Apocalypse and tax havens

In one year alone (2016), multinational corporations (MNCs) were estimated to have shifted USD 1 trillion of profits to tax havens, with an estimated USD 200-300 billion in lost tax revenue worldwide. (The Cayman Islands, Luxembourg, Bermuda, Hong Kong and the Netherlands are among the most important tax havens.) Another study estimates multinational enterprises shift close to 40% of their profits to tax havens globally. As for regions, the main European banks are reckoned to have booked EUR 20 billion (close to 15% of their total profits) in tax havens. In Germany, by way of one country, MNCs there are said to have shifted corporate profits of some EUR 19 billion to tax havens, with an estimated tax revenue loss of roughly EUR 5.7 billion.

Assume now the Climate Emergency intervenes as apocalypse. The Cayman Islands, Bermuda, Hong Kong and the Netherlands? Under water. MNCs? They should be so lucky! Tax havens and forgone tax revenues? After the apocalypse, what taxes?

These points bode forth an interesting set of policy issues. In particular, why ever, it seems, are we spending time and resources on reducing the use of tax havens when all our energies—all our political will—should be directed to averting the climate-induced apocalypse? Indeed, today’s tax havens are visibly part of the opportunity costs of deadly climate inaction. Reducing tax havens is worse than meaningless unless the generated revenues are directed to mitigating the impacts of climate change–and even then it could be too little too late.

Or is it too little too late in quite another sense? For surely part of being in the apocalypse means we have to manage the Climate Emergency far better everywhere than we (can) manage tax havens here or there, and now. . .

Unless, of course, you are among the many who imagine that getting rid of these tax sinkholes for the rich and already-undeserving is already among the few things that are truly urgent.

Principal sources

Aliprandi, G., M. Baraké, and P-E Chouc (2021). Have European Banks Left Tax Havens? Evidence from country-by-country data (Report 2). The EU Tax Observatory. Paris School of Economics.

Ciuriak, D. and A.J. Eurallyah (2021). Taxing Capital In The Age Of Intangibles. Discussion Paper, Ciuriak Consulting. (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3920763)

Fuest, C., F. Hugger, and F. Neumeier (2021). Corporate Profit Shifting and the Role of Tax Havens: Evidence from German Country-By-Country Reporting Data. CESifo Working Paper No. 8838. Munich Society for the Promotion of Economic Research, Munich.

Garcia-Bernardo, J., and P. Janský (2021). Profit Shifting of Multinational Corporations Worldwide. ICTD Working Paper 119, Institute of Development Studies, Brighton UK.

Narrative policy analysis: then, now and ahead

Why would we think a book on policy written nearly three decades ago remains relevant? It seems to me by way of answer that the major policy and management issues, though much changed, are still characterized by high uncertainty, complexity, incompletion, and polarized conflict, the focus of the 1994 Narrative Policy Analysis.

So that we start on the same page, issues are uncertain when causal knowledge about them is found wanting by decisionmakers. Complex when their elements are more numerous, varied and interconnected. Incomplete, when efforts to address them are interrupted or left unfinished. And conflicted, when individuals take opposite positions on them often precisely because of their uncertainty, complexity and incompleteness.

Such issues are often now called wicked problems, said to be intractable to conventional policy and management intervention. In the older language, the “truth” of the matter is difficult if not impossible to establish—right now when a decision has to be taken.

How then to make the decision that claims urgency and priority?

In answer, though narrative analyses of policy issues have evolved over the three decades, two foci of the original approach remain salient. First its terminology and second, its drive to identify narratives that underwrite policymaking, given current intractability.

First, the terminology. It’s next to impossible to avoid terms like policy narratives. They are those stories with beginnings, middles and ends, or if cast as arguments with premises and conclusions that policy types and managers tell themselves and others in order to take decisions and justify them.

The narrative analytical approach continues to ask you to start by identifying the different types of narratives in the issue of concern—some of which are very visible—the dominant policy narratives—others of which have to be found or identified, including marginalized counternarratives.

