What Institution Is Working?

Toyota Goes Down

OK, I know, it isn't buying American, but for the past nearly thirty years I have been very happy with Toyota cars. The largest vehicle I've bought from them was their moon buggy van in the mid 1990's. Otherwise they've all been compacts. My current car is a Corolla that got me 35+ MPG on my trip to New York and back, and that was doing 70+ MPH on significant stretches. I've been happy with these cars because Toyota's quality has been superb, along with excellent engineering. So what has happened?

I just finished reading Profit Beyond Measure: Extraordinary Results through Attention to Work and People by H. Thomas Johnson & Anders Broms, in which the authors laud Toyota's manufacturing management approach, contrasting it with American auto makers, and demonstrating why it has been superior in all respects. Indeed many people have thought Toyota was something of an iconic institution, standing for quality and value. Now the shine is off. The latest revelations about its quality and design issues, along with the behavior of the CEO not becoming of the family name, Toyoda, show that even this former paragon of virtue can no longer be counted on.

Which leads me to ask the question: Are any long standing institutions in our societies working?

A Who's Who of Formerly Trusted Names

Let's start at the top. Congress? Both the Senate and the House are mired in such partisan political maneuvering that they are failing to enact any meaningful legislation. Look at the recent situation in the Senate with one senator holding up all of the presidential nominees for government jobs. Does this really sound like a functional government? And what about the 60-vote rule to avoid a filibuster? Now it seems to apply to everything. The irony is that not one of those senators or congressmen think they are doing anything wrong. I wonder how many of them actually think at all.

And then there is the Supreme Court. The decision to allow corporate monies to flow into political campaigns (or close enough for effect) is outrageous. Free speech by a legal person entity??? And wasn't it Chief Justice Roberts who promised not to be an activist judge? We see how far that got.

Finally (at the top) we have the President of the United States (POTUS). Look how effective the health care reform has been. What did he accomplish in Copenhagen (at the climate conference not the Nobel awards)? Just mentioning his financial advisory appointees is enough to tell you how well that institution is holding up. Summers, Geithner, Bernanke (all right he already had the job, but he got re-upped), do I need to go on? Look at the mess they have made of the financial bailouts. Anyone know where the money went? Goldman-Sachs gave theirs back? That is what they claim anyway.

Speaking of banks and Wall Street, how do you think those venerable institutions are doing? Supposedly, profit-wise, some of them are doing OK, the ones the Feds haven't closed down for insolvency. But are they doing what they were supposed to have done with the bailout money? You know, make loans? It appears not. Businesses are still struggling to make payroll let alone contemplate creating new jobs because they can't get loans. And Wall Street has been on a roller coaster ride. Right now they are down (the DOW closed below 10,000 the other day). They almost recovered from the slide in 2008 before starting a long descent. Hope you cashed out your 401K while they were flying high(er).

Education and schools are descending into the pits of despair. Ever since society implicitly decided that education was all about jobs, and high paying ones at that, the whole American education system has been declining in producing truly educated citizens who can think critically. Indeed, I would argue that this decline in critical thinking skills in the general populace is what is at the base of the dysfunctional political process that has lead inexorably to the conditions I mentioned above. Now the arguments heard from high and low, from both right and left, decry our pathetic math and science education because our "leaders" see us as not being able to compete in the global marketplace since we don't have as many scientists as, say, the Chinese. More of the same pathetic thinking that got us into this mess in the first place. It never has occurred to anyone that more is not better, Better is better. Not every human being is cut out to be a scientist or even be mathematically inclined. And yet we force students from an early age on to conform to those expectations. We now have a country of mostly unhappy people who struggled with the technical courses in the name of mammon and never really learned much about life and living. What a tragedy.

Let's see. Democracy on the slide because we have a less than well informed and educated citizenry. Oh yes, why are they less than well informed? Could it be the press has fallen down on the job? Do the mainstream media actually inform us or do they merely entertain those who, since they haven't learned to think critically, actually believe they are watching "the news", and are grateful that it happens to be titillating?

Well, surely the wealth production engine of this great country is intact. Surely free enterprise, capitalism, and the economic system are in good shape.

