Lepore on disruption

by Eric on June 24, 2014

Jill Lepore deserves an award for her New Yorker essay against the gospel of disruption. The last paragraph alone is a sufficiently fine piece of writing to warrant reading the whole thing.

For those of you blessedly unfamiliar with the theory of disruptive innovation, it goes like this: Everyone, every institution that is superb at providing a product or service is in truth a Goliath, merely waiting for a little innovative David to topple him with a better way to do his job. Why work up your muscles to carry a cudgel if you can deal death with a slingshot?

Amazon has disrupted book-selling. Online commentary has disrupted journalism. MOOCs will disrupt the university (people swear).

You who are merely doing your job exceptionally well and profitably – you are a complacent fool.

In her essay, Lepore beats the tar out of the scholarship that gave rise to this preaching. Apart from pointing the article out to you, I want to comment briefly on how she says what she says. In truth, Lepore gives two arguments for the price of one, and it’s the second that I find more fetching and worth a little extra remark.

Mainly, and entertainingly, she points out the entire theory of disruptive innovation is bunk on its own terms. It neither explains what it’s meant to explain, nor predicts what it’s meant to predict. It’s a fable that comforts the comfortable, by depicting their rapacious waste as the inevitable manner of capitalism’s progress. I won’t try to summarize what Lepore says about the embarrassing failures of the theory, because she already says it well.

But Lepore makes a secondary argument you could almost miss. She notes that even if the theory of disruption were sound, there are certain human activities to which it should not be applied.

Innovation and disruption are ideas that originated in the arena of business but which have since been applied to arenas whose values and goals are remote from the values and goals of business. People aren’t disk drives. Public schools, colleges and universities, churches, museums, and many hospitals, all of which have been subjected to disruptive innovation, have revenues and expenses and infrastructures, but they aren’t industries in the same way that manufacturers of hard-disk drives or truck engines or drygoods are industries. Journalism isn’t an industry in that sense, either.

Lepore says all this, but spends little time on it; having noted that people aren’t disk drives, she spends most of her essay observing that the theory of disruptive innovation doesn’t really apply to disk drives anyway.

I’d hazard a guess Lepore knows her essay works better this way. A significant portion of her readership would find it tedious to be told less briefly that we need to remember, or revive, the language of public trust, public interest, public service.

Lepore’s choice of emphasis reminds me of the origins of American liberalism in a different age. Back in the early 1900s, Charles Beard noted that merely to tell Americans that their factories were injuring workers more wantonly than those of any other country would fail to move a nation so fixated on profit. You had, he said (and I’m paraphrasing, because I’m not able to look it up at the moment), to tell the American people that it was inefficient to keep killing workers – that it was a waste of human capital, an unproductive use of resources.

This rhetorical tactic aims at moral ends by appealing to a venal calculus. Like the commuter who rescued his fellow-citizen from a train track because he didn’t want to be late to work, maybe we will rescue our public goods from disruption – not because it’s the right thing to do, but because we won’t profit if we don’t.

{ 168 comments }

1

William Timberman 06.24.14 at 6:02 pm

I’d hazard a guess Lepore knows her essay works better this way.

Framing again. Game theory again. Do I reveal my antediluvian origins if I say I regret the necessity? Well, so be it. Fortunately for all concerned, irony has no power whatever against the inevitable. (That roar you hear in the background is the sound of a global intelligentsia outsmarting itself yet again — a sound very like that, if memory serves, which attended my own intellectual individuation.)

2

SN 06.24.14 at 6:14 pm

What’s driven me crazy from the start about the gospel of disruption is that on one reading it commits the naturalistic fallacy–we should change everything because this thing is happening. Even if it were true, there’s no evidence that we would know how to predict and act on the disruptive process. Or that we should act on it. But if you don’t assume that, you can’t make the money on disruption.

Note that the New Yorker put Christiansen out there as some kind of profit earlier, which was extremely irksome.

I literally cackled with glee about 2 paragraphs in. I’ve been desperately waiting for someone to puncture this balloon.

Another glorious thing about her piece was that she really shows how the capacity to do actual historical analysis is necessary for these wanna-be gurus. (Well, necessary if they want to make claims approximating truth. It’s not necessary for them to make absurd ideological claims and make money doing so. Thomas Friedman’s house is proof of this.) And they don’t have a clue how to do history.

3

shah8 06.24.14 at 6:20 pm

You will not believe how hard it is for people to understand that secondary argument. Jaysus.

*ahem*

Never mind venting little ole me.

4

shah8 06.24.14 at 6:32 pm

Ah, I should explain just a bit more:

The problem with intelligent people is that they can create elaborate arguments to buttress weak sentiment, e.g. Charles Murray. Because people are complex and contrary, such gossamer arguments usually depend on talking about essential aspects, where there aren’t any, of people. The arguments are constructed that way because it slants the playing field anytime the axiomatic stuff isn’t blasted to smithereens. Adversaries thus tend to find venally neutral terms in place of acid and evisceratory rhetoric, of course, in the name of decorum. We all then start talking as if capitalist utilitarianism is here, natural, and always the best dictionary and thesaurus, no matter how crazy the bland is…

5

Ed Herdman 06.24.14 at 6:38 pm

Quite a long article, so I’ll have to come back to this. There’s still a couple things I can say here:

One, how did all the “Innovator’s Dilemma” discussion totally miss the phenomenon of the Hidden Champions (or the Mittelstand, as it was once called in Germany)? When these companies are “disrupted” it seems plain to me that we are likely looking at an opportunity for data point-picking, but the bulk of Hidden Champions continue along for the long run.

Has there been a sustained critique of the idea before now? This blog post has some commentators already moving in the direction of questioning the possible value the “innovator’s dilemma” could have in, say, a discussion of healthcare. Jill Lepore mentions a facet of this that wasn’t immediately obvious to me: Not only are some types of job not ripe for innovation, but there are in fact many types of job those ethics are betrayed by the mindset of disruptive change.

There is a great exchange here between Timothy Geithner and NPR host Robert Siegel, where Geithner argued that “banks are different.” The whole exchange is noteworthy, as Siegel presses Geithner with the point that the apparent complexity of banking looks like an innovation. Geithner denied this, stating that it was essentially a regulatory and scale problem:

This was not a crisis caused by financial innovation on a massive scale. It wasn’t a crisis caused fundamentally by a set of new fancy things that, in retrospect seem very risky. It was a crisis caused because we had a long period of confidence that it was safe to lend a lot of money, safe to borrow a lot of money relative to income, that your house prices would never fall, that recessions would be short and shallow.

We can believe Siegel, and we say that banking and innovation don’t mix. We can believe Geithner, and we still must say that innovation and banking don’t mix. In truth, how many bankers likely told their bosses at review that they “weren’t in the business of innovating?” How many shareholder packets claimed that?

One final note. How much misplaced faith are people putting in “the innovator’s dilemma” as the answer to inequality? My guess is – a whole lot. I’m not sure how much it can do in most industries, where abuse of the patent system and high capitalization simply close off opportunities for prospective competitors. Yet this is probably likely to be presented as “the good part” of destroying established companies.

6

geo 06.24.14 at 7:12 pm

Great post, Eric. Thanks particularly for the quote/paraphrase from Charles Beard. When you find or remember where it’s from, would you mention in a comment or update?

7

Kevin Donoghue 06.24.14 at 7:43 pm

Interesting. Maybe the way to sell gun control to Americans is to point out that massacres of schoolchildren result in the destruction of potentially valuable human capital, which is uneconomic.

8

Trader Joe 06.24.14 at 7:52 pm

An excellent article.

Wall Street spends 58 minutes of every hour trying to predict which technologies will prove to be disruptive and which will make little difference. History has proven definitively that despite all of energy and motion they can do this correctly exactly 50% of the time (less fees and expenses of course).

(Before anyone asks, the other two minutes are spent pilaging innocents, maiming adorable puppies and otherwise causing global mayhem, unless of course they are simply wasted.)

9

The Temporary Name 06.24.14 at 7:59 pm

A sort of embarrassing response, I think:

http://www.businessweek.com/articles/2014-06-20/clayton-christensen-responds-to-new-yorker-takedown-of-disruptive-innovation

But Christensen understands a key point:

Well, in the first two or three pages, it seems that her motivation is to try to rein in this almost random use of the word “disruption.” The word is used to justify whatever anybody—an entrepreneur or a college student—wants to do. And as I read that, I was delighted that somebody with her standing would join me in trying to bring discipline and understanding around a very useful theory. I’ve been trying to do it for 20 years.

10

Peter King 06.24.14 at 8:31 pm

As regards Lepore’s secondary argument, in Systems of Survival Jane Jacobs argued at length that applying the values and goals of business to enterprises whose values and goals are different is problematic. Jacobs said that doing so produces “monstrous moral hybrids”.

11

Anarcissie 06.24.14 at 8:32 pm

I’ll resume my role of third-grader here and ask: Didn’t Marx write ‘The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society. … All that is solid melts into air,’ etc. So is Lepore and her fans here arguing against Marx, or is disruption different from revolutionizing the means of production? I’ve generally found that observation of Marx repeatedly confirmed in daily life, especially amid the corps, and it certainly seems to be functioning well to immiserate that part of the working class who still have jobs. I recently read a sort of biography of Western Electric, and while it was modest in its style, diction, and intellectual penetration, it chronicled a history of constant creative destruction well enough, right up to the point where it was finally creatively destroyed itself. No doubt the money men crawled out on top and went to infest some other wreck-to-be. That’s the way we do things, isn’t it?

12

Stephenson quoter-kun 06.24.14 at 9:01 pm

I always thought that “disruption” was something about how you can’t beat the local maximum by starting from the local maximum (because someone else is there already), so you have to start somewhere else (“downmarket” is the typical example); in turn, the occupier of the local maximum won’t be able to compete with you once you’ve found a higher maximum. Of course, that’s also pretty much tautological if you assume that incumbent businesses occupying the local maximum will refuse to leave it – you just need to assume that some greater maximum exists elsewhere, then start climbing a bunch of hills until you find it. It certainly makes a neat model.

The problem is that Clay Christensen picked the aggressive-sounding word “disruption” for this concept, and people now think that calling their crummy new business “disruptive” makes them sound edgy and exciting. Rich middle-aged white men exhorting their naive proteges to be more “disruptive” is not a pretty sight for anyone with a modicum of self-awareness.

These people are certainly distasteful. It does not follow, however, that they are necessarily wrong. Maybe the top of the hill that the MOOCs are climbing right now is going to turn out to be higher than the hill that traditional universities are sitting on. It’s probably worth finding out if that’s the case. In the abstract, the idea that new interactive and communicative technologies ought to change how we educate ourselves (and how much that costs) does not seem particularly outlandish. I can’t feel terribly upset that some people are trying it, even if I think they’re occasionally a tad obnoxious about it.

Is being “disruptive” good for business? In a way, probably not. It rests on the assumption that the path less traveled does actually lead to a pot of gold, which probably isn’t true in most cases. Trying to disrupt an industry is hard and most of the time it won’t work. Most plans to disrupt existing, proven business models are simply going to fail. It might be better in most cases to aim lower and make some existing business a little bit more efficient.

The flip-side is that improving existing institutions might be even harder. There’s good evidence that most improvements in productivity come about through the entry of new firms rather than the sudden improvement of existing ones (whatever Bain Capital might say otherwise). Hierarchical organisations really don’t like listening to the tier 7 functionaries even if they have a much better idea for how the business should work than the people who are in charge. It’s probably a good thing that some firms get disrupted, and the ones we should be really afraid of are the ones who seem to be immune to it.

I’m not sure I get Eric’s point about why, then, some organisations – those consisting of “people”, as opposed to the soulless droids who start, own, operate or work for other organisations – ought to be immune from disruption. The example institutions were, in some cases, disruptive themselves once. Churches have pretty much always been in the business of disrupting each other, and using technology to do so. I’m going to hate myself for typing this, but many religious movements start off as downmarket outsiders, being dismissed as cranks by the establishment, which they eventually infiltrate and take over. At a sufficiently abstract level, that’s disruption in action. There’s no obvious reason why organisations of people cannot, or should not, be disrupted.

I can understand people saying that they don’t like the specific disruptions on offer: disrupting education is simply not possible as universities represent a centuries-old tradition that cannot be improved upon by a team of Silicon Valley 20-somethings on caffeine drips; or, if it is possible, it will lead to education that is worse, not better, and therefore we must now allow it; or, even if it is possible to deliver better education by some measure, the wider costs make it undesirable. The problem is that if you’re picking your arguments from The Rhetoric of Reaction, you’re probably not making very good arguments. Sitting athwart history shouting “stop” has never worked very well, least of all in America.

