limits of political power

When policies, institutions or leaders fail, they are quickly replaced by others. I have often wondered about how few people pose the simple question “Why should we believe it will be any better with this?” In the 1970s, academics gave a lot of attention to policy failure and problems of implementation. Indeed it was an important intellectual strand in the breakdown of the post-war consensus allowing the rise of neo-liberalism. And the Cabinet Office of the new Labour Government of 1997 recognised that implementation issues needed as much attention as policies themselves. Those who think in linear fashion credit leaders, managers, institutions and policies with power they simply do not have. System thinkers and marxists in their very different ways recognise this. Systems thinkers would urge experimentation and decentralisation. I am less ceratin of the practical steps Marxists would suggest for our various social and economic ills.
These thoughts were sparked off by a good essay on the Open Democracy site by Jeremy Gilbert about the current Labour leadership contest which poses a basic question no one has really posed - How did Blair, the advocate of a communitarian politics,
weakly informed by the traditions of Christian socialism and Catholic social teaching, become Blair the fanatical advocate of merciless market liberalisation? And why on earth should we imagine that the next Leader will not also betray the promises of the campaign?

There is a simple answer to this question available, which is to say that in any society dominated by liberal capitalism, political opposition from either right or left will inevitably find itself having to make communitarian noises, because the lack of community is the most obvious failing of a competitive market society and one which most of its inhabitants will keenly feel. Isn’t this what ‘The Big Society’ is all about, along with ideas of ‘Red Tory’ Philip Blond?
Just as with New Labour, but in a shorter time frame, we’ve witnessed an opposition come to power speaking a language of community and fairness, only to see it bow to the demands of the financial markets and the Whitehall monetarists by promising a historic assault on the remaining institutions of social democracy.
We must then assume that the story was similar, if slower, for Blair: pressure from elites in the City, the Civil Service and the media, gradually winning him over to the cause of full-blown neoliberalism. David Miliband and Jon Cruddas would probably argue - with some justification - that Blair’s personal commitment to communitarianism had never been run very deep, and that their own is far more serious. But this is really beside the point. Whatever his personal convictions or lack of them, Blair was elected leader of the party on a prospectus almost identical to that which they now propose, but within 5 years was trying to drive a programme informed by an almost diametrically opposite set of principles; and the party was apparently powerless to stop him.

The question which this leaves open for all of the Labour leadership contenders, or their supporters is: why should we believe that their leadership will be any different? How will they react when their civil seravnts and their friends with the yachts and the hedge funds and the influential newspapers, tell them that, no matter what they might once have believed, what they have to do now is to cut taxes and privatise public services?
Will they have put in place institutions and a movement which enables them to resist such pressure better than New Labour - bereft of any real political or social base after its deliberate evisceration of the party’s democratic structures - was able to? Should we trust any of them to resist the seductive pressure to defend the interest of the elite of which they have themselves become a member? Most importantly of all: will they at least acknowledge that such pressure will inevitably be brought to bear, and will reveal genuine conflicts of interest within our society between the rich and the poor, the employers and the employees, the upper-band tax-payers and the low-paid hospital cleaners?

Right now, there are at least two possible futures implicit in the forms and symbols of modernisation which we can see all around us: an world of vicious competition, new forms of authoritarianism and a dreadful narrowing of personal and collective aspirations; a YouTube world in which the authority of centralised media and corporate capital is severely weakened by the power of decentralised democracy and collective creativity. The latter is a real possibility, immanent to the most transformatory tendencies of our age, but it will prove unrealisable without a programme of institutional and democratic transformation far more radical than anything envisaged even in the days of Labour’s halting half-conversion to the cause of constituional reformin 1992.

Of course, we know which world all of the Labour contenders would say they want to lead us to. But then the question comes back round again, almost unchanged: will they recognise that there are powerful forces which will try to stop them, to push them in the other direction, to ensure that it is only Murdoch’s version of modernity that can possibly triumph, and that ‘community’ becomes just an alibi for the decimation of public services? Will they tell us what they plan to do about it when such pressure is brought to bear? Until they do, I’m reluctant to vote for any of them