Assume you—the policy analyst, manager, researcher or decisionmaker—find a much-current policy narrative to be too simplistic for the complexities at hand. You can rejigger that narrative in three ways: Denarrativize it; provide a counternarrative or counternarratives; and/or offer a metanarrative (or metanarratives) accommodating a range of story-lines (arguments), not least of which are versions of the simplistic narrative and preferred counternarrative(s).

First, denarrativize! To denarrativize is to critique a dominant policy narrative, point by key point. The best way to do that is to bring counter evidence to each point the offending narrative holds. To denarrativize is to take the story out of the story, i.e., to disassemble it by contravening its parts. Abundant case evidence exists to call into question the Tragedy of the Commons, for example.

First, counternarrativize! The chief limitation of denarrativization is the inability of critique on its own to generate an alternative narrative to replace the discreditable one. In contrast, a counter-story challenges the original by virtue of being a candidate to replace it. Common property resource management is said to be one such counternarrative to older Tragedy of the Commons storyline.

First, metanarrativize! A metanarrative is that policy narrative—there is no guarantee there is one, or if so, only one—which the narrator holds in order to understand how multiple and opposing policy narratives are not only possible but consistent with each other. Claims to resource stewardship is a metanarrative shared by policies based in the Tragedy of the Commons as well as in other explanations, including but not limited to common property resource management. In this metanarrative, a group—the techno-managerial elite, “the community”—asserts stewardship over resources, because they alone, so the metanarrative goes, are capable of determining and adjudicating where and in what form better management holds.

III

The second advantage of the original approach continues to be its recognition that decisions have to be made. Yes, of course, taking time to deliberate, being reflective and having second thoughts remain important, but even here acting these ways can end up being a decision of real import.

So, at some point you face a choice over which is the better policy narrative. For narrative policy analysis, a better policy narrative meets three criteria:

The narrative—its story with beginning, middle and end, or argument with premises and conclusions—is one that takes seriously that the policy or management issue is complex, uncertain, interrupted and/or polarized.

The narrative is one that also moves beyond critique of limitations and defects of the dominant policy narrative (criticisms on their own increase uncertainties when they offer no better storyline to follow).

The narrative gives an account that, while not dismissing or denying the issue’s difficulty, is more amenable and tractable to analysis, policymaking and/or management. Indeed, the issue’s very complexity—its numerous components, each varying in terms of its functions and connections—offers up opportunities to recast a problem differently and with it, potential options. Problems are wicked to the degree they have yet to be recast more tractably.

This means that the preferred policy narrative can be in the form of a counternarrative; or it can be in the form of metanarrative; but it won’t be in the form of a critique or other non-narratives like circular arguments or tautologies.

Nor should you think that in a planet of now more than 8 billion people you have to invent a preferred policy narrative from scratch: Preferred policy narratives—note the plural—should be assumed from the get-go to already exist and to being modified right now.

To summarize, the policy narratives of interest for narrative policy analysis are not those used by policy types who insist they already know the truth. This approach is NOT about how various Big Lies have evolved from Goebbels through Trump, as in: The Jews were to blame before; the Blacks were later to blame; Islamists are to blame now.

Rather and to reiterate, narrative policy analysis over the last three decades remains relevant for those issues that policy types, analysts and researchers already admit a high degree of uncertainty, complexity, incompleteness and polarization—or again in today’s parlance the issues are wicked and intractable in their current casting.

To see if we’re still on the same page by this point, assume in this thought experiment you are faced with two dominant environmental crisis narratives about globalization:

The green narrative assumes that we have already witnessed sufficient harm to the environment due to globalization and thus this narrative demands taking action now to restrain further global destruction. More research isn’t needed in order to decide that new action is required, now.

The ecological narrative starts with the massive but largely uncertain (including unknown) effects of globalization on the most complex ecosystem there is, Planet Earth. Here enormous uncertainties over the impacts of globalization, some of which could well be irreversible, are reason enough not to promote or tolerate further globalization, in the view of many ecologists.

