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Musings Report 2024-29 7-20-24 Optimized for Fragility
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Optimized for Fragility
Correspondent Tom D. summed up my work in one compact line: "The real risk of maximum optimization is profound fragility." I wish I had come up with this brilliant summary, for it captures a wealth of insights into the systems that control our collective destiny.
I recently rediscovered another brilliant line, this one from correspondent Ray W.: "It is axiomatic that failing systems work the best just before they fail catastrophically." These two ideas speak to the same dynamic, for it is also axiomatic that highly optimized system work extremely well within the confines of their optimization. The upside of this optimization is efficiency and the maximization of profits. The downside is this arrangement is intrinsically fragile, as any deviation in the optimization or envelope collapses the system.
Globalized supply chains offer an example that we're all familiar with: the ease of ordering and receiving goods from around the world masks the fragilities and vulnerabilities created by the relentless optimization to increase efficiencies and profits. These supply chains operate in very narrow envelopes with near-zero buffers of redundancy (i.e. multiple sources of components, distribution, etc.) and near-zero slack in timing and warehousing.
Every point of optimization is a potential point of failure.
A new book teases apart the global supply chains and reveals their inherent proximity to failure. 'We're asking a lot of these people': how fragile is the global supply chain? A new book looks at how the pandemic highlighted issues with the supply chain and how precarious things still are.
In his book, How the World Ran Out of Everything: Inside the Global Supply Chain, New York Times journalist Peter Goodman is out to change that. With the amount of exploitation in the supply chain, the ease of such transactions is not magic – it's more magical thinking.
Here's an excerpt from the Amazon summary:
"While the scale of the pandemic shock was unprecedented, it underscored the troubling reality that the system was fundamentally at risk of descending into chaos all along. And it still is. Sabotaged by financial interests, loss of transparency in markets, and worsening working conditions for the people tasked with keeping the gears turning, our global supply chain has become perpetually on the brink of collapse.
Award-winning journalist Peter S. Goodman reveals the fascinating innerworkings of our supply chain and the factors that have led to its constant, dangerous vulnerability.
Goodman weaves a powerful argument for reforming a supply chain to become truly reliable and resilient, demanding a radical redrawing of the bargain between labor and shareholders, and deeper attention paid to how we get the things we need."
Examples of glitches bringing entire production / distribution to a halt are not hard to find: a fire in a factory in Japan that was the sole global source of a specialty industrial solvent shut down production for months.
Such failures are rare, so we've become complacent and blind to the fragilities piling up in the supply chains we now depend on so absolutely. Prior to the globalized, financialized optimization-driven centralization of production and distribution, a county might have been served by a dozen small dairies. Should one close, the slack could be picked up by the remaining producers. Now that county--and hundreds of other equally dependent counties--gets virtually all its dairy products from massive factory-farm operations hundreds or thousands of miles away.
This is optimization at work: eliminate redundancies and buffers as needless expenses reducing profits.
This raises the key question: what's being optimized? Global supply chains aren't optimized for resilience; they're optimized for efficiency in service of maximizing profit margins which are thinned by global competition. The difference between a profit and a loss may well boil down to modest reductions in cost wrung out of supply chains.
The vast majority of these optimizations are hidden or only visible to insiders who understand the narrowness of the envelope and the ways the systems / technologies have been optimized to function best within the confines of the envelope.
Consider another common experience, being a passenger on an airliner. If we know little about the system design and economics of the aircraft, we might assume the airliner operates pretty much the same at various altitudes and speeds. But this is not the case: the aircraft and its engines have been optimized for highly efficient fuel consumption in narrow envelopes of altitude and speed: generally speaking, above 30,000 feet and between 500 and 540 miles per hour.
Outside of these envelopes, the efficiency of the fuel consumption falls off significantly.
Optimization has other more subtle vulnerabilities.
Essayist Samo Burja has insightfully illuminated two intangible manifestations of optimized fragility: 1) the proceduralization of knowledge into bureaucratic processes that define the workflow, tasks, management and goals of white-collar workers, and 2) the decay of the networks that enabled the original design of the processes--the values, rules, relationships and informal structures that were the foundation for developing the knowledge of how the system worked and could be optimized.
The End of Industrial Society: The Industrial Revolution stopped before it was ever completed. The aftermath is not a clean and developed world, but lost knowledge and civilizational decline.
Silicon Valley is an oft-cited example of how these values, rules, relationships and informal structures generate a difficult-to-duplicate culture in which specific skills can be transitioned to new fields and systems. Burja mentions 19th century Vienna as another example of such an incubator zeitgeist: the list of luminaries in various fields who made Vienna home (or started their career there) is impressively long.
Burja describes how the decay or loss of these "social technologies" reduces civilizations to hollowed out shells prone to collapse, as the knowledge needed to design / optimize the system has been replaced with facsimiles--procedures and processes--that contain no real knowledge.
I have addressed the weaknesses of relying on processes rather than results, which demand a higher order of flexibility, adaptability, accountability and willingness to experiment and fail--everything that's been stripped out of bureaucracies to optimize the workflow of procedures / processes.
As Burja notes: "Bureaucracies decay in a way that is much less visible than the decay of factories."