If you think so, I have a bridge in Brooklyn to sell you. We seem to have entered an era when companies like Enron are more the rule than the exception. CEO pay has gone through the roof compared with the average worker, even when those same CEOs are driving their firms into the ground. How does that sound functional?

The most pernicious thing about capitalism and the economic thinking behind it is the way in which its practice is raping the natural world, producing pollutants and CO₂ and persists with beliefs that endless growth and greed are good things. I mean, and this always drives me nuts to think about it, these people actually do believe this! It doesn't matter how much evidence you put before them, they persist in their cherished beliefs. Oh, I forgot, they went to the same school system I was just complaining about. Well, no wonder.

Seriously, though, what has capitalism done for you lately? We shipped the high paying jobs off to other countries. Today it takes two breadwinners working extra hours just to keep even with adjusted income levels from the mid 20^th century. The middle class is rapidly disappearing and the proportion of the population, in the US, that has to get food stamps to survive has gone way up. What happened to the promises (I can still hear Ronald Reagan talking about 'morning in America')? Why aren't we all truly rich? Don't think the cheap knock-offs from China you bought in WallMart counts as showing how rich you are.

As I sit here this morning, enjoying one of the warmest Februaries on record in the Pacific Northwest while folks on the east coast are digging out of record snows (global warming isn't just about warmer mean temperatures, it is also about increasing anomalous weather patterns), I really wonder what institutions are actually working as intended. Have the environmental NGOs been successful? I used to give contributions, for example to the World Wildlife Fund, to help save the world, or maybe at least the whales. But as I read the articles on species extinctions and the fallout from them, I wonder. Have the climate NGOs influenced the governments to really do something about CO₂ emissions? They have succeeded in getting the leaders to flap their lips, but so far no real action.

What is working?

To be honest, I cannot see anything that we would recognize as an institutional part of the US (and many other OECD countries) as working as intended, or as we always thought they did. The whole globe is in decline because we are running out of net energy to power those very institutions that comprised our global societies. The only thing I think we can count on as working is our human bonds with a small group of others, our communities insofar as they actually exist. I live in a neighborhood, not a community. I envy those who have opted for small, intentional communities based on sharing and caring for one another ala the small towns of yesteryear. No they were not perfect. People get into squabbles and don't behave well some times. But overall, the small community is the kind of social environment that we humans evolved within. We actually do work best in that environment, on average.

In the end, that is what will save those of us fortunate enough to be a part of a community situated in the right geographical location (climate and isolated from climate refugees, etc.) focused on food growing and light manufacture of essentials (like candles for light at night!) As far as I can see that kind of arrangement is the only institution that will work in the long run.

[EDIT: Thanks to a reader, Rudy, I fixed the egregious number for the DOW stock price. I had said 9,000, but, of course, meant 10,000. Freudian slip? I wonder.]

Comments

[David]

Thankfully science as an institution has managed to resist succumbing to this otherwise universal failure, though.

[George Mobus]

Hi David.

RE: science as an institution.

I wonder. The process of science certainly still works because it is meta to human foibles in the long run. But the institutionalized science as represented in things like ossified journals with their least publishable units, driven I think by tenure systems in the universities, seems to be stumbling. Every year we publish more and more knowledge, but seem to have less and less understanding as a society. And that is what institutions serve, the culture.

I'm thinking too of 'big' science that is getting mired in paperwork and management complexities. Joe Tainter chalks this up to the marginal return on investment in complexity. Unless, for example, the Large Hadron Collider or Fermilab discover the Higgs boson (or prove its non-existence) some time soon, there will have been a huge expenditure of resources that went for naught! Even if they do find it, it will be years before the significance is felt by society as a whole, if ever.

Don't get me wrong. I personally would love to know if the Higgs particle satisfies the mystery of mass. But what good does that do to the man in the street?

Something similar is going on in medical research, especially with pharmaceutical trials. Large, complex studies produce very little payoff unless they hit on a miracle drug (like Penicillin). Lots of management overhead for very little payoff.

Of course this payoff to investment problem varies across sciences and within pockets of scientific specialties. I don't want to paint with too broad a brush. Nevertheless, as an institution (e.g. government funding agencies, university labs, national labs [don't get me started on fusion research in the latter!], etc.) I have some very disconcerting questions about efficacy. For one thing these institutionalized approaches have failed almost completely to find some of the most pressing issues facing humanity (e.g. peak net energy, found by unfunded independent researchers working overtime!) and they have certainly failed to communicate what they have found to society in an efficacious way (so as to get political will for change).

