Category Archives: public policy

The Butcher, the Baker, and Bain?

The Invisible Hand (courtesy of jeff-for-progress.blogspot.com)

The Invisible Hand (courtesy of jeff-for-progress.blogspot.com)

. Old adages die hard. Just consider the longevity of Adam’s Smith characterization of the self-regulating market as an invisible hand in his classic work, The Wealth of Nations. As Smith opined, “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.”

This sentiment, a persistent trope reverberating from one generation to the next, has become a center-piece of the American ethos as well as a mainstay of the Republican party. Nowhere is this more evident than in the on-going Republican electoral campaign. Thus, it is only by invoking the mantra of the invisible hand that Romney can criticize President Obama’s economic strategy, and get away with it, without having to lay out a strategy of his own. He claims to have the magic formula! So, instead of policy ideas, we hear the old refrain, “what’s good for business is good for the country,” or as updated by Romney, “What’s good for Bain is good for the economy.”

The Tooth Fairy  (courtesy of zazzle.com)

The Tooth Fairy (courtesy of zazzle.com)

Call me a skeptic, but having faith in the invisible hand today seems no different to me than believing in the Tooth Fairy. After all, no one can seriously claim that bankers, investors, and equity firms, such as Bain, were not pursuing their own interests when the economy went belly up. How else to explain that big business magnates increased their wealth dramatically in the wake of the 2008 recession, while those lower on the rung experienced calamitous losses. But this begs the question: if businesses were doing what they are wont to do, why then did the market fail to regulate itself? Might this be black magic?

Perhaps is is time to forego the rhetoric of the Republican Party and take a hard look at Smith’s long-standing dictum. To date, neo-classical economists offer little hope in this regard: Try as they might, they have yet to explain how individual actions at the level of the butcher or the baker translate into macro level outcomes, whether good or bad. Fortunately, some nontraditional economists, viewing the economy from evolutionary and complexity perspectives, have provided some promising new insights.

Robert H. Frank, in his book The Darwin Economy: Liberty, Competition, and the Common Good, addresses the issue of the invisible hand head on. As he contends, Darwin’s evolutionary theory, especially as it relates to the role of competition, is far more accurate about the nature of economic life than Adam Smith’s account’s in The Wealth of Nations. In Frank’s words:

When the ability to achieve important goals depends on relative consumption, as it clearly does in a host of domains, all bets regarding the efficacy of Adam Smith’s invisible hand are off. Notwithstanding the uncritically enthusiastic pronouncements of many of Smith’s modern disciples, unbridled market forces often fail to channel the behavior of self-interested individuals for the common good. On the contrary, as the pioneering naturalist Charles Darwin saw clearly, individual incentives often lead to wasteful arms races.

Combining the wisdom of evolutionary and complexity thinking, economist, Erik Beinhocker points out that the equilibrium outcomes, associated with the invisible hand, are entirely unrealistic. As he notes in his pathbreaking book, The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics, the economy is not a static phenomena, but rather a dynamic, complex adaptive system, which is subject to oscillations, power laws, and phase transitions. Moreover, outcomes, as traditional economists would have us believe, are not the product of predictable linear processes; instead, they emerge from the bottom up as the result of the constant interactions and adaptations that take place at all levels of the system. Hence, policy interventions–be they Republican or Democratic–may play a role in determining outcomes, but they are only one factor in a myriad of influences on the economic system.

rough_seas (courtesy of adpulp.com)

rough_seas (courtesy of adpulp.com)

When the economy is conceived in complex, evolutionary terms, the present economic crisis makes a certain amount of sense, unpleasant though it may be. However, what makes no sense at all, given the complexity of the economy, is to blame Obama for the present state of affairs, as Romney so flagrantly does. To the contrary, in times such as these, when the seas are rough and the future uncertain, what’s needed is not someone like Romney, who flips and flops floundering with the waves in the hope that equilibrium will naturally follow, but rather a captain, such as Obama, who will be steady at the helm and stay the course.

