[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
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
Faber, £12·99, 267 pp
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