Both seek to stop harmful effects on the environment from globalization. But which is the better narrative when it comes to the next steps ahead in environmental policy and management?

From a narrative analytical viewpoint, if future unpredictabilities—uncertainty, complexity, conflict and unfinished business—are taken seriously, the ecological narrative is the better one. Or if you are sure that in your case the green scenario is the one to start now and here, your challenge is to detail how conditions could lead to hitherto unspecified unpredictabilities in the local scenario(s).

See also: E. Roe and M. van Eeten (2004). “Three—Not Two—Major Environmental Counternarratives to Globalization,” Global Environmental Politics 4(4).

Managing-ahead for latent risks and latent interconnectivity

To keep highlighting that “there are hundreds and hundreds of organizations having oversight responsibility for [fill in name the region]” misses the fact that interconnectivity becomes a focus only with respect to specific failure/accident scenarios there. Changing the scenario focus over what are the important manifest interconnections means having also to chang the focus over what are the latent ones of concern.

What are latent interconnections? To answer that, we have first to describe latent and manifest risk. If manifest risk is where the probability of failure (Pf) and the consequences of failure (Cf) are known or estimated, “latent risk” is when uncertainty over Pf or over Cf exists. Once the missing estimate is provided, what was latent becomes manifest risk.

High reliability management recognizes that management of latent risk—the management of nonmeasurable uncertainty—should be ahead of the risk becoming manifest. (Think of measurable risk as associated with professionals’ skills in pattern recognition across a run of cases and nonmeasurable uncertainty as associated with their skills when it comes to a one-off, what-if scenario formulation.)

Minimally, this management-ahead is to forestall the realization of those risk-with-respect-to scenarios that would decrease options and/or increase volatility of reliability professionals. In other cases, the management-ahead is to help realize risk-with-respect-to scenarios that would manifestly increase options and/or decrease task environment volatility.

Now to implications for and about latent and manifest interconnectivity. In complex, interconnected systems with which I’m familiar (where high reliability, including safety matter as an existential priorities), four inter-related factors move center-stage for the managing-ahead of latency:

Analytic modeling uncertainties become a major consideration. Not only do analytic models differ in terms of their uncertainties—e.g., electricity modeling appears to be better than levee modeling. Even more important, the more interconnected the infrastructures, the more latent risks to be managed in light of input and output variables as well as their joint their control variables, which modelers often miss or avoid (e.g., waterflows central to real-time services of key interconnected infrastructures).

The evolutionary advantage of each control room’s ability to operationally (re)design workarounds to compensate for (latent but now emerging) defects in hardware and software under interconnectivity take on added prominence in real time.

A key latency–but one often ignored or not recognized outside the infrastructure control room by regulators and legislators–centers around small change/large impact scenarios. For example, the November 2006 disconnection of a single power cable in northern Germany triggered regional blackouts as far away as Portugal. True, but: How many times were such small changes managed before so as not to lead to huge impacts (the disasters averted) and would subsequent “remedies” undermine this prior ability to manage reliably, had the remedies been instituted earlier?

A focus on the classic common-mode failure around spatially collocated elements of different infrastructures, such as a shared utility corridor, is misleading when the chokepoints of the respective systems are physically located elsewhere. A chokepoint of one infrastructure tripping over into disrupted or failed operations is profoundly more important if collocated next or adjacent to the chokepoint of another infrastructure with which it is also latently interconnected.

When safety is less a noun and more an adverb

In infrastructure studies, “safety” is its most problematic when used more as a noun than adverb. Safety, if it is anything, is found in practices-as-undertaken, i.e., “it’s operating safely.” If the behavior in question reflects a “safety culture,” that noun, culture, is performative and not something in addition to or prior to “culturally.”

Safety is no different from democracy or intelligence. They too happen adverbially—“behaving democratically in that s/he, e.g., votes in elections, pays taxes and more”—and “thinks intelligently” (whatever that means in practice). To believe safety, democracy and intelligence are otherwise is like thinking you make fish from fish soup.