Cultural Contradictions

In the primary madness of the Republican Party, much is made of the cultural divide between urban supporters of Romney, and rural supporters of Santorum. Meanwhile, an equally, if not more, consequential clash is occurring, which has received far less public attention. This is the growing conflict between cultural and economic values, a tension that sociologist Daniel Bell first pointed out thirty six years ago, in his classic book The Cultural Contradictions of Capitalism.

I was first introduced to Bell’s work when working at the Office of Technology Assessment on the study Intellectual Property Rights in the Age of Electronics and Information. In fact, the ideas he discussed in “Cultural Contradictions” provided the basis for my analysis of how intellectual property rights might be affected by a changing information environment.

Daniel Bell (courtesy of us-intellectual-history.blogspot.com)

Daniel Bell (courtesy of us-intellectual-history.blogspot.com)

According to Bell, society consists of three realms–the political, economic, and cultural–each governed by differrent values and norms, or as he put it, axial principles. Looking ahead, he predicted that, as electronic technology enhanced the value of information in each of these realms, they would be brought into increasing conflict. Looking at how these conflicts might be played out in the policy arena, our OTA study concluded that:

The resolution of these issues in an information age will be more problematic. . . .Given the variety of opportunities that the new technologies afford, the increased value of information, changing relationships among the traditional participants in the intellectual property system, and rising expectations about the benefits of these technologies, the number of stake holders with disparate interests and competing claims on the system will be greater than ever before. In such a context, the granting of intellectual property rights, instead of mutually serving a variety of different stakeholders may actually pit one against another.

This theme has been developed from a variety of different angles over the last several years. For example, in his book, The Cultural Economy of Cities, Allen J. Scot, lays the groundwork for further discussion, describing how the economic and the cultural realms have converged: as he points out, today, economic products now have greatly enhanced semiotic value, whereas cultural goods are increasingly capitalized for sale. Taken together, these products comprise a rapidly growing portion of the nation’s economy, and–as Daniel Pink contends in his book Whole New Mind:Why Right Brainers Will Rule in the Future, they are the new source of America’s competitive advantage. Richard Florida would presumably agree, having argued in The Rise of the Creative Class that today’s creators now constitute a class in their own right.

Ironically, the predictions about a culture/economic clash would seem to have proven wrong. What has happened instead is the colonization of culture by the economic realm, a point that I make in my paper, Creativity: The Goose That Laid the Golden Egg. Whereas I make my case based on shifts in the architecture of the creative landscapes that allow economic actors to assume a defining role in the cultural realm, Lawrence Lessig draws a similar conclusion arguing from a legal standpoint. In his book, Free Culture he points out that, given the growing economic value of creative products, the danger today is that the laws governing the economy will come to encompass norms and activities associated with culture and creativity.

The Proof of the Pudding is in the public silence. The only place where one can see contention is in the Republican primary, where Santorum carries the banner of culture, while Romney touts economic profits.

What’s Fair is Fair

What's fair is far (courtesy of openlibrary.org) Life, of course, is full of ironies, but what strikes me most recently as such is the coincidence between FCC Chairman Julius Genachowski‘s decision on August 22, 2011 to eliminate the Fairness Doctrine and the raging debate about Super Pacs brought on in part by the Supreme Court’s decision in Citizens United vs. Federal Communication Commission. This game-changing Supreme Court decision allows groups of people, including corporations, to raise and spend unlimited amounts of money in support of a candidate, so long as there is no coordination with the candidate.

Free speech, it now seems, is no longer a constitutional right; but a matter of money. Those without, are in effect silenced. Scratching my head, I have to ask myself: What’s fair about that? Thanks to Stephen Colbert, the situation was brought into stark, as well as comic, relief when he parodied the new campaign finance rules, setting up his own Super Pac, Definitely Not Coordinated with Stephen Colbert Super Pac, and transferred it to his alter ego Jon Stewart.

