Archive for the ‘managerialism’ Category

Well, this is interesting, both on the Bo Xilai story and also on the general theme of the state of the art in contemporary authoritarianism. It looks like a major part of the case is about BXL’s electronic surveillance of Chongqing and specifically of top national-level Chinese officials:

One political analyst with senior-level ties, citing information obtained from a colonel he recently dined with, said Mr. Bo had tried to tap the phones of virtually all high-ranking leaders who visited Chongqing in recent years, including Zhou Yongkang, the law-and-order czar who was said to have backed Mr. Bo as his potential successor. “Bo wanted to be extremely clear about what leaders’ attitudes toward him were,” the analyst said.

That’s Zhou Yongkang as in the head of the whole Chinese internal security structure, cops, spooks, and all. Bo’s police chief (and future sort-of defector) Wang Lijun is described as being “a tapping freak”, addicted to the productivity and hence apparent power of electronic intelligence. Not only that, Wang eventually began tapping Bo, who was also tapping the CDIC feds who came down to keep an eye on him.

The practicalities are, as always, interesting.

The architect was Mr. Wang, a nationally decorated crime fighter who had worked under Mr. Bo in the northeast province of Liaoning. Together they installed “a comprehensive package bugging system covering telecommunications to the Internet,” according to the government media official.

One of several noted cybersecurity experts they enlisted was Fang Binxing, president of Beijing University of Posts and Telecommunications, who is often called the father of China’s “Great Firewall,” the nation’s vast Internet censorship system.

It’s worth pointing out that the provincial networks belonging to China Mobile, China Telecom etc. are usually organised as companies in their own right, and they often have their own AS numbers, and indeed they often contract for substantial network development projects with Western vendors (Nokia Siemens recently had a big mobile network contract in Sichuan, notably) on their own right.

Anyway, Fang’s involvement is very interesting indeed. He is responsible for the state-of-the-art authoritarian solution to the Internet. This is not just, or even primarily, a question of blacklisting websites or turning off the Internet. The Great Firewall’s detailed design, as the Cambridge Computer Lab found out a while ago, is specifically intended to be a semi-permeable membrane. Rather like Hadrian’s Wall, it is more about the gates through it than the wall itself, and the defences point in both directions.

When a computer within it tries to initiate a TCP connection to one outside that is classified as dodgy, the Firewall sends an RST message back to kill the connection. This permits much higher performance than the DNS-based blacklisting typical of, say, the UAE.

It also means that it’s possible to ignore the RST and look through the firewall by using your own firewall utility (specifically, set something like iptables to drop any RSTs for connections in states other than ESTABLISHED before a suitable time has elapsed). However, it would be a fair guess that any traffic doing this is logged and analysed more deeply.

Further, there is a substantial human infrastructure linking the media/PR/propaganda system, the police system, and the Ministry of the Information Industry. This uses tools such as moderation on big Web forums, direct recruitment, harassment, or persuasion of important influencers, the development of alternative opposition voices, and the use of regime loyalist trolls (the famous wumaodang).

The firewall, like Hadrian’s Wall or the original Great Wall, also has an economic function. This acts as a protectionist subsidy to Chinese Internet start-ups and a tariff barrier to companies outside it. Hence the appearance of some really big companies that basically provide clones of Twitter et al. Because the clones are inside the firewall, they are amenable to management and moderation.

And none of this detracts from the genuine intention of the people at 31 Jin-rong Street, the China Telecom HQ, to wire up the whole place. Iran’s surprisingly important role providing broadband to Afghanistan and diversionary links to the Gulf reminds us that providing connectivity can be a powerful policy tool and one that you can use at the same time as informational repression.

So, Fang’s achievement is basically a package of technical and human security measures that let whoever is in charge of them command the context Web users experience.

Last autumn, several of the Chinese web startups were subjected to the combined honour and menace of a visit from top securocrats. Tencent, the owner of QQ and the biggest of the lot, got Zhou Yongkang in person. In hindsight, this will have been around the time the CDIC landed in Chongqing.

So, where am I going with this? Clearly, there was serious disquiet that somebody was usurping the right to control the wires. Even more disquieting, the surveillance establishment in Fang’s person seemed to be cooperating with him. And the systems he set up worked just as well for someone increasingly seen as a dangerous rebel as they did for the central government. (In fact, the people who like to complain about Huawei equipment in the West have it the wrong way round. It’s not some sort of secret backdoor they should be worrying about: it’s the official stuff.)

I do wonder, depending on what happens to Fang (he’s still vanished, but his Weibo feed has started updating again), if we might not see a relaxation of the firewall, which the pundits will consider “reform”. In fact it will be no such thing, rather a cranking up of internal chaos to facilitate a crackdown on opposition.

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So, why did we get here? Back in the mists of time, in the US Bell System, there used to be something called a Business Office, by contrast to a Central Office (i.e. what we call a BT Local Exchange in the UK), whose features and functions were set down in numerous Bell System Practice documents. Basically, it was a site where the phone company took calls from the public, either for its own account or on behalf of a third party. Its practices were defined by Bell System standardisation, and its industrial relations were defined by the agreement between AT&T and the unions, which specified the pay and conditions for the various trades and workplace types inside the monster telco. If something was a Business Office according to the book, the union agreement covering those offices would apply.

