notes on the industrialisation of decision making

worrying away at an old subject

(I’m working on a new book, tentatively entitled “Crisis v Data”, trying to make the case that crises are, definitionally, failures of the world to match our mental model of it and thus [various important conclusions about policy, AI, things in general]. This is what I’m typing at the moment; it may or may not make it into the book, but it’s the sort of bridge from The Unaccountability Machine to what I’m doing now. Long term readers might recall similar things from eighteen months ago)

The subject that’s in the background of this book is what might be called “the industrialisation of decision making”. Over the last century or so, the complexity of the modern developed world has got definitively too great for any one human being, or even any small group of human beings to manage and hold in their head. These days, even most companies, government departments and similar organisations have to deal with more variety, more information than anyone could reasonably expect to process. Which is a problem, because processing information, and making decisions, is the whole problem of management, governance and life itself.

We have coped with this by building systems. I wrote about this a lot in “The Unaccountability Machine”, but the idea is that there is an analogy between the production of manufactured goods since the Industrial Revolution, and what we’ve done to management. Rather than trying to make decisions one by one, treating each case as an individual, we have used the central insight of the factory system and the division of labour; standardisation and specialisation.

Consider, for the moment, the famous description by Adam Smith of a pin factory. Rather than having each worker sit around producing pins, the process of pin-making is broken up into simpler and repeatable tasks. As Smith said:

“One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving, the head; to make the head requires two or three distinct operations; to put it on is a peculiar business, to whiten the pins is another; it is even a trade by itself to put them into the paper; and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hand”

And in this way, vastly more pins can be produced by a few dozen workers than they could manage if they were trying to make them one at a time.

But we should note that, logically prior to the division of labour, there has to first be an operation of standardisation. The “manufactory” as described is producing by reproducing a “standard pin”. The system only works if each step in the process is getting the piece of work-in-progress that it was expecting. And it only produces one kind of pin (or one of a few minor variations, which would need to be considered ahead of time). If you want a special, unique pin then it’s going to need to be manufactured artisanally, in the pre-industrial manner.

The standardised product is, inherently, a compromise design. Like an off-the-peg suit, it won’t fit your needs perfectly, but it will be close enough and a lot cheaper than the bespoke version. And the trade-off is very good; by agreeing that we were going to have things which were quite as nice but much easier to make, the modern world was made possible. Adam Smith is dead right about that.

But ever since the beginning of the Industrial Age, there have been critics. And those critics might need to be listened to a bit more now that what we are standardising is not just the goods themselves, but the decisions which govern their manufacture. And even the decisions which govern those decision-makers.

Which is what we’re doing. I don’t think this is even a metaphor. A bureaucracy is an industrial decision-making factory. It takes the same raw material, and operates on it by creating a standardised information set, allowing a standardised decision to be made, by the shared operation of a group of knowledge workers, each of which is operating on a particular part of the process in which they specialise.

What could go wrong? The first long-standing critique of industrialisation has been pretty easy to dismiss. It’s the noble but sentimental tradition of John Ruskin and William Morris, to the effect that the design tradeoff of the standardised industrial product is bad for us, or at least that it tends to be made badly. We have ugly and cheap things in our houses, when we could have beautiful handmade things.

Except we couldn’t, of course. And the same thing might be true of decision making in the industrial world. We all want to be treated as individuals and to have an accountable human being that we can speak to, but this might be as unrealistic a luxury demand as a wish to have hand-made cutlery, hand-thrown plates and hand-blown stemware on our tables.

But let’s turn that point around. Mass-produced consumer goods have a quality that we can measure and compare to the artisanal versions. What about mass-produced decisions? When the compromises on quality are being made within the cognitive process itself, what basis do we have to know whether the tradeoff was a good one? How do you know when you are making worse decisions? It’s a problem

It’s even more of a problem when you consider the related criticism that Ruskin and Morris used to make – that industrialisation tended to degrade and coarsen the workers themselves. When a skilled glassblower becomes the operator of an automated glassmaking machine, something is lost. Again, when you transfer this argument from physical skills of production to managerial skills of decision making, I think it needs to be considered anew, rather than presuming that we can still use the same devastating argument (in summary “oh come off it will you”) that defeated the Arts and Crafts movement versus the Industrial Revolution.

Are we getting worse decisions, and worse people as leaders? And if we think the answer is no, how would we know if we were?