I closed the last post with the question, "So what might help us to make more sound policy decisions in a context of complexity?" Let us start with a thought experiment.
The year is 1895, and we are in America. As we look at recent trends, we see a rapidly growing population and increased urbanization. Intra-urban transportation is largely by horse-drawn vehicles. Expanding urban centers means more and more people concentrated together who are not growing their own food. That means more and more food from far-flung areas must be transported into cities and distributed to ever-expanding neighborhoods. Most of this will have to be by horse-drawn vehicles. Most personal public transportation will be by horses. That means we are going to need more and more horses. But the increased number of horses also means streets filled with horse manure and the potential spread of disease. We perceive that the transportation system will soon be overwhelmed, and our cities will be cesspools on the verge of collapse. What shall we do?
Some would no doubt begin increasing their investments in the buggy industry. Others might have turned to legislation to restrict the growth of cities or at least control them so they do not get out of control. Others would pursue the development of innovative technologies to resolve transportation issues. Looking back, we see that all three strategies were employed somewhat. Some folks invested in creating more efficient existing industries, the city planning movement was born, and experimentation with creating a viable automobile was underway. Any of these strategies pursued alone would have been perilous to the growth and prosperity we see today, but they brought tremendous benefits.
I recently finished reading The Origin of Wealth by Eric Beinhocker. Beinhocker takes us back to 1987.
The still nascent PC industry has just gone through a period of explosive growth. No one has ridden that growth harder than Microsoft. But MS-DOS is no coming to the end of its natural life cycle. Customers are beginning to look for a replacement operating of the new generation of machines. (335)
Microsoft was a $346 million corporation up against multi-billion-dollar giants like IBM, already working on creating its own OS/2 system. Meanwhile, AT&T, Sun Microsystems, and Xerox, among others, were teaming up to create a user-friendly version of Unix. Apple was plowing ahead with its graphics-based interface environment. What should Microsoft do? Improve its MS-DOS systems? Join up with IBM on OS/2? Join up with AT&T and friends on Unix? Throw its money in with the Apple environment? Take the high-risk strategy of creating something new on its own? Which strategy should Microsoft choose? Bill Gates and Microsoft did something unconventional. They did all of the above! We might ask how the relatively small Microsoft could afford to do this? Gates concluded they could not afford not to do it. Here is how Beinhocker describes it:
First, Microsoft continued to invest in MS-DOS. Although everyone was predicting the operating system’s demise, it still had an enormous customer base. Many customers were very cautious about switching, and each version of DOS was incrementally more powerful than the last. There was still some chance that DOS would continue to morph and provide what customers wanted for some time.
Second, Microsoft saw IBM as a real threat. Big Blue was still a powerhouse on the hardware side in 1987 and wanted to regain control of the operating-system market. But IBM also knew it would be risky to go it alone. As Michael Corleone said in the The Godfather, Part II, “Keep your friends close, but your enemies closer.” Gates and IBM agreed to turn IBM’s OS/2 operating-system project into a joint venture.
Third, Microsoft saw Unix as a lesser threat than IBM, but a threat nonetheless. Microsoft held discussions with various companies, including AT&T, about participating in joint efforts on Unix. The discussions kept Microsoft’s options open and the company plugged into what was going on, but also fueled speculation about Microsoft’s Unix strategy. This had the benefit of creating additional uncertainty for the Unix advocates and slowing their progress.
Fourth, in addition to playing the Unix alliance game, Microsoft bought a major stake in the largest seller of Unix systems on PCs, a company called the Santa Cruz Operation. Thus, if Unix did take off, Microsoft would at least have a product of its own in the market.
Fifth, Gates did not pull back on investing in applications, but continued to build that business at the same time, despite the strain on resources. In particular, Microsoft built its position in software for Apple Macinstosh, passing Apple itself, as the leading supplier. This provided a hedge in case Apple capitalized on the discontinuity in the market to push its own operating system ahead.
Sixth, and finally, Gates made major investments in Windows. Windows was intended to be the best of all worlds. It was built on DOS and was backward-compatible with DOS applications, it was multitasking like OS/2 and Unix, and it was easy to use like Macintosh. But most importantly, it would keep control of the PC operating-system market firmly in Microsoft’s hands. Success with Windows was clearly the company’s most preferred outcome.