Not that the Fairness Doctrine has been active over the past 20+ years. Put into place in 1949, the Doctrine was intended to assure that broadcasters not only made room for issues of public importance, but also aired contrasting perspectives. The rational behind the Government’s involvement in broadcasting–notwithstanding the Constitutional guarantee of free speech–was the industry’s use of scarce, public airwaves–a rationale that was upheld by the Supreme Court in its 1969 decision Red Lion Broadcasting Co. vs FCC.

Televisions are Not Toasters (courtesy of ancient jars.com)

Televisions are Not Toasters (courtesy of ancient jars.com)

The subsequent expansion of media venues gradually weakened this rationale. In 1987, FCC Chairman Mark Fowler--famous for equating televisions with toasters–repealed the Fairness Doctrine, although it remained on the books until Chairman Genachowski’s recent decision to effectively eliminate it.

Paradoxically, today, while media outlets are plentiful, opportunities to raise one’s voice and be heard are becoming increasingly scarce. For, as Tim Wu has argued in The Master Switch, growth in media has led, time and time again, to vertical integration and greater industry concentration. Likewise, in his book The Myth of Digital Democracy, Michael Hindman illustrates how, as the number of outlets on the Internet grow, they become more and more concentrated in accordance with a power law. Hence, to gain a platform for expression under these circumstances requires having money, and lots of it.

To appreciate the full impact of this situation, one need only consider the frantic scrambling in the Republican Primary, not so much for votes but for dollars. As the contest shifts from backyard barbecues to the national media, and from policy pronouncements to negative advertising, the candidates chances of success are measured increasingly by the size of their Super PAC’S war chests. In fact, pointing to the $30.2 million that his Super Pac, Restore our Future, has raised, Mitt Romney has triumphantly predicted his own final victory.

Fierce competition, they say, is good for democracy, not just the market. Recent events make me question whether this is always the case. At the very least, this spending spree is wasteful: I can’t help thinking that the amount of money raised by the SuperPacs to promote–what more often than not is–false information far exceeds the meagre $23 million annual budget of the former Office of Technology Assessment, a Congressional agency tasked to seek out the truth, and one that Newt Gringrich, when Speaker of the House, helped to destroy. In his thoroughly engaging bookThe Darwin Economy: Liberty, Competition and the Common Good, Robert H. Frank cautions against unbridled competition on more theoretical grounds. Employing Darwin as his frame of reference, he argues that such contests are likely to lead to an arms race, in which the winner may benefit in the short run, but the society will lose overall.

Sadly Frank’s scenario sounds all too familiar. With money now a proxy for speech, dialogue has become more and more vacuous, even as speech is no longer free. Could it be time for a new Fairness Doctrine?

He Who Forgets History. . .

Paul_Reveres Ride

Paul_Reveres Ride

There is considerable irony in the fact that Tea Party groups have sought to legitimate their cause by choosing a name that evokes the Founding Fathers and the events that culminated in the writing of the Constitution and the birth of the Republic. For it is, in fact, these politicos who have conjured up and propagated a totally slipshod account of early American history. Of course, history is open to interpretation, and reinterpretation, but not to distortion of the facts. As Cass Sustein emphasizes in his book Republic.com 2.0, what’s alarming about today’s historical expediency is that, for many undiscerning people, it fills a gap in their historical knowledge, substituting fiction for fact.

Perhaps no one has gone further to link him or herself to the trappings of American history than Sarah Palin who, while coyly avoiding questions about her potential candidacy for President, undertook a bus tour of historical places as a means of educating Americans about their origins. (Presumably, if people understood American history, they would see the merits in Palin’s political positions) What hubris! The trip backfired, to say the least. Visiting the home of Paul Revere, Palin garbled the story of his ride, contending that Revere road to warn the British rather than the militia. When challenged by Fox News, Palin denied her gaffe, insisting that she “knew her American history.” So ended her tour, if not her presidential ambitions.