So, while I agree that science as a process continues to fulfill its purpose, discovering knowledge, I am much less sure about the institutionalized aspects of science.

George

[Robin Datta]

I had 4 riceburners starting with a Datsun 280Z in 1996.12 and three Toyota Supras (the last one being a "twin intercooled turbocharged 320 hp V6 which I gave up in 2007.05 for a Bowling Green z06 only because Supras were no longer made. It unfortunately lacks the dependability of those others. Toyota's fall from grace may have been a while in the coming but was swift in its dénouement.

The basic problem with science today is avarice. There was once a time when it was considered unethical to seek more than a modest profit on a new drug - at least that was the case at the time of the discovery of sulfonamides, cortisone and insulin; they could have made their discoverers extremely wealthy in our day and age, where different attitudes are the norm (the patent for insulin was sold to the University of Toronto for one dollar.)

But in other sciences as well, everyone is out to see how they can make a buck. Knowledge can continue to advance in such an environment but it will be molded to those constraints.

Perhaps when we are out of sheep to shear, the shepherds of our social conscience and noesis may revert to those values.

[thirra]

George,you paint a true to life picture.My overall name for much of what you describe is moral corruption and it has a massive presence here in Australia.Moral corruption inevitably leads to incompetence and some times to actual criminal corruption.

As for Toyota,I had a nasty experience with this company a few years back.I had a major and expensive transmission failure in the Landcruiser I owned.It turned out that a vital part was not designed properly and was too weak.The replacement part was much stronger so obviously Toyota knew about the problem but chose not to inform the owners.As these vehicles are commonly used in remote areas there was a significant safety factor as well as honouring their obligations.

I complained to them by letter but I got a smart arse reply.Like any large corporation they are driven by profit and are very secretive.I can't help but enjoy their discomfort in this latest fiasco.

I still have the vehicle and I hope it will be the last 4 wheel vehicle I own.

[George Mobus]

Well said Robin.

What happened to concepts like usury and other moral/ethical constraints on avarice? Could it have been our getting used to always having massively greater quantities of energy to work with that spoiled us. We've become a throw-away society because its "cheaper" to do so than repair a piece of plastic or a mass produced sock. My wife was a bit amused when I pulled out the thread and needle to repair some undershirts that had holes in the under arm region. Most of them were more than ten years old! But I felt they still had some life in them. In prior times I would have just turned them into dust rags and had done with it.

When we get into the habit of thinking we will always have more wealth in the future, we do forget prudence and thrift. These days I've adopted something more like austerity to break my own habits of thinking along those lines.

George

[George Mobus]

Thirra,

Same idea as Robin's. Moral corruption of values that we brought from our late Pleistocene evolution when there really was scarcity. Saving, maintaining what you have, etc. are all the kinds of activities that would keep all of us from wasting energy and other resources. But we have seemed to think that we were freed from the bonds of scarcity when the flood of fossil fuels hit the economy, enabling machine work and a lot of innovation in technology for convenience and easing the work burdens of life. At least we behave as if we think that way.

But with the coming of peak net energy (already passed) and the severity that will be the result of peak oil production (here) it will be obligatory to go back to our careful husbanding of resources ways or suffer great losses. The old morals, borne of necessity, will be back in style one day soon. Try to hold out for it!

George

[David]

In the past, maybe the rigid social hierarchy and powerful institutions provided a structure that brought prosperity, order and sustainability - but at the price of some people being trapped in godawful lives through accident of birth. Perhaps we chose to sweep this away for the most "moral" of reasons but, as it turns out, human nature means that the experiment is doomed to failure.

[Tom]

Even the Vancouver Olympic opening ceremony had a glitch: in the climactic lighting of the indoor flame, the 4th pole failed to operate - how utterly embarassing!

[George Mobus]

Tom and David,

As Joe Tainter points out, the more complex an institution becomes the less benefit it provides, and in the end the benefits have a way of becoming liabilities.

See my previous blog: http://questioneverything.typepad.com/question_everything/2010/02/energy-flow-emergent-complexity-and-collapse.html re: Tainter.

George