Make the Poor Poorer

Ha-Joon Chang | Disruption is Overrated | Conquest's Second Law | Factoids | Elsewhere

Stowe Boyd

May 20, 2024

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a person driving a car with a computer on the dashboard — Photo by Jonas Leupe on Unsplash

Quote of the Moment

Why do we need to make the rich richer to make them work harder but make the poor poorer for the same purpose?

| Ha-Joon Chang, Economics: The User’s Guide

Disruption Is Overrated

Christopher Mims, a columnist for the Wall Street Journal, sent me on a journey through my notes as a result of a piece he wrote, What I Got Wrong in a Decade of Predicting the Future of Tech. He names five groups of errors, starting with this:

1. Disruption is overrated
Why are three of the most valuable companies of 2014—Microsoft, Apple, and Google—bigger than ever? How is Meta doing so well even as people have for years been abandoning Facebook, its core product? Why is Twitter still chugging along, no matter what its new owner gets up to?

He doesn’t mention monopoly power, but he should.

The short answer is that disruption is overrated. The most-worshiped idol in all of tech—the notion that any sufficiently nimble upstart can defeat bigger, slower, sclerotic competitors—has proved to be a false one.

Clay Christensen is a false prophet, as we shall see.

It’s not that disruption never happens. It just doesn’t happen nearly as often as we’ve been led to believe. There are many reasons for this. One is that many tech leaders have internalized a hypercompetitive paranoia—what Amazon founder Jeff Bezos called “Day 1” thinking—that inspires them to either acquire or copy and kill every possible upstart.
Economic historians have been picking apart the notion of business-model disruption for a long time, and yet hardly a day goes by when a startup, investor, or journalist—including yours truly—doesn’t trumpet the power of a new technology to completely upend even the biggest and most hidebound of industries.

That ‘for a long time’ links to Jill Lepore 's The Disruption Machine, which is perhaps the best takedown ever of Clay Christensen’s The Innovator’s Dilemma. I will return to Lepore’s evisceration in a few paragraphs.

It sounds like he is free of Christensen’s hokum, but he then reverts, pulled in by the black hole of the disruption field, using ‘reinvention’ as a softer form of disruption:

Don’t believe it. In a world in which companies learn from one another faster than ever, incumbents have an ability to reinvent themselves at a pace that simply wasn’t possible in the past.

So it's 'reinvention' at work? Not monopoly power? In the end, he remains an reluctant acolyte of disruption, really.

But I really like the cynicism he offers up in a later section describing the undercurrents of techno-optimism:

Tech is, to put it bluntly, full of people lying to themselves. As countless cult leaders, multilevel marketing recruits, and CrossFit coaches know, one powerful way to convince people that following you will change their life is to first convince yourself.

The short version of Jill Lepore’s towering, and quite long, The Disruption Machine is this: Clayton Christensen is a charlatan, a false prophet whose ideas lead nowhere. Her thesis:

[D]isruptive innovation as a theory of change is meant to serve both as a chronicle of the past (this has happened) and as a model for the future (it will keep happening). The strength of a prediction made from a model depends on the quality of the historical evidence and on the reliability of the methods used to gather and interpret it. Historical analysis proceeds from certain conditions regarding proof. None of these conditions have been met.

And then she dismantles everything he prophesied, using that benchmark.

Here’s a few quotes from her analysis:

Every age has a theory of rising and falling, of growth and decay, of bloom and wilt: a theory of nature. Every age also has a theory about the past and the present, of what was and what is, a notion of time: a theory of history. Theories of history used to be supernatural: the divine ruled time; the hand of God, a special providence, lay behind the fall of each sparrow. If the present differed from the past, it was usually worse: supernatural theories of history tend to involve decline, a fall from grace, the loss of God’s favor, corruption. Beginning in the eighteenth century, as the intellectual historian Dorothy Ross once pointed out, theories of history became secular; then they started something new—historicism, the idea “that all events in historical time can be explained by prior events in historical time.” Things began looking up. First, there was that, then there was this, and this is better than that. The eighteenth century embraced the idea of progress; the nineteenth century had evolution; the twentieth century had growth and then innovation. Our era has disruption, which, despite its futurism, is atavistic. It’s a theory of history founded on a profound anxiety about financial collapse, an apocalyptic fear of global devastation, and shaky evidence.

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The idea of innovation is the idea of progress stripped of the aspirations of the Enlightenment, scrubbed clean of the horrors of the twentieth century, and relieved of its critics. Disruptive innovation goes further, holding out the hope of salvation against the very damnation it describes: disrupt, and you will be saved.

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Disruptive innovation is a theory about why businesses fail. It’s not more than that. It doesn’t explain change. It’s not a law of nature. It’s an artifact of history, an idea, forged in time; it’s the manufacture of a moment of upsetting and edgy uncertainty. Transfixed by change, it’s blind to continuity. It makes a very poor prophet.

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Faith in disruption is the best illustration, and the worst case, of a larger historical transformation having to do with secularization, and what happens when the invisible hand replaces the hand of God as explanation and justification.

It’s astonishing to me that people continue to cite Christensen as a visionary. As Lepore points out, he thought the iPhone would not succeed, based on his theory:

In 2007, Christensen told Business Week that “the prediction of the theory would be that Apple won’t succeed with the iPhone,” adding, “History speaks pretty loudly on that.”In its first five years, the iPhone generated a hundred and fifty billion dollars of revenue.

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Conquest’s Second Law

I came across a quote that cited Conquest’s Second Law, which is this —

The behavior of an organization can best be predicted by assuming it to be controlled by a secret cabal of its enemies.

— which had me laughing uncontrollably.

I looked him up and was astonished to learn all Robert Conquest had accomplished. A successful writer of history and much-heralded poet, he even wrote science fiction. He was awarded the Presidential Medal of Freedom in 2005.

I believe, though, we will be known most for his second law. The first law doesn’t have the same zip:

Generally speaking, everybody is reactionary on subjects he knows about.

Factoids

AI in farming

3M tones of pesticides are sprayed onto crops every year. Global sales of pesticides rose to $79B in 2022, according to S&P Global Commodity Insights, part of a big research group. That trend could change. A number of new spraying methods employing artificial intelligence (AI) are being commercialised, promising to cut the amount of pesticides a farmer needs to spray by a colossal 90%.

| The Economist

This is a great example of how AI should be applied. This is not someone generating stupid-reading marketing copy, or replacing workers on an assembly line. Instead, this AI application is doing something a/ humans apparently can’t do, and b/ leading to an enormous decrease in poisoning the Earth while saving a lot of money.

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We want strong leaders, not ones who care

Since the 1980s, the candidate who rated higher on “strong leadership” has never lost. The one who more people agree “really cares about people like you” loses about half the time.

| American National Elections Studies (hat tip to M. Steven Fish)

Says something about the human spirit.

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