Friday, November 8, 2024

Gales of creative political disruption

In one of the many immediate post-election opinion pieces someone compared Trump's policies to the "gales of creative destruction", a term coined by the Austrian economist, Joseph Schumpeter in his 1934 book "The Theory of Economic Development"[1].  It's an interesting but ultimately flawed analogy.

While social media can bee seen as the technological shift that has created the context for innovation in the political area, there are two critical differences. 

First in business there are clear outcomes that determine which experiments fail and which succeed. The process of variation, selection and retention (which the strategy literature borrowed from evolutionary biology) relies on the selection of the more fit experiments to be retained; but it's unclear that in politics there is a strong relation between measurable outcomes and retention.  (While James March argued in Exploration and Exploitation"[2] that too swift a convergence on one solution precluded experimentation that could 1) lead to a more advantageous position on a hilly (rugged) landscape and 2) prevented adaptation to a slowly changing context, abandoning any connection between the quality of outcomes and retention is more  even problematic).

Second, Schumpeter envisioned a large number of entrepreneurial experiments from which one might emerge as a winner, and has Tushman and Anderson[3] have suggested, would for a period become the dominant paradigm. The analogy to the political arena is that at any point in time there is generally only one experiment, not many, and there can be no cross-sectional comparisons by which to select a more fit approach.  This analogy becomes more disturbing when one realizes that 99% of new ventures fail. That's why logical incrementalism[4,5] is a safer course.  

[1] Schumpeter, J. A. (1934). The Theory of Economic Development. Cambridge, MA, Harvard University Press.

[2] March, J. G. (1991). "Exploration and Exploitation in Organizational Learning." Organization Science 2(1): 71-87.

[3] Tushman, M. and P. Anderson (1986). "Technological Discontinuities and Organizational Environments." Administrative Science Quarterly 31: 439-465.

[4] Lindblom, C. E. (1952). "The Science of Muddling Through." Public Administration Review 19(2): 77-88.

[5] Quinn, J. B. (1980). Strategies for Change; Logical Incrementalism, Richard D. Irwin.

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