Tuesday, November 10, 2009

Why ‘free markets’ often are not really free. The ‘systems trap’ of success to the successful.

I am reading a powerful and evocative short book, entitled Systems Thinking. It was authored by the late Donella Meadows, a close friend and collaborator of many years. It was edited by Dana’s former research assistant, Diana Wright and published posthumously after her death.

The current debate over health brings to mind a ‘systems trap’ Dana identifies (one of several) that she calls ‘Success to the Successful - Competitive Exclusion.’ Dana writes: (p. 127,128)

‘Using accumulated wealth, privilege, special access or inside information to create more wealthy, privilege, access or information are examples of [this archetype]’ This system trap is found whenever the winners of a competition receive, as part of the reward, the means to compete even more effectively in the future. That’s a reinforcing feedback loop, which rapidly divides a system into winners who go on winning and losers who go on losing.” The business executives about whom I wrote last evening are among the beneficiaries of this trap. Here are some other examples:

In most societies the poorest children receive the words education in the worst schools, if they are able to go to school at all. With few marketable skills, they qualify for only low paying jobs, perpetuating their poverty.

People with low income and few assets are not able to borrow from most banks. Therefore, either then can’t invest in capital improvements, or they must go to local moneylenders who charge exorbitant rates. Even when when interest rates are reasonable the poor pay them and the rich collect them.

land is held so unevenly in many parts of the world that most farmers are tenants on someone else’s land. They must pay part of their crops to the landowner for the privilege of working the land and so never are able to by lland of their own. The landowner uses the income from tenants to buy more land.

Dana does not write about health care, but it seems pretty clear that many those who are the leading charge against health care reform, using their wealth and position are not numbered among the 47 million Americans who lack health insurance, a national disgrace. This includes of course, many - not all - members of Congress. No member of Congress, of course, lacks health insurance coverage. That would be unthinkable. Like many - not all - high-level business executives they view themselves as members of a high caste elite, that is not governed by the circumstances, nor constrained by the moral precepts with which ordinary folk (the low caste and untouchables) must deal.

AN ADDITONAL THOUGHT: This blog later evoked a reflection on how to write in a way that will change people’s minds. This is something I discuss in my ‘International Development’ course. It is a challenge that reformers and spiritual leaders face. The blog I wrote was a reflection of outrage and anger, but if its goal was to transform those whom I targeted as complicit in injustice, it almost certainly did not achieve its goal. The great spiritual leaders often write that such transformations must begin with connection, forgiveness and empathy. Among leaders now living, Nelson Mandela may exemplify this best.

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Blogger Tom Fiddaman said...

I once played a great game, in a course taught by Dennis Meadows, demonstrating the success-to-the-successful dynamic. It was called Starpower, and involved trading colored chips. After the first round, players were divided into three classes, based on scores, which were basically a matter of luck given the initial chip distribution. Subsequent rounds were preceded by a rule-changing session, in which higher classes got more votes. I happened to be in the top class. We soon hit on the idea of changing the rules so that the middle class would receive fewer chips than the lowest class. That guaranteed that the lower groups would endlessly recirculate, and no one could amass enough resources to join our highest class. It was an eye-opening experience.

Dana Meadows wrote about it here

10:18 AM  

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