In the Reaganite 80s, after the Bell System was broken up, someone realised that it would be possible to get rid of the union rules if they could re-define the site as something else. Not only could they change the rules, but they could move the site physically to a right-to-work state or even outside the USA. This is, it turns out, the origin of the phrase “call centre”.

In the UK, of course, call centres proliferated in parallel with utility privatisation and financial deregulation. A major element in the business case for privatisation was getting rid of all those electricity showrooms and BT local offices and centralising customer service functions into `all centres. At the same time, of course, privatisation created the demand for customer service in that it was suddenly possible to change provider and therefore to generate a shit-load of admin. Banks were keen to get rid of their branches and to serve the hugely expanding credit card market. At another level, IT helpdesks made their appearance.

On the other hand, hard though it is to imagine it now, there was a broader vision of technology that expected it all to be provided centrally – in the cloud, if you will – down phone lines controlled by your favourite telco, or by the French Government, or perhaps Rupert Murdoch. This is one of the futures that didn’t happen, of course, because PCs and the web happened instead, but you can bet I spent a lot of time listening to people as late as the mid-2000s still talking about multimedia services (and there are those who argue this is what stiffed Symbian). But we do get a sneak-preview of the digital future that Serious People wanted us to have, every time we have to ring the call centre. In many ways, call centres are the Anti-Web.

In Britain, starting in the 1990s, they were also part of the package of urban regeneration in the North. Along with your iconic eurobox apartments and AutoCAD-shaped arts centre, yup, you could expect to find a couple of gigantic decorated sheds full of striplighting and the precariat. Hey, he’s like a stocky, Yorkshire Owen Hatherley. After all, it was fairly widely accepted that even if you pressed the button marked Arts and the money rolled in, there was a limit to the supply of yuppies and there had to be some jobs in there as well.

You would be amazed at the degree of boosterism certain Yorkshire councils developed on this score, although you didn’t need top futurist Popcorn Whatsname to work out that booming submarine cable capacity would pretty quickly make offshoring an option. Still, if Bradford didn’t make half-arsed attempts to jump on every bandwagon going, leaving it cluttered with vaguely Sicilian failed boondoggles, it wouldn’t be Bradford.

Anyway, I think I’ve made a case that this is an institution whose history has been pathological right from the start. It embodies a fantasy of managing a service industry in the way the US automakers were doing at the same time – and failing, catastrophically.

What is it that makes call centres so uniquely awful as social institutions? This is something I’ve often touched on at Telco 2.0, and also something that’s been unusually salient in my life recently – I moved house, and therefore had to interact with getting on for a dozen of the things, several repeatedly. (Vodafone and Thames Water were the best, npower and Virgin Media the worst.) But this isn’t just going to be a consumer whine. In an economy that is over 70% services, the combination of service design, technology, and social relations that makes these things so awful is something we need to understand.

For example, why does E.ON (the electricity company, a branch of the German utility Rhein-Westfälische Elektrizitätswerke) want you to tell their IVR what class you are before they do anything else? This may sound paranoid, but when I called them, the first question I had to answer was whether I owned my home or was a tenant. What on earth did they want to know that for?

Call centres provide a horrible experience to the user. They are famously awful workplaces. And they are also hideously inefficient – some sites experience levels of failure demand, that is to say calls generated due to a prior failure to serve, over 50% of the total inbound calls. Manufacturing industry has long recognised that rework is the greatest enemy of productivity, taking up disproportionate amounts of time and resources and inevitably never quite fixing the problems.

So why are they so awful? Well, I’ll get to that in the next post. Before we can answer that, we need to think about how they are so awful. I’ve made a list of anti-patterns – common or standard practices that embody error – that make me angry.

Our first anti-pattern is queueing. Call centres essentially all work on the basis of oversubscription and queueing. On the assumption that some percentage of calls will go away, they save on staff by queueing calls. This is not the only way to deal with peaks in demand, though – for example, rather than holding calls, there is no good technical reason why you couldn’t instead have a call-back architecture, scheduling a call back sometime in the future.

Waiting on hold is interesting because it represents an imposition on the user – because telephony is a hot medium in McLuhan’s terminology, your attention is demanded while you sit pointlessly in the queue. In essence, you’re providing unpaid labour. Worse, companies are always tempted to impose on you while you wait – playing music on hold (does anybody actually like this?), or worse, nagging you about using the web site. We will see later on that this is especially pointless and stupid.

And the existence of the queue is important in the social relations of the workplace. If there are people queueing, it is obviously essential to get to them as soon as possible, which means there is a permanent pressure to speed up the line. Many centres use the queue as an operational KPI. It is also quality-destroying, in that both workers and managers’ attention is always focused on the next call and how to get off the current call in order to get after the queue.

A related issue is polling. That is to say, repeatedly checking on something, rather than being informed pro-actively when it changes. This is of course implicit in the queueing model. It represents a waste of time for everyone involved.