What Gates created was not a focused big bet, but a portfolio of strategic options. One way of interpreting what Gates did was that he set a high-level aspiration – to be the leading PC software company – and then he created a portfolio of strategic experiments that the possibility of evolving to toward that aspiration. (335-336)
My interest here is not whether what Microsoft did was best for the computer industry but rather how Microsoft survived and thrived in an uncertain environment. What Microsoft did was to spread risks much like you or I would with a mutual fund. We could try to pick a star stock for our 401K, hoping to be set for life. However, pick any of several dog stocks, and we can lose all or most of our investment. By choosing a more balanced portfolio, you lose some potential upside of picking a star performer because you invest in several companies that don't give a good return. Not having all your funds invested in the one right company is the price you pay to avoid having all your funds in the wrong company. Of course, if you knew which firms would advance, there would be no question about where to invest, but in the real world, there is much uncertainty. We are left with risk management. Just as a fund manager moves funds to well-performing assets, so did Microsoft begin to focus its investments on the achievers while keeping its fingers on other possibilities until they had faded. They added new strategies to their portfolio as they emerged to ensure they were not unexpectedly taken by surprise.
This is how I expect we must deal with public policy concerning complex scientific questions. We must manage risks. We pursue multiple strategies knowing that, in a sense, some of the money and effort will be wasted because it will go to strategies that do not pan out. We pay this price to avoid not having invested partially in the right strategies.
Take climate change, for example. Despite some rather vitriolic claims by activists, it is not certain that we are in grave danger from increased temperatures, at least in the near term (and maybe not at all.) Yet, if we are persuaded that there is a reasonable potential for significant negative consequences, we can't simply ignore the problem. I could see at least three strategies working at the same time.
First, we make our actions more efficient and take low-cost steps to reduce emissions. (Picking the fruit from the low branches.) The downside is that we may have invested our energies into strategies that were needless to start with. On the upside, should the risk picture become more clearly threatening, we will have already made some initial steps toward alleviating the problem and be ahead of the curve.
Second, we plan and organize ourselves now for negative contingencies that could arise even as we pursue more precise information about what is happening. Worst-case or bad scenarios could be considered in community planning based for coastal areas or regional agriculture. A small downside is that we will have planned and prepared for contingencies that will not happen. However, a larger downside is the possibility that regulation and control become so heavy it damages the economy, which would hinder innovation and reduce the rate at which people around the world emerge from poverty and become part of an environmentally concerned community. On the upside, we will again be ahead of the curve should bad scenarios become more likely.
Third, we invest in and encourage the development of new technologies that might replace or radically minimize the impact of existing technology. The upside here is very high. The discovery of new sustainable energy resources could simultaneously reduce our dependence on fossil fuels (the purchase of which goes to help fund some of the most despotic nations on the fact of the planet), it could accelerate the efforts to lift billions of people out of poverty, and it could reduce the level of pollution we put into the air (CO2 is technically not pollution.) The downside is minimal.
The greatest danger is to pursue one strategy (like going after our star stock for 401K) without pursuing all three. Should bad scenarios become more likely, the first strategy alone would leave us behind the curve on planning and technological innovation. The second strategy alone would leave us with more emissions in the air than we otherwise would have had and leave us behind on the technology learning curve. The third strategy alone leaves us with more emissions that would otherwise be necessary, farther behind on the curve, and planning for contingencies.
I realize I am being simplistic here. I hope and intend to give a sense of what I think is needed for public policy in the context of complex scientific issues where uncertainty is always a challenge.
In addition to the above, we must create a public space where reasonable discussion can be had about these issues. Most of our civic institutions have been severely weakened in recent years. There are few venues where civil conversation can be had to genuinely explore complex issues. Even in the Church, conversing among different folks without descending into polemic vitriol is challenging. It strikes me that providing a space where such conversation can be had might be one small way the Church becomes a beacon of shalom into our communities. As we begin to enter the brave new world of biotechnology and bioethics, these issues will only get more complex and more distressing.
There are a few things I am sure of. Whether we talk about businesses, government, science, or the media, no such people are objective, impartial participants. The bulveristic "gotcha" game of ignoring issues to defame and demonize differing parties is unacceptable. We all come from some context that biases our take on things. People like Ellen Goodman, writing, "Let's just say that global warming deniers are now on a par with Holocaust deniers, though one denies the past and the other denies the present and future," are more than a little over the top. Climate change science has none of the kind of certainty this kind of inflammatory rhetoric is intended to defend.
Freedom to dissent and question is an essential element of scientific inquiry. A favorite Enlightenment story is about science set free from the totalitarian oppression of the Church that enforced conformity to its absolute, unquestioned truth through inquisitions and intimidation. How is the religious fervor with which some demean their opponents, seeking in some cases to deprive them of their livelihoods and ruin their reputations, any different except that they lack the power of the state to make their will prevail?
The number of issues involving complex science and uncertainty will only increase in the future. How about we start now in developing the institutions, relationships, and public spaces for this kind of conversation to happen?
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