If I’ve understood correctly, the argument is that, since disruption isn’t the only way to improve things, we could profitably attempt to rediscover some of the other ways. To borrow from Hirschman again, we could use a bit more Voice and a bit less Exit. To which I would wholeheartedly agree, but I would point out that here the disruptionists have an advantage: they’re well-organised, well-funded and have a clear and ambitious program of action. Those of us who think that we could make institutions run better by, say, making them more democratic, are sadly reduced to carping about the excesses of the other side most of the time.

13

Stephenson quoter-kun 06.24.14 at 9:05 pm

(“…must not allow it…” in the middle of my penultimate para)

14

AcademicLurker 06.24.14 at 9:24 pm

The problem is that if you’re picking your arguments from The Rhetoric of Reaction, you’re probably not making very good arguments. Sitting athwart history shouting “stop” has never worked very well, least of all in America.

The trouble is that that line of argument can be used to push any brand of snake oil or hucksterism or just plain bad idea under the sun.

“There’s no point in sitting athwart history shouting ‘stop'; in the future everyone will be ordering their pet food online. You might as well get on board with the inevitable and buy as many shares of pets.com as you can…”

15

Metatone 06.24.14 at 9:29 pm

I should probably re-read the Lepore article because on my first reading I thought “some good points, but it could have been a so much better article, with a bit more focus and details…” but then, innovation theory is something I’ve spent plenty of time with…

@stephenson qk

1) I think the point is that sometimes the theory of disruption breaks down and is effectively snake oil. For example, a lot of the stuff in healthcare about “using technology to overcome Baumol” is actually just about selling people on a lower, less effective service. Christensen would point out that it’s not real disruption if the original low-end product never gets better, but that rarely stops the hype machines… (And indeed, he also distinguishes the “good enough” low-end product due to tech advance as a separate case.)

2) If you look at studies from the US/UK you get mislead into believing productivity advances come from entry/exit. In Germany/S. Korea, pretty much the opposite. The evidence for exit is mostly sentimental trash from glibertarian romantics who like to believe in some non-existent underdog economy in the USA…

16

Page 06.24.14 at 9:36 pm

“This rhetorical tactic aims at moral ends by appealing to a venal calculus. Like the commuter who rescued his fellow-citizen from a train track because he didn’t want to be late to work, maybe we will rescue our public goods from disruption – not because it’s the right thing to do, but because we won’t profit if we don’t.”

This could very well work, and sometimes does; but then the problem is of course, what happens when we are faced with a situation where the right thing to do is not efficient, and does not save resources? 100+ years (at the least) of liberals making this tactical decision in terms of argument makes sense in the short term — it’s a good strategy — but is disastrous in the long term, as we actually feel awkward, queasy, and annoyed by argument about the public good and the ethical society. Since not enough people go ahead and make that argument, we lose the capacity to even make it a viable option, strategically speaking.

17

Phil 06.24.14 at 9:38 pm

The key to ‘disruption’, and what distinguishes it from the ‘creative destruction’ thinking which it draws on, is the premium it puts on the cheap and nasty: quality is the enemy, because mediocrity is cheaper and hence will outsell it. This in turn means that the people you want to empower are not the people doing the work – least of all if they’re doing the work because they believe in it – because they’ll just drag you down with their professionalism and their belief in a job well done. Disruption is explicitly anti-worker, and (incidentally) anti-Tom Peters and anti-Peter Drucker into the bargain. (Argument borrowed from here.)

18

bob mcmanus 06.24.14 at 9:43 pm

The Real

The primordial Real in which a (pre-Oedipal) human subject is born is differentiated from the real which a subject integrated into the symbolic order experiences. In the former, the real is the continuous, “whole” reality without categories and the differential function of language. Following the mirror stage, however, and the eventual entrance of the imaginary and the symbolic (the split of the subject between the conscious imaginary and the unconscious symbolic), the real may only be experienced as traumatic gaps in the symbolic order. An example of this are traumatic events such as natural disasters, which effectively break down the signification of everyday life and cause a rupture of something alien and unrecognizable, without the usual grammar of the symbolic that conditions how to make meaning of something and how to proceed.

But that’s a little narrow and technical. We come into being as speaking subjects by means of a disruption in the Symbolic.

And of course, what Anarcissie said. And also, the proletariat comes into class consciousness-for-itself by means of a rupture with the prevailing hegemony. Revolution is a rupture with atrophied institutions. Etc

It is very bourgeois liberal to be frightened of a discourse of discontinuous change.

19

bob mcmanus 06.24.14 at 9:51 pm

And I didn’t even mention RBC theory and real shocks. Or Naomi Klein.

The Lapore article is a great example of the kind of sensible writing that enforces and maintains an ontological hegemony.

20

bianca steele 06.24.14 at 9:59 pm

Phil’s comment, not surprisingly, is insightful (and his link foregrounds some things Lepore herself says (not all of which I agree with)). But the point of disruption, and you see this is you read Lepore’s article, is not that employees hold back companies from surviving. It’s that non-survival is a foregone conclusion. Disrupted companies can hold on for years, sometimes, but not forever, and they never come back to where they once were. That doesn’t mean–and no one says, except the kind of people who were chanting “paradigm shift” twenty years ago–that everyone is disrupted. It does mean that once no one wants minicomputers anymore, you can’t just make better minicomputers and still play in the big leagues.

Back in 1990, companies were dealing with two disruptions: the PC and Microsoft. We are down to exactly one company that existed in 1980, out of a dozen or more, still making a good amount of money on state-of-the-art computers (and IBM and a few others in smaller markets). On the other hand, in 1995 it had been “decided” that nobody could compete with Microsoft and they’d have 100% of every software market, and that did change.

21

Brett 06.24.14 at 10:06 pm

@Metatone

1) I think the point is that sometimes the theory of disruption breaks down and is effectively snake oil. For example, a lot of the stuff in healthcare about “using technology to overcome Baumol” is actually just about selling people on a lower, less effective service. Christensen would point out that it’s not real disruption if the original low-end product never gets better, but that rarely stops the hype machines…

I don’t think it’s about selling people on a less effective service, although it can be about selling them a cheaper one. If you look at stuff like the increased use of robotics in surgery and IBM’s Watson as a diagnostic tool, the eventual hope is that you might be able to make health care cheaper and more reliable, especially if you don’t need doctors for a whole bunch of medical tasks.

There’s definitely a “snake oil” element, although that’s mostly with the use of “disruption” as a selling point. It’s just a way to make startups that are usually too risky for banks to touch and too expensive for the entrepreneurs to self-finance to appeal to the vanity of rich would-be investors. There’s plenty of precedent for that – British banks in the late 18th century usually wouldn’t touch factories as investments because of the risk and perceived tawdriness of them, at least from what I remember of reading Peter Stearns.

2) If you look at studies from the US/UK you get mislead into believing productivity advances come from entry/exit. In Germany/S. Korea, pretty much the opposite. The evidence for exit is mostly sentimental trash from glibertarian romantics who like to believe in some non-existent underdog economy in the USA…

South Korea had plenty of entry/exit, including among the Chaebol Conglomerates. That was something that Joe Studwell pointed out in his book about how East Asia industrialized while talking about South Korean industrial policy – most of the giant conglomerates around today are not the same ones that existed back in the 1960s and 1970s in South Korea.

22

Ed Herdman 06.24.14 at 10:09 pm

Anarcissie & quoter-sama:

I’m not sure what the Marx quote has to do with disruption in this case, but it’s a point worth pursuing. The “innovators” really don’t care about the relationship between business or workers – hence SN’s mention of the naturalistic fallacy. The author’s focus on capitalism in America at a particular period in time does not mean that we can’t apply these same categories to relationships between workers. It’s an interesting omission.

This Amazon review by Kartick Vaddadi of The Innovator’s Dilemma says the book contrasts three types of change. All of them are useful for consumers. Then there is a discussion of how it is that responsiveness to protecting particular kinds of change is useful and gets enshrined in companies, and where it isn’t.

Kartick Vaddadi’s statement that SSDs in computers are “disruptive” over regular hard drives is right – if we mean what the difference is for consumers. If we’re talking about the difference to manufacturers, though, patent portfolio sharing and cross-licensing, as well as the expiration of many fundamental research patents, mean that there are a large number of companies that manufacture them.

Many other recent technologies that are arguably “disruptive” have been developed within a notably stable industry. Take the video space: sedTV and FED could have been disruptive for providing great new displays, but cost ruled them out years ago. Digital coin miners have kept graphics hardware manufacturers nVidia and AMD well in the black for a period, though that party is now over. It’s not just external events that push these changes, though: AMD and nVidia seem to mirror each other when they roll out DX12 (from nVidia, in collaboration with Microsoft) after Mantle, or when AMD decides it needs FreeSync after nVidia announces G-Sync. These are two technologies (and standards) that provide that experience of a “disruptive” improvement to consumer technologies, and they appear to have been done through cooperation, instead of winner-takes-all strategies.

Both companies are paying very close attention to ways in which they might be able to catch up their competitor dipping into forbidden secrets, in hopes of forcing a disruptive exit from the marketplace. But it’s not clear that this is anything more than just churning on. Even in the case where some company can force such an issue through the courts, the government has been cautious of throwing an established company overboard (when such a large part of the economy could trail behind it). At this scale, companies are more likely to settle for patent cross-licensing and royalties to evade criticisms of monopoly (which is basically one result of directionless “disruption” taken to the extreme), as with Intel and AMD.

Yet the idea of disruptive technological development isn’t all bunk.

Onto quoter-san’s point: The “local maximum” sounds close to saying that there is an upper bound of some type, like ‘how pure can we refine our materials,’ ‘how precise are the production processes,’ ‘which metallurgy and crystallography textbooks do we read.’ All these things can improve over time. But at every step the level of research and understanding is far less than it could be, so we never actually do what is “optimum” (or among the optimal choices) when imagining a complex piece of technology. Only relatively recently (I think in the mid-80s) did we really start moving computer modeling of technology to incorporate physical modeling. And of course there is a limit to how far we can spend calculating what is best. Electrical engineering textbooks state as standard that you can use a “lumped load” model for many tasks, and below certain frequencies you don’t need to pay close attention to RF effects and the like. The latter is an omission by design; the former is omitted by accident.

The idea of “disruptive technologies” is best when it points out that not only do we somewhat lag behind achieving what is possible, but in fact whole fields of discovery often go unnoticed due to accidents of history, physiology, and everything else. Start thinking of “what would aliens value in technology?” or alternative histories (wouldn’t Neal Stephenson approve?) and this becomes clearer. What if IBM researchers hadn’t stumbled across the eclectic raft of insights (spin-coating, the analogy to vinyl discs) that made the magnetic rotary hard disk a reality in 1956?

“Disruption’s” place in advancing technology seems way overrated. We can find Usenet posts from the early 1990s with people accurately predicting how much RAM people would have. Moves away from 2D manufacture to more 3D manufacture were known and used by Seymour Cray when his computer company was relatively young, even though only recently have such ideas started to be developed for consumer products.

But it still happens.

The basic problem seems to be a simple human one: It’s easy for bureaucracies to get too focused on things that are entirely extraneous to the decision making, and even if they try to do everything right, there’s still the possibility somebody else will find that low-hanging fruit first. The key, I think, is trying to figure out whether we actually need companies to become immortal institutions – are HP or IBM immortal? GM or Ford? – and also how it is that we can make sure that companies with the expertise and the people get rewarded.

I’ll just end up by mentioning one of the all-time technology whoppers: Sight-shorted businessmen looking for something like the next “disruptive change” gave away one of the crown jewels of 20th century display technology, because the grass was greener on the other side. From the piece:

The four Jewish men who worked in an almost-secret division called Autometric for Paramount Pictures on the project then called Chromatron—which after a handshake became the Japanese “invention” the Trinitron—are barely a footnote on Wikipedia, while the engineers at Sony live on in glory. Nobutoshi Kihara, who in 2011 died in Tokyo at eighty-four, was as celebrated in Japan for his role in the Trinitron’s invention as he was for inventing the Walkman. The project was sold for a mere one million dollars in a deal cooked up at a cocktail party. Within a few years it made billions, the Trinitron dominating the world market. Sony tweaked five years of research for sure, but in this daughter’s opinion they should share credit. Even if in my father’s opinion: “Who cares? I don’t think about it, only you.”

The story as I have it so far, is that the stores wouldn’t stock color sets because the picture was so unsteady. Engineers were under fire to produce a bankable consumer model. The head office was always breathing down their necks. Someone was going to make a killing. If a man at RCA made the breakthrough, it would reestablish his company as the leader. The big executives visiting the floor would say things like, “That Tokyo fellow put SONY on top of the map with the transistor radio. Out of nowhere, they led the world.” Or: “Think bigggg. New ideas saved Ford, the ’49 Sedan was introduced in ’48 and saved the company from bankruptcy.”

Finally, prediction #4 off this list should sound pretty familiar today.

23

bianca steele 06.24.14 at 10:09 pm

And sure, “big leagues” begs the question. If popularity doesn’t matter, and you think IBM’s or Honeywell’s product (whatever those are) are higher quality than a Lenovo laptop–and they probably are, in a lot of ways–pointing out that IBM doesn’t make PCs anymore and whatever acquisition of Honeywell’s, which used to do so doesn’t, either, is irrelevant.