Repetition is one of the most annoying of the anti-patterns, and it is caused by statelessness. It is always assumed that this interaction has never happened before, will never happen again, and is purely atomised. They don’t know what happened in the last call, or even earlier in the call if it has been transferred. As a result, you have to provide your mother’s maiden name and your account number, again, and they have to retype it, again. The decontextualised nature of interaction with a call centre is one of the worst things about it.

Pretty much every phone system these days uses SIP internally, so there is no excuse for not setting a header with a unique identifier that could be used to look up data in all the systems involved, and indeed given out as a ticket number to the user in case they need to call again, or – why not – used to share the record of the call.

That point leads us to another very important one. Assymetric legibility characterises call centres, and it’s dreadful. Within, management tries to maintain a panopticon glare at the staff. Without, the user faces an unmapped territory, in which the paths are deliberately obscure, and the details the centre holds on you are kept secret. Call centres know a lot about you, but won’t say; their managers endlessly spy on the galley slaves; you’re not allowed to know how the system works.

So no wonder we get failure demand, in which people keep coming back because it was so awful last time. A few companies get this, and use first-call resolution (the percentage of cases that are closed first time) as a KPI rather than call rates, but you’d be surprised. Obviously, first-call resolution has a whole string of social implications – it requires re-skilling of the workforce and devolution of authority to them. No wonder it’s rare.

Now, while we were in the queue, the robot voice kept telling us to bugger off and try the Web site. But this is futile. Inappropriate automation and human/machine confusion bedevil call centres. If you could solve your problem by filling in a web form, you probably would have done. The fact you’re in the queue is evidence that your request is complicated, that something has gone wrong, or generally that human intervention is required.

However, exactly this flexibility and devolution of authority is what call centres try to design out of their processes and impose on their employees. The product is not valued, therefore it is awful. The job is not valued by the employer, and therefore, it is awful. And, I would add, it is not valued by society at large and therefore, nobody cares.

So, there’s the how. Now for the why.

Thinking about the political castration of Ken Clarke and the fact that not even the Treasury in its most R.G. Hawtrey-esque mood seems to be able to stop the expansion of the prison industry, it struck me that the political class’s attitude towards the public service known as justice is fundamentally different to its attitude to all the others, including defence and policing.

Since the mid-1980s and the rise of the New Public Management – possibly an even more pernicious intellectual phenomenon than New Classical economics – it’s been a universal establishment consensus, shared by all parties, that any public service can be improved by giving bits of it a pseudo-budget to spend in a pseudo-market. Playing at shops is the defining pattern language of post-80s public administration. (This chap wrote at the time that the whole thing was remarkably like the 1960s Kosygin reforms in the Soviet Union, and perhaps we can induce him to post it up on his blog!)

For example, the 1990s Tory government wanted “fundholder” GPs to buy hospital services in an NHS internal market. Now they want to do something similar again, but more, faster, and worse. All sorts of local government services were put through a similar process. Central government agencies were ordered to bill each other for services vital to their operations. The Ministry of Defence was ordered to pay the Treasury 6% a year of the value of all its capital assets, such as the Army’s tank park, reserve stocks of ammunition, uniforms, etc. As a result, the MOD sold as many vehicles as possible and had to buy them back expensively through Urgent Operational Requirements when they had to fight a war. Supposedly, some vehicles were sold off after Kosovo, re-bought for Afghanistan in 2001, sold again, re-bought for Iraq in 2003, sold again, and UORd in a panic in 2006.

(Off topic, if you’re either a reporter hunting a story or a dealer in secondhand military vehicles, watch closely what happens to the fleet acquired under UORs for Afghanistan in the next few months.)

But there is one public service where the internal market is unknown. I refer, of course, to criminal justice. For some reason, it is considered to be normal to let magistrates and judges dispense incarceration, one of the most expensive products of the state, as if it were as free as air. The Ministry of Justice is simply asked to predict-and-provide sufficient prisons, like the Department for Transport used to do with motorways. Like motorways, somehow, however hard the bulldozers and cranes are driven, it never seems to be enough, and the prison system operates in a state of permanent overcrowding. Interestingly, the overcrowding seems to prevent the rehabilitative services from working, thus contributing to the re-offending rate, and ensuring both the expansion of the prison industry and the maintenance of permanent overcrowding.

The new public managers bitch endlessly about “producer interests” – they mean minimum-wage hospital cleaners, but somehow never GPs – but you never hear a peep about our bloated and wasteful criminal justice system. In fact, now that we have private jails, this producer interest is vastly more powerful as it has access to the corporate lobbying system and a profit motive.

Clearly, the problem here is that the gatekeepers to the system – the courts – have no incentive to use taxpayers’ money wisely, as they face neither a budget constraint nor competition. There is a rhyme with the fact that a British Army company commander in Afghanistan has a budget for reconstruction of $4,000 a month, which he must account for meticulously to the Civil Secretariat to the Helmand Task Force, but in each section of ten riflemen under his command, at least one of them can spend $100,000 on destruction at any moment, by firing off a Javelin anti-tank missile, every time he goes outside the wire. As once the thing is fired, he no longer needs to tote the fucker any further, you can see that a lot more is spent on Javelin rounds than reconstruction, and indeed the task force was getting through 254 of them a month at one point.

