Our economic system has no (explicit) concern for ‘we’ in its design, it is all about ‘me’ getting what I can for ‘myself’—it is best labeled an egoistic economic system.  The pursuit of material self-interest is the guiding principle for all action.

It promotes (and requires) a belief system about what being human means that is narrow and thus limiting.  That is, it rests upon people believing they are at base individualistic, selfish, materialistic and competitive.

As discussed in It’s the EconoMe, Stupid, society to the egoist is “nothing but the sum of the actions of each individual; it is nothing apart from what each individual separately contributes to it” and what one can extract from others.

Making Society In Service

While most acknowledge that democracy is of, for and by the people, it’s objective is also to afford individual freedom in life in the pursuit of liberty and happiness. Since democracy is about having a society of free individuals it is rather easy to mold it into a system in service to egoistic economics.  That is, given the focus on individual freedom and without a similar compelling vision of a collective ‘we’—everyone’s responsibility to each other, to community—democracy is easily hijacked by self-interest.  Everyone believing in self-interest is not the same as people having a shared common interest.

Happiness when viewed through the lens of egoistic economics becomes the egotistical ‘Me’ having ultimate freedom to maximize ‘My’ profit. The story is that if you do what is expected, if you work hard in striving to maximize your material self-interest then you too will realize happiness.  If you don’t realize happiness then it is your fault, after all as the story goes we are all independent individuals each seeking our own gain. You’re on your own and should be lovin it! (That is if you are among the few who can win.) While this is an alluring story, it is also a foolish story to believe.

Think Again, Critically

Just a little inquisitiveness and critical analysis with an open mind would reveal that no one ever got what they have without the cooperation and help of others.  Each individual would be lost without the support and help of  ‘We’.

Thus we understand that life in society is not simply a collection of independent individuals bumping into each other as each exercises their notion of individual liberty to have it all for ‘Me’. The fact is that we need each other for more than the satisfaction of our material desires. We are not simply instrumental to each other’s needs. While our economic system would have us believe this for the sake of maximizing our self-interested desire to consume we are not mere cogs in this machinery.

It is a fact that each is an individual whole person and just as factual each is part of the whole of human society. That is, while you and I are different individual ‘I’s’ we are not separate ‘Me’s’.  This ‘I’ that I am and the ‘I’ that you are are deeply connected. And by acknowledging and acting on this connection we can become a ‘We’.  In our society we can sustain the unity implied by us being in this particular society.

Accordingly, we each must recognize our I-We nature and the dual responsibility that this implies.  Forsaking either one we forsake our self.  We have a very deep interpenetrating responsibility to each other’s unfolding, and therefore each of us is incomplete without each other.  As noted by Amitai Etzioni “the I’s need We to be” (The Moral Dimension). To treat anything collective with contempt is to disdain human society itself; the same can be said about the individual.  Moreover, with morality and ethics requiring a concern for ‘we’ a society of individuals where ‘me and mine’ is what’s important would find it impossible to avoid becoming an unethical society.

To hear people speak disparagingly about ‘those people who rely on society’s assistance’—you know the poor who have not gotten ahead on their own—you would think that they themselves took no help from society whatsoever.  They seem unable to understand that if not for society—especially the government policies written to favor their interests—the current gains they enjoy would not exist.  They wouldn’t have so much to love about ‘your on your own economics’ if the politicians they paid for hadn’t helped them to make the vast majority of gains derived from society their gain.

The collusion among moneyed interests and government—private business and political parties—is tantamount to injecting steroids into self-interested behavior.  It is nothing short of pure greed.  But in the context of egoistic economic society greed is good; the 1987 movie character, Gordon Gekko, and his 21^st century real life incarnates on Wall Street tell us it is so.  It is because of greed that the drive for getting and having goes forever unsatisfied ensuring a consuming and acquisitive society.  This has transformed what could have been a society of equals in regards to political power into a system for maximizing gain for a select group.

With money equating to speech, those with the most money overwhelmingly have the most say; the converse being those with the least money have the least say.  When money matters the people with money matter more!

It Can Be Better

In a culture that’s all about me getting it all for me, it is a bit naive to believe that those who rigged the system to serve their material self-interest will actually change things for the benefit of everyone.  You see the system is not at all broken, it is working just fine doing what it is rigged to do.  It is not that those in authority don’t know what to do to right the ship: It is that they haven’t the will to do what is right for the benefit of all.  We mustn’t forget that universal care and compassion is anathema to the greedy.