Important methodological implications of using triangulation in complex policy and management

Triangulation is the use of multiple methods, databases, theories, disciplines and/or analysts to converge on what to do about the complex issue. The goal is for analysts to increase their confidence–and that of their policy audiences–that no matter what position they take, they are led to the same problem definition, alternative, recommendation, or other desideratum. Familiar examples are the importance in the development literature of women and of the middle classes.

In triangulating, the analyst accommodates unexpected changes in positions later on. If your analysis leads you to the same conclusion regardless of initial positions already highly divergent, then the fact you must adjust that position later on matters less because you have sought to take into account utterly different views from the get-go.

Everyone triangulates, ranging from the everyday cross-checking of sources to more formal use of varied methods, strategies and theories for convergence on a shared point of departure or conclusion. Triangulation is thought to be especially helpful in identifying and compensating for biases and limitations of any single approach. Obtaining a second (and third. . .) opinion or soliciting the input of the range of stakeholders or ensuring you interview key informants with divergent backgrounds are three common examples.

Detecting bias is fundamental, because reducing, or correcting and adjusting for bias is one thing analysts can actually do. To the extent that bias remains an open question for the case at hand, it must not be assumed that increasing one’s confidence automatically or always increases certainty, reduces complexity, and/or gets one closer to the truth of the matter.

Now return to our starting point: The approaches in triangulation are chosen because they are, in a formal sense, orthogonal. This has another profound methodological implication: The aim is not to select the “best” from each approach and then combine these elements into a composite that you think better fits or explains the case at hand.

Why? Because the arguments, policies and narratives for complex policy and management already come to us as composites. Current issue understandings have been overwritten, obscured, effaced and reassembled over time by myriad interventions. To my mind, a great virtue of triangulation is to make their “composite/palimpsest” nature clearer from the outset.

To triangulate asks what, if anything, has persisted or survived in the multiple interpretations and reinterpretations that the issue has undergone over time up to the point of analysis. Indeed, failure to triangulate can provide very useful information. When findings do not converge across multiple orthogonal metrics or measures (populations, landscapes, times and scales…), the search by the analysts becomes one of identifying specific, localized or idiographic factors at work. What you are studying may be non-generalizable–that is, it may be a case it its own right–and failing to triangulate is one way to help confirm that.

Pastoralists as the witnesses-protagonists

In my reading, narratives of pastoralism divide into three major groups. There are the studies of pastoralism long past (think: Wilfred Thesiger). I’ve also read anthropological studies from the 1950s and 60s that share a nostalgia for pasts not threatened by modernizing pressures.

The second group is everything that Thesiger and colonial-era anthropologists are not. To cut this long story short, today’s pastoralists are imbricated through and through by overlapping settler-colonial, racial and global capitalisms. There is a deep irony in the fact that the thorough-going critiques of capitalism end up shadow pricing a past thought to be outside the cash-nexus.

The third group is for me more interesting and recent. The literature here seeks to stand in the pastoralists’ marginal(ized) positions and from there speak to the dominant economies and politics at the center. Some of this draws pastoralists to the center by demonstrating how their practices and ways of thinking are shared by, if not have positive implications for, center-based economics, banking, and pandemics (I have in mind the recent work of Ian Scoones and his PASTRES colleagues at IDS Sussex).

I want to focus on a fourth group of narratives, and frankly one I’m not sure exists like the others. Here the narratives are those where contemporary pastoralists are “witnesses-protagonists,” much along the lines of the character, “witness-protagonist,” found in certain period-specific novels.

III

In her 2024 Modern Language Quarterly article, “On the Origins of the Witness-Protagonist,” Anastasia Eccles gives examples of novels where such characters are found. For our purposes, these are less important than the features she ascribes to this character type (I quote at length):

This essay focuses on the “witness-protagonist”: a recessive but still identifiably major character who observes the developments of the main plot from a position on its margins. Such characters are familiar from modernist novels, but this essay turns back to a formative stage in their history to recover their forgotten political significance. . . .