My aphorism speaks to the same dynamic: "Continuous failure doesn't draw attention; only sudden failure attracts a crowd."
Another source of fragility is revealed by the question, What's being optimized?
Systems tend to default to optimization priorities that weaken the entire system in ways that are not obvious to those doing the optimizing. For example, in the corporate world, optimizing supply chains to cut costs is a no-brainer; the systemic fragilities created by this shared goal--all participants are seeking to increase efficiencies (or reduce quality, cheat, etc.) to boost profit margins--are "somebody else's problem," also known as "the tragedy of the commons:" the entirety of the supply chain is effectively the Commons of global trade, to be exploited by each participation without regard to how every bit of optimization adds to systemic vulnerabilities.
In the housing sector, the default optimization is set by liability--do whatever reduces the risks of lawsuits--and by the engineering profession's tendency to add requirements that add to safety. (I have sat in on engineers' meetings discussing improvements to building codes, and have seen this in action.)
The overall cost and complexity of the approval and construction processes are given low priority, as from the litigation-engineering point of view, each additional requirement is relatively modest in cost compared to the total cost of the completed house. This is how the cost of construction has been pushed into the stratosphere: there are few if any constituencies prioritizing low-cost housing that can be approved in days rather than months.
As I've often noted, as a builder in the mid-1980s I could obtain a county building permit for a simple starter house in a single day, a process that now takes months even though the changes in the actual construction are modest. This is the decay / continuous failure that's indiscernible to observers.
Burja's point about the loss of actual knowledge plays into this as well: if the process optimizes following procedures, then no actual knowledge of how to build houses is needed. Yet when it comes time to adapt to changing conditions--conditions that demand rapid evolution of the system--the system collapses because the foundational knowledge has been lost or stripped out as an unnecessary expense.
Optimization that appears entirely logical and practical to those doing the optimizing ends up hollowing out the system to the point that the resulting fragility dooms the system to collapse.
The system works great due to optimization until the consequences of that optimization--systemic fragility--crash the system. Put another way, each point of vulnerability is the equivalent of a "keystone" species in an ecosystem: remove the keystone species and the entire ecosystem collapses, much to everyone's surprise.
Highlights of the Blog
Twisters on the Horizon: Is This Decade a Re-Make of 'That 70s Show'? 7/19/24
The Roots of American Populism: Are Trump and Vance Populists? 7/16/24
I Fear for Our Nation 7/14/24
Best Thing That Happened To Me This Week
I happened upon the first five lines of Mary Oliver's poem "Wild Geese:"
You do not have to be good.
You do not have to walk on your knees
for a hundred miles through the desert, repenting.
You only have to let the soft animal of your body
love what it loves.
I confess to being embarrassed that only now have I stumbled upon Oliver's poetry. For those like me seeking an introduction to her work, this is a good introduction: 10 Best Mary Oliver Poems.
In a close second, I found a simple Marcella Hazan recipe to use some of the fresh tomatoes and eggplant we're harvesting in our gardens: page 195 in Marcella's Italian Kitchen, Chicken with Eggplant and Fresh Tomatoes. I steamed the eggplant rather than fry it, and added some Yukon Gold potatoes gifted us by a friend-farmer.
Like many of Marcella's recipes this one is very simple and easy to prepare: nothing fancy but deceptively so, for the results hold their own against more elaborate dishes of the same ingredients.
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What's on the Book Shelf
How the World Ran Out of Everything: Inside the Global Supply Chain
Days of Rage: America's Radical Underground, the FBI, and the Forgotten Age of Revolutionary Violence
Marcella's Italian Kitchen
From Left Field
NOTE TO NEW READERS: This list is not comprised of articles I agree with or that I judge to be correct or of the highest quality. It is representative of the content I find interesting as reflections of the current zeitgeist. The list is intended to be perused with an open, critical, occasionally amused mind.
Many links are behind paywalls. Most paywalled sites allow a few free articles per month if you register. It's the New Normal.
The End of Industrial Society: The Industrial Revolution stopped before it was ever completed. The aftermath is not a clean and developed world, but lost knowledge and civilizational decline. (Samo Burja)
The AI we could have had (FT.com)(via Douglas Rushkoff)
For Older People Who Are Lonely, Is the Solution a Robot Friend?
Boomers Own Half of U.S. Wealth. So Why Are We Seeing More Homeless Boomers? | WSJ (7 min)(via BrandonRox)
Wealthy Americans are anxious about making ends meet (via BrandonRox)
Do gut microbes have a role in autism itself?
Goldman's Head Of Research Crucifies The "AI Bubble": Not One Transformative Application Has Been Found
‘This sucks. I want to go back to being famous’: Kevin Bacon’s experiment as a ‘regular person’
AI is effectively ‘useless’—and it’s created a ‘fake it till you make it’ bubble that could end in disaster, veteran market watcher warns
Iron Law of Bureaucracy (B.J.)
The experts: oncologists on the simple, doable, everyday things they do to try to prevent cancer
My Osler Oration 2024: 16 pages of thinking around why present sickness systems are bound to fail and why we need to build a health system around health rather than sickness (via David D. MD)
'Magick Show' trailer (2:25)-- my friend Richard Metzger's new documentary...
"A cage went in search of a bird." Franz Kafka
Thanks for reading--
charles |
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