Great expectations

Romania has been in crisis for the past few months – but not quite the same as the rest of Europe. They have been in thrall to the IMF for the past year – despite many of their indices (such as public debt) being much better than almost all other EU members.
The latest 20 billion IMF loan package led in May to government proposals to cut pensions causing, in turm, serious public protests and demonstrations. The Constitutional Court, however, ruled that this was unconstitutional – perhaps not surprising given the incredible pensions the judges and other members of the political class enjoy.In one case an ex-judge is known to have a monthly pension of 8,000 euros and generals (of which Romania has an extraordinary number) can expect about 5,000 euros a month. This in a country whose average monthly wage is 150 euros. And a 25% cut in public service wages has gone through – making life even harder for teachers and others. Not surprisingly, then, there was a government reshuffle last week which got no mention in the UK press (apart, presumanbly, from the FT) and it deserved little – except that a related blog from an excellent political analysts – Sorin Ionita – helped me understand the role which political parties here in Romania play in sustaining the corruption which everyone rails against. His site referred me to an articleeleven things which Vladescu won’t tell us (in Romanian only I’m afraid) which is an attack by an esteemed Romanian financial journalaist (Soviani) on the previous Minister of Finance for his dishonesty and hypocrisy in concealing eleven sources of income he had. As Minister, he was on the Board of several state companies – and apparently received 96,000 euros a year for attending their Board meetings which he forgot to declare. For an example of the financial asset declaration forms which have recently became compulsory you can see one filed by a State Secretary in the same Ministry - Bogdan Dragoi. The only problem is that although this 30 year-old official has been working in the Ministry for more than a year, his form (dated 10 June 2009) tells us that he is working in the municipality of Bucharest! However his brief CV (on the EIB website since he was appointed in Feb 2009 to its Board) tells us that he finished the municipal job exactly one year earlier than he completed and signed his declaration - in June 2008!
His declaration form also tells us that his net annual earnings were 50,000 rons (about 1250 euros - perhaps he made a mistake and this is actually monthly?) – although he also admits to owning 25,000 sq metres of land in Bucharest and another 25,000 sq metres of land in Calarasi). Of course he is now a State Secretary - actually earning 9,600 euros a month! He obviously hasn’t been using his Rolex, Breitweiler and other 2 watches (which he values in total at 14,000 euros) and does not therefore realise that it is now mid-September 2010. Rip van Winkle rather than Midas!
Just imagine yourself in such a situation - your boss has been sacked and is being publicly pilloried for having failed to declare external earnings. The first question of a normal person would be "Is my own declaration form in order?" But no, people like Dragoi enjoy such patronage (with no experience - he became a State Secretary at the age of 26 after an extended education!)and protection and seem so contemptuous of these forms that he doesn't even bother to update his form which understates his income by a factor of 40! 250 euros he says when it is actually 9,600!
His out-of-date form does, however, declare some of the additional revenues he earned as a committee member of various state funds.
I alighted on his declaration form by accident – just choosing his file at random from the list of officials’ forms. These assets, earnings and concealments reveal systemic immorality which, in Romania’s case, seems to be shaped and sustained by the role of its political parties which grabbed significant amounts of property in 1990 and which now determine the career path of young characters like Dragoi (nationally and internationally) and take in return a significant part of his earnings. For more on this issue see Tom Gallagher's recent article.

When people talk about pinning their hopes on the younger generation, I will always think of this face. It is when these scams are revealed that I feel some shame for having spent time working trying to reform such systems.

where do we go to understand countries?

I am still musing about the apparent paucity of insightful writing about individual European countries - by English writers at any rate. But I have initially to test my hypothesis. First I have to establish a standard or (in the modern jargon) a benchmark. And am I talking about articles, books, blogs or broadcasting? Clearly we are overwhelmed with information about events all over the place – but generally in short pieces of broadcasting or articles. The article in Vanity Fair about the Greek crisis which so impressed me was 11,000 words long – and was a superb balance of technical information and quirky interviewing and analysis (of the Mount Athos monks). Where else can someone write in such length except in journals such as New York Review of Books, London Review of Books, New Left Review, New Yorker. And it is generally specialists (academics) who get through these editorial hoops – and not just any academic but those who have learned the difficult art of writing both clearly and creatively - such as the historians Timothy Garton Ash and Tony Judt. Such people are fairly rare – since communicating with the general public is not a skill which is good for one’s academic career. I am a great fan of all these journals – but have to ask also about how they decide which topics will be of interest to their readers. The mainstream media make judgements about the short time-span and limited subject matter of interest to their readers. The upmarket journals may credit their readers with more intelligence – but make equally questionable assumptions about the range of their interests. So lots of stuff about the economy and education in New York Review of Books – but little about European countries. Italy, of course, is always good for knock-about comedy.
As far as books are concerned - the need for publishing niches has created a good market for travelogues which are generally well-written but which focus on a very narrow aspect of a society –eg construction workers, the fez, carpets, And academics writing on particular countries also focus on such narrow aspects (politics, economics, history) as to leave us with no real insights.
Was there a golden age? France had Richard Cobb and, more recently, Theodor Zeldin; Spain, Gerald Brennan: the USA, Alaister Cooke; Italy, Luigi Barzini. But note - only the countries where the Brits would go on holiday.
The painting is from my collection - L Minkov's Razgrad mosque only 3 hours down the road from here in Bucharest!