24

William Berry 06.24.14 at 10:15 pm

@bob mcm:

Sometimes I work hard to agree with you; more often I have difficulty getting past my initial “Oh, FFS.”

25

Bruce Wilder 06.24.14 at 10:50 pm

If I say, “don’t think of a pink elephant!”, can you avoid imagining a pink elephant?

The Lapore article is a great example of the kind of sensible writing that enforces and maintains an ontological hegemony.

If I say, “don’t think of an ontological hegemony”, can you avoid imagining an ontological hegemony?

26

Ed Herdman 06.24.14 at 11:04 pm

“Ontological hegemony” is one of those big green things they put around large British estates, isn’t it? They used to hunt people in them.

27

bob mcmanus 06.24.14 at 11:05 pm

Hey! No fighting in the War Room more disruptions of the disruption thread!

I have surely reached my quota for this thread

28

Thornton Hall 06.24.14 at 11:11 pm

Don’t want to derail substantive discussion here. But do want to note that the principle triumph of Reaganists is the invidious creep of market think into all aspects of life.

29

shah8 06.24.14 at 11:15 pm

I immediately thought of this thread when reading: https://www.techdirt.com/articles/20140622/06531127647/course-tesla-wasnt-just-being-altruistic-opening-up-its-patents-thats-whole-point.shtml

The point about how hard the business press focuses on the non-normal-ness of Tesla sharing its patents is very applicable. We are encouraged to think of disruption in antagonistic, competitive ways. We are encouraged to think of cannibalistic business plans as being dangerous. It’s all about who’s winning and who’s losing in the papers, when disruptive change is fundamentally about the rewiring of networks and the construction of new networks of more modern conceptions. When Tesla wants to do a little mutualism, patent lawyers stand agape. They will not be disrupted.

30

J Thomas 06.24.14 at 11:18 pm

This is just recycled Schumpeter.

Schumpeter tried to reason out how it was that there were so many obvious market inefficiencies and so much obvious waste in the economy, when the invisible hand ensures that there will be hardly any waste or inefficiency.

He argued that each industry inevitably approaches monopoly, and this makes it easier for innovators to come up with alternative technology. The old established industry has had a long time to improve on their learning curve, they will be somewhere near their local optimum. The innovators will be far from their own local optimum, but they must get better than the established approach before they can compete. Monopoly lowers the bar, and so helps to increase the rate of innovation.

He argued that business cycles are a good thing because in recessions the least productive businesses fail and so release the resources they were inefficiently using to be available for new purposes. People see the inefficiency of recessions, but they don’t see the higher efficiency they cause.

Left to itself, everything the economy does encourages creative destruction which improves the economy in the long run.

Schumpeter made JustSo stories to explain the contradiction between observed facts versus the theory of efficient markets.

Anyway, apart from the hoopla there is something important about the disruptive concept. If you are running a business in a particular market niche, and you get an innovation which results in

1. Higher prices
2. Bigger sales

that’s very good. Like, customers get improvements they are willing to pay more for, and also those improvements let them use your product more. Even after your competitors catch up with you, you get a slice of a bigger pie.

But what if instead you get an innovation which results in

1. Lower costs
2. Lower or same sales.

Then you can sell cheaper and increase market share. But when your competitors catch up, you get a slice of a smaller pie.

If you already have a significant market share, you benefit from the first kind of innovation and you suffer from the second kind. But if you start out with no market share, you benefit either way. Assuming you have sufficient resources to actually break into the market with your cheap innovative product.

There are various ways to assign importance to this. It’s a concept that has some uses. I don’t see that it has a lot of moral significance, unless you are in the market for moral justifications and you think this is a better fit to your needs than competing intellectual products.

31

William Timberman 06.24.14 at 11:40 pm

Bob, it’s no use. Ontological Hegemony, Inc. doesn’t need a standing army — there’s never any shortage of volunteer defenders both savage and genteel. Maybe if you called it Maggie’s Farm instead you’d seem closer to the soil, and therefore more trustworthy, more the sort of person they’d like to have a beer with. And then they’d listen, right?

For what it’s worth, way back here in the last row, me, I’m listening, and I prefer it as it comes, if you please, without all the customary hail fellow well met. (It’s hard enough to think about these things as it is without the added burden of appearing respectable — let alone chummy — while I’m doing it.)

32

Bruce Wilder 06.24.14 at 11:43 pm

Business is boring and discouraging for most of those participating. There’s a market for preachers, who can feed the spiritual need. Clayton Christensen, I’m sure, imagines himself a scholar and a theoretician, but what he is, is a coach-at-half-time of a losing game for dispirited salesmen, wishing they were doing anything half as meaningful as playing a high school basketball or football game.

For this reason, the strongest parts of Jill Lepore’s essay, for me, concerned the concept of disruption as a cultural phenomenon, expressing the intense anxiety of the times. (And, bob mcmanus, with all the incisiveness of the impenetrable Nagel, may have been addressing this, I don’t know.) I wanted her to make the connection between the depth psychology of the faith in disruption and the yawning vacuum where public purposes and ethical commitment should be in the political and business discourse. I wanted her to make that connection and explain it, and I feel disappointed.

She did try to challenge the pretension with which Christensen transforms his “case-studies” into just-so stories, decorated with bumperstickers masquerading as analytic concepts. It is kind of mean to challenge Christensen’s enthusiasm for “disruptive” innovation with the fact that Seagate, a focus of one of his first studies, is still the largest hard-drive maker, after more than 40 years. And, I like mean. But, it was not clear to me what her point was. Ditto, for the observation that U.S. Steel is a unionized workplace. And, for the record, journalism is a profession; journalists work for businesses that publish stuff.

33

Thornton Hall 06.24.14 at 11:56 pm

@30 So much of public discourse gets confused by the fact that journalists think journalism is a pure public good.

34

The Temporary Name 06.24.14 at 11:58 pm

For this reason, the strongest parts of Jill Lepore’s essay, for me, concerned the concept of disruption as a cultural phenomenon, expressing the intense anxiety of the times.

I may not be a cheery and content person but I don’t recall the times that weren’t anxious. Maybe “disruption” is the Late, Great Planet Earth for suits.

35

Bruce Wilder 06.25.14 at 12:37 am

J Thomas @ 28 I agree, Christensen’s ideas do seem to be a recycling of Schumpeter’s in some ways.

Schumpeter could use the term, economic rent, in a sentence and hope to be understood. He understood that the economy had a structure, and economic rents marked out power in that structure. Christensen’s ideas have evolved in the direction of emphasizing the business model, and the potential of a new technology to enable or require a different business model. Schumpeter would have understood “disruption” in terms of capturing or diverting sources of economic rent. Early Schumpeter celebrated the entrepreneur as a hero of wild spirit; late Schumpeter was very impressed by the organizational resources of the large American business corporation, with its R&D labs and planned obsolescence. In Capitalism, Socialism and Democracy, when “Socialism” was closely associated with central planning, Schumpeter wondered aloud whether planning by giant corporations would not come close to driving what we would call start-ups — the founding of wholly new enterprise on new principles and producing new products — toward practical extinction.

Schumpeter did not foresee just how far the processes of incremental improvements would carry us. Nor do we fully appreciate how very different the world of work and business seems as a result of the progress of incremental innovation in the processes of making things. The business model for building a railroad wasn’t so hard to figure out: you bought land along the route, in anticipation of the effect building the road would have on property values. And, once the railroad was built, the railroad had considerable advantages in speed and cost of transport with which to bargain over rates, though many roads went bankrupt discovering that merchants gained considerable leverage as well, knowing that the railroad was stuck with its sunk-cost investments and sizeable overhead. Still, the business model, so to speak, had tangible elements forming a visible outline.

Did you know that a television network was originally based on ownership of a high-capacity transmission line connecting member stations? That was the eponymous “network” and its costs were considerable enough to form part of what economists used to call a barrier to entry, along with factors like the limited number of television channels in each market — there were only 12 on the VHF dial back in the day, and less than half of those available in any given city — and the huge costs of esoteric devices like cameras, not to mention the highly trained, unionized technicians.

Now what’s a television network? A website and a Roku app? One of the biggest sunk-cost investments might be the marketing concept and the logo design.

That’s an extreme example, but it’s the outcome of a general trend. The unit costs of manufactured goods has become remarkably low, and the proportionate effect of investments in intangibles like “brand” very large. Christensen is haunted, I understand, by a missed prophecy regarding the iPhone and Nokia, which he tries to explain away by a reference to smartphones competing with (disrupting) personal computers. But, personal computers are disrupting themselves, by becoming so cheap, that you cannot build a company with the overhead of a Dell or H-P around them.

I wouldn’t recommend that anyone get their religion from the Harvard Business School, but I can see why businessmen might feel the need for one.

The world must seem fragile, indeed, when business rests not on tangible brick-and-mortar and the quasi-rents of expensive machines or the expertise of loyal workforces, but on brand names, clever graphics and intellectual property claims.

36

Bruce Wilder 06.25.14 at 12:45 am

Temporary Name: I don’t recall the times that weren’t anxious.

Yes, of course. To every age, etc.

I thought Lepore was fairly clear, though, in tying this particular concept of disruption to the particular character of our anxieties, in contrast to other times.

37

Anarcissie 06.25.14 at 12:46 am

Ed Herdman 06.24.14 at 10:09 pm @ 20:
‘I’m not sure what the Marx quote has to do with disruption in this case…’

My thought was that disruption was not a novelty, but inherent in capitalism. Lepore says, very generally, well, it didn’t really happen, a lot of the old companies are still around, a lot of the new disruptive ones disappeared, and so on. The focus is on companies. However, to take one example, the PC didn’t disrupt the computer world; it disrupted the office, the workplace. In 1960, business offices were full of people typing, running mechanical calculators, running copiers, receiving and sending and carrying mail around and so forth. A lot of the jobs required a certain amount of skill and knowledge and were sometimes paid accordingly. Thirty or forty years later, most of those people were gone because their jobs were gone. Some of them wound up programming computers and some of them wound up as associate assistant manager of the produce department in the local Safeway. A good many of them went on Welfare or Disability or retired early. So the PC and related equipment were the means of chopping out a significant section of the middle working class, the substance of many communities. It was part of stopping the mill that turned immigrants, internal and external, into worthy citizens; it was part of the turn where ‘we’ started going down, although our companies and their leaders were continuing to go up. That is how this particular phase of disruption worked.

38

The Temporary Name 06.25.14 at 1:00 am

I thought Lepore was fairly clear, though, in tying this particular concept of disruption to the particular character of our anxieties, in contrast to other times.

It does occupy a funny space as a manual for and justification of self-immolation.

39

Bruce Wilder 06.25.14 at 1:01 am

A lot of them went into administration and management and “services”. A kind of Jevons effect took over, but one with darker motives than just wasting paper on the long, long way to the paperless office. Administration began to busy itself with very complex administrative tasks, the better to make itself essential and valuable, re-organizing for the brave new world. “Disruption” could be a friend to a certain sort of administrative busywork. Isn’t that part of the message of Lepore reflecting on her early temp career? The growth of Administration drove out-sourcing, for example, and the use of temporary workers on contract. Administration began to eat the University alive. And, it’s goal is the MOOC, the equivalent of my television network qua Roku app, where all that’s left to do is administer the revenue stream.

40

bianca steele 06.25.14 at 1:02 am

In 1960, business offices were full of people typing, running mechanical calculators, running copiers, receiving and sending and carrying mail around and so forth.

Heck, in 1975 my Highlights magazine came with an address label written out longhand! In 1959 the US Government and General Motors sent out payroll checks engraved on rock–true fact!

Seriously, trying to drum up sympathy for the person who lost their job saying “we need this in triplicate” and “that was a computer error” like they did in 1970, by claiming other industries not only caused their problems but that other industries didn’t have job losses themselves, seems to me terribly misguided.

41

The Temporary Name 06.25.14 at 1:05 am

Seriously, trying to drum up sympathy for the person who lost their job saying “we need this in triplicate” and “that was a computer error” like they did in 1970, by claiming other industries not only caused their problems but that other industries didn’t have job losses themselves, seems to me terribly misguided.

Should sympathy be drummed up for that person?

42

bianca steele 06.25.14 at 1:08 am

Should sympathy be drummed up for that person?

WTF kind of a question is that?

43

The Temporary Name 06.25.14 at 1:10 am

WTF kind of a question is that?

One kind. Do you figger that person deserves sympathy?

44

bianca steele 06.25.14 at 1:13 am

Is that a question you really think the answer might be “no” to? What a craptastically insulting thing to say.

45

The Temporary Name 06.25.14 at 1:20 am

My apologies then. But why would sympathy from that angle be terribly misguided?