What we are facing is a self-imposed crisis of will.  We participate in the creation of our reality by acting on what we believe about our selves.  Having the will to change enables our ability to change. Where there is a will there is (always) a way also implies where there is no will there is no way.

Preserving What Is

In a self-interest based culture most people’s concern is a narrow (self-interest) concern.  Appealing to the general narrowness of concern among the citizens political parties readily gain support from various self-interest groups by creating fear among the people that their interest is at risk.  Such a strategy tends to be divisive (it creates an ‘us versus them’ mentality) which is exactly what those seeking to control the thinking of their audience requires.  If I can get you to think other citizens are detrimental to your interest and that I am on your side then you will support me, which is in my interest—after all my interest is what I really care about.  Facts must not get in the way of ‘me’ getting ‘mine’.

Political campaigns have devolved into medicine shows where each seeking election is selling his/her brand of snake oil while at the same time casting opponents and their supporters as the enemy as they play upon the fears of the audience’s narrow self-interest.  So election after election, congressional session after congressional session nothing fundamentally really changes.   It is the same wine in a different bottle.

So the assumption of egoistic economics (which guides the functioning of American society) that if you attend first and foremost to your self-interest—in the extreme holding supreme your liberty to do as your self-interest desires—then eventually and unintentionally everyone will benefit is at best clearly false and at worst destructive to society.  If America is the United States, then what is it that they are united about?  What is it that unites them?

The Root of It All

So what’s the problem with American democracy?  Egoistic economics is the problem! Self-interest can’t possibly unite!  Having only concern for me and mine is not the way to a well functioning sustainable human society—it is more the making of an unruly unethical collection of divisive groups.  Each seeking self gain does not lead to a unified effort toward a future better than the present.

Organizations that are sustainable are not designed and managed this way, so why would anyone believe society without a unifying vision that binds people together would have a chance of sustaining itself?  A wise businessperson would not even try to design and manage an organization wherein everyone is out for him or herself and where no one has concern for and commitment to the collective known as the organization.

It should be quite clear that a functioning viable society must advocate equally for individual and community—for the ‘I’s’ and ‘We’—since they are complimentary (and necessary) components of a wholesome society.

They are symptoms of an enacted belief by the majority of society, which has become institutionalized in society’s systems, that self-interest (which includes special interest) is paramount and correspondingly success in life is measured by the size of one’s material gain.  That is to say, they are symptoms of a wrongly purposed economic system becoming infused into every aspect of life in society, most notably government, education and of course the conduct of business.

In regards to the system of government, when wealth becomes so concentrated and elected officials become so money dependent then the conduct of government unavoidably moves increasingly in favor of the wealthy.  In effect, the very wealthy become the overlords of society.

Today we are clearly operating according to a set of beliefs that are antithetical to the advancement of democracy and the development of people.  The fact that we have elections—that we are allowed to vote—though necessary it is not sufficient to ensure democracy is operative and thus ensure freedom from oppression.  Voting when you have little choice does not equate to participation in choosing who will represent you.

Occupy Wall Street could provide the finger-snap that will awaken people in society from their hypnotic sleepwalk through life.

Oh you say people are awake, they aren’t sleepwalking.  Really!  As noted by Charles Blow, “most Americans now say that the fact that some people in the U.S. are rich and others are poor does not represent a problem but is an acceptable part of our economic system.” This is a manifestation of the unquestioned belief that material self-interest is paramount.

How often do people think the same thoughts in the same way they’ve always thought about them?  How often do they listen (without judgment) and seek to understand? How often have they actually explored perspectives that are not consistent with their view of how things are without filtering that of the other through the beliefs they hold so dear? Thinking is not merely a rearrangement of thoughts!

How often do you actually critically think about your thinking?  How often do you explore and challenge the beliefs and assumptions that are the foundation of your beliefs, thoughts and actions? How often have you actually improved the way you think and what you think about?

Those protesting the injustice and unfairness of the way things are in society are providing a wake-up call to everyone—just as the Vietnam and civil rights protesters did before them.  The Occupy Wall Street protest must keep the focus on changing the system and not follow the suggestion of what many pundits and news anchors offer, fixing on ‘a simple demand’ and/or forming or becoming aligned with a political party.  Either one of these would limit the scope, make for colonization of the message and turn the conversation more divisive.