Balkans basket-case

I find it astonishing that I learn more about the Greek crisis from an article in the US Vanity Fair than in any serious British journal or blog. And what a story it is.

In just the past decade the wage bill of the Greek public sector has doubled, in real terms—and that number doesn’t take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. “We have a railroad company which is bankrupt beyond comprehension,” Manos put it to me. “And yet there isn’t a single private company in Greece with that kind of average pay.” The Greek public-school system is the site of breathtaking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked, Finland’s. Greeks who send their children to public schools simply assume that they will need to hire private tutors to make sure they actually learn something. There are three government-owned defense companies: together they have billions of euros in debts, and mounting losses. The retirement age for Greek jobs classified as “arduous” is as early as 55 for men and 50 for women. As this is also the moment when the state begins to shovel out generous pensions, more than 600 Greek professions somehow managed to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians, and on and on and on. The Greek public health-care system spends far more on supplies than the European average—and it is not uncommon, several Greeks tell me, to see nurses and doctors leaving the job with their arms filled with paper towels and diapers and whatever else they can plunder from the supply closets.
“The Greek people never learned to pay their taxes .... because no one is ever punished. It’s like a gentleman not opening a door for a lady.”
Where waste ends and theft begins almost doesn’t matter; the one masks and thus enables the other. It’s simply assumed, for instance, that anyone who is working for the government is meant to be bribed. People who go to public health clinics assume they will need to bribe doctors to actually take care of them. Government ministers who have spent their lives in public service emerge from office able to afford multi-million-dollar mansions and two or three country homes. Oddly enough, the financiers in Greece remain more or less beyond reproach. They never ceased to be anything but sleepy old commercial bankers. Virtually alone among Europe’s bankers, they did not buy U.S. subprime-backed bonds, or leverage themselves to the hilt, or pay themselves huge sums of money. The biggest problem the banks had was that they had lent roughly 30 billion euros to the Greek government—where it was stolen or squandered. In Greece the banks didn’t sink the country. The country sank the banks.
The author interviews 2 tax inspectors who were punished for whistle-blowing – the first just took it for granted that I knew that the only Greeks who paid their taxes were the ones who could not avoid doing so—the salaried employees of corporations, who had their taxes withheld from their paychecks. The vast economy of self-employed workers—everyone from doctors to the guys who ran the kiosks that sold the International Herald Tribune—cheated (one big reason why Greece has the highest percentage of self-employed workers of any European country). “It’s become a cultural trait,” he said. “The Greek people never learned to pay their taxes. And they never did because no one is punished. No one has ever been punished. It’s a cavalier offense—like a gentleman not opening a door for a lady.” The scale of Greek tax cheating was at least as incredible as its scope: an estimated two-thirds of Greek doctors reported incomes under 12,000 euros a year—which meant, because incomes below that amount weren’t taxable, that even plastic surgeons making millions a year paid no tax at all. The problem wasn’t the law—there was a law on the books that made it a jailable offense to cheat the government out of more than 150,000 euros—but its enforcement. “If the law was enforced,” the tax collector said, “every doctor in Greece would be in jail.” I laughed, and he gave me a stare. “I am completely serious.” One reason no one is ever prosecuted—apart from the fact that prosecution would seem arbitrary, as everyone is doing it—is that the Greek courts take up to 15 years to resolve tax cases. “The one who does not want to pay, and who gets caught, just goes to court,” he says. The easiest way to cheat on one’s taxes was to insist on being paid in cash, and fail to provide a receipt for services. The easiest way to launder cash was to buy real estate. Conveniently for the black market—and alone among European countries—Greece has no working national land registry. “You have to know where the guy bought the land—the address—to trace it back to him,” says the collector. “And even then it’s all handwritten and hard to decipher.” But, I say, if some plastic surgeon takes a million in cash, buys a plot on a Greek island, and builds himself a villa, there would be other records—say, building permits. “The people who give the building permits don’t inform the Treasury,” says the tax collector. In the apparently not-so-rare cases where the tax cheat gets caught, he can simply bribe the tax collector and be done with it. There are, of course, laws against tax collectors’ accepting bribes, explained the collector, “but if you get caught, it can take seven or eight years to get prosecuted. So in practice no one bothers.” The systematic lying about one’s income had led the Greek government to rely increasingly on taxes harder to evade: real-estate and sales taxes. Real estate is taxed by formula—to take the tax collectors out of the equation—which generates a so-called “objective value” for each home. The boom in the Greek economy over the last decade caused the actual prices at which property changed hands to far outstrip the computer-driven appraisals. Given higher actual sales prices, the formula is meant to ratchet upward. The typical Greek citizen responded to the problem by not reporting the price at which the sale took place, but instead reporting a phony price—which usually happened to be the same low number at which the dated formula had appraised it. If the buyer took out a loan to buy the house, he took out a loan for the objective value and paid the difference in cash, or with a black-market loan. As a result the “objective values” grotesquely understate the actual land values. Astonishingly, it’s widely believed that all 300 members of the Greek Parliament declare the real value of their houses to be the computer-generated objective value. Or, as both the tax collector and a local real-estate agent put it to me, “every single member of the Greek Parliament is lying to evade taxes.”
The Greek state was not just corrupt but also corrupting. Once you saw how it worked you could understand a phenomenon which otherwise made no sense at all: the difficulty Greek people have saying a kind word about one another. Individual Greeks are delightful: funny, warm, smart, and good company. I left two dozen interviews saying to myself, “What great people!” They do not share the sentiment about one another: the hardest thing to do in Greece is to get one Greek to compliment another behind his back. No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible; the collapse of civic life only encourages more lying, cheating, and stealing. Lacking faith in one another, they fall back on themselves and their families. The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself. Into this system investors had poured hundreds of billions of dollars. And the credit boom had pushed the country over the edge, into total moral collapse.