46

Ed Herdman 06.25.14 at 1:21 am

@ Anarcissie / #37:

I think I reached close to the same conclusion in my second overlong post, roughly.

If you’re saying that there is a disruption inherent in capitalism and that focusing only on one aspect of it causes a disconnect with reality – then probably, yes, that appears to be the case.

Not sure that it’s quite accurate to the history of IBM to say that the PC didn’t disrupt things – but it’s really beside the point (for reference, I remember an IBM insider saying “IBM at the time had the people, had the technology, everybody was ready to go…and the company just didn’t.”) The PC, and the Microsoft/IBM split, really was disruptive for IBM.

The bigger story behind that, though, is this: IBM’s still around, and they’re still selling services and computers that would look fairly familiar to people who sold System 360s back in the day. So it turns out that protecting that market actually has kept IBM in good stead. They weren’t beating the world with software development, during the heyday of Microsoft, but they didn’t need to be.

@ bianca steele / #40:

I’ve seen stacks of old printing plates used by IBM to print their punched cards. You can probably find them on eBay still. It’s not a stone tablet – but close enough, right?

Interesting point on shifting blame. In this discussion, you often hear people say “we have to spin off a company to protect the main company (and also isolate the spinoff from entrenched staid corporate culture), and that “entrepreneurs” must always try on their own and fail repeatedly. There are lots of emotional reasons why these things might happen, but I can’t accept the argument that things must be this way, that companies can’t have internal leadership to follow a new vision while protecting old strategies. The idea that a spinoff is isolated from the main company seems silly, like moving an office across the street or into another state somehow means that it’s no longer in competition with the old markets.

47

Bruce Wilder 06.25.14 at 1:29 am

Because entrusting internet and cellphone technologies to a company with “telegraph” in its name has worked out so well.

48

J Thomas 06.25.14 at 1:40 am

#37

Lepore says, very generally, well, it didn’t really happen, a lot of the old companies are still around, a lot of the new disruptive ones disappeared, and so on.

http://www.thinkinenglish.com/jokes_in_english.php?option=kawal&id_kawalu=972

But senor, the old nondisruptive company does not always lose.

49

Ed Herdman 06.25.14 at 1:58 am

@ Bruce:
You mean the company that invented many of those same technologies?

There is the Bad Bell, which had to be fought on issues like Carterfone, but there is also a Good Bell which theoretically allowed stability, and developed a lot of the ubiquitous technology of the ‘net and telephony, either internally, or at Lucent, or whatever else got spun off. Simplistic, maybe.

I’m more interested in restricting companies from doing bad than I am with blowing them up, and ensuring that the tech landscape is forever fragmented. Standardization could theoretically help but I don’t think a Kropotkinesque (“Fields, Factories, and Workshops”) view of small local players adhering to standards would help with economies of scale.

But maybe I’m wrong in this – it’s been argued for a long time that you have to reach a critical mass in having the right people in the same place to do big things, but a lot of our big tech standards are done at cross-industry meetings, and Big Thinkers tend to step on each others’ toes anyway.

50

shah8 06.25.14 at 2:16 am

okay, a bit OT, but what’s the deal with all the replies with comment numbers that don’t match? I’m having to work a bit harder to follow what’s going on.

51

Anarcissie 06.25.14 at 2:24 am

I am horrified to read that someone thought I might be trying to drum up sympathy for somebody.

Let me try again.

‘The heavy is the foundation of the light; the still is the basis of the quick.’ Thus, if you dismember the infrastructure, the superstructure collapses. (‘That which is to be thrown down is first lifted up.’) If disruption is really inherent in capitalism, and as Marx says capitalist disruption destroys culture, and if you do not desire collapse, then either disruption must be managed, or the capitalist social order must be cleverly replaced by something else. (What a magic trick that would be!) But instead, disruption is being fetishized. (That is probably a symptom, rather than a cause.) In any case, collapse will not be averted. The only thing wrong with Uncle Karl’s little poem is the last line: ‘… Man is at last compelled to face with sober senses his real condition of life and his relations with his kind.’ That seems most unlikely, going by how previous dissolutions of the established order worked out.

52

William Timberman 06.25.14 at 2:31 am

If we’re looking for concrete examples, what about Apple, Inc.? Apple, it seems to me, is the perfect embodiment not only of Christensen’s thesis, but of LePore’s antithesis as well. And if, a thousand years from now, archaeologists should uncover the remains of Apple’s apparently empty spaceship headquarters, and its thousands of apparently empty retail outlets, all emblazoned with Jony Ive’s tantalizingly reductionist version of the apple-with-a-bite-out-of-it corporate logo, what will they think they’ve found?

The temples of a successor to Judeo-Christianity, maybe — the cross of humility replaced by the symbol of a belated, yet somehow insanely successful acceptance of the serpent’s gift? I’m indulging myself in a fanciful vision here, I suppose, but I’d argue that it’s not entirely inconsistent with what Apple does in fact represent. And what about that iPhone — what it is and what it does? Can you think of a more perfect symbol of both the streamlined moderne and the classic contradictions of capitalism? Mirabile dictu, it even fits in your pocket.

53

floopmeister 06.25.14 at 2:33 am

Just a thought here…

Perhaps one area where the Marx quote is also relevant is that the orginal Marxist meaning of ‘destruction’ (whether creative or otherwise) is that it can lead to crises which existentially threaten any particular system as a whole (whether an industry, specific market, particular nation state’s economy, or capitalism as a whole). Disruptions can lead to the risk or reality of systemwide collapse.

This is analogous to the insights of ecological theories on systems tipping points or collapse (ie Gunderson and Holling’s Panarchy) in which unpredictable disruptions can lead to cascading failures throughout interconnecting systems and thus shift them into a neew spahse space (ie a world in which large hard drives are no longer necessay – or in which VHS is the new agreed video technology).

The problem seems to be is that Schumpeter (and those who have come after him like Christensen) are more than willing to valorise the destructive effects of disruptive innovations (clear away the dead wood!) while ignoring the original connotations of the concept. There’s a disconnect in scale between such sub-system disruptions and the overall pristine equilibrium of the system itself – sometime clearing away the dead wood is dangerous if it had other purposes or unintended side effects such as housing for small mammals in a forest (literal ‘dead wood’) or employment for citizens (and how archaic that word sounds!).

Sometimes the cascading effects of disruptions are systemwide – these boosters don’t seem to acknowledge that.

54

floopmeister 06.25.14 at 2:35 am

neew spahse space
What happens when the ‘infinite number of monkeys’ are slysdexic?

Obviously meant ‘new phase space’ :)

55

bianca steele 06.25.14 at 2:45 am

Anarcissie,

If by the PC didn’t disrupt the computer world; it disrupted the office, the workplace you didn’t mean to imply that the significant effects of the PC revolution had nothing to do with the disruption of the workplaces of people who worked on and with computers even before the PC revolution, I apologize. I was annoyed by what I thought was the implication, which was apparently inadvertent, that technology is bad primarily because it eliminated the jobs of accountants and receptionists–and doubly annoyed by what I thought was the suggestion that if computer industry workers had suffered, their suffering didn’t matter, or that it was okay to explain it away, more okay to explain away one kind of workers’ suffering than another’s.

And I couldn’t help pointing out that there was a lot of mechanization of office work already in the 1950s (my mother worked for a company that made that kind of equipment, I just finished Revolutionary Road, which in 1955 has machines for doing the kind of thing Francis Spufford describes the Soviets’ trying to do in Red Plenty), which helped the economy grow as much as it did, and which also led to a lot of jobs, but led as well to complaints about big bureaucracies that were also already tied to ideas about computerization. That part was meant to be a joke, sorry if it came off wrong.

56

floopmeister 06.25.14 at 2:48 am

The temples of a successor to Judeo-Christianity, maybe — the cross of humility replaced by the symbol of a belated, yet somehow insanely successful acceptance of the serpent’s gift?

Also don’t forget that the first Apple went on sale for $666.66 and the Apple start up sound is in fact the

Tin foil hats for everyyone!

57

shah8 06.25.14 at 2:51 am

Okay, you all, just wait one second…

What is it when we’re talking about when we are talking about disruptive innovations? Going through this thread, it seems like “disruptive goods” seems to outweigh any other kind of innovation. Not disruptive logistical/backoffice/manufactoring device, nor do we talk about disruptive government services like the damming of the Colorado, victorious armies, or welfare programs. I mean, shouldn’t a big part of this discussion be about Obamacare and the theorizing/politics leading up to the startup, since a big part of health care reform was precisely how and how not to disrupt? If we’re talking about ideology, shouldn’t we be talking a bit more about the split between private and public good in more than just the sense that this managerialism helped to reduce the public infrastructure or bust unions? Where, how, and when discourse about disruption is probably important, as well as where the discourse is aimed it. I started thinking about this stuff because floopmeister @53 is talking about clearing away dead wood. All the leftover buggywhips? What?

58

shah8 06.25.14 at 2:51 am

Okay, you all, just wait one second…

What is it when we’re talking about when we are talking about disruptive innovations? Going through this thread, it seems like “disruptive goods” seems to outweigh any other kind of innovation. Not disruptive logistical/backoffice/manufactoring device, nor do we talk about disruptive government services like the damming of the Colorado, victorious armies, or welfare programs. I mean, shouldn’t a big part of this discussion be about Obamacare and the theorizing/politics leading up to the startup, since a big part of health care reform was precisely how and how not to disrupt? If we’re talking about ideology, shouldn’t we be talking a bit more about the split between private and public good in more than just the sense that this managerialism helped to reduce the public infrastructure or bust unions? Where, how, and when discourse about disruption is probably important, as well as where the discourse is aimed it. I started thinking about this stuff because floopmeister @53 is talking about clearing away dead wood. All the leftover buggywhips? What?

59

William Timberman 06.25.14 at 3:01 am

floopmeister @ 56

The fruit of the tree of knowledge. What could go wrong? Floopmeister, you seem to be barking up the wrong tree here. In other words, you seem to have misread my intent. Must I spell it out?

60

floopmeister 06.25.14 at 3:11 am

Must I spell it out?

Only if you think I was serious :(

61

William Timberman 06.25.14 at 3:20 am

Point taken, floopmeister, and apologies for my own misreading. Given your previous post, it did seem unlikely, but like bob mcm at times, I can’t seem to color inside the lines, and have on ocassion been taken to task for crimes I haven’t actually committed. Less so here than elsewhere — the CT fathers and mothers are an admirably tolerant bunch — but still…. Whatever one’s fancies, one never likes to be mistaken for a snake handler.

62

Steve Diamond 06.25.14 at 3:35 am

Of course Marx has something (important) to say about disruption. It is at the heart of his theory of relative surplus value. Lepore may be right to claim that “disruption” is used in a facile way – and is no doubt uttered a thousand times a day in pitches by 20-somethings to angel investors here in the Valley. But if you don’t think the phenomenon isn’t real you haven’t been paying attention – just spend a few minutes looking at the DRAM industry or considering the implications of Moore’s Law.

63

floopmeister 06.25.14 at 3:35 am

William – no problem. The exact same thing has happened to me on numerous occasions (including one memeorable case here at CT where I entirely missed the joke).

Sometimes I think what is really needed for online discourse is the worldwide online introduction of ‘Sarcastica’ font :)

http://www.dafont.com/sarcastica.font

64

Ed Herdman 06.25.14 at 3:38 am

@ shah / #58:

I can understand why everybody missed it, but I believe I mentioned “Not disruptive logistical/backoffice/manufactoring device” arenas in my second post. Actually, in my draft I was even more explicit about this.

List-o-mania:
– Relations between workers and management
– Bureaucracies (Gone Wild!)
– Common artifacts (TVs)
– Devices and techniques commonly used to create artifacts (metallurgy and the Heavy Press Program…speaking of that, I don’t think there has been any technology to disrupt the merits of the Alcoa-type presses, which remain useful in specialized industries. Likewise, the heavy engineering investments going into automotive weight reductions to meet the new CAFE standards would seem to put steel industries in a tight spot, but actually there’s a lot of room there, even if you don’t believe the bullish-on-steel reports out of ArcelorMittal.)

- Space goat holy shrines! They like them apples.

65

Lee A. Arnold 06.25.14 at 4:21 am

Lepore writes, “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.'”

Ross looks like an interesting scholar. However it should be pointed out that most scholars of the previous few generations would recognize this as Lovejoy’s argument of the relationship between the 18th century’s “temporalizing” of the great chain of being, and Leibnitz’ principle of sufficient reason. Lovejoy probably would have seen the current “disruption” rhetoric as yet another romanticist variation on the basic framework. It is remarkable how thoroughly the West is still ensconced in an era that started in the 18th century.

66

Mitch Guthman 06.25.14 at 4:26 am

I really don’t accept Amazon’s supposed disruption of the book selling business. Amazon “disrupted” the book selling business only because, for reasons I do not understand, its stockholders allow it to operate as basically a charitable enterprise dedicated to providing consumers with staff that’s really cheap because Amazon doesn’t need to turn a profit.