But it’s not a precise match. The military do, indeed, have to worry about their resources, as do the police. Only the courts can dispense public money without limit.

What if we were to give every magistrates’ court a Single Offender Management Budget, out of which it could buy imprisonment, probation, community service, electronic tagging, etc in an internal market? This would make it obvious to the magistrate how much cheaper non-custodial interventions are than jail. It would force them to resist the temptation to jail everybody out of risk-aversion or political pressure. If a court was to start off the year handing down 16-month sentences for stealing a packet of fags, and end up in queer street by Christmas, well, that will teach them to waste taxpayers’ money.

In fact, we could go further. Foundation courts would be able to borrow, if necessary, to tide themselves over to the end of the year, although of course they would have to make efficiency gains next year to repay it. It would be possible for a foundation court to go bankrupt and close. This, of course, will drive up standards. Perhaps we could even introduce an element of choice, letting defendants choose which jurisdiction they are prosecuted in.

I am, of course, joking. But not entirely.

This LA Times story about the Boeing 787 Dreamliner (so called because it’s still a dream – let’s get the last drop from that joke before it goes into service) and the role of outsourcing is fascinating. It is partly built on a paper by a senior Boeing engineer which makes among other things, this point:

Among the least profitable jobs in aircraft manufacturing, he pointed out, is final assembly — the job Boeing proposed to retain. But its subcontractors would benefit from free technical assistance from Boeing if they ran into problems, and would hang on to the highly profitable business of producing spare parts over the decades-long life of the aircraft. Their work would be almost risk-free, Hart-Smith observed, because if they ran into really insuperable problems they would simply be bought out by Boeing.

Even in its own financial terms, the whole thing didn’t make sense, because the job of welding together the subassemblies and hooking up the wires doesn’t account for much of the profit involved. Further, the supposedly high-margin intellectual-property element of the business – the research, development, and design of the plane – is only a profit centre after it’s been built. Until they’re done, it requires enormous amounts of investment to get right. The outsourcers were expecting the lowest-margin element of the company, assembly, to carry the costs of developing new products. Whether they were funded with equity or with debt, this implies that the systems integrator model, for aircraft at least, fundamentally restricts innovation.

This is one of the points I’d like to bring out here. Hart-Smith’s paper – you can read it here – is much stronger on this than the LA Times was willing to be. It’s a fascinating document in other ways, too. For a start, the depth of outsourcing Boeing tried to achieve with the 787 is incompatible with many of the best practices used in other industries. Because the technical interfaces invariably become organisational and economic ones, it’s hard to guarantee that modules from company X will fit with the ones from Y, and if they don’t, the adjustment mechanism is a lawsuit at the financial level, but at the technical level, it’s rework. The dodgy superblock has to be re-worked to get it right, and this tends to land up with the manufacturer. Not only does this defeat the point of outsourcing in the first place, it obviates the huge importance of avoiding expensive rework.

Further, when anything goes wrong, the cost migrates remorselessly to the centre. The whole idea of systems integration and outsourcing is that the original manufacturer is just a collection of contracts, the only location where all the contracts overlap. Theoretically, as near to everything as possible has been defined contractually and outsourced, except for a final slice of the job that belongs to the original manufacturer. This represents, by definition, all the stuff that couldn’t be identified clearly enough to write a contract for it, or that was thought too risky/too profitable (depends on which end you look at it) for anyone to take the contract on. If this was finance, rather than industry, it would be the equity tranche. One of the main reasons why you can’t contract for something, of course, is that you don’t know it’s going to happen. So the integrator essentially ends up holding all the uncertainty, in so far as they can’t push it off onto the customer or the taxpayer.

This also reminded me a little of Red Plenty – one of the problems is precisely that it’s impossible to ensure that all the participants’ constraints are mutually compatible. There are serious Pareto issues. There may be something like an economic law that implies that, given that there are some irreducible uncertainties in each contractual relationship, which can be likened to unallocated costs, they flow downhill towards the party with the least clearly defined role. You could call it Harrowell’s U-Bend. (Of course, in the macroeconomy, the party with the least well defined role is government – who you gonna call?)

Anyway, Hart-Smith’s piece deserves a place in the canon of what could be termed Sarcastic Economics.

I suspect that the problems he identifies have wider consequences in the economy. Given that it’s always easier to produce more or less of a given good than it is to produce something different, the degree to which it’s possible to reallocate capital has a big impact on how quickly it’s possible to recover from a negative shock, and how bad the transition process is. I would go so far as to argue that it’s most difficult to react to an economic shock by changing products, it’s next most difficult to react by producing more (you could be at a local maximum and need to invest more capital, for example), and it’s easiest to react by producing less, and that therefore there’s a structural bias towards deflationary adjustment.

Hart-Smith’s critique holds that the whole project of retaining product development, R&D, and commercial functions like sales in the company core, and contracting everything else out actually weakens precisely those functions. Rather than being able to develop new products quickly by calling on outside resources, the outside resources suck up the available capital needed to develop new products. And the U-bend effect drags the costs of inevitable friction towards them. Does this actually reduce the economy’s ability to reallocate capital at the macrolevel? Does it strengthen the deflationary forces in capitalism?