The witness-protagonist took shape during a period of mass revolution abroad and democratic mobilization in Britain in which constituencies lacking formal recognition claimed the power to remake the structures of collective life. These historical developments turned the phenomenon of “unwarranted” participation into a pressing matter of public debate—and a basic condition of modern political subjectivity. The characters considered here tend to strike readers as illegitimate subjects who do not quite fit into or live up to their assigned roles. Instead of anchoring the whole, as we might expect protagonists to do, they call the form of the whole—its boundaries and its internal arrangement—into question. In their curiously unstable narrative position, they illuminate the formal conditions of democratic agency. . . .

Such a figure thus embodies the apparent paradox of a peripheral center or a major minor character. . .

The witness-protagonist, then, is a character whose status in the novel as a whole is somehow in question. We might say that these characters pose problems of or for form, insofar as form is taken to mean some principle of underlying fit or coherence among the novel’s parts. The signs of this problem are evident in the commentary surrounding these characters, which so often takes the form of a struggle to fix or locate or categorize a figure who does not quite behave like a normal protagonist. . . .

If the novel form projects an imagined community or potential body politic, these novels draw attention to that community’s grounds and limits. By focusing on characters whose station in the novel is anything but secure, they underscore the contingency of any particular arrangement of the collective. . .
Accessed online through https://read.dukeupress.edu/modern-language-quarterly/article-abstract/doi/10.1215/00267929-11060495/385703/On-the-Origins-of-the-Witness-Protagonist?redirectedFrom=fulltext

I don’t know about you, but I suspect I’m not the only one who sees pastoralists we’ve studied or read about in terms of: being at the margins, but still difficult to locate with respect to the dominant narrative; not like the usual protagonists at the center, though still clearly a center of gravity interacting with that bigger narrative; but so insecurely as to call into question the dominant narrative(s).

An example I have in mind is that of a 2023 Annual Review of Anthropology article, “Financialization and the Household,” by Caitlin Zaloom and Deborah James. Although not explicitly in the preceding terms, the quote below captures this sense of speaking substantively and interactively about the center from the perspective of householders, including rural and poor households at the margins:

Finance and the household are a pair that has not received sufficient attention. As a system, finance joins citizens, states, and global markets through the connections of kinship and residence. Householders use loans, investments, and assets to craft, reproduce, attenuate, and sever social connections and to elevate or maintain their class position. Householders’ social creativity fuels borrowing, making them the target of banks and other lenders. In pursuit of their own agendas, however, householders strategically deploy financial tools and techniques, sometimes mimicking and sometimes challenging their requirements. Writing against the financialization of daily life framework, which implies a one-way, top-down intrusion of the market into intimate relations, we explore how householders use finance within systems of social obligations. Financial and household value are not opposed, we argue. Acts of conversion between them produce care for the self and others and refashion inherited duties. Social aspiration for connection and freedom is an essential force in both financial lives and institutions.
https://www.annualreviews.org/doi/full/10.1146/annurev-anthro-052721-100947

Imagine if the very first article you ever read about global financialization began with the preceding quote. Imagine that those articles you actually have read up to this point on global financialization now must be re-read as slightly-off-center by comparison. What you thought was the plot all along isn’t the plot with which you could have started.

Source. Ian Scoones (forthcoming, 2024). Navigating Uncertainty: Radical Rethinking for a Turbulent World. Polity Press.

Infrastructure and reliability: 4 examples where conventional wisdom falls short

1. Second chances in the energy transition

2. The positive functions of social dread, blind spots and organizational setbacks for infrastructures and their reliability

3. Retrospective versus prospective standards of reliability in the financial sector

4. “Once nuclear power plants have been in operation long enough, we’ll see more major accidents more of the time”: Yes or No?

Second chances in the energy transition

Attempting to enact political and economic transformation without infrastructure support – without a way of pumping water, growing food, or delivering healthcare – is like doing origami with smoke. No matter how ambitious your scheme, how virtuosic your technique, the folds vanish as soon as you make them. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8414030/

You needn’t be clairvoyant to realize that the energy transition–whether in its reform or radical versions–means a host of second chances for critical infrastructures and their provision of reliable services.