I don’t think Amazon would be particularly disruptive if it had to turn a profit to stay alive. I think it would be out of business in a year or two. to turn a profit to stay alive. I think it would be out of business in a year or two.

67

Bruce Wilder 06.25.14 at 4:29 am

Yes, you would think we would have disrupted that whole Enlightenment thingee by now.

(Maybe we have! If so, oops.)

68

William Timberman 06.25.14 at 4:46 am

Bruce Wilder @ 65

Every now and again one of us has, but after Blake, we’ve been afraid to mention it to anyone above the rank of corporal. So…what in the fullness of time ought to have become an Umwertung aller Werte is now generally considered a form of onanism.

69

Some guy 06.25.14 at 5:06 am

I see someone has mentioned the Bloomberg followup @9. I was surprised at Christensen’s dismissive attitude, his whining about how Lepore was “mean” and most telling, his continual use of her first name when he reveals, at the last, that he has never mee her. I couldn’t get past the sense of outraged entitlement that a womanhad dared to impugn his credentials. Between that and the revelation that the investment was nothing more than him selling his name, what credibility does he have left?

70

Rakesh 06.25.14 at 5:34 am

This criticism seems narrow to me. It is more generally the market, of which one manifestation may be Schumpeterian disruptive innovation, from which certain institutions need to protected. For example, Richard Nelson argues that the provision of the news is a public service, but we can’t count on private institutions guided by profit made through paid subscribers and advertisers to provide the journalism that a democracy needs for its functioning.
Disruptive innovations that take a lot of advertisers and paid subscribers elsewhere may further compromise the quality of the news, but even in the absence of disruptive technologies, the market already poses grave threats to the operation of some important institutions.
This criticism, as quoted here, does not seem to cut deeply enough.
But I look forward to reading the article.
I am reminded that Nathan Rosenberg, most sympathetic to Schumpeter, once criticized his exaggeration of the economic importance radical innovations and relative neglect of the incremental innovations that were responsible for most technological progress. Another place to look here is Chris Freeman’s theory of national systems of innovation in particular at the performance of systems in which venture capital, looking for next big thing, has less power.

71

Ze Kraggash 06.25.14 at 6:33 am

If the market were 100% competitive, there were no barriers to entry and other restrictions (like patents and brand protection, for example), then there would’ve been disruption all the time, and nothing but disruption. No business would survive for more than a week.

Disruption is limited to the extent that competition is restricted.

72

Lee A. Arnold 06.25.14 at 6:37 am

I think it is important to understand that in Capitalism, Socialism, and Democracy, Schumpeter describes his idea of “creative destruction” in the context of a very careful argument that capitalism will destroy itself by setting up OTHER seeds of its own downfall. It is as if he wants to counter any opinion that “creative destruction” is part of that downfall process: “creative destruction,” he says, is really the process of capitalism being healthy. So don’t point to it, and say that is why capitalism will fail. Capitalism’s failure will come certainly, but for very different reasons. (In a similar way, his book starts out with a learned four-chapter criticism of Marx: Schumpeter dismisses some of Marx on the way to presenting his own theory of why capitalism will fail — and which he finally calls a Marxian analysis!) I think however as we enter an historical stage that uses fantasy rhetoric like “disruptive innovations” for what appear to be self-marketing ploys, Schumpeter himself might have wondered whether the real story here is that finally, capitalism is mentally imploding, which is indeed part of his argument about how capitalism will set up the seeds of its own downfall.

73

Stephenson quoter-kun 06.25.14 at 7:10 am

For all the talk of Schumpeter, I still think that Hirschman is more relevant. Hirschman’s conception of organisational ‘slack’ explains how, over time, a business can drift away from delivering the best possible value to its customers (indeed he thought it was inevitable, that organisations are “permanently and randomly subject to decline and decay, that is, to a gradual loss of rationality, efficiency, and surplus-producing energy no matter how well the institutional framework within which they function is designed.”). When this happens, customers can express their dissatisfaction by exiting the relationship or by speaking up in some way, and it’s only in response to this that the decline might be arrested or reversed. Hirschman was definitely interested in the question of which kinds of customers would be the canaries in the coal mine, and he hypothesised that some companies might actually be quite happy to lose their most troublesome customers in the short run, however deleterious this might be in the long run.

However, where Hirschman thought that this might lead to a stable situation in which fairly mediocre near-monopolies could survive indefinitely, Christensen argues that such mediocrity will eventually create the possibility of disruption. The company simply drifts too far from its customers, or perhaps from a specific sub-group of those customers who demand the most innovative products, that it cannot anticipate future demand reliably. Moreover, this shift can appear sudden, because it’s not easy to measure the pent-up demand for alternatives to the current market leader.

There are pretty good examples of this today. If you measure the market share of operating systems in the “personal computer” industry, you might conclude that MS Windows is still dominant. Until, that is, you consider smartphones and tablets as “personal computers” and you realise that Windows – despite the massive, corporate-policy-mandated install base that has existed since the 90s – is at around 35% and falling. There are more personal computers running Linux (Android) than Windows! Desktop PC sales are flat or declining. Microsoft, a mediocre (in terms of its operating systems) near-monopoly is being disrupted, and it’s pretty much explicable in terms that Christensen laid out. Microsoft was simply on to too much of a good thing with the Windows operating system and couldn’t figure out how to engage new markets without undermining the Windows revenue stream, and now those new markets are bigger than the old ones.

I don’t think Schumpeter has anything particular to say about this. Sure, this process could be described as “creative destruction”, but that concept can be widely applied. Slack and disruption seem to capture a bit more about the dynamics – they provide mechanisms by which creative destruction can happen which makes saying “it’s just creative destruction” seem a bit empty.

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Phil 06.25.14 at 7:37 am

Disrupted companies can hold on for years, sometimes, but not forever, and they never come back to where they once were.

But that (as Lepore points out) is the trouble with the ‘disruption’ story – it’s an each-way bet. $DISRUPTOR succeeds and $DISRUPTED goes bust? What did I tell you! $DISRUPTOR goes bust? Failure’s all part of the process! $DISRUPTED is still around and doing fine? Ah, but they’re not dominant any more… Like Lepore, I’ll take a disrupted Seagate over a disruptive MiniScribe any day.

And this is also the point of the article I linked – not to discuss the details of Disruption, The Process but to identify the distinguishing marks of “Disruption”, The Snake Oil. Whether disruption corresponds to anything real or not, “disruption” is a very influential – and mostly pernicious – brand of management-speak; that article suggests where it came from and why.

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Ed Herdman 06.25.14 at 7:54 am

It’s not just Seagate, though – even if Seagate doesn’t get into the SSD business, there’s still Hitachi HGST, Western Digital, PNY, OCZ (well, Toshiba), even old standby Intel (bubble memory doesn’t cut it anymore). Within this space, disruption sure doesn’t seem to be the guiding pattern for industry. Disruptors seem at most to exist as fine grains floating with the currents, while companies exist, like sponges, to filter and trap them. Tech sponges.

People love to talk about the failed companies of days gone by, but nobody seriously thinks that when DEC dried up, all its research into CPUs was reinvented by other players. That persisted and still exists as the kind of innovation that Congress sought to reward with the patent act. For every one of these companies, as well, I’d not be surprised if there are still other “Hidden champions” hanging around, like Texas Memory Systems.

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Nattering Nabob 06.25.14 at 8:25 am

… we swapped paperback novels—Kurt Vonnegut… that kind of thing

I feel strongly that Lepore’s article wants to be called Schumpeter, Foma and Granfalloons

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hix 06.25.14 at 9:15 am

Feals like there are lots of emotions in this debate because distrutive innovation is such a right wing buzzword and because its now applied to Universities teaching methods. Dont see how the narrower model is worthless. Wont happen always everywhere obviously.

The German mittelstand in particular is a very weak argument against disruptive innovation, since they sit on such small upmarket niches. They are often specialiced in the little part of the market with very high quality demands thats left, while the entire rest of the market is supplied by some Chinese factory. Everyone else in the west is usually doing bad or is bankrupt as predicted by the theory.

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Nick 06.25.14 at 11:27 am

To me, it seems like disruption is a misuse of Schumpeterian creative desctruction for tech-business guru purposes. The whole point of creative destruction is you can’t know where its coming from next; some people can make vaguely intelligent guesses. You just benefit from a good market position while you can. There is no way of taming it. In that sense, Lepore is right on target calling bullshit.

But I think criticising creative destruction itself on the basis that these companies last longer than implied by supposedly overwhelming market forces slightly misses the point: we are fundamentally interested in profits going to firm owners or shareholders. The fact that firms themselves survive in some form by changes in ownership does not imply that creative destruction hasn’t taken place. Their products and practices have still been changed dramatically. The question is instead how long out-sized returns to existing owners are maintained. I think one does see large swings in returns on that front. You don’t do THAT well buying shares in already successful companies, and not consistently.

Shareholders don’t benefit all that much when a big company they own stock in sucks in a new entrant – its actually a cost of maintaining their market position, while the owner of the new entrant walks away with millions or billions.

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Trader Joe 06.25.14 at 11:33 am

While I think the concept of ‘disruption’ is massively over used it doesn’t mean that there aren’t in fact businesses and technologies which do prove to be very disruptive.

You can say that Uber is just another way to call a cab and it doesn’t do anything a telephone couldn’t have accomplished but the fact is that because of the app they are taking millions of dollars of rides that the monopolistic taxi cab companies had always had for themselves and it has created thousands of job opportunities.

Cab companies are more than a little afraid of being disintermediated and that makes Uber (and its peers) disruptive. Traditional taxis or rickshaws or hitchhiking doesn’t need to ‘disappear’ for Uber to have accomplished being disruptive.

Equally – disruption doesn’t have to imply being cheaper or inferior. Cable TV and Sattelite TV has all but completely displaced over the air transmission of TV signal and the result is significantly more expensive for consumers, but they also get significantly more choice (opinions abound as to whether the content is better or just more). The point of the disruption here wasn’t to put anyone out of business – but to change the business itself and create a product (i.e. choice) where previously there was none.

This is the far more common type of disruption. While I think Lapore did an excellent job of making her points, she never quite connected the dots to the point that dispruption can be about changing the playing field, not necessarily eliminating the game.

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Rakesh 06.25.14 at 2:33 pm

In his Ethics Badiou reminds us that there was a time that Deleuze was for disruptive innovation–the creation of free, i.e. private-sector radio stations at the time that French radio was entirely state-run. Deleuze spoke of this as the conquest of a fragmented, multiform territoriality. Badiou grants that this was partly right. But notes that what took place was mostly the conquest of radio by capital. Badiou argues that to oppose capital we must oppose one univeralism against another, not merely react to it or counterpose particularism against universalism. Lepore seems to be saying that we should not simply welcome disruption of the status quo for a greater plurality of options as progress?

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Map Maker 06.25.14 at 2:45 pm

Jill Lepore could have been writing about Apple’s Republican founders working in garages on their laptops from what I read. Or shopping at one of the +300 department stores that continue to dominate the US retailing scene as Kmart fades into history.

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Lee A. Arnold 06.25.14 at 2:54 pm

Uber is another case where there really isn’t anything that should be considered patentable, and it will inhibit competition in other “uberable” areas, so to speak. I wonder how much of this “disruption” rhetoric is driven by winner-take-all strategies enabled by our ridiculous system of intellectual property.

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Metatone 06.25.14 at 2:56 pm

@Brett – Studwell’s book was pretty shallow and missed a lot of the real dynamics. Lots of the “bankruptcies” he cites were actually little more than bank enabled name changes.

The book is a great illustration of how if you want to see Schumpeter/Christensen theories as the prime movers then you will, even when the evidence isn’t there…

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Layman 06.25.14 at 3:29 pm

Metatone @ 15

“I think the point is that sometimes the theory of disruption breaks down and is effectively snake oil.”

I thought the point is that there is no theory of disruption to break down, for commonly understood definitions of ‘theory’, e.g. predictive utility. If “sometimes someone comes up with something new, and sometimes it works, and sometimes the someone in question is an upstart, and sometimes the upstart is successful, and sometimes that success topples some established giants, and sometimes the upstart eats them; but more often not”, now what?

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Anarcissie 06.25.14 at 3:39 pm

Companies and people come and go; disruption endures.

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bianca steele 06.25.14 at 3:41 pm

@74

I’m all for calling out people who pull technical jargon out of its proper context and apply it haphazardly to anything that interests them at the moment. The thing is–if you look at firms from the inside, from the point of view of people who work and (metaphorically) move around inside of them, not only from the point of view of academic economists–when you get disrupted, you damn well know it. It’s not something the boss has to explain to you. If a consultant has to explain it to you, using theory about what “has to” be the case and about how your employer doesn’t fit the narrative anymore so you’d better change the way you work to change your employer to a different kind of thing, it probably isn’t disruption. No one had to explain to the cabbies that Uber was “disrupting” them, and nobody is arguing they have to be more like Uber to survive either.