Palin is not alone in crafting historical events in accordance with her own political objectives. Speaking to the group Iowans for Tax Relief, Michele Bachmann claimed, for instance, that equality was not something that was contested and fought for, even at the expense of a civil war; rather, as she said, individuals, regardless of their origins, came to the United States and were treated as equals.

Slavery in America

Slavery in America

Acknowledging that slavery existed at the time, she contended that the Founding Fathers — especially John Quincy Adams–vowed to work for its elimination. No matter that a number of Founding Fathers–including Washington and Jefferson–were slave owners; that the Constitution counted slaves as three-quarters of a man; or that John Quincy Adams, a young boy at the time, was not a Founding Father.

Even more alarming than these individual cases is the formal rewriting of history, as in the recent case in Texas. Concerned that American textbooks veered too far to the left, the Texas Board of Education (comprised of ten Republicans and five Democrats) unabashedly voted to alter the American narrative to bolster a conservative perspective. Most outlandish of all, the Board voted to discount Thomas Jefferson’s role in providing the philosophical underpinnings of the new Republic, notwithstanding his authorship of the Declaration of Independence. As Fritz Fischer, national chairman of the National Council for History Education characterized it: This should not be a matter of partisanship, but rather of good history.

As George Santayana said, He who forgets history is doomed to repeat it. Might Santayana’s admonition provide a clue as to why Tea Party members, and others of their ilk, seek to distort it? I believe so. In fact, it would appear to me that today’s Conservatives would like nothing more than to return to a semi-mythical past when, according to their lights, life was much simpler, God prevailed, and Government was more circumspect. It’s time for a rereading, not a rewriting, of history.

Getting Back to Speed~~The Road to Recovery

Currumbin Wildlife Sanctuary 058 from Michael Dawes

Currumbin Wildlife Sanctuary 058 from Michael Dawes

It’s commonplace to note the ups and downs in life. As they say in Spanish: la palma sube, y el coco baja. And yet, when we find ourselves at our own nadir, or in the midst of a deep recession, we often despair. The way back up seems so steep, and the recovery so slow. Worse yet, to garner hope, and seek a way out, we need someone, or something, to blame.

As I read the news each morning, searching for the slightest positive signs, I too am discouraged, but not so much by the slow pace of economic growth, or even by the slanderous attacks made against President Obama. Far more disheartening to me are the pontificating pundits,’ who, once having heralded Obama’s ascendence, are now unrelenting in their criticisms of him for failing to get it right.

Economic indicator from jakekrohn

Economic indicator from jakekrohn

One need only consider Elenor Clift’s recent piece in Newsweek, “The Problem With the Cult of Obama: Halfhearted Soul-Searching at the White House,” in which she calls upon the President to reinvent himself in accordance with voters’ aspirations. As the Jungian analyst Lawrence Staples, author of the book, Guilt With A Twist: The Promethean Way, might point out in response, winning praise–or an election, for that matter–is not the best measure of success. After all, Prometheus outraged the Gods when he stole fire from Zeus and gave it to mortals, but, in so doing, he greatly enriched humankind.
promethea.org

promethea.org

In like fashion, the Democrats poor election results might not reflect Obama’s inability to track the pulse of the American people, but rather his willingness to nonetheless take a risk, and diverge from the game of politics, in order to achieve what he believes to be overriding societal goals. (See, for such an argument, Ari Emanuel, “Forget the Carter Comparison: Obama is Following in the Footsteps of Harry Truman–and That’s a Very Good Thing.)