And space does not allow me to excerpt what the author has to say about how even the Greek monks (on the Athos peninsula) were sucked into the cauldron of corruption.
There are perhaps 3 issues from such a story - one for the Greeks themselves and others in the Balkans; about how a country can be brought to its knees in such a way and how it can get off its knees. All credit to the new government and its Finance Minister that they were determined from the very beginning to be so transparent about the scale of the fiscal lying and cheating they found.
The second issue is the role of the European Union - where it was in all this in the last 2 decades. And the final issue is the poverty of foreign reporting in Britain - that it has to be an American journalist to write such an exposure. Only the academic Perry Anderson has written such insightful stuff about various European countries - in London Review of Books and New Left Review.
The painting is Bosch's The Ship of Fools,

Bucharest

Coming down to the plains for a few days requires a careful choice of books – it was the intriguing John Lane book on art and ecology; David Harvey’s The Enigma of Capital; the Amos Oz Reader; Mazower’s The Balkans; and Pearce’s When the Rivers Run Dry which made it. I have skimmed through the Lane book – which initially charmed me with its attempt to explain cultural activity with reference to the loss of community following on the humanistic spirit of the renaisance, reformation and capitalism. I am always a sucker for overarching theories (except economic!) but was disappointed to find no reference to Art Nouveau, Georg Grosz or Brecht!!
I was then amazed to find a reputable US journal actually arguing that the global financial crisis was not another market blip – but a sign of the Marxist contradiction
A strange posting in Open Democracy put me onto a powerful article by Simon Jenkins a year ago about the Saxon villages of Transylvania.
Initially I was glued to the television - Foyle's War and a black and white with Frank Sinatra and Tony Curtis fighting at the end of the 2nd WW in France. One of the many attractions of the Sirnea house is that it has no TV, fridge or washing machine. I never miss them - but have to admit that it is nice to enjoy the occasional ice cream (particularly sorbet)and access Hallmark, BBC Entertainment, TNT, MGM channels
Today I defrosted the fridge here in Bucharest (we have no washing machine here)