The way things are is the result of a system of orientation that has ordered life in (our) industrialized society for quite sometime.  Thus its underlying assumptions and beliefs are hidden well below the surface of everyday experience. Since these have reached their extreme and have become massively destructive, they need to be brought to the surface for conscious exploration by an awakened critically thinking mind. To detach our self from our thoughts, which as Mahatma Gandhi said “is the prerequisite for effective involvement.”  Gandhi noted that attachment to our opinions often distorts our thinking—it keeps us from engaging the power of critical thinking.

This is not a left-right issue or a political party issue but a very human issue! We must break away from the habit of thinking in either/or terms—such thinking leads to fear and diminishes understanding.  It is time that we wake up to the fact that we are all the same: human beings seeking to live a fulfilling and meaningful human life.  It is not the time—and it is not clear when it ever is—to recoil against ideas intended to help everyone. We are so deeply connected that when others are unjustly treated we all suffer.  Yet because of an attachment to individualism as our guide we are unable to understand our interdependence and connectedness.  We must cease believing that it is all about me having mine so to hell with we.

What is a sure fire way to keep things as they are?  Continue to reinforce the primacy of the individual over the collective—keep people thinking in either/or terms.  Incite people to fear the bogyman by creating stories about those who aren’t members of their group. This keeps people fearful and reactive thus stopping them from thinking and actively listening (without distortion and judgment) to the ideas of others.  So the focus of attention turns toward demonizing others and most importantly away from collaborating with others toward fundamental system change.  Yes this is all part of keeping people from coming together to solve the problem thus ensuring things continue as they are.

It is time to let go of the thought that you are of this party or that and to embrace the fact that you are at base a human being and to acknowledge that each and every ‘I ‘ needs a vibrant ‘we’.

What we need is to develop as a society of people toward becoming a human-centered society—a viable society.  This requires a viable citizenry, which can’t be realized as long as the system fundamentally remains as it is.

The choice between Gilding and Hagel is not just one of threat versus opportunity (as Friedman contends), but of challenging the solidity of the foundation versus believing the foundation is unquestionably solid.  Based upon the summaries provided by Friedman, Gilding seems to be saying we must re-think the very precepts of what we are doing and Hagel is saying we must continue with the system and just up the ante (i.e. the Big Shift) to succeed—its re-think or re-load.

If Hagel is correct then our problems (e.g. inequitable distribution of wealth, unemployment, social unrest, environmental destruction etc) will go away because we will work harder together to learn faster and realize advances in technology that will overcome the ill effects of our actions.  But how do we come together when the system tells us we should care only about our personal material gain!

It makes little sense to try to turn a bad idea into a winning idea by increasing the investment in the idea.

If Gilding is correct (and I think he is and the argument in It’s the Econome, Stupid explains why) then following Hagel will only accelerate us toward committing suicide.

Friedman claims “my heart is with Hagel, but my head says that you ignore Gilding at your peril.”  It seems we ought to be using our critical thinking minds and not increase energy in applying the same system of orientation that caused The Great Disruption.

The process of learning, particularly in primary and secondary education, is a collaborative process involving student and teacher. Teachers facilitate learning more than they produce learning.  The paraphrased Buddhist proverb when the student is ready the teacher will appear succinctly expresses this fact.  Hence placing all responsibility (and blame) on the teacher for what is learned reflects a grave lack of understanding.  Such misunderstanding places supreme importance on teacher accountability for results—exactly what we are getting from Arne Duncan and other similar thinking reformers.

Of course improving the education and preparation of teachers is an important component, but so too is the preparation of students.  Although human beings are born with a curious and inquiring mind—a need to learn—this latter issue lies squarely in the lap of students, parents and community—it is an individual/cultural/societal issue.   What can we do to feed and develop the inherent need to learn? A focus on teacher accountability for results will do little.

To get education right requires that we cease using the same level of thinking that created the problem we now face and begin to think anew.  A place to begin is to critically think about and explore the question, why educate?