With or without Stop-Oil, infrastructures will remain central to energy provision and interconnectivity; with or without Sustainability, reliability will be demanded across that interconnected provision. Yes, of course, technologies and system configurations will change, but even the keywords of radical versions–transformative, emancipatory–are redolent with the promise of second chances along the way. So too for the concepts and practices of infrastructure and reliability.

So what? For one thing the Climate Emergency portends all manner of illiquidity, not least of which are today’s critical infrastructures being tomorrow’s stranded assets. But stranded underscores the place-based character of the assets. Stranded also implies the possibility of other uses for the infrastructure. Stranded, in other words, means taking the places for second chances very seriously. Will the energy transition(s) be granular enough to do so?

The positive functions of social dread, blind spots and organizational setbacks for infrastructures and their reliability

Proposition: Under conditions of social complexity (more elements, more interconnections, more differentiated functions), what is negative in effect can also be positive when the mandates are for high reliability in service provision.

Social dread

Every day, nuclear plant disasters, airplane crashes, water-supply collapse—and more—are avoided that would have happened had not operators and managers in these large systems prevented their occurrence.

Why? Societal dread is so intense that these events must be precluded from happening on an active, continuous basis. (It might be better to say that we don’t altogether know the degree of “societal dread” unless we observe how knowledgeable professionals operate and manage hazardous critical infrastructures.)

There is such fear of what would happen if large interconnected electricity, telecommunications, water, transportation, financial services and like did fail that it is better to manage them than not have them. Here, ironically, distrust is as core as trust. One reason infrastructure operators manage reliably is that they actively distrust the future will be stable or predictable in the absence of the system’s vigilant real-time management.

We of course must wonder at the perversity of this. But that is the function of this dread and distrust. Namely: to push all of us in probing further what it means to privilege social and individual reliability and safety over other values. We are meant to ask: What would it look like in world where such reliability and safety are not so privileged?

For the answer to that question is obvious: Most of the planet already lives in that world of unreliability and little safety. We’re meant to ask, precisely because that answer is that clear.

Blind Spots

Another way to describe hazardous sociotechnical systems is that they have significant blind spots when it comes to their management, some visible others not.

For example, my state’s department of motor vehicles handbook states:

Blind Spots
Every vehicle has blind spots. These are areas around the vehicle that a driver cannot see when looking straight ahead or using the mirrors. For most vehicles, the blinds spots are at the sides, slightly behind the driver. To check your blind spots, look over your right and left shoulders out of your side windows. Only turn your head when you look. Do not turn your whole body or steering wheel.
https://www.dmv.ca.gov/portal/handbook/california-driver-handbook/

“Driving a vehicle” is, in other words, managing the way drivers do in much part because of the vehicular blind spots posed for those drivers.

The broader point is that blind spots in sociotechnical systems represent a mix of both weaknesses and strengths for their managers. You get all the advantages and the disadvantages of driving a car in comparison to otherwise driving a tractor-trailer or horse-and-buggy. Or the same point from the opposite direction, you get all the advantages and disadvantages of managing micro-grids in comparison to otherwise having to manage the current electric transmission and distribution grids.

Organizational Setbacks

Setbacks—unanticipated, unwanted, and often sudden interruptions and checks on moving forward—are fairly common and typically treated as negative in complex systems and organizations.

Less discussed are the conditions under which such setbacks are positive. Arguably best known is when a complex organization transitions from one stage of a life cycle to another by overcoming obstacles characteristic of the stage in which the organization finds itself. An example is CAISO (the California Independent System Operator of the state’s main electric transmission) moving from its startup phase in the late 1990s to its full ongoing operations at present in 2024.

Other positive setbacks serve as a test bed for developing better practices, whatever the stage the organization finds itself. Some setbacks are better thought of as design probes for whether that organization is on the “right track,” or if not, what track it could/should be on. In yet other circumstances, setbacks serve to point managers in the direction of things about which they had been unaware but which matter.