cheese, bears and impact assessment

The Sunday service was belting across the hills of the bowl in which much of Sirnea sits as we climbed up the steep backhill of our estate - and was still to be heard on our return almost three hours later after our cheese trip to the next village in the valley over the crest of the hill. The latest dog to adopt us – Bobitsa – caught up with us just before we encountered about a hundred sheep on the high meadow – which turned out to be part of a much larger flock belonging to the guys from whom we bought out first 2 kilos of sheep cheese (a strong burdurf). The area is like Shangri-lai – totally unchanged. The guys who had the cow cheese were not at home – but we were hailed by an 80 year old in a house overlooking the track who had about 20 rounds (like haggis) of cow burdurf in his cellar – for 5 euros a kilo. Then another conversation with the old couple next door – which apparently touches on the innappropriateness of a 15 year age difference in a couple. As I waited patiently with the 4 kilos weighing me down in my backpack, I was struck by the realization that the view I was looking at had been unchanged for at least 75 years. The only novelty is the old TV inside the gloomy living room.
I have been reading quite a lot recently about the way of life which has been lost. Andrew Greig’s At the Loch of the Green Corrie is a poetic evocation of (and tribute to) Norman MacCaig - one of the amazing generation of Scottish poets whose last member (Edwin Muir) past away a few weeks back. Toward its end, it paints a powerful picture of the rich but simple life of village communities before struck by television and tourists. William Blacker’s book on Maramures village life does the same – as do the Greg Mortensen books on village life in Pakistan and Afghanistan.
Our last conversation is with the shepherd of the sheeps we had encountered earlier. He tells us casually that they had the previous day had a run in with a brown bear and her cubs on the wooded hill above (only a kilometre from our house!)
Now I have to get back to thinking about impact assessment. A friend has drafted a small manual on the subject to try to help improve the quality of legislation in a small transition country. Some years back I did a paper on the work we consultants do to help the establishment of meritocratic appointment systems in civil services; of fit-for-purpose public organizations; of policy and legal drafts which have some chance of achieving results; of training systems to produce more analytical and open-minded officials. The paper is number 12 on my website). The point I made was that these were all highly rationalistic exercises which challenged powerful political forces in the bureaucracies and political class of these countries – and perhaps we were all just going through the motions. More specifically I suggested that we needed to pay attention to both the demand and supply sides – and that too much technical assistance operated only on the supply side with the result that systems and procedures were produced which no one wanted. So, if impact assessments are actually to be used, we perhaps need to produce not only manuals (for those supposed to be doing it) but procedures which ensure that people are demanding higher quality work. I know that when I was Secretary of the cabinet which ran Strathclyde Region (with its 100,000 officials – teachers, police, social workers, road, water and sewage engineers etc), I refused to accept papers from the various departments unless they had an Executive summary which followed the logic of policy analysis and impact assessment. That quickly got the message out!

systems again

Even thicker snow apparently struck Britain yesterday – so this was a wide front! Noises were heard in the attic during the night! Bats or rats? We did hear an ominous gnawing sound under the terrace a week or so back! I’m only worried about the risk to the electricity cables?? Nothing evident in the cold light of day – although there are gaps between the old wooden beams through which light can be seen via the schitza roof tiles. These are the issues which threaten relationships – with one meekly accepting nature’s way and the other waiting to pounce and dreaming up various scientific interventions.
I need to return to the systems issue – but on another occasion. Margaret Wheatleyis another writer who has tried to use chaos theory in a rethink of management and Chris Hood’s The Art of the State has the fatalistic school as one of his four basic schools of thinking about government and society. What I’m trying to square is the rationalistic spirit of things such as impact assessment and the logframe in project planning (which are gods for the consultancy world) – and the reality of change. Robert Quinn’s Change the world is perhaps the book which most easily expresses what the approach might mean for managers. But government consultants and policy advisers who work in EU candidate or "neighbourhood' countries have a moral dilemma. The EU expects us to push this rationalistic crap. What do we do?

And here’s a useful case-study just issued by International Crisis Group – on Azerbaijan. It may not be in crisis at the moment - but the report argues that such is the depth of the corruption and repression which the younger Aliyev continues to practice (to the disregard of the rural population) that we can anticipate storms ahead. Coincidentally I am reading Tom Reiss's The Orientalist - about the life of Lev Nussimbaum alias Kurban Said who wrote the marvellous Ali and Nino novel which depicts the tension in Baku in the early part of the 20th century caught as many of its residents were between West and East.
The picture is of the lane at the bottom of our garden - not far from the Transylvanian border

Snow and systems thinking

As I drive back from the mega Hornbach store on this side of Brasov city with a large heather-purple carpet and lots of storeage boxes for the attic, I suddenly spot the snow on the Bustegi mountains to my left at Bran! On 2 September! And when I reach home I glimpse it also on Piatre Craiului at our back. A week or so ago I was worried that I had wrongly named my blog – since a few maps I saw in recent books named this part of the mountain range The Transylvanian Alps. But I am now reassured that this is indeed part of the Carpathian range which stretches in an incredible arc from Serbia east, north and then west to Slovakia. Nick Crane did a book on his walk across all the Alps – including these- and it’s about time I read it.
As I pass through my neighbour’s small farm/guest house (they very kindly allow me to leave my car parked at their front) I pick up 2 litres of the Maramures palinka they have bought for me – powerful stuff at 4 euros a litre!