The very things that would help—systems thinking, statistical thinking, theory of human development and learning theory—apparently are not part of the knowledge base of the reformers. Instead, reformers continue to apply the same level of thinking–reductionism and competitive context setting—that supports poor quality. A focus on parts will unlikely result in an improved whole (system), since performance of the system emerges from the system as a whole, from the parts in relationship.

In short those in authority must re-think and thus re-design the system, and not merely manipulate the parts in pursuit of better results. Throwing money at a problem, absent of understanding, no matter the amount is never a sound approach.

Perhaps someone should teach Arne about the process of learning, though it is not clear that he is ready.

The Hype

Statements in a recent New York Times article on job growth misrepresent the pattern in the unemployment rate, which has actually shown an overall decreasing pattern since October 2009. The statement, “August brought no increase in the number of jobs in the United States, a signal that the economy has stalled and that inaction by policy makers carries substantial risk” is using July results (9.1) as the anchor for judgment as to what happens in August as a signal of the state of the economy as represented by the unemployment rate. Looking out to August, from July, there is about a 1 in 3 chance that the August number will be lower, a 1 in 3 chance it will be higher and a 1 in 3 chance it will be unchanged. Looking at month-to-month movement is not the way to developing understanding.  Two points do not constitute a trend; all the data are relevant toward understanding the state of the system.

The Story

The story is not that August is the same as July, that there was no movement in the unemployment rate between two points.  The story here is that business has laid-off thousands of people, are squeezing huge profits from those who are employed and yet business is not willing to hire.

The story is that those in authority don’t seem to understand that consumption-production cycle rests largely on a population of consumers having an income that enables them to consume what is produced.  The author of the article astutely noted, “The problem is less that companies are laying people off than that they are not hiring.”  Being able to produce at a high profit will not keep the consumption-production cycle turning if there is no one to consume what is produced—business produces in response to demand.  In fact astute business people realize that they don’t just create and produce products/services they also create and produce demand—why else would anyone invest in advertising!  Henry Ford grew his car-making business by hiring and paying people so that they could consume what his business produced.  It is about the basics of business and not about high finance and econometric modeling.

Statistically speaking patterns of variation are revealed over time and not from one point in time to the next. When we focus our concern on month-to-month differences—or the highest or lowest month—then the pattern in the data become unimportant and imperceptible. The one point attracting our focus gets all the attention and the important (more) long-term developing patterns are believed inconsequential and thus we put them off.  Inevitably the effect of this misplaced attention is the source of a future crisis.

The Reaction

So doing what Mr. Obama has done—acting on a misunderstanding—by instructing the Environmental Protection Agency to pull back on more stringent standards on ozone emissions will do little for the consumption-production cycle.  So our air quality has a slightly better chance of getting worse, right along with the unemployment rate.  It is mere superficial action to give the appearance that something is being done in response to the unfavorable unemployment rate—the concern is for something else, not on those unemployed.  Recall it was the absence of regulation in support of unfettered profiteering that caused the recession, not the creation and enforcement of regulation.  Perhaps profiteering is keeping the situation from getting better.

It is like saying the brakes failed to stop me before hitting a tree, so I am going to put a bigger gas tank in the car.  A focus on the outcome and not the cause turns attention to the fact that the car is stopped, not why it stopped.  With this perspective of course a larger gas tank will enable the car to go—that is if the brakes don’t fail again.

The Approach

Jay approaches error correction or problem resolution following the belief that “most mistakes fall into one of three categories: planning, procedures or performance.  Accordingly Jay contends “it’s important to understand what kind of mistake has been made before you try to deal with it.”  In other words it seems that Jay first determines the category of the cause of the mistake.  Is it a planning mistake, a procedural mistake or a performance mistake?

Jay tells of a situation involving the ordering of custom shopping bags for his picture-framing business.   The plot of the story centers on ordering—more accurately double ordering—custom bags.  Jay’s bottom line summary of the situation sums it up fairly well, “It turned out that a second order of bags had been placed only six months after a previous order.”  Given that each order provides about a 3-year supply of bags, this double ordering resulted in considerable inventory on hand.

The Investigation

Jay’s investigation provides the following account:

“I asked the purchasing person how this could have happened, and she told me that our inventory manager had said we were running out. I called the salesman from the bag company who I had been doing business with for many years and asked him if he thought it was odd for us to be reordering so soon. He said he did. As a matter of fact, he said he told the buyer that it was impossible that we needed to reorder so soon and that she should check the stock again. Which she did. Once again, the guy in charge of inventory told her we were running low. They put the order through.”