For example, among all its negative features, did the 2008 financial crisis also serve as a timely interruption to remind us how central regulators are to the continuity of complex financial and credit systems? Did the crisis end up as a much-needed probe of how well the financial and credit institutions are keeping their sectors on track and under mandate? Was the 2008 crisis a test bed for more anticipatory strategies in credit lending and investing? Did the crisis in effect serve as an obstacle, whose surmounting has been necessary to promote the operational redesign of the financial and credit sectors in more reliable ways?

Note the obviously mixed answers to these questions mean the setbacks cannot be considered a priori negative.

Upshot: Complex is as positive as it gets in critical infrastructures mandated to be highly reliable.

Retrospective versus prospective standards of reliability in the financial sector

Nuclear explosions occur, dams are overtopped, and grids do separate and island, but these events are rare–rare because of their management beyond technology and design–and when they do happen they serve to reinforce their must-never-happen dread.

In contrast, financial services have “should-never-happen events”—bank runs should be avoided and financial crises shouldn’t happen. The standard of operating reliability is not one of precluding financial crises from ever happening, but rather of treating these crises (1) as avoidable though not always, or (2) as inevitable (“busts are part of market capitalism”) or at least (3) compensable after the fact (as in the pre-2008 assurance that it’s better to clean up after a financial bubble bursts than trying to manage it beforehand).

Not having reliability of financial services based on must-never-happen events has major consequences for standards of economic stability and growth.

At the macro level, there are two different standards of economic reliability: The retrospective standard holds the economy is performing reliably when there have been no major shocks or disruptions from then to now. The prospective standard holds the economy is reliable only until the next major shock or downturn.

Why does the difference matter? In practical terms, the economy is prospectively only as reliable as its critical infrastructures are reliable, right now when it matters for economic productivity. Indeed, if economy and productivity were equated only with recognizing and capitalizing on retrospective patterns and trends, economic policymakers and managers could never be reliable prospectively.

III

For example, a retrospective orientation to where we are today is to examine economic and financial patterns and trends since, say, 2008; a prospective standard would be to ensure that–at a minimum–the 2008 financial recovery could be replicated, if not bettered, for the next global financial crisis.

The problem with the latter–do no worse in the financial services sector than what happened in the last (2008) crisis–is that benchmark would have to reflect a must-never-happen event for the sector going forward.

What, though, are the chances it would be the first-ever must-never-happen event among all of that sectors’ should-never-happen ones?

“Once nuclear power plants have been in operation long enough, we’ll see more major accidents more of the time”: Yes or No?

By way of answering, yes or no, let’s start with an anecdote:

There is an apocryphal story about Frederick Mosteller, a famous professor of statistics at Harvard University. Sometime in the 1950s, a student of Mosteller´s was unconvinced that a six-sided die had a precise 1/6 chance of landing on any of its six sides, so he collected a bunch of (cheap) dice and tossed them a few thousand times to test his professor´s theory… Evidently, according to said (bored) student the numbers five and six appeared more frequently than the numbers one through four. Professor Mosteller´s unsurprising response was that the student had not tossed the dice enough times. ‘Rest assumed’, the student was told, the law of large numbers would ‘kick in’ and everything would (eventually) converge to 1/6. Undeterred, the student continued rolling a few thousand more times, but the fives and sixes were still showing up way too frequently. Something fishy was afoot. It turns out that the observed frequencies were not quite 1/6 because the holes bored into dice – to represent the numbers themselves – shift the centers of gravity toward the smaller numbers, which are opposite the numbers five and six. Ergo, the two highest numbers were observed with greater frequency.
https://cpes.org.uk/wp-content/uploads/2016/06/stefan_voss_paper.pdf

In other words, it takes a very great deal of work to undertake a randomized control experiment, as “control” is such a misleading term in the real world. Something uncontrolled/uncontrollable intervenes significantly between treatment and measurement.

