Monday, August 29, 2011

Social Innovation Will be More Important Than Technological Innovation

Technological innovations can be helpful, but they won't solve our fundamental problems. For that, we will need social innovations.

The explosive rise and global impact of technological innovation has persuaded us that technology is the ultimate solution to all our problems. This assumption is rarely questioned; it has become like the air, unseen and unexamined.

The solution to the coming energy dislocation between supply and demand is technology: alternative energy, innovations in deep-oil recovery, etc.

The solutions to our epidemics of declining public health (diabesity etc.) is more and better medical technology--more stents, more diagnostics, more medications, etc.

The solutions to our problems in education is more technology: a laptop for every student, etc.

The solution to a no-growth, jobless "recovery" is more technology.

All this boils down to a cargo-cult in which a better battery, a better software package and a better diagnostic tool will enable us to avoid any changes in our lifestyle and culture, which is based on three basic principles:

1. Ever-rising consumption of goods and services

2. Ever-rising levels of credit/debt to fuel that consumption

3. Ever-rising complexity on a systemic, structural level

The notion that technological innovation is intrinsically incapable of "fixing" our problems is not just alien to our collective mindset, it is essentially sacreligious. In the current cargo-cult of technology worship, the basic assumption is better engineering can solve every problem.

This includes social engineering, of course--"nudging" the populace to modify their behavior as deemed appropriate by the Central State, and punishing whatever populace veers away from the chosen path.

Thus we have two powerful cargo-cults influencing the American economy, society and government: the Keynesian "monetary easing," borrow-and-spend your way to permanent prosperity Cult of the Fed and its Keynesian priesthood, and the cult of technological innovation as the fount of all solutions.

The idea that both these cults are the equivalent of the Mayan priesthoods which oversaw the decline and implosion of the Mayan Empire is not just an outlier--it is heresy of the first order.

Ironically, perhaps, it is glaringly obvious that both cults will fail because they do not understand the problems and are automatically applying tools that cannot possibly fix what is broken: the three basic principles undergirding the American economy and society are crumbling, though that devolution is mostly hidden from view.

Frequent contributor Harun I. recently commented on the fundamental blindness of classical economics and engineering, both social and technological:

You wrote: "Here is the ugly truth about the Savior State, welfare state, social welfare state, or whatever you choose to call the Central State: The Savior State displaces and destroys community and social capital. By making individuals dependent on the Central State for free money, free food, free housing, etc., then the State has taken over the natural function of community."


Something I have noticed is that you are the only blogger who discusses the psychological effects of the current policies -- which are complete failures. Most people, especially young adolescents and young adults are desperately trying to express their independence and grow. The current system of protecting welfare state and monetary system status quo fiefdoms paradoxically depends on their physical participation while ignoring their psychological and emotional needs.

The natural process of individuation is being subverted and its deleterious effects are bubbling to the surface.

Indeed, true wealth is found in vibrant community. Vibrant community exists when the people in the community contribute (probably the most important ingredient in high self-esteem is self-efficacy), and have a sense of social responsibility. More simply, vibrant community exists when its participants feel they matter.

Current policies, however altruistic its adherents and defenders may be, promote polarization (class warfare), and, most importantly, among those at the margin, especially in the young, poor mental health, which spills over in predictably unpredictable behavior.

In short, current policies are anti-community and pro-sociopathic.

Note to economists and social engineers: there is no algorithm that can express or replicate the heartfelt warmth and the bonds that are created and strengthened when a community voluntarily reaches out to help each other during difficult times.

Note to big box corporations: I, and probably many more Americans miss the local bakery, butcher, clothier, grocer, etc. It was never just about stuff. It was more about stopping in and shooting the breeze over coffee, your kids playing on the same teams, it was and is about genuine mutual interest, the emotional context. They not only knew your name but knew you and you knew them. It's about the personal relationship. It's about community.

A group of people without the ingredients of community is known as a mob.

At some point I think we will come to realize that the reasons for a societal collapse are much deeper and more complex than people not buying enough Ford F-150's or assuming sufficient (whatever that means) debt. This is a deeply flawed argument.

The laws of Thermodynamics tell us that we may control the rate of reaction of between finite resources but we cannot make more. If we do not expand beyond the bounds of earth it is inevitable that we will go backward as resources dwindle, but this need not be done so fearfully or chaotically.

Everything human begins and ends in the mind. Wealth and poverty, both relative terms, are neither measure nor predictor of love and decency.

I believe your background in philosophy better suits you to this discussion than many of the other bloggers out there. Most of them are basically quants and are predilected to thinking everything is solvable through an equation. But you seem to understand that human interaction is much more subtle and cannot be neatly packaged into a finite equation. If it is an equation at all, its variables change every few fractions of a second.

Thank you, Harun. Yes, technological innovation can help solve some specific problems. But to believe that all problems can be distilled down to a technical solution is quasi-religious and ultimately self-destructive. For example, the skyrocketing cost of healthcare (sickcare) "innovations" will bankrupt the nation within this decade. That is not the view of some fringe, it is the conclusion dictated by the data. Meanwhile, the health of the populace arguably declines every year even as spending driven by technological innovation leaps up by hundreds of billions of dollars.

I will be addressing some of the intrinsic limitations in the "engineering/tech is always the answer" mindset/religion in the next week, for it seems self-evident that while technological innovations could smooth the transition to a new economy and social order, the mere faith in technology is insufficient. We need new models for understanding our situation, and social innovations to match the technological innovations that are already in the works.

If this recession strikes you as different from previous downturns, you might be interested in my new book An Unconventional Guide to Investing in Troubled Times, now available in Kindle ebook format. You can read the ebook on any computer, smart phone, iPad, etc.Click here for links to Kindle apps and Chapter One.

Readers forum:

My new book An Unconventional Guide to Investing in Troubled Times is available in Kindle ebook format. You can read the ebook now on any computer, smart phone, iPad, etc. Click here for more info about Kindle apps and the book.

Order Survival+: Structuring Prosperity for Yourself and the Nation (free bits) (Mobi ebook) (Kindle) or Survival+ The Primer (Kindle) or Weblogs & New Media: Marketing in Crisis (free bits) (Kindle) or from your local bookseller.

Of Two Minds Kindle edition: Of Two Minds blog-Kindle

Thank you, Geoff F. ($20), for your most generous contribution to this site -- I am greatly honored by your support and readership. Thank you, Gabriel M. ($10), for your very generous contribution to this site -- I am greatly honored by your support and readership.

Terms of Service

All content on this blog is provided by Trewe LLC for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. These terms and conditions of use are subject to change at anytime and without notice.

Our Privacy Policy:
Correspondents' email is strictly confidential. The third-party advertising placed by Adsense, Investing Channel and/or other ad networks may collect information for ad targeting. Links for commercial sites are paid advertisements. Blog links on the site are posted at my discretion.

Our Commission Policy:
Though I earn a small commission on books and gift certificates purchased via links on my site, I receive no fees or compensation for any other non-advertising links or content posted on my site.

  © Blogger templates Newspaper III by 2008

Back to TOP