Interestingly, there’s also a presentation from Airbus knocking about which gives their views on the Dreamliner fiasco. Tellingly, they seem to think that it was Boeing’s wish to deskill its workforce as far as possible that underlies a lot of it. Which is ironic, coming from an enormous aerospace company. There’s also a fascinating diagram showing that no major assembly in the 787 touches one made by the same company or even the same Boeing division – exactly what current theories of the firm would predict, but then, if it worked we wouldn’t be reading this.

Assembly work was found to be completed incorrectly only after assemblies reached the FAL. Root causes are: Oversight not adequate for the high level of outsourcing in assembly and integration, Qualification of low-wage, trained-on-the-job workers that had no previous aerospace experience

I wonder what the accident rate was like. A question to the reader: 1) How would you apply this framework to the cost overruns on UK defence projects? 2) Does any of this remind you of rail privatisation?

The Book

Red Plenty is a fictionalised history, or possibly a work of hard historical science fiction, which covers what it describes as the “fifties’ Soviet dream” but which might be better termed the Soviet sixties – the period from Khrushchev’s consolidation of power to the first crackdown on the dissidents and the intervention in Czechoslovakia. This is a big book in a Russian way – it’s always been a science-fiction prerogative to work with the vastness of space, the depth of history, and the wonder and terror of science and technology, but it’s also been fairly common that science-fiction has had a bit of a problem with people. The characters who re-fire the S-IVB main engine for translunar injection, with nothing but a survival pack of big ideas for use on arrival, tend to vanish in the cosmos. At its best, this has given the genre a disturbingly calm new perspective – chuck out your literary chintz, the rocket equation will not be fooled. At worst, well, OH NO JOHN RINGO.

Red Plenty covers a lot of big ideas, some serious hardware and even more serious software, and great swaths of the Soviet Union. But you will also need to be prepared to meet quite a lot of difficult but rewarding people, rather like the geneticist character Zoya Vaynshtayn does at the party Leonid Kantorovich’s students throw in Akademgorodok. In that sense, it has a genuinely Russian scale to it. The characters are a mixture of historical figures (as well as Kantorovich, you will spend some time in Nikita Khrushchev’s interior monologue), pure fictions, and shadow characters for some historical ones. (Emil Shaidullin roughly represents Gorbachev’s adviser Abel Aganbegyan; Vaynshtayn the historical geneticist Raissa Berg.)

So what are they up to?

Rebooting Science

Kantorovich, a central figure of the book, is remembered as the only Soviet citizen to win a Nobel Prize in economics, and the inventor of the mathematical technique of linear programming. As a character, he’s a sort of Soviet Richard Feynman – an egghead and expert dancer and ladies’ man, a collaborator on the nuclear bomb, and a lecturer so cantankerous his students make a myth of him. Politically, it’s never clear if he’s being deliberately provocative or completely naive, or perhaps whether the naivety is protective camouflage.

A major theme of the book is the re-creation of real science in the Soviet Union after the Stalinist era; biology has to start up afresh, economics has to do much the same, and everyone is working in a large degree of ignorance about the history of their fields. Some things simply can’t be restarted – as Spufford points out, despite all the compulsory Marxism-Leninism, even genetics hadn’t been erased as thoroughly as independent Marxist thought, and nobody in charge was willing to even think of opening that particular can of worms. On the other hand, the re-opening of economics as a field of study led to what the biologists would have called an adaptive radiation. Pioneers from engineering, maths, biology and physics began to lay spores in the new territory.

Comrades, let’s optimise!

The new ecosystem was known as cybernetics, which was given a wider meaning than the same word was in the West. Kantorovich’s significance in this is that his work provided both a theoretical framework and a critical technology – if the problem was to allocate the Soviet Union’s economic resources optimally, could it be possible to solve this by considering the economy as a huge system of linear production functions, and then optimising the lot? The idea had been tried before, in the socialist calculation debate of the 1920s, although without the same mathematical tools.

This is one of those events whose significance has changed a great deal over time. The question was whether it was possible for a planned economy to achieve an optimal allocation of resources. The socialists thought so; their critics held that it was impossible, and elaborated a set of criteria for optimal allocation very similar to the ones that are familiar as the standard assumptions in the economic theory of the firm in perfect competition. These days, it’s often presented as if this was a knockout argument. From the firm in perfect competition, we hop to Hayek’s idea that a market economy is better at making use of dispersed, implicit knowledge. Basta. We won.

The socialists weren’t without intellectual originality. In fact, they did actually formulate a mathematical rebuttal to the firm in perfect competition – the Lange model, which demonstrated that optimal allocation was a possibility in theory. The Hayekian critique wasn’t considered that great at the time – it was thought a much better point that the barrier to effective planning was a practical one, not a fundamental one. And even then, it was well known that the standard assumptions don’t, actually, describe any known economy. It would simply be impossible to process all the data with the technology available. Even with the new tools of linear optimisation, who was going to do all those sums, especially as the process is an iterative rather than a formal one? Stalin and Hitler had their own way of solving these arguments – no man, no problem – and the whole thing ended up moot for some time.

