    companies, lawyers, architects, designers, builders, or anyone else.
    They are bound by the same law which governs every other human
    activity - and that law is that most of it fails.

    Why Most Things Fail might have been just another melancholy dirge on
    the omnipresence of death of the "all flesh is grass" variety, but
    this engrossing and entertaining book is much more than a mordant moan
    on mortality. It is a careful, comprehensible analysis of the limits
    of human rationality's ability to control the world, and of the
    implications for public policy - and, to some extent, for personal
    conduct - of the failure of most rational calculation to produce its
    intended results.

    Ormerod occasionally over-states the hopelessness of the human
    predicament. Impres-sed by the parallels between the law which relates
    the frequency of extinctions in the animal kingdom to their size (the
    larger the percentage of living creatures an extinction wipes out, the
    less often such an event happens) and the law which relates the
    frequency at which firms fail to their size (the rate at which firms
    fail exactly parallels the way species go extinct), he concludes that
    firms will fail at a predetermined rate - irrespective of the
    decisions of the people who run them.

    The collapse of IBM, for example, wasn't really the fault of its
    executives. Nor was it due to Bill Gates's planning genius at
    Microsoft. No one, including Mr Gates, expected Microsoft's Windows 3
    to be the huge success it became. It wasn't any better than the
    competing products, and in some ways it was worse. Luck, more than any
    rational (or irrational) choice by managers, explains why IBM shrank
    and Microsoft prospered.

    No amount of planning or rational calculation, insists Ormerod, can
    escape the iron law of failure which governs human endeavour. That
    conclusion, however, seems to me to be too despairing. Human reason
    can't be as impotent as Ormerod implies. After all, its application to
    the problem of how to understand the laws which govern the natural
    world has produced spectacular results over the past 200 years.

    Thanks to the development of technology and some sensible decisions on
    how to apply it, Western societies enjoy an unprecedented degree of
    prosperity and productivity. Progress in the standard of living is not
    simply an accident: it has been a goal of human rationality, and has
    been achieved as a result of rational calculation. Ormerod's
    despairing vision of the inevitable failure of practical reason seems
    unable to account for that fact.

    Still, his arguments on the limits to which we can expect more
    specific political, economic or managerial policies to achieve their
    stated goals are persuasive. Our inevitable ignorance about the
    future, and about the way people will behave, sabotages the fulfilment
    of most plans. It doesn't matter whether those plans are made by the
    executives of a company such as Coca-Cola (their attempt to improve
    the taste of Coke was so great a failure that the new product nearly
    ruined the company and had to be withdrawn after a matter of months),
    or by Government ministers (despite 50 years of effort to eliminate
    it, there is now more inequality in Britain than there was in 1955).

    The moral is simple: keep central planning to a minimum, and expect to
    be disappointed - whoever wins the next election.

    Alasdair Palmer is Public Policy Editor of The Sunday Telegraph

    Why Most Things Fail
    Paul Ormerod
    Faber, £12·99, 267 pp

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