Turning the pundits’ criticism back upon themselves, one might ask: What have you done lately to stimulate recovery? To be sure, negativism is not the answer. Think about recovery from disease. Do you blame the sick person; do you lash out against God? These are self-defeating strategies. I know from personal experience, having been caregiver to my husband, Brock Evans, as he successfully battled stage 3a multiple myeloma. Most unhelpful were the doctors who slinked along his bedside, rolling their eyes behind his back, and cautioning him that “people in his condition don’t do very well.” On the other hand, what made all the difference in the world–that is to say, in addition to his own courage and fighting spirit– were the mailbags from well wishers reaffirming their love and cheering him on. One turning point came when he received a song, written for him by Carol King, appealing to him to “Hold On, Hold On.” It went like this:

You ask yourself the question
What am I going to do
How can I go on when life has let me down
You know it won’t be easy
But time will take you through
You can find your courage in the love inside of you

Hold on, Hold on . . .

So, as in the words of Hal David, it would seem that “What The World Needs Now, is Love Sweet Love, “ or, at the very least, some very enthusiastic cheerleaders.

Standardization: Reveries and Retrospectives

October Daydream! / Rêverie d’octobre! by Denis Collette...!!!

October Daydream! / Rêverie d’octobre! by Denis Collette...!!!

If you’re like me, you often leave a discussion, or conference, getting your best ideas after the fact. Having mulled the conversation over, again and again, you wake up in the middle of the night with the most inspired thought, but instead of feeling satisfied, you berate yourself for having missed an opportunity to make a great point.

If you’re like me, you get your best ideas after the fact. 

Last night, I did just that, but instead of feeling poorly about it, I realized–perhaps for the first time–that my idea had been latent. As such, it could not have been used to provide an input into the discussion; rather it was a direct output of the discussion with my colleagues, as well as of the nocturnal dialogue that took place inside my brain.

The occasion for this insight was a conference on Standards Education, sponsored by the National Institute for Standards and Technology (NIST). The aim of the conference was to encourage universities to incorporate a standards curriculum within their course offerings. The focus, for the most part, was on engineering and business schools. My panel, the last of the day, was designed to be a little provocative–that is, to think about standards education in the context of a dynamic future, in which educational institutions are themselves in flux, the boundaries of their ivory towers crumbling in the face of an increasingly complex environment. By all accounts, we were successful, thanks to the inputs of our four panelists Michael Spring, Mark McCarthy, Peter Lord, and Laura DeNardis.

The discussion with some of my colleagues continued on the drive home, but when I reached my door I was ready to put it aside, and just relax. And so I did, taking my dog for a walk; having a glass of wine and eating a pizza with my husband; and–before falling asleep–reading a chapter of an excellent biography of Schumpeter, Prophet of Innovation, by Thomas K. McCraw. However, after a few hours, I woke up with a start, as well as an idea about why engineering schools have so few courses dedicated to standard setting. It must be that when the body is in a dream-like state, the neurons in the brain are free to fire, and to roam every which-way, generating new and interesting ideas as they create new paths and explore unknown territories.

I woke up with a start, with an idea about why engineering schools have so few course dedicated to standard setting 

In retrospect, I suspect that my brain was reaching back into my memory to a book I had read and admired a long time ago, entitled Machine-Age Ideology: Social Engineering and American Liberalism, 1911-1939. Written by John M. Jordan, the book tells the story of the American engineer, and how–during the first part of the 20th century–he became a hero in American life, celebrated in movies, novels, and popular culture. This hero-worship reached its apogee with Herbert Hoover’s election to the presidency.

1959 American Standard bathroom by 50s Pam

1959 American Standard bathroom by 50s Pam

According to Jordan, what made engineers so respected, as well as unique, was their disregard or–better still–disdain for politics, a perspective increasingly shared by the American public during this period. This was the thought that struck me in the middle of the night: it is this engineering mentality, this desire to circumvent values and politics, that accounts for engineering schools’ lack of enthusiasm for incorporating standardization in their curricula. For, anyone who has studied US standards setting–as I have–will attest to the highly contentious and politicized nature of this process.

I often get ideas when I awake in the middle of the night. Some are less noteworthy than others. But this one, I believe, stands up in the light of day!