Computers: a technical fix

But if it had been impossible to run the numbers with pen and paper in 1920, or with Hollerith machines and input-output tables in 1940, what about computers in 1960? Computers could blast through millions of iterations for hundreds of thousands of production processes in tens of thousands of supply chains; computers were only likely to get better at it, too. Red Plenty is about the moment when it seemed that the new territory of cybernetics was going to give rise to a synthesis between mathematics, market-socialist thinking, and computing that would replace GOSPLAN and deliver Economics II: True Communism.

After all, by the mid-60s it was known that the enormous system of equations could be broken down into its components, providing that the constraints in each sub-system were consistent with the others. If each production unit had its own computer, and the computers in each region or functional organisation were networked, and then the networks were….were internetworked? In fact, the military was already using big computer networks for its command-and-control systems, borrowing a lot of ideas from the US Air Force’s SAGE; by 1964, there were plans for a huge national timesharing computer network, for both military and civilian use, as a horizontal system cutting across all the ministries and organisations. Every town would get a data centre.

The Economics Fairy Strikes Again

But, of course, it didn’t happen. There’s a good paper on the fate of the Soviet internetworkers here; Spufford has a fascinating document on the end of indigenous general-purpose computer development in the USSR here. Eventually, during the 1970s, it became increasingly obvious that the Soviet economy was not going to catch up with and outstrip anyone, let alone the United States, and the Austrian economists were retroactively crowned as having obviously been right all along, and given their own chance to fail. Spufford frames the story as a Russian fairytale; perhaps we can say that in fact, economics is the fairytale, or rather the fairy. Successive groups of intellectuals have fought their way through the stacks of books, past the ideological monsters, and eventually reached the fairy’s grotto, to be granted their greatest wish. And it’s always the same one – a chance to fail.

Why did the Soviet economists fail? Red Plenty gives a spectacular sweep through the Soviet economy as it actually was; from the workings of GOSPLAN, to the management of a viscose factory, to the world of semi-criminal side payments that actually handled the problems of day-to-day survival. In the 1990s, the descendants of one half of the socialist calculation debate swept into Russia as advisers paid by the Thatcher Foundation. Arriving on the fairy’s magic cloud, they knew little of how the Soviet economy worked in practice, and duly got their opportunity to fail. The GOSPLAN officials of the 60s were reliant on data that was both completely unreliable, being the product of political bargaining more than anything else, and typically slightly less than a year out of date. And the market socialists were just as reliant on the management of Soviet industry for the production cost data they needed to make sure all those budget constraints really were consistent.

That’s a technical explanation. But there are others available. Once communism was achieved the state was meant to wither away, and not many of the people in charge of it were at all keen on this as a pension plan. Without the power to intervene in the economy, what was the point of the Party, again? Also, what was that stuff about letting people connect computers to the telephone network and pass messages from factory to factory? Where will it end? The central government, the Politburo, GOSPLAN, STAVKA – they would never accept it.

Another, more radical, is that the eventual promise of Red Plenty was to render not so much the top of the pyramid, but the middle management, redundant. The rapid industrialisation had created a new management class who had every intention of getting rich and staying that way. (This was the Yugoslavs’ take on the Soviet Union – the new class had simply taken over from the capitalists.) What would happen to their bonuses, and their prerogative to control the planners by telling them what they wanted to hear?

And yet another is that the whole project was flawed. Even if it was possible to discern the economy’s underlying cost-structure, write the software, and optimise the whole thing, how would this system deal with dynamic economics? How would it allocate investment? How would it cope with technological change? It’s no help to point out that, in fact, a lot of the questions are nowhere near being solved in any economics.

Soviet History

One view of the USSR’s history is a succession of escape attempts. The NEP of the mid-20s, Nikolai Voznezhensky’s term at GOSPLAN in the 1940s, the Soviet 60s. Each saw a real effort to get away from a political economy which was in many ways a wild caricature of the Industrial Revolution, screwing down the labour share of income in order to boost capital investment and hence industrial output, answering any protest against this with the pistol of the state. As well as trying new economic ideas, they also saw surges of creativity in other fields. They were all crushed.

Arguably, you could say the same thing about perestroika. The people who signed the Alma-Ata protocol to arrange the end of the Soviet Union and the dismissal of Gorbachev were not, in fact, heroic dissidents, but rather career communist bureaucrats, some of whom went on to become their own little Stalins. Spufford says in the endnotes to Red Plenty that part of the book’s aim is a prehistory of perestroika – one view of the characters is that many of them are developing into the people who will eventually transform the country in the 1980s. Green politics was an important strand in the great dissident wave, right across the USSR and Central Europe; Zoya Vaynshteyn’s genetic research, which turns up some very unpleasant facts, is a case in point. Valentin, the programmer and cadre, is going to retain his self-image as a bohemian hacker into the future. Another Party figure in the book is the man who refuses to get used to violence, which will also turn out to be important in 1989.

Anyway, go read the damn book.

Apple’s internal security team may be scary – and especially the name (Worldwide Loyalty Team). But they are as nothing, in terms of creepiness, to this Microsoft web page, which provides the criteria against which MS employees are assessed for their use of humour and the targets they are given to improve. You will not be able to unread this.