Following his approach Jay asked: “Was this a planning problem? No. Was this a procedure problem? Yes. The purchasing person was fairly new and someone should have been overseeing what she was doing more carefully. Was it a performance problem? Absolutely. The inventory manager had been careless before. After being told that the order must be a mistake, he should have figured out what was happening.”

So applying the planning-procedure-performance approach Jay concluded that it was not a planning mistake but rather mistakes in procedure and performance.  So whose procedure and whose performance?  After all one does need to find those responsible.

The Solution

Making a short story shorter, Jay talked to both the purchasing and inventory persons in the presence of the operations manager about what to do when a question of this sort arises.  Inevitably both these people proved irresponsible and were replaced.  As Jay concluded “This situation was mostly the result of having the wrong people in important jobs.”  (Can’t help but ask, who hired the wrong people?)

If as Jay claimed, “responsible employees do not have to be told they messed up”, then the solution seems quite clear, don’t hire irresponsible people!  If you have irresponsible employees then you’ve made the (first) mistake!  Was it a planning, procedural or performance mistake?

A System’s Perspective

The above approach is one based on reductionism in that it seeks to break the problem into discrete identifiable parts.  Unfortunately reductionism is not appropriate here as the concern is for the functioning of the whole—the performance of the enterprise—and its affect on the constituent parts, and not merely separate parts locally transacting.

In other words a business organization is a system—a network of constituents in mutual relation—and breaking it apart into separate parts will not afford understanding of the functioning and performance of the whole.  Performance is an emergent property and thus it can’t be understood through reductionism.

Let’s flash back in time to the early stages of a new enterprise where the business hasn’t grown enough to warrant employing others to help do the work—the time before employees. Let’s estimate the probability that this mistake would have occurred if the owner or two or three partners were doing everything.  The probability is near zero.  Why?  Many would say, because they are the owners and they care.  Although the fact that they care can’t be denied—and caring does have an affect—it isn’t the primary cause for the probability being near zero.

What the most likely reason is that (before employees) they would be in possession of all the information that they need.  Further they would have an understanding of how each and every function/activity that comprises the work of the business interrelates—they understand the works as a whole.  In short, they wouldn’t decide to act one way that would negatively impact them carrying out another activity. The decisions would most likely be informed decisions with an understanding of the impact each has on the business as a whole (i.e. the system) and on each of the other functions/activities within the system.

In summary why is it unlikely?  Those doing the work understood the system and their role in it as they perform each of the activities.  Unfortunately, the very popular way of organizing—dividing the work and managing each component as if it is not integral to the whole—is so very wrong.  Yet because everyone does it it is rarely questioned or challenged; it is the way management.

Different Perspective, Different Understanding

With this perspective the first mistake was in the structuring or organizing of the work of the business itself.  It appears that the work of the organization—which begins as a whole—was divided and parceled out as tasks for individuals to carry out.  Evidence of this is the purchasing manager did the purchasing and the inventory manager did inventory; each had their own separate responsibility.  When the purchasing manager was told “when a vendor or anyone else tells us that something doesn’t seem right, we need to look into it” and the response was “when you say we, who are you referring to?” suggests a lack of appreciation for the interdependent nature of each functional activity.  That is, the activities parceled out to at least this employee are not integrated with the (interdependent) activities of others—the work lacks wholeness and jobs lack connectedness.

What we have is divided responsibility, and with divided responsibility no one is responsible for the purchasing-inventory work of the organization.  What would make this even worse would be if employees were required to meet his/her own separate numerical goals specific to his/her individual job.

Different Mistake Identified Means Different Solution

What’s needed is shared responsibility, which is determined by the way the work (of the company) is organized/structured.  Of course the work of the organization has to be divided among many people but the many jobs also have to be integrated.  The work of the company must become whole again.

Not integrating it into a cohesive whole was (quite likely) the first mistake made by those in authority.  It is a mistake of management to organize and structure the work in a way that fragments it.  This sets people up for failure since it increases uncertainty about one’s role and makes it unnecessarily difficult.