Communications and Complexity: The Need for a Policy Interface

communication by Guacamole Goalie

communication by Guacamole Goalie

Tomorrow, the Communication Culture and Technology Program at Georgetown University will join together with the Quello Center for Telecommunication Management and Law, Michigan State University, and the Alexander von Humboldt Foundation and University of Konstanz, Germany,
in hosting a conference on Applying Complexity Theory to Improve Communications Policy. The conference is based on the premise that the field of communication constitutes a complex adaptive system, such that we need new regulatory approaches and tools that can take this complexity into account. We plan to cover four topic areas: 1) the value added of complexity theory; 2) tools and methodology for using complexity theory; 3) applying complexity theory to national broadband policy; and 4) building support for, and incorporating, complexity theory into communications policy.

I have been thinking about how one might structure the policy environment so as to foster greater interaction of policy actors and their diverse approaches and ideas

Having been assigned the task of facilitating the final panel, I have been pondering structural approaches to promoting complexity analysis–in particular, I have been thinking about how one might structure the policy environment so as to foster greater interaction of policy actors and their diverse approaches and ideas. My assumption is that to analyze complexity adequately, the policy structure must, itself, reflect it.  Some thoughts come to mind in this regard. 

For example, building on Ron Burt‘s characterization of good ideas, it would appear that policy organizations should be structured in such a way that policy actors benefit not only from strong ties among like-minded associates, but also from weak ties across diverse associations. As Burt notes:

Opinion and behavior are more homogeneous within than between groups so people connected across groups are more familiar with alternative ways of thinking and behaving, which give them more options to select and synthesize from alternatives (http://faculty.chicagobooth.edu/ronald.burt/research/SHGI.pdf)

One might conclude, therefore, that–for complexity to be attended to–the  architecture of the policy making arena must provide links across diverse policy domains. 

This conclusion coincides with the conclusions of a paper that my colleagues Ellen Surles, Qi Chen and I wrote for the Social Science Research Council, entitled Fostering a Communication Policy Dialogue: The Need for a Sustainable Communication Interface. In this paper, we adopted  John Kingdon‘s description of policy making as a non-linear process, which entails the convergence of three different streams–identifying problems, identifying solutions, and making political decisions. Kingdon argues that when these streams converge there is a window of opportunity when policy outcomes can occur. In our paper, my colleagues and I sought to identify the structural properties that would allow such convergence to take place. Viewing these three policy streams as distinct worlds, each with its own habitus, we identified the need for a policy interface, that would help policy actors to communicate with one another. As we argued:

The policy debate can become inhibited and muted in part because many players lack the resources and skills to communicate across these fields of policy activities. It is especially helpful when a number of diverse actors interact and engage with one another to the extent that they create a space where they can find common ground. We call this space the policy interface. Issues rise on the policy agenda when [policy streams] converge in such a way that ideas are translated and actors come to value each other’s perspectives and therefore perceive policy issues in a congruent way.

Much as in the case of Burt’s notion of good ideas, the architecture of the interface that we described provides for both weak and strong ties.  It allowed policy actors from different activity fields to maintain their individual perspectives, while coming together in a common space where they might have a productive–and far richer–dialogue. 

The US communication policy arena lacks such an interface, and policy making suffers as a result.  Jurisdiction is divided among numerous agencies, whose independent actions often lead to conflicting outcomes.  Issues are not considered to be complex; rather they are typically reduced to approximate the specific mission of the agency in which they are resolved.  

Time to Push the Restart Button for OTA

Time to Push the Restart Button for OTA

The outstanding question, therefore, is where might we look for such a policy interface?  Not surprisingly, given my own background, I would look to a government agency such as the Office of Technology Assessment, which not only brought diverse actors together, and incorporated their perspectives in the agency’s research results. As importantly, OTA translated complex problems into narratives that both Congress and the public could grapple with.