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J Thomas 06.25.14 at 3:52 pm

I’m more interested in restricting companies from doing bad than I am with blowing them up,

I firmly agree.

and ensuring that the tech landscape is forever fragmented.

We don’t really know what’s possible along those lines.

Standardization could theoretically help but I don’t think a Kropotkinesque (“Fields, Factories, and Workshops”) view of small local players adhering to standards would help with economies of scale.

The way standards have been working, we start out with new technology where various competitors adopt things that are somewhat similar that are incompatible. Then at some point they agree on an interface standard, so that the various versions can be at least connected together and if possible in some context can become interchangeable. Or they fail to agree.

A standards attempt that comes too early tends to fail because it isn’t quite clear what needs to be agreed on. Also each competitor wants it his way and not the other guy’s way. Given time they have a better idea who has won, or if there isn’t a clear winner they see how to make a good compromise. A standards attempt that comes late, is pretty much irrelevant.

Economy of scale, that depends. Pretty often, when economy of scale is important the best scale involves just one production center. But customers demand two in case something goes wrong like a lawsuit that gets it shut down temporarily or permanently, or a civil war, or something.

My tentative guess for what you would want, is you have some expensive parts that give you economy of scale, that are pretty much standardized and change slowly. And then you get stuff around them that allows lots of competing designs and that part gets lots of competition and improves fast. The stuff that’s hardest to make needs to provide a stable platform for the easier stuff to adapt to.

Just a thought.

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The Temporary Name 06.25.14 at 4:09 pm

Whether disruption corresponds to anything real or not, “disruption” is a very influential – and mostly pernicious – brand of management-speak; that article suggests where it came from and why.

Thanks for “that article”.

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StevenAttewell 06.25.14 at 4:32 pm

Speaking of disruption and Uber… one thing that Lepore doesn’t really get into the article (except for a bit about the financial industry) is the mystique and mystification of disruption.

For example, Uber is not disruptive because it’s actually innovative – it really is just a car service that uses apps rather than a phone line. What makes it actually disruptive is that it’s turned its entire workforce into temp independent contractors, and thereby offloaded enormous costs when it comes to insurance, background checks, wages, employee benefits, etc. and that it’s blatantly defying regulations designed to ensure stability, profitability, and a living wage within the industry, to the benefit of itself and the detriment of others.

But because it’s supposedly “disruptive” in the tech sense, it often gets given a pass and the negative side effects of Uber don’t get examined that closely.

Likewise – take something like airbnb. Airbnb’s “disruptive” qualitities are that they’ve somehow conned people into letting them take their 18% cut instead of using a free intermediary like craigslist, and that they’ve been able to get away with massive tax evasion and regulatory evasion that would otherwise eat into their price advantage. And yet, “disruption” is often used to paper over the prosaic details of a shady business model.

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shah8 06.25.14 at 4:40 pm

One thing I’m paying attention to, because so many finance bloggers are paying attention to it, is the potential disruption of international payment via online parabanking companies. Think: http://blogs.reuters.com/felix-salmon/2010/06/22/competition-in-payments/http://blogs.reuters.com/felix-salmon/2010/06/22/competition-in-payments/

As with Bitcoin and money created by cell phone companies, I tend to view all this as being about the combat of networks rather than the combat of best practices. In this sense, I believe that there is going to be a major crash in the internet economy in Silicon Valley, leading to the resolution of a few, large, networks, whether that means a big company or some sort of cartel. The collusion lawsuit over tech pay is just one sense of what people are really trying to process, whether that was by one network or another. Since so much money is flowing into what is a business war zone, invariably the debt that supports this isn’t going to anything that will pay it back, even at .01% interest. When the money flows out, business is rationalized, and we see the processes and products that actually are winners, and then imagine that those things “disrupted” “uncompetitive” organizations.

For instance, when we talk about Nokia, we talk a lot about Elop’s disastrous effort to change course, which had “disruptive intent” all over it, what with prematurely obsoleting the Symbian platform in favor of Microsoft OS, Cortez style, and then rushing out a product everyone hated, at least at first, Lumia. However, take a look at the sort of networks centered by Google, using the Android platform, or the sort of walled garden that Apple cultivates. It seems to me that the urgency of Elop’s actions were pretty much all about the fear of being left out of a vital international corporate ecology, and not quite about the lack of products or innovation in and of itself. In the end, the real record most of us has, aside from deep diving Google, are the products that we see on store shelves, and their commercial success/failure tends to mask everything that went on before it. Broader economic trends and geopolitics determines what new innovations are successful and what old innovations are obsolete, and not the inherent worth of the innovation. Nokia just picked the wrong alliances, is all.

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J Thomas 06.25.14 at 4:48 pm

Equally – disruption doesn’t have to imply being cheaper or inferior. Cable TV and Sattelite TV has all but completely displaced over the air transmission of TV signal and the result is significantly more expensive for consumers, but they also get significantly more choice (opinions abound as to whether the content is better or just more). The point of the disruption here wasn’t to put anyone out of business – but to change the business itself and create a product (i.e. choice) where previously there was none.

I may not understand how the authorities are using the term, but that doesn’t look like an example to me. With cable TV, the provider sells a TV product to you. With broadcast TV, the provider sells your eyeballs to advertisers. It’s two different markets. They only overlap if the time you spend watching cable cuts down on the number of eyeballs the broadcasters can sell, or if the number of people who think broadcast TV is good enough cuts down on the number of cable subscriptions sold.

I prefer to look at disruption in terms of reducing the size of the market. Like, say you have a company that sells printers, scanners, copiers, and fax machines. That’s three kinds of inputs — computer files, scanning, and fax. and it’s three kinds of outputs, computer files, printing, and fax.

printer: computer -> paper
scanner: image -> computer
copier: image -> paper
fax: phone -> paper, image -> phone

If you bought all four you would have 3 printers and 3 scanners embedded in them.
It would make sense to have just a printer, and a scanner, and a computerfax card.

But instead they sell printer combos that include printer, scanner, copier, and fax for hardly more than the price of a printer. Anybody who buys one of those is unlikely to buy a second product out of the four. Total industry sales go down.

Why do they sell these things when it reduces total sales? For a long time they didn’t. When they did, maybe it was because there was enough competition that the first to do it thought they would gain more sales taken from other competitors than they would lose taken from themselves. But if they thought that, in the long run they were probably wrong.

Disruption comes when a marketing possibility is there which, used by a currently-successful competitor, would be cutting their own throats. Possibly they go ahead and do that, or possibly somebody new comes in and does it. Sometimes the opportunity is there and nobody has done it, yet.

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Trader Joe 06.25.14 at 5:13 pm

J Thomas @90

Why cable and later satellite TV was disruptive relative to plain old broadcast TV is that it created 100s of new content producers. When they first started laying cable there was no CNN, no ESPN, no HGTV ….. none of it. They laid cable and broadcast things that were already in existence, but because for example CNN didn’t need to put up a tower in every city in America they could reach a national audience via the distribution chanel of cable, not via free airwaves.

People were happy to pay for the ‘premium’ content of CNN, weather channel, sports channels etc. and it expanded the pie without canibalizing any of the incumbents. Simply put the creation of a distribution channel created its own product content – if you build it they will come. If that’s not distruptive I’m not sure what is.

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Thornton Hall 06.25.14 at 5:34 pm

I have time to follow this thread because I’ve been disrupted. I went to law school before the warnings were issued and then lost my job in the depth of the recession. The good/bad thing is that there now exists the document review industry. Also, I got married while I was employed (allowing me to marry-up). The disruption caused a fair amount of suffering, not the least of which involved my increasingly Reaganist father arguing against unemployment insurance to a son who (hopefully) unbeknownst to him, was using UI to pay the mortgage.

Should you feel sorry for me? Does it make a difference that under employment allowed me to discover serious joy as an amateur woodworker? That my wife and and now realize that we are very close to a goal we didn’t know we had: building a cabin in the woods? I don’t know the answer.

It does seem to me that the renaming of some well known piece of the metaphysical world–a particular cause or event–has a long history and is itself a piece of the metaphysical world that could be named and get a book. I think the funny thing is that if you do a good job and identify a unique thing that has never previously been seen as a thing separate from other things, then no one will buy your book. They are too inside to see the shape of things (see, cf, business managers who think their skills qua “business managers” is a big part of their success). We didn’t actually need a book about tipping points or or a book about disruption. Thinking fast/slow, as near as I can tell, had two parts: the part that is interesting and the part that is noticed and discussed among academic economists. Really, the money is in finding a new way to say “you can’t step in the same river twice.”

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MPAVictoria 06.25.14 at 5:45 pm

“Should you feel sorry for me? Does it make a difference that under employment allowed me to discover serious joy as an amateur woodworker? “

Sorry about your job loss and good luck with your new passion.

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The Temporary Name 06.25.14 at 5:51 pm

In this sense, I believe that there is going to be a major crash in the internet economy in Silicon Valley, leading to the resolution of a few, large, networks

Maybe it’s the job of disruption to convince the world that losing all their financial services to America is a good thing.

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Thornton Hall 06.25.14 at 5:52 pm

@93. Thanks! Things are good. I get $30 an hour to review docs and $40 an hour as a handyman. Not to mention the ineffable joys of trying to understand the comments of unreconstructed Marxists, Hegelians, and whatever you call folks who love Schumpeter!

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bekabot 06.25.14 at 5:56 pm

The problem with intelligent people is that they can create elaborate arguments to buttress weak sentiment, e.g. Charles Murray.

…He speculated further on the witty and the dull. These latter are the redoubtable body. They will have facts to convince them…Neither of them was like Mrs. Mountstuart, a witty woman, who could be hoodwinked; they were dull women, who steadily kept on their own scent of the fact, and the only way to confound such inveterate forces was, to be ahead of them, and seize and transform the expected fact, and astonish them, when they came up to him, with a totally unanticipated fact.”

— George Meredith, The Egoist

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Plume 06.25.14 at 5:58 pm

Too few Americans question this whole thing. They just seem to take it on faith that “creative destruction” is the norm, natural, the only way possible of doing things . . . and that humans are naturally competitive, blah blah blah.

In reality, the vast majority of humans hate competition, run from it, and would rather cooperate with one another, peacefully, enjoy their free time with friends and family, kick back, perhaps even smell the roses from time to time.

It’s always been a small percentage of humans that have a need to compete and win, to control others, to order others around. The alphas and the sociopaths among us — who, in America, mostly go into business.

And the con has always been these alphas, these sociopaths, telling everyone else that we all share the same need and drive for competition and victory as those alphas and sociopaths . . . . which isn’t true. But it is an excellent way of ensuring “cooperation” and acceptance of our own exploitation. It is an excellent way of brainwashing us into believing that what the alphas and sociopaths do is perfectly “natural” to them and to all of us.

In reality, however, the vast majority of us don’t seek competition — or at least competition of the decisive and far-reaching kind. We don’t want to be conquerors and world beaters. We’re cooperative, social beings first and foremost, and we need to stop buying into the con.

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MPAVictoria 06.25.14 at 5:59 pm

God damn I love it when Plume posts. I find his optimistic view of human nature comforting in the extreme.

/Hope your writing is going well.

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MPAVictoria 06.25.14 at 6:00 pm

“I get $30 an hour to review docs and $40 an hour as a handyman.”

Hmmm. Perhaps I need to look into “laid off lawyer” as my next career move.

/More seriously, glad to hear things are going well. :-)

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Plume 06.25.14 at 6:06 pm

Of course, the other key thing we should be questioning is the waste. This “disruption” and endless “creative destruction” creates sooooo much waste. Companies building themselves up and falling to others. Duplication of products, energy, labor time, ending up in the trash heap. Literally and figuratively. Waste.

To me, this is an insane way of organizing society. To do this on purpose, to set up a system that actually fights against itself, again and again and again, so that decades are wasted, with businesses overcoming each other, industries overcoming each other . . . and few people seem to get how grotesquely wasteful and inefficient this really is . . . . aside from the human factor of people losing their jobs, perhaps their homes, their chances for quality of life improvements, along the way.

Cooperation across the economy would be far, far more efficient, and far, far less wasteful. And the earth is running out of time when it comes to that waste and that pollution to begin with. One day, it’s going to make the decision for us. Someday soon it’s going to remove us from the equation.

It would be better to act before that day.

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Plume 06.25.14 at 6:06 pm

Thanks, MPAV,

Have finished my novel and am now starting another. Getting some friends to read the former before deciding what to do with it.

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Thornton Hall 06.25.14 at 6:13 pm

@99 yeah, only 3,166 hours to go and my loans will be paid!!! Then it’s really easy street!! ;)

Oh wait… taxes.

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Bruce Wilder 06.25.14 at 6:21 pm

Lee A. Arnold: I wonder how much of this “disruption” rhetoric is driven by winner-take-all strategies enabled by our ridiculous system of intellectual property.

