[unrev-II] I'm having a problem

From: Mike Taylor (mzt10@amdahl.com)
Date: Fri Jan 21 2000 - 15:56:40 PST

From: Mike Taylor <mzt10@amdahl.com>

I guess I must be the one who doesn't get it. After the sessions so far,
I'm confused about the goals here. I think there is a big difference
between improving the collective intelligence of an organization - a team
or a business unit or whatever - and trying to solve what are perceived as
big social problems. Yet these are treated as the same problem.

An organization, in general, has quite a few important attributes that are
already agreed on - a goal or goals, some processes such as
decision-making, a culture and so forth. So I have no problem thinking of
an organization as a "social organism" and using the ideas of CoDIAK to
make it work better as an organism.

But then the leap to solving perceived social problems is too huge for me.
If there is an organization whose goal it is to solve those problems, then
fine, I can see that CoDIAK can potentially help that organization be more
effective in achieving its goal.

But at some point the concept of a unitary organization disappears and a
market takes over. For example, there is no organization that manages the
world energy supply. Therefore there is no obvious target for improvement.
There is simply a market of buyers and sellers whose collective actions in
setting prices control demand and the allocation of resources to supply
development. The market in this case uses the "collective IQ" of all the
buyers and sellers in setting those prices. It is argued that we are
running out of fossil fuels, and that efforts to provide alternatives are
insufficient. This is really an argument that the market is wrong and is
setting the price of energy too low, causing a future supply shortage by
failing to provide adequate economic incentives for the development of
substitutes for fossil fuels. But no matter how apparently convincing the
arguments that this assertion is true, remember that the market price is
set taking into account the collective expertise of all the participants.
And remember the Club of Rome and other historical forecasts of shortages
of commodities which have proven wildly inaccurate even though they seeemed
convincing at the time. The market worked and supply appeared or demand
moderated as appropriate..

In this respect it is hard for me to imagine that any knowledge management
process is going to be successful for this kind of global social issue. So
long as you have a market where economic advantage can be gained by trading
on the use of private and proprietary information, participants will not
reveal or share that information in a repository. We do not know what
information is being used by the market participants whose decisions set
prices. But we can be quite confident that they are all using the best
information they have.

If there is no market, then we have a regulated or controlled environment
where some organization controls prices and supply. This has been tried.
The Soviets called their orgnaization to do this Gosplan. It was not
successful. It may be argued that a CoDIAK-enhanced equivalent of Gosplan
should be created to manage the energy supply. I'm not convinced that this
has any more chance of working than Gosplan. The organization would never
have access to the amount of knowledge that a market system brings to bear
because the economic incentives to develop that knowledge would have
disappeared. Even though the CoDIAK enhanced organization might be better,
it simply would not encompass all the knowledge that all the people who
participate in decision-making in the market model might possess or be
incented to acquire.

So in economic terms, the problem comes down to a "tragedy of the commons"
problem. This is the economic problem where a shared resource that nobody
owns, such as the common grazing land in a village or the fish on the Grand
Banks, is abused because no-one has the economic incentive to manage and
care for it. The DKR would have such a problem - it appears to depend on
altruism for its content rather than economic advantage.

This is fundamentally different than the situation within an organization,
where the interests, economic or otherwise, are served by the DKR and the
management of the organization will provide the incentives to support and
utilize the DKR.

Where am I going wrong?

Mike T.

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