The Ultimate in Unbundling

Day 174 - Bundle! (Courtesy of tommy.toast)

Day 174 - Bundle! (Courtesy of tommy.toast)

Checking our luggage on a United airplane headed for Seattle, we experienced the ultimate in unbundling.   Not only did we have to master the use of the terminal kiosk to access our boarding pass; in the process, we were offered a variety of additional features–all formerly available as part of a flight package.  Included, for example, was baggage storage,  extra leg room, an upgrade to first class, and additional miles.  In the heat of the moment, we decided we could use some extra leg-room.  Inserting our credit card into the kiosk once again, we requested additional space. Alas, we got instead extra miles–heaven only knows to where. Although the lady at the counter could not tell us the destination of these miles, nor how to make use of them, she did know that they were nonrefundable. Sympathetic to our plight, she explained: “Sorry, we have been instructed not to provide passengers much help. The airline companies want us, instead, to train the passengers to take over our jobs.”

 Sympathetic to our plight, she explained: “Sorry, we have been instructed not to give passengers much help. The airline companies want us, instead, to train the passengers to them over our jobs.”  

What a disturbing comment!  Stopping at a fast food counter, I began to ponder it. As I assembled a meal to take on the plane from among the assorted, individual food items, I was struck by what appears to be an inexorable seepage of the idea of unbundling from its origins in the divestiture of the American telephone system to the deconstruction of commonplace pleasures and practices, such as a formal lunch.

A satisfied lunch guest! by maurice flower

A satisfied lunch guest! by maurice flower

Certainly, the modularization of information and communication technologies has greatly facilitated the process of unbundling. Allowing companies to maximize their profits and differentiate their products, by charging on a service by service, item by item, basis, unbundling has been extolled by economists, such as Hal Varian and Garth Saloner, as the essence of efficiency.  As these authors argue in their book, Information Rules, unbundling promotes innovation, encourages competition, and provides for greater consumer choice. One should note, however, that these advocates make little mention of social costs.

This is not the first time that I have thought about the costs and benefits of unbundling. Having directed the OTA study, Critical Connections: Communications for the Future, I spent the eighties participating in the debates surrounding the divestiture of the Bell telephone system. Notwithstanding–or perhaps because of–the in-depth research we conducted, and the intense discussions in which we were engaged, I was never totally convinced of the wisdom of unbundling the communication system.  One book that had a significant influence on my thinking was Steve Coll’s intriguing narrative The Deal of a Century: The Breakup of At&T (1986), in which he describes the high drama and serendipitous events that led to the unexpected divestiture outcome.  These included, for example, Baxter’s bias, Green’s takeover of the case, Reagan’s absence at a critical meeting, and Brown’s unanticipated willingness to make a deal.   As a relatively young policy analyst at the time, I was shocked at what appeared to be a lack of analysis driving such a momentous decision.  I was relieved when, at the end of Coll’s book, he raised the question of social costs associated with unbundling, especially the new transaction costs that would fall to the user.

Humpty Dumpty ... by abbietabbie

Humpty Dumpty ... by abbietabbie

As bundling proceeds apace, encroaching on all realms of our lives, perhaps it is time to revisit its underlying rationale.  In particular, we need to reassess what is lost when all sorts of products and services are disassembled, and users are expected to put Humpty Dumpty together again.  The telephone is a prime example. At the time of divestiture, the transaction costs for users were relatively low–choosing among styles and colors, coping with jacks, and inside wiring.  As technology has advanced, however, sorting out the choices and technological complexities can befuddle even the best of us.  

Even more troubling for me, is the unbundling (or one might say disembedding) of the economic product from the context in which it is employed. The problem is well laid out in The Social Life of Information written by Paul Duguid and John Seely Brown, the book I have assigned for next week’s Networked Economy Class.  As the author’s note, just as in the case of United Airlines, businesses are increasingly substituting technology for human interaction, and with dire consequences.  What such businesses fail to recognize is that technologies can not replicate the knowledge generation, knowledge sharing and/or the norms of reciprocity and collaboration that are inherent in human interaction.  Nor do such policies foster consumer loyalty–next time for me its Southwest Air!