!

You use the case of Uber, which is attacking taxi service, and more pointedly, the public system of taxi service regulation, while also rather cynically abusing the intellectual property system.

This goes back to the central point of the OP: drawing attention to the hidden, deprecated, second thesis of the Lepore article, deprecated because the OP speculates, ” A significant portion of her readership would find it tedious to be told less briefly that we need to remember, or revive, the language of public trust, public interest, public service.”

Any long established way of doing business allows us to work out an ethic within that framework, an acceptable boundary between private interests and public values. The ethic is only sustainable in that business model framework, even though it may relate to some more transcendental standard of moral conduct and values. And, when the business model goes, the ethic — and often a whole slew of public administrative functions and understandings — get trashed as well. The question of a public interest does not go away, but the old answer no longer applies in the disrupted circumstance.

Clayton Christenson takes a sidelong glance at this issue, by generalizing to the effect that the disruptive innovator is often introducing a product or service that doesn’t meet established expectations for “quality” and talking about how the incumbent is often inhibited by commitments to technical or engineering standards that are “higher” than apply in the brave new world of the disruptive innovator.

Lepore may be taking notice, when she mentions that U.S. Steel is unionized, but the rival minimills are not. Certainly, as she takes up the case in relation to journalism, when she discusses the concept of a journalistic wall, which some think, with almost religious devotion, ought to separate editorial operations from publishing and advertising. As the old order of production is disrupted, the old order of ethics and public service is disrupted with it.

Innovation is a strategic play, an attempt to change the game and the rules of the game. And, attacking, or leveraging, the institutions, including regulatory institutions, that define and enforce rules of the game in the public interest, is necessarily part of the game. The rules governing cellphones are different from the rules governing landlines. The rules governing newspapers are different from the rules governing blogs. The rules governing car service may be different from the rules governing taxi service. The rules governing international payments by innovative parabanking or bitcoin or whatever may be different from the rules governing clearing houses and correspondent banking.

There’s a real risk, when innovation is a private affair, driven by private money seeking private gain exclusively, that the defense of the public interest becomes a reactionary and ultimately doomed activity. Public goods and public infrastructure are just opportunities to cannibalize, to be absorbed in privatization or discarded as obsolete.

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New Haven Lawyer 06.25.14 at 6:32 pm

The “disruptive innovation” theory says, to oversimplify, that the key to success for a company is to pursue disruptive innovation and eschew merely sustainable innovation. Whether this is correct, of course, depends on what you mean by success and what you mean by innovation.
Lepore and others have observed that the theory defines success narrowly in terms of making money, excluding other valuable measures. But even if we’re talking about making money, this discussion seems to reflect some confusion between the success of a company and the success of a product or service. (I’ll refer to products as shorthand but my argument applies equally to services and product-service hybrids.) As a financial or investment matter it’s meaningful to say that this or that company (as distinct from its operations or products) is successful—e.g., its profits and stock price increase and the company becomes more valuable. But although successful companies often make successful and profitable products, they don’t always—a company can be extremely successful as an investment without improving its products or increasing its sales or sales revenue, for example by cutting costs. (That’s the Bain Capital version of success.) Alternatively, a company can make very successful products, with a large market share and increasing sales at increasing prices, but be unsuccessful as an investment, for example because of excessive debt, litigation or similar costs, or just disappointing the expectations of the stock market. What strategy you adopt depends on what kind of success you’re looking for.
There is also confusion between three dimensions of potentially innovative change (note that even radical change may not be truly innovative—business and product revolutions may be merely repeating history): change in the structure, financing, or management of the company; change in the means by which the product is made, packaged, delivered, etc.; and change in the product itself from the point of view of the purchaser or user of the product. Extreme leverage, lean management, and going private are examples of the first kind of innovation; just-in-time manufacturing and internet-based marketing a la Amazon are examples of the second; solid state drives to replace disk drives are an example of the third.
Similarly, a university that moves from a faculty-dominated “academic” to a board-dominated “businesslike” management approach is changing in the first dimension. One that replaces large numbers of regular faculty with adjuncts or distributes videos of its courses online is engaged in the second kind of change. And one that develops curricula, teaching approaches, materials and evaluation methods that are tailored to the MOOC approach is changing—and presumably innovating—in the third way.
A company and its products may display one, two, or three of these kinds of innovation (or none); if two or more kinds co-exist they can be complementary or symbiotic, or conflicting and destructive, or completely independent of one another. An innovation in one dimension can be incremental and “sustaining” while one in another dimension is revolutionary and “disruptive”—in the same industry or company at the same time. There is no one-size-fits-all explanation.
Even assuming contra Lepore that Christensen’s examples are fairly chosen and accurately reported, what do they prove? He depicts established companies disdaining new products of poor quality introduced by upstarts. Presumably the established companies do so because management believes that customers won’t accept the low quality even for something new. Why do they believe that? Perhaps sometimes they’re narrow-minded and insular. But sometimes the usual sources of information based on which product development decisions are made (surveys, focus groups, observing trends elsewhere, etc.) don’t support the conclusion that customers will buy the new product. Customer response isn’t just hard to predict, it may be fundamentally impossible to predict. Maybe the established company is making a smart decision, and the upstart is making a foolish one—a foolish one that in this case (perhaps one out of ten or a hundred or a thousand) turns out to be correct. If “pursue disruptive technology” means “make dumb decisions and be extraordinarily lucky,” it isn’t much help.

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Thornton Hall 06.25.14 at 6:42 pm

@103 Bruce Wilder

I’m confused about the import of your comment. In the case of Airbnb the public has an interest it not being ripped off and, not being discriminated against based on race, etc, just like in any hotel or motel. And, of course, the vast majority of the investment in this “disruptor” was from the DOD and other govt sources. Is it the latter (the source of the investment) that causes the former (the fact that our old regime of values is still applicable)? Is it just a lucky case? Or are you saying the total opposite?

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Bruce Wilder 06.25.14 at 6:48 pm

Thornton Hall @ 104

There’s a great article to be written about Uber, AirBnB and other examples from the emerging “sharing” economy, with biting and cynical wit. I’m just not the guy to write it. Sorry.

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slavdude 06.25.14 at 7:49 pm

What a coincidence. Here’s a puff piece about Christensen in the current issue of the Harvard alumni magazine: here.

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lemmy caution 06.25.14 at 8:11 pm

The point of “disruption” rather than the older concept of “improvement” is that the “disruption” makes something involved worse (but other things better) than the prior state of affairs. It is thus a horrible idea to apply to things like medicine or education because it allows massive failures to be swept under the rug. Nobody would say that a MOOC was better than in person education, but thanks to the concept of disruption they don’t have to.

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lemmy caution 06.25.14 at 8:22 pm

“Equally – disruption doesn’t have to imply being cheaper or inferior.”

It is important to Christenson’s model that it is inferior in some way. Otherwise, the customer base of the original product will demand it and the original companies will try to provide it.

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Barry 06.25.14 at 8:23 pm

“The problem with intelligent people is that they can create elaborate arguments to buttress weak sentiment, e.g. Charles Murray.“

Intelligent? That reminds me of Barney Frank’s comment on Newt:

‘He’s a stupid person’s idea of what a smart guy sounds like’.

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MPAVictoria 06.25.14 at 8:30 pm

“‘He’s a stupid person’s idea of what a smart guy sounds like’.”

I have always liked that joke.

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The Temporary Name 06.25.14 at 8:47 pm

It is important to Christenson’s model that it is inferior in some way. Otherwise, the customer base of the original product will demand it and the original companies will try to provide it.

The disk-drive example is a weird one because I don’t really remember “worse” in an innovation except maybe for zip drives. But I haven’t read his book.

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Ed Herdman 06.25.14 at 9:42 pm

@ lemmy / The Temporary Name on Christenson:

There doesn’t seem to be a requirement that anything be inferior about the product at all. Trader Joe’s argument is okay, but I’d point out that there are plenty of cases (tho mostly in the sundry consumables / dry goods space) where advertising makes or breaks a product. Yes, the low margins for dry goods probably rarely (if ever) meet the other definitions put forth for a disruptive product, but it’s certainly possible for something to simply be [i]different[/i] without actually being so. I don’t want to get too far into the weeds over this, but I think that what determines disruption is what is said and believed about a product, popularly, regardless of whether it’s actually true.

Part of the reason this happens is that techniques for discerning true comparative advantage of one product over another are rarely developed (at least in time to drum up support for sustaining the existing market). Companies have every incentive to distort these differences, because their belief that “in the future, Y product will be far better (at being future-proof in making $) than X ever was (it’s dead to us)” means they have to drum up support now.

It’s also important to note that disruptive technologies often are known to be inferior by large groups of people, but depending on the type of product and the scale of production, large groups of consumers may be powerless to do anything but accede to the change.

Some types of markets have built up accommodation for more maintenance/support-oriented companies servicing “disrupted” products. Others have barely any accommodation.

hix / #77:
If I had said that the Mittelstand was an absolutely universal alternative to market disruption, that would clearly be wrong for the reason you give. However, let’s note a couple things: The modern positioning of Mittelstand companies (or at least the conception of them) may turn out to be as much a historical anomaly as was the postwar era of low income and wealth inequality, though for very different reasons. If technology, and the economy at large, begin to afford less room for disruption, then it stands to reason that

And there is also the not wholly minor question of the Mittelstand companies having the ability to endure for a very long time. It seems that in fact some types of company – even those involved with the supposedly chaotic world of consumer-oriented parts distribution – have a large amount of immunity from disruption (if that means having the ability to continue operating as a business.

I also wonder whether your argument that Mittelstand-type companies are all sitting on “small upmarket niches.” There are plenty of companies which I think qualify as Mittelstand companies – i.e. http://www.goforward.com.tw/en/company.html with its claimed capitalization under $1M USD – in the rough and tumble of supplying major components for omnipresent low-market consumer appliances.

We’ll see if that large sound of vast amounts of loose change (the average value of the what Dave Jones of EEVBlog unflatteringly calls “Shenzhen market” cheapies) starts to turn to hard dollars, or what will happen if the regulatory scene around China shapes up. But let’s not forget that there is a huge domestic demand as well. If the fly-by-nights end up being pushed into closing or becoming Mittelstand themselves, then where is the argument?

(I wrote a bit more about this earlier, which I’m carrying over in my response to J Thomas

Rakesh / #80:
This is one of the most important points, for me, and nicely summarized.

J Thomas / #87:

Not sure what I was thinking with dismissing Kropotkin – the increasingly decentralized manufacture of tech (in many arenas) is starting to extend to precision parts, so his example (industrial weaving) starts to look like today’s 3D printers. Some things (Heavy Press stuff) probably don’t need to be everywhere, and can be shared. Other things (semiconductor and other ultra-precision refinement, manufacture, and testing facilities) also seem like they work better when more centralized (but perhaps this can change in the future with different manufacture methods). And, even if we don’t get an “official” standard, I think that the emerging Mittelstand-type companies can become the de facto standard (I think this describes most early companies in the 3D printing realm, though some large companies from other industries – i.e., one manufacturer of CAD software – are trying to muscle in as well).

I think a key element in this is the false technofuturist allure of ‘disruptive technologies,’ when ‘disruptive technologies’ mean you need a totally new design of physical plug for your new cable, with no parts in common, and this just to squeeze out people who previously made fine data cables, and who could easily upgrade their processes to meet the new standards. The dark side of IP, I suppose. Planned obsolescence, it’s been called, but here we have the specter of entire supply chains being flattened for no apparent reason other than pursuit of monopoly.

It would be nice if consumers had some ability to push back against cosmetic / monopolistic disruptions. I think one of the potentials of the Mittelstand type company is its ability to use its smaller size to insulate itself against change, so if its main source of demand starts to weaken, perhaps it can start to make up those losses by back-channel or direct service sales.

To achieve this, of course, it would be nice if the global market for service and maintenance of common goods was improved. Here we are in the year 2014 and we treat a startlingly high portion of the objects off assembly lines as one-off handcrafted, unserviceable, and irreplaceable works by artisans. The only thing that has changed is that no artisans can even service much of the new stuff. Not all of this is bad, though – in the old days, a lot of the functions we now take for granted in a computer required costly plug-in boards or extra modules, all of which represented extra points of failure; today a lot of that is down to one small chip which can be replaced with relatively little impact. So far, the argument against owning something forever (like a family buying an early cast iron stove might have thought about it) is that there are still sizable improvements being made from model to model.

I think we may be in for this if the pace of technological improvements start slowing down notably.

shah8 / #89:

Of course, watch them scramble to protect their interests and deny this disruption.

Banks are a puzzling fit in this discussion – clearly many of their functions don’t seem to be uniquely valuable, and all the competition promises to boost responsiveness to customer needs and pare back some of the most egregious tacked-on fees. But on the other hand, bank panic and the Great Depression. Maybe this just means we need a truly centralized bank serving microlenders and other smaller players who do not need to be enshrined as “too big to fail.” We would still have to police predatory and incompetent practices, but what’s new?