Furthermore, the fact that the purchasing person was “fairly new” and apparently not properly trained and prepared was another contributing cause of the over ordering.  Recall, Jay even noted that the “inventory manager had been careless before”! Surely he/she is not responsible for his/her own training!  This is management’s responsibility to ensure that employees have the, support, knowledge and skills necessary to successfully do the work.

So the situation involves: a) not training new employees; and b) structuring the work so that responsibility is divided. Also the solution involved talking to those who made the mistake—with the implication that they were to blame—asking them not to make the mistake again, without looking deeper and further into the system itself seeking systemic causes and rectifying.  The actions taken only ensure that this kind of mistake will happen again, irrespective of the individuals employed to work in the system.   It would be more by luck that things went well!

Management must develop and maintain the system as well as prepare people (with education and training to build knowledge and skills) so that they can be successful in supporting quality in the work of the organization.  Quoting Deming, management works on the system, the people working in the system.  Management must do their job so that others can be successful at doing theirs!

We should care because this approach when applied to anything other than locally contained situations—that is when applied to complex systems—will actually create far more problems than the solution of the moment it is intended to address.  Placing all one’s energy toward minimizing the one cause or maximizing an isolated outcome will ultimately result in the destruction of the system itself.

Wise physicians know that treating the whole person is far more helpful to a patient’s wellbeing than a single focused approach toward short-term relief.  Similarly, wise business executives know that a single-minded pursuit of profit at all costs is eventually detrimental to the viability of the business enterprise.

Reductionism is also being played out every day by the very way organizations, especially business organizations, are organized and managed.  Since most business enterprises seek the same purpose—profit maximization—it is not surprising that they are brought to order in a similar fashion.  Effectually, to exercise control, the system is reduced to (i.e. broken up into) more manageable pieces.  Adding insult to injury, each part then is required to maximize the attainment of a goal in support of profit maximization of the whole.  The common phrase associated with an effect of this practice is silos—and many know all too well the adverse effects of this.  Some of the many unintended effects include: poor communication throughout, inadequate levels of cooperation and collaboration, waste, rework, and insufficient organizational capability to support strategy.  Yet those in-authority positions continue doing this!

In regard to the problem of America’s national debt, reductionism was the approach in the problem solving recently carried out before our very eyes by the U.S. Congress. Rather than developing an understanding of the functioning of the whole and its effect on constituent parts, the approach taken involved isolating elements as if they are separate unrelated things and choosing one as both cause and solution. The impact of reductionism in this case is compounded by a narrow focus.  So with only a few arguing for a systemic approach—calling for a more complete solution—reductionism won out.

Though it appears most economists predict that the effects of this single-minded action will likely have a deleterious affect on the economy and society, the full compliment of effects cannot be precisely determined, though all of the effects will emerge.

What can be said is that reductionism is not applicable to problem solving of dynamic complex systems.  Why?  With dynamic complex systems the concern is for the functioning of the whole and its affect on the constituent parts, and not merely separate parts locally transacting.  Interdependence along with the nonlocal nature of cause and effect in systems cannot be disregarded or separated out.

Moreover doing so diminishes understanding. Because a system is a set of relationships—deeply nested interdependent relationships—every action will affect multiple relationships throughout the system. Moreover one action has multiple effects and those effects are nonlocal and nonlinear—stated simply, you can’t do just one thing. Hence understanding of the emergent properties of the system cannot be realized by breaking things apart.  Reductionism as an approach to managing systems diminishes understanding and thus reduces the soundness of decisions.

Hence it is therefore foolish, futile, and ultimately fatal to attempt to solve problems of a system applying reductionism.  Moreover, we can’t overcome the effects of reductionism in the management of a system by further application of reductionism to solve the resultant problems.  As Einstein is remembered saying, you can’t solve problems with the same level of thinking that created them!  Doing so will likely lead to destruction—greater imbalance and fragmentation—of the system, reducing everything to rubble.

Accordingly, those who make policy that serves special interests or an ideology fabricate a justification (for doing so), making the illogical seem quite logical and factual.  In order to gain support for their logical fallacy they initiate a propaganda campaign to sell others on the idea. After a time hearing this story even the initiators themselves become quite convinced of the truth and accuracy of the falsehood.