One of my ambitions recently has been to try to understand the practical implications of the systems way of thinking – for example what it might mean for government policy-making. I was vaguely aware of it in the 1970s from my link with the Tavistock Institute and was reminded of it first in the 1990s by Peter Senge’s The Fifth Discipline and, more recently, by John Seddon’s critique of the command and control regimes.
The insight about interconnectedness – caught in the famous observation that the flapping of a butterfly’s wings on one side of the planet can cause a storm on the other side – seems profoundly conservative. If things are so complex, then best to leave well alone ie minimize government interventions. And that is certainly the message of James Scott’s Seeing like a State – how certain schemes to improve the human condition have failed which has become a recent classic. One reviewer summed it up excellently -

It begins with a romp through eighteenth- and nineteenth-century German forestry--and the failure of the foresters to understand the ecology of the forests that they were trying to manage. It continues with a brief digression on how states tried to gain control of their populations through maps, boulevards, and names.

These are prequels to a vicious and effective critique of what Scott calls "high modernism": the belief that the planner--whether Le Corbusier designing a city, Vladimir Lenin designing a planned economy, or Julius Nyerere "villagizing" the people of Tanzania--knows best, and can move humans and their lives around on as if on a chessboard to create utopia.

Then a chapter on agriculture in developing economies that characterizes agricultural extension efforts from the first to the third world as analogous to Lenin's nationalization of industry, or Nyerere's forced resettlement of Tanzanians. But the targets -- the agricultural extenders who dismiss established practices -- lose solidity and become shadows. They are no longer living, breathing, powerful rulers,; instead they are the "credo of American agriculture," the "catechism of high- modernist agriculture," the "high-modernist aesthetic and ideology of most colonial trained agronomists and their Western-trained successors" -- truly straw men.

The conclusion is a call for social systems that recognize the importance of what Scott calls "metis": a Greek word for the practical knowledge that a skilled and experienced worker has of his craft. Most such practical knowledge cannot be easily summarized and simple rules, and much of it remains implicit: the devil is in the details.

T he key fault of "high modernism," as Scott understands it, is its belief that details don't matter -- that planners can decree from on high, people obey, and utopia results. Scott's declarations of the importance of the detailed practical knowledge possessed by the person-on-the-spot -- of how such knowledge cannot be transmitted up any hierarchy to those-in-charge in a way to do any good--of how the locus of decision-making must remain with those who have the craft to understand the situation--of how any system that functions at all must create and maintain a space in which there is sufficient flexibility for craftsmen to exercise their metis (even if the hierarchs of the system pretend not to notice this flexibility)--all of these strike an economist as very, very familiar.

All of these seem familiar to economists because they are the points made by Ludwig von Mises (1920) and Friedrich Hayek (1937) and the other Austrian economists in their pre-World War II debate with socialists over the possibility of central planning. Hayek's adversaries--Oskar Lange and company--argued that a market system had to be inferior to a centrally-planned system: at the very least, a centrally-planned economy could set up internal decision-making procedures that would mimic the market, and the central planners could also adjust things to increase social welfare and account for external effects in a way that a market system could never do. Hayek, in response, argued that the functionaries of a central-planning board could never succeed, because they could never create both the incentives and the flexibility for the people-on-the-spot to exercise what Scott calls metis.

Today all economists--even those who are very hostile to Hayek's other arguments (that government regulation of the money supply lies at the root of the business cycle, that political attempts to reduce inequalities in the distribution of income lead to totalitarianism, that the competitive market is the "natural spontaneous order" of human society) -- agree that Hayek and company hit this particular nail squarely on the head.

Looking back at the seventy-year trajectory of Communism, it seems very clear that Hayek (and Scott) are right: that its principal flaw is its attempt to concentrate knowledge, authority, and decision-making power at the center rather than pushing the power to act, the freedom to do so, and the incentive to act productively out to the periphery where the people-on-the-spot have the local knowledge to act effectively.
In short, by the end of his book James Scott has argued himself into the intellectual positions adopted by Friedrich Hayek back before World War II. Yet throughout the book Scott appears to be ignorant that the intellectual terrain which he has reached has already been well-explored

A whole book is available online about the implications of systems thinking for management.