In fact, it’s the kind of thing for which the only valid response is to pretend to take it seriously. Why not print out a copy and carry it around? Score your friends against this fine 4×4 matrix chart!

Via this comment, it turns out that the program is based on the ideas of a 70s cult leader who fell out with the Scientologists in a dispute about intellectual property – how very Microsoft of him – and who reconverted his organisation into the management consulting industry. (I’ve often thought a terrorist group should try that one some day.)

The Wikipedia article on the dispute is very funny – two blind men fighting over a comb doesn’t really do justice to the full absurdity of it, as two cult/hucksters duel over the rights to the kind of ideas that shouldn’t be treated so much as property as like toxic waste, or one of those weird codicils that occasionally force some poor swing-voter to fork out for a new church roof. If they were sane, they’d be fighting to get rid of this stuff; but then they wouldn’t be there.

But the really interesting thing is that Werner Erhard’s ideas have already killed one of the great computer-development groups, Doug Engelbart’s Augment Lab at SRI, which dissolved into a stew of project failure and ego wars under their influence. Here’s the money quote, from What the Dormouse Said:

A woman who Bob Albrecht, the People’s Computer Company guru, had been involved with went through the training and came back transformed into a very un-Zen-like creature. She no longer believed that everything was interconnected, but rather had decided that she wanted it all for herself and would do anything to get it.

There’s a key cultural inflection point right there. And I bet Linus Torvalds doesn’t make sure to check that

Do I ever encourage a near party atmosphere because of my comfort with using humor?

always returns False, or worry about finding his personal brand.

Something interesting about the NHS NPfIT project. During my recently completed two-week conference binge, I spoke to people from a British telecommunications company who were fresh, if that’s the word, from tangling with the NHS IT Zombie, and had apparently escaped before it ate their brains with a spoon. I also heard people from a French telecommunications company who had been working in the same field speak.

They agree on this; national healthcare institutions are too complicated for any one organisation to build the kind of comprehensive, end-to-end workflow system that NPfIT envisaged. This is partly because of the incredible complexity of their business processes; an episode of care can span anything from a GP appointment that ends by the patient being told there is nothing the matter with them, or an immunisation being administered in a single visit by a nurse, to 20 years of treatment for a cancer and subsequent surveillance. There are a hell of a lot of other organisations that interact with the NHS, and who aren’t part of the project.

In fact, if they were, the scale and scope of NPfIT would increase to the point at which it encompassed most of the public sector; it would have to integrate with the social security system, and because of all those benefits that are delivered as tax credits, with the Revenue as well, and (because the NHS provides the armed forces’ medical care) with the MOD’s personnel system and even with tactical communications systems in the RAF, because Selly Oak receives casualties direct from the war. Of course, it no doubt already needs to talk to the Treasury’s systems. You might as well just ask the ghost of Stafford Beer to build us a Cybersyn for the whole economy.

But that wasn’t the worst of it. The real problem, according to my source, was that the designers of NPfIT believed that there was an organisation called the NHS. In fact, this was a bit like modelling a blue whale as a homeogenous sphere to make the maths easier. The killer wasn’t that medicine is complicated; it was that the NHS isn’t a monolithic organisation. It is, of course, an institution – a set of social, political, and economic expectations and relationships, a recognisable culture, a way of understanding the world. But it’s far from being a single organisation.

Instead, it’s an ecosystem, made up of many organisations that sometimes play similar roles (it’s a hospital; it’s a GP practice) but differ dramatically in their internal structure, rather as a dolphin and a Humboldt squid are both social, pelagic, fast-swimming predators in the subtropical ocean. However, only one of them is even a tetrapod, and only a real idiot would assume they were both sufficiently described by the concept of “shark”. And the interactions between the creatures in this ecosystem are deeply complicated.

In that sense, it’s quite a lot like the Internet. That, too, consists of a grab-bag of diverse organisations that cooperate with varying success on the basis of a few rules and a rough common culture, which is often honoured more in the breach than the observance. That also has a lot of odd emergent features that arise from its complexity, and would almost certainly be impossible to design as a single organisation. Indeed, an old staple of Internet-related mailing lists is the question of what the word “Internet” actually means.

Cue facile libertarian woofing. Yadda yadda Hayek privatise the BBC. Spare me. Neither does this mean the NHS is disorganised; it may well mean that it’s better for its geographically and functionally diverse components to work differently. It would be surprising if they all shared a single optimal strategy. Of course, there is a perfectly good paradigm for building effective information systems in circumstances like these (and another one). What’s really deeply depressing about this is that after all the blundering about and the money, there’s still not the key element that makes a Web-like approach possible – standard data formats and interconnection procedures.

How much would it have cost to sponsor an effort to fix that, coming up with an XML standard or a Semantic Web ontology and some NHS standards, setting down for example where the canonical data would live and who could get at it in what circumstances?

Reader “Ajay” has a theory that aviators are uniquely unfitted for government. There are a considerable number of data points in his favour. However, here’s a possible counter-example. Ernest Millington has died; he was one of three MPs for the brief Common Wealth Party, a radical leftist group that emerged during the second world war, and held the Distinguished Flying Cross for completing no less than thirty bombing raids over Germany as a squadron leader in the crack 5 Group.