Currently there are several such active campaigns.  In education reform, the selling of Waiting for Superman is one such example. It is the notion that the quality  of our education system will improve if we turn attention to better results, better testing and accountability.  Though preposterous, it has become quite popular.  Another is the idea that austerity will reduce the national debt and mysteriously produce jobs thus eventually lowering the unemployment rate is a logical fallacy.  In healthcare, selling the notion that vouchers payable to private insurance is equivalent in services received under Medicare is yet another related fallacy.

The inherent fear that these stories instill, as with all fears, stops people in their tracks—it stops them from actually thinking. Even though in reality there is no bogyman (that it is all fabrication) the story becomes so viral that its illogical nature is perceptible to only but a few.  Predictably, consumed by fear and absent of any critical thinking by the citizenry, there is a ground swell of support for a foundationless course of action—one designed to benefit a few.

In the case of unemployment, the fear that corporations aren’t adding enough to the bottom line—no amount is ever enough—or that uncertainty about taxes or the rising deficit is the bogyman keeping otherwise reasonable people from taking responsible action.  Paul Krugman calls this government inaction against unemployment learned helplessness.  This is a nice way of saying it is just plain foolishness and quite sad.

It is sad that we allow ourselves to be governed by fear, sad that ideology of special interests trumps common interest (and common sense).  There is little doubt we have fear and not the will to push it aside.

Fear stops people from thinking and tends to cause them to latch on to logical fallacies dressed up as fact thus ignoring or denying the merits of the very thing that could help them.  Keeping us thinking in either/or terms and limiting us to a world comprised of immediate short-term fears—yes the very concerns that the bogyman creators want—reduces the likelihood that we will develop an understanding and make informed decisions.  With the bogyman ruling the day, we will come to rue what we have allowed.

The first step in problem solving is to correctly define—that is to identify and delimit—the problem.  Failure to do this results in at least confusion about what one is focusing on and at worst a solution that not only ignores the real issue but provides a cover for it, allowing the problem/issue to continue to intensify and expand in its symptomatic effects.  Consequently complex problems tend to be recurring problems because they are not structured and well defined.

Hence we see the first step being a misstep with so many of our complex problems, especially our societal problems.  Problems of organizational quality, performance and change are quite complex.  So too are societal problems of education, crime and healthcare.  Consider as illustration the way we’ve defined the problem of healthcare—as we’ve so named it—has caused us to sweep the real issues under the rug leaving us with this monster of a bump in the middle of the room. The bump is problematic but it is not the problem!  It would be like lumping automobile design and manufacturing with automobile insurance, with highway design and construction and with driver training and defining/naming it driver safety.  Clearly trying to improve this—perhaps as measured by fewer accidents—as if it were one entity would be ill advised and foolish.

In regards to healthcare, each faction (i.e. each special interest group) has its own solution to the bump. As a result the lack of a properly defined problem manifests as disagreement over solutions when the crux of the disagreement is really confusion about the very nature of the bump.  So as each faction offers their exact solution for dealing with the bump—which is actually a myriad of problems not yet understood—we are left with ineffective but exact solutions to the ill defined problem.

Imagine if we rolled the rug back to reveal the very nature of this bump we are confusingly calling healthcare.  We’d see that we have private medical care & services, we have private insurance for medical services, government insurance for medical services and we have care of one’s health as the major constituents of this bump.  This is not one system.  Rather these are separate but reciprocally interdependent systems.  Thus, if we treat them as one, or as if one is dominant, then we can’t help but to overlook the interdependence and thus fail in our effort to improve the well being of people in society.  It should not be surprising, based upon an analysis by Richard Wilkinson and Kate Pickett, that compared to industrialized nations U.S. health expenditure person is among the highest, life expectancy is among the lowest and infant deaths per thousand live births is among the highest.

Each of these systems must be improved toward optimizing their collective functioning—they are, after all, reciprocally interdependent!  What we must not do is allow one to dictate their collective functioning—say by maximizing its role or profit gain or by minimizing its internal cost.

So the question is why is there continued effort toward resolving such an ill defined problem?  Could it be that those in-charge haven’t a clue about the steps in effective problem solving?  Could it be that those advancing their solution will (personally) benefit from the solution they are advocating, especially when the symptoms intensify and expand?