This means that one reason why there haven’t been more nuclear accidents (given their complex and unpredictably interactive technologies) is not because “we haven’t waited long enough.” It’s more likely other intervening factors have been and are at work.

And one such reason is that the plants have been managed beyond their technologies. They are managed more reliably than theory predicts precisely because of the next failure ahead–that is, there are no guarantees and as such must be managed reliably instead.

Being right is a matter of genre: a lesson from Louise Glück

In public policy, the wish–so often unfilled–is for the right person at the right time in the right place doing the right thing.

In poetry by contrast, we have Louise Glück’s poem, “Crossroads,”

My body, now that we will not be traveling together much longer
I begin to feel a new tenderness toward you, very raw and unfamiliar,
like what I remember of love when I was young—

love that was so often foolish in its objectives
but never in its choices, its intensities.
Too much demanded in advance, too much that could not be promised—

My soul has been so fearful, so violent:
forgive its brutality.
As though it were that soul, my hand moves over you cautiously,

not wishing to give offense
but eager, finally, to achieve expression as substance:

it is not the earth I will miss,
it is you I will miss.

Given the poem’s theme, the shortening of lines from three to two is so RIGHT!

Major read: the positive functions of social dread, blind spots and organizational setbacks in complex sociotechnical systems

Proposition: Under conditions of social complexity (more elements, more interconnections, more differentiated functions), what is negative in effect can also be positive.

Social dread

For the answer to that question is obvious: Most of the planet already lives in that world of unreliability and little safety. We’re meant to ask, precisely because that answer is that clear.

Blind Spots

Another way to describe hazardous sociotechnical systems is that they have significant blind spots when it comes to their management, some visible others not.

For example, my state’s department of motor vehicles handbook states:

Blind Spots
Every vehicle has blind spots. These are areas around the vehicle that a driver cannot see when looking straight ahead or using the mirrors. For most vehicles, the blinds spots are at the sides, slightly behind the driver. To check your blind spots, look over your right and left shoulders out of your side windows. Only turn your head when you look. Do not turn your whole body or steering wheel.
https://www.dmv.ca.gov/portal/handbook/california-driver-handbook/

“Driving a vehicle” is, in other words, managing the way drivers do in much part because of the vehicular blind spots posed for those drivers.

The broader point is that blind spots in sociotechnical systems represent a mix of both weaknesses and strengths for their managers. You get all the advantages and the disadvantages of driving a car in comparison to otherwise driving a tractor-trailer or horse-and-buggy. Or the same point from the opposite direction, you get all the advantages and disadvantages of managing micro-grids in comparison to otherwise having to manage the current electric transmission and distribution grids.

Organizational Setbacks

Setbacks—unanticipated, unwanted, and often sudden interruptions and checks on moving forward—are fairly common and typically treated as negative in complex systems and organizations.

Note the obviously mixed answers to these questions mean the setbacks cannot be considered a priori negative.

Upshot: Complex is as positive as it gets. in large sociotechnical systems.

Another article ends where it should have started

. . . .The German solar sector conservatively reinforces an inherently unequal global and national political economy, rather than fostering a radically restructured economy that runs on principles of solidarity and sustainability, not profit. Radical democratization and decentralization, the mandatory use of recycled materials, while curbing the power of corporations involved in the political economy of energy, with a strict (and strictly enforced) ban of all trade of electronic and other toxic waste together with fundamentally reformed regulations on trade of energy manufacturing resources prioritizing ecological and social justice concerns, might be a start.

“Might be a start“? An anemic “might be” to conclude a long set of spot-on criticisms? So comes to end another article where it should have started.

Why? Because readers already know we need radical restructuring. Many could and would add to this list of desirables.

So then the question remains as it has been: how are we to get there? What are the better practices across a wide spectrum of sites that work to achieve behaving better–economically and democratically and regulatorily?

Another virtue in reviewing really-existing practices as widely as possible “might be” to demonstrate that solar renewables are the last thing a good number of sites need worry about.