Later, after the party lost its other seats, he took the Labour whip and served on until he lost his seat in 1950. He later worked as an encyclopedia salesman, rejoined the RAF, and eventually became a teacher and a senior official in the London Borough of Newham’s education service. The stories are predictably fantastic:

He left school because his father expelled him from home after he heard him address a crowd from a street- corner soapbox on behalf of the Labour League of Youth, alongside Ted Willis, the latterly ennobled creator of Dixon of Dock Green. Homeless and penniless, the boy found a clerk’s job. He was sacked when his employer heard him evangelising for ethical socialism at Speaker’s Corner in Hyde Park, London. He joined the Labour party – and was expelled in the late 1930s for supporting the Communist party-backed anti-fascist popular front….

While still a flight lieutenant, he went to an RAF conference at which he was the only officer present below the rank of wing commander, but also the one with the most operational experience. He disagreed strongly with plans advanced at the meeting, which he maintained would result in heavy casualties. This was noted by Air Vice-Marshal Sir Ralph Cochrane, commander of 5 Group, Bomber Command. Cochrane made him a squadron leader on the spot, promoted him to wing commander a few days later and posted him, in October 1944, as commanding officer of the new 227 squadron, based at Balderton in Nottinghamshire. A remarkable 30 Lancaster sorties followed, with raids ranging across Germany, Czechoslovakia and the Romanian oilfields, and taking in the bombing of Panzer tank groups during the Battle of the Bulge at Christmas 1944….

When Chelmsford’s Conservative MP, Colonel J McNamara, was killed on his way home from Italy, a scratch group of Common Wealth supporters set about finding a candidate. Millington’s views were well known in the area, and a deputation met him in a railway station waiting room. Ten minutes was all the time he could spare, and they made him their candidate there and then…

He first arrived at the Commons with his newly awarded Distinguished Flying Cross ribbon inexpertly self-sewn on to his uniform. A Conservative MP, who was a squadron leader in the RAF police, approached. “You are improperly dressed,” he told Millington.

“If you are talking to me as an RAF officer,” Millington replied, “take your hand out of your pocket and address a senior officer as ‘Sir’. If you are addressing me as a fellow MP, mind your own business and bugger off.”..

Some people just don’t get it… The party was also far from boring, as its Wikipedia article sketches out. Leading figures included J.B. Priestley, the British Battalion of the International Brigade’s former political commissar Tom Wintringham, and the rebel Liberal MP Sir Richard Acland, at a time when he thought Hitler had some remarkably sound ideas. Despite this, the party struck a consistent left-libertarian line based on a critique of managerialism and an interest in decentralisation of government and organisational theory.

So, the provisional wing of Chris Dillow, in short. Not being bound by the pact between the major political parties, under which they didn’t contest by-elections during the wartime coalition so as not to alter the political balance, they stood at several by-elections and won, possibly to their own surprise. I was not as surprised, however, as I might have been that they took Skipton.

Eventually, the party fell apart as some of it wanted to be back in the Labour Party and others lost interest. Comically, it became involved with Plaid Cymru; less comically, a lot of ex-members helped to start Amnesty International.

There should be a special term for the phase in the adoption of an idea between the point at which everyone accepts its desirability, and the point at which it wins over other ideas politically. This isn’t the same as the point of implementation; it’s quite possible for your idea to go into practice, but still to be in the queue elsewhere. So here we are; from E-Health Insider, it looks like the NHS NPfIT is looking at throwing away the disastrous Cerner and iSoft systems and issuing new tenders. In fact, some trusts in the South East have been permitted to sort their own problems out.

However, David Nicholson (the very model of a modern managerialist) is in charge and he for some reason won’t let all the other trusts do this. Even though it is clearly sensible, and is being done, it’s still in the special gap of political unacceptability. I thought this was interesting:

Nicholson said a key problem that the NPfIT programme had faced throughout was the unique requirements of the NHS and what it is trying to achieve. “There is no system off the shelf we could go for.”

Yet the programme was set up so that the NHS IT community, to say nothing of the NHS clinicians, and even less of the patients, had absolutely no input to it. Both Cerner and iSoft are trying to adapt off-the-shelf products from the US. And the attempts to save by outsourcing were disastrous.

“The Lorenzo product is being developed at Morecambe Bay, so we’re really optimistic that something will come out of that, but its not inevitable,” he went on. “And I think we’ll know over the next few months whether these products will actually be able to deliver the things they promised to do.”

That might have been an idea before you bought them, eh. Further, note that he thinks Lorenzo still might get somewhere because of in-house development work

The other issue he said that was being focused on is how to deliver products more quickly and to give trusts more flexibility. Answering questions on the Summary Care Record, the NHS boss said it was possible to de-couple the Summary Care Record from the wider CRS development and simplify it.

This is damning to the entire project. If the record formats can be standardised without the rest of the system, there is no reason for “the system” as sold to Tony Blair to exist. Every trust could have its own system as long as they used the standard.

Remember, the only way to kill a zombie is to aim for the head. By the way, it’s not as if the Americans don’t have Bad Medical IT as well.