The U.S. government initiated The Race to the Top –and before this it was No Child Left Behind—that essentially uses accountability for results and a bag of cash—$4.35 billion to be exact—to get the attention of those in authority of public education within each state.  However, as noted in the Wall Street Journal, “the U.S. has been trying without much success to spend its way to education excellence for decades.”  Pay for success: Sounds great!  After all this is what business does, so it must be the best thing to do!

Obviously the intent is to incite—actually to incentivize—each state to focus on getting better results (i.e. educational outcomes) in their school system.  Offering money in a society that greatly values money is a sure-fire way to get peoples’ attention.  I am sure the argument is that the allure of money will get people to do something.   After all, nothing is being done now!  Of course the prospect of getting the money will most likely cause some action, but it isn’t that clean and simple.

Misguided Management

Seemingly it is believed—erroneously I might add—that popular business practices are effective.  Accordingly, The Race to the Top is fashioned after what leaders of business organizations often do—create competition, manage by results, incentivize and devise pay-for-performance schemes.  However the popularity of these practices is neither credible nor sufficient evidence to support their effectiveness.  Yes they get people to take action—so too would yelling Fire—but getting people to act is not quite the same as preparing people to improve quality.  These popular business practices have never proven to be effective over the long run, so why the Secretary of Education (Arne Duncan) includes these as the levers for improvement of quality lacks scientific support and is thus unclear.

When the context is competitive then nothing is more important than winning.  Some might argue this is what we want from our education system, people who know how to win!  Politely, no! This is not what is needed!  We really need graduates who know how to learn at higher levels and who find learning joyful.  We need people who can think critically and who can perceive and understand subtle trends in the world around them. If these were realized, we might then have a society of people capable of seeing trends way before it is obvious even to the casual observer and making decisions that help society realize human progress, not mere material growth.

Managing by results means results rein supreme. Some might contend that knowing how to get results is what it is all about!  When getting results is what matters the process becomes the least of people’s concern.  Hitting the numbers—by hook or by crook—is what becomes important!  We see this play out in business all the time yet we seem to ignore its cause.

What management really communicates is that process and quality are irrelevant, and it is all about results after all.  Thus what is (tacitly) learned is how to rig the system or fudge the numbers in one’s favor so that the results show oneself to be the winner.  In this environment, might we see fraud and cheating scandals in the future?  We see it occurring in business all too often—can you say Enron, WorldCom and Wall Street!

Getting What You Pay For

Last but surely not least is merit pay—pay-for-performance—based on the meeting the set numerical goals to determine one’s compensation and/or continued employment. The argument in support of this system is that it incentivizes (i.e. forces) people to ensure that they measure up.  If a person’s job depends on it, then it will surely bring focus to what they do.  This is nothing more that management by fear—the antithesis of what underlies quality.

Of course we want people to do quality work!  But this merit pay arrangement changes the relationship one has with their job—it changes what one does. What this essentially does is causes people to choose between outcomes and process. In business you might say it is not the product or service that matters it is the sale!  Guess what will win out?  In education this translates to teachers becoming trainers and students becoming highly trained test takers—yet test scores don’t equate to a quality learning experience!

Merit pay sounds great but it doesn’t work as intended because it rests on erroneous assumptions, and there is credible research to support this.  Also, if it worked as well as its widespread use would indicate, then the vast majority of business organizations would exemplify the pinnacle of performance from top to bottom.  But they don’t!

Learn How to Think About Quality

The very things that would help—systems thinking, statistical thinking, theory of human development and learning theory—are disregarded. Instead, managers/leaders continue to apply the same level of thinking–reductionism and competitive context setting—that supports poor quality. Throwing money at a problem, absent of understanding, no matter the amount is never a sound approach.

What must be understood is that the system—the organization—is designed and managed to produce what it is delivering.  Thus a fundamental change of the system and the way it is managed, not changes within the system, is required.

In short management must re-think and thus re-design the system, and not merely manipulate the parts in pursuit of better results. Holding the worker accountable for better results is simply avoidance behavior.

Management therefore must detach from what habit of thought provides and use critical thinking before using the organization’s money as a first step toward quality.  Management needs to learn about quality and its’ improvement toward understanding the ‘why’, ‘what’ and ‘how’ of quality—educate one’s self rather than begin the wholesale training of workers.

Clearly when those in authority focus on results and employ money through competitive and accountability schemes in an effort to improve quality, it is a signal that they haven’t a clue of what to do.