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J Thomas 06.26.14 at 12:03 am

I’m increasingly unclear on the concept.

Some people talk like it’s disruptive if somebody gets disrupted. That implies that polio vaccine was disruptive because rather quickly the market for iron lung machines etc went away.

A second version, it’s disruptive if the new product is in some way inferior to the old product. But there is always *some* way that the new product is inferior. Automobiles are worse than horses because your horse can find its way home when you are too drunk to, but the car can’t.

I keep thinking it should be disruptive when it makes the market smaller. So for example, say you make a product which is important for computer chip design. If a company wants to equip 100 seats they need 100 copies of your product. But then somebody else comes up with a product which does 80% of the things yours does, for 20% of the cost. So the company with 100 seats then buys 80 of theirs and 20 of yours and they save 64% of the costs for that. The new product is inferior to yours but it dominates the market. Meanwhile the chip-design companies depend on you to make cutting-edge improvements and do new things they need done, and you have 20% of the budget you expected. That’s disruptive. And maybe you could have made the new product yourself but you didn’t want to. Because you would have cut your gross down to 36% of what it would have been if nobody introduced the new product. You don’t want that! But these new guys are happy to get 16% of what you would have been paid, because otherwise they would have nothing.

I think this approach is clear, and you can often tell whether it’s happening or not which is harder to do with the first two. But I get the impression people mostly don’t use this meaning.

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floopmeister 06.26.14 at 12:23 am

In reality, however, the vast majority of us don’t seek competition — or at least competition of the decisive and far-reaching kind. We don’t want to be conquerors and world beaters. We’re cooperative, social beings first and foremost, and we need to stop buying into the con.

Exactly! The application of the sterile ‘insights’ of orthodox economics to all fields of human endeavour (bye bye Gary Becker and good riddance to you…) is part of the con:

“[evidence] from many fields indicates that cooperation and altruism are the statistical norm and represent the more typical, “normal,” spontaneous (or natural) and healthy behavioral pattern in primates. In fact, cooperative sociality is a necessity for well-being in anthropoid primates.”
Sussman & Cloninger 2011, ‘Origins of Altruism and Cooperation’, Developments in Primatology: Progress and Prospects, Volume 36, Springer New Yorkp, pp. viii

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Thornton Hall 06.26.14 at 1:13 am

@114 FWIW in another thread today I was accused of being an idiot b/c I didn’t understand that North Korea is an example of what happens when a country is run “based on altruism.” It was a climate skeptic making the accusation in a thread on Bloomberg View where I was arguing that we sometime stop using a technology for reasons other than narrowly defined economic self interest (my example was slavery).

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MPAVictoria 06.26.14 at 1:20 am

Always avoid the comment sections of newspapers. They are where decency and good sense go to die.

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floopmeister 06.26.14 at 1:37 am

…North Korea is an example of what happens when a country is run “based on altruism.”

Sounds like someone’s been rifling through their well-thumbed copy of Atlas Shrugs again.

Never a good idea to base your worldview on a bad romance novel from the 1950’s.

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roger gathmann 06.26.14 at 1:55 am

I find it interesting that in the discussion of Lepore’s article, which specifically talks about continuity and incremental innovation, these terms disappear – as though innovation and disruption were identical. Her point, I think, is that they are not, and that there is a lot to be said for institutional continuity. I think this is a very good point. There’s a myth that when a technology is superceded, somehow, it will fade away. But horses are still massively used for plowing and even in the military – Osama famously got away on a pony. And many companies keep on doing the same thing for decades and even centuries. The internal combustion engine, using gasoline, is still the major mode of transportation in the US and most of elsewhere. We haven’t much changed the way we build roads, sewers, and skyscrapers. There was a nyt magazine article about the pacifier last week – the form with the little bulb attached to a small shield has been around since 1901.
Lepore isn’t denying that there are disruptive spillovers, but I do think the disruptive story of innovation is way overblown. Meanwhile, the destruction of r and d departments in favor of manic searches for disruptive apps is, I think, a fad that can’t last – although it can leave spillover damage. Here’s an article that seems pertinent, re the aging of our hard ware: http://www.nytimes.com/2014/03/16/magazine/silicon-valleys-youth-problem.html?module=Search&mabReward=relbias%3Ar%2C%5B%22RI%3A5%22%2C%22RI%3A16%22%5D

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Plume 06.26.14 at 2:58 am

Really good article by David Graeber, over at The Baffler, talking about sociability and evolutionary patterns. He focuses on the element of “play,” posing some very interesting questions about it possibly existing in much less complex organisms.

What’s the point if we can’t have fun?

I love the Taoist story he uses as illustration:

Zhuangzi and Huizi were strolling on a bridge over the River Hao, when the former observed, “See how the minnows dart between the rocks! Such is the happiness of fishes.”

“You not being a fish,” said Huizi, “how can you possibly know what makes fish happy?”

“And you not being I,” said Zhuangzi, “how can you know that I don’t know what makes fish happy?”

“If I, not being you, cannot know what you know,” replied Huizi, “does it not follow from that very fact that you, not being a fish, cannot know what makes fish happy?”

“Let us go back,” said Zhuangzi, “to your original question. You asked me how I knew what makes fish happy. The very fact you asked shows that you knew I knew—as I did know, from my own feelings on this bridge.”

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Plume 06.26.14 at 2:59 am

Sorry for the bad coding:

Here’s the link:

http://thebaffler.com/past/whats_the_point_if_we_cant_have_fun

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Anarcissie 06.26.14 at 4:53 am

We are the primates who invented slavery.

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Bruce Wilder 06.26.14 at 5:22 am

David Graeber . . . talking about sociability . . .

hmmm

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Plume 06.26.14 at 6:16 am

Anarcissie,

But who is that “we”? I doubt that it consisted of more than a tiny fraction of the population, from start to finish. Our alphas and sociopaths, our Alexanders and Napoleons, who now take up their world-beater positions in the corporate world, largely.

Again, I think they want us to accept responsibility, and that we’ve been brainwashed into believing that the pathologies of the richest and most powerful are shared equally among their victims. My observation of the human condition tells me this is pure propaganda and a con.

Not to see we bear no responsibility. Sometimes the absence of action is the presence of guilt. But for the most part, that “we” is a tiny slice of humanity . . .

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Plume 06.26.14 at 6:17 am

“Not to say” . . . . that is.

127

Peter T 06.26.14 at 9:18 am

As someone said upthread, there’s no point arguing with a load of bunk. “Disruption’ joins “re-engineering”, “flat structures”, “just do it” and much else as another fad – this time peddled from Harvard. There’s an endless appetite for being told that there’s a simple, easy way to do something complex and demanding. It is in particular vogue when the system elevates people who don’t have any real grasp of what they are running. The interesting thing is the kind of advice on offer: all these fads have a negative theme. They are not saying that aristocratic blood or the virtues of being white are enough to build an empire. Instead, they are saying that all you need to do is wreck something to make lots of money.

128

Shelley 06.26.14 at 11:53 am

As corporations become ever more powerful, they attempt to take over the mind as well as everything else. Teaching college, we hear of “productivity” and are given brilliant solutions such as cutting remedial classes as a means of reducing the students who need help. Get rid of the class, and voila! the students magically write at a higher level.

Business is a lousy model even for business. That’s how we got in the mess we’re in now.

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Thornton Hall 06.26.14 at 12:53 pm

@123, 125 & 126
Riffing off the idea of the alphas and psychopaths (my preferred phrasing for the people who brought us Reaganism is “grifters and sociopaths”) getting us to take responsibility and the way some dude from Harvard can come up with a clever name for a bogus phenomenon and sell a book, perhaps there’s a how to succeed in business trend book to be written about what I think is the quintessential strategy of the financial crisis:

If it is legal and it makes money you are morally required to do it as a business, which includes spending millions of dollars on an ad campaign to convince Americans that individuals who make the legal and money saving choice to walk away from an underwater mortgage are immoral.

Is there a one word description for that? Maybe if I ride in enough taxis with Tom Friedman I’ll come up with something pithy.

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Anarcissie 06.26.14 at 1:28 pm

Plume 06.26.14 at 6:16 am @ 123 –
So you don’t think the state is (re)created in daily life? If only the leadership, the superstructure, is pathological, why can’t the rest of us just cast it off?

@ generally –
It is true ‘disrupt’ etc. are buzzwords. However, I believe Marx on this one: the disruption of human culture, institutions, and relations is inherent in capitalism, and, if you look at the situation with a long enough perspective, in the whole slavery-feudalism-capitalism sequence, just beginning to go really fast at the end (where we are riding along in the handbasket). The situation would be more hopeful if we could count on capitalism finally disrupting itself into nonexistence before it destroys the world physically.

Like clichés and stereotypes, buzzwords often contain a core of truth.

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Stephenson quoter-kun 06.26.14 at 3:01 pm

tldr; arguing about change vs. continuity is pointless, the real question is about direction of travel.

roger @118:

Her point… [is] …that there is a lot to be said for institutional continuity. I think this is a very good point.

Disruption causes discontinuity because, by definition, it’s about incumbents being overtaken by newcomers. The continuation of the institutions of the incumbents is rendered impossible.

I’m not sure that this is so bad. Nothing is forever, we all die and we’re much better off for the fact that certain past institutions are now dead. The really important question is which institutions are dead, and which are likely to die in the future.

I think this is what’s behind the fear of disruption. There’s nothing wrong with disruption per se, and I imagine that if capitalist behemoths were being disrupted by socialist enterprises or anarchist collectives there would be many fewer complaints (from the average CT commenter, that is; I imagine somewhere there’s a community where the exact opposite reaction would occur). We’re not afraid of disruption so much as we’re afraid of the specific individuals doing the disrupting, and the kind of values they bring. Alex Payne made a similar point recently in response to Marc Andreessen’s insinuation that people who are worried about robots are anti-robot, whereas in fact they’re just worried about Marc Andreessen owning lots of robots (read it, it’s rather good).

To learn a bit from the other side, we might remember Friedrich Hayek’s “Why I am not a conservative”, in which he points out that simply resisting some idea of one’s opponents is never enough – the best you can hope to do is implement a milder version of your opponent’s proposal. The conversation we’re having right now seems to assume that:

1) Disruption is going to happen
2) We need to figure out which institutions need to be saved
3) We must complain, cavil and cajole until those institutions get some kind of protection
– or -
1) Disruption is bunk
2) But even if it’s bunk, it’s still going to lead to something that looks an awful lot like disruption happening to things we’d rather not have disrupted

Disruption is just a particular kind of change, in which the incumbent loses out. There are probably more bad incumbents than good ones. Plenty of them look like the kind of companies Clay Christensen would describe as vulnerable – no longer delivering what their customers want, relying on increasingly dubious innovations to sustain their profitability and position. The banks are basically fucked. The advertising model of most large internet companies is questionable at best. Customer-hostile approaches such as planned obsolescence, DRM and closed “ecosystems” are increasingly being used to juice profits and limit competition, as companies seem incapable of making profits in competitive markets. The software industry is actually pretty dumb. What would be wrong with turning around and saying “hang on a minute, how about we disrupt you?”.

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J Thomas 06.26.14 at 3:38 pm

Disruption at the technology level is a somewhat important concept. Incremental change will get you closer to your local optimum. It’s fairly obvious how to do it, and the rewards decline logarithmicly — usually the closer you get, the smaller the improvements still available.

When you switch to a new local optimum, all the incremental changes you made approaching the old optimum are wiped away. Maybe you can still use some of them, and the methods you used to make them may still be valuable, but everything you put into getting closer to the old local optimum is now obsolete. But of course you have something better, and since you’re lower on the learning curve you can probably improve faster…. There’s something there.

Disruption on the company level is less interesting, unless you are an employee or stockholder of one of the companies involved. Sure, evolution often drives species into dead ends, where they are selected to do something that works in the short run but gets precarious. It’s like you’re traveling through a giant maze, following the trail of cheese crumbs, and you’re finding more and more crumbs, and then suddenly you hit a blank wall and you’re a long way from anywhere and there’s no cheese. It happens. It happens. You can blame it on your competitors, which implies that they played a deeper game than you, but chances are they didn’t. Probably they were just luckier, in the short run.

Then there’s the bigger picture. How can it happen that a worse product gains market share against better products, perhaps driving them to extinction so that people who want the better products simply can’t get them? If you deeply believe in free-market economic theory that will seem like a contradiction. Though it’s always possible to come up with some sort of JustSo story to explain each individual example. If the new product is cheaper then we can say the customers preferred to pay less more than they cared about any other factors. If it’s more expensive but it’s pink we can say that women liked it better because it was pink. Etc. There’s always a story you can make up. But how about this one — every time you buy a major-brand product, a significant part of the price you pay goes to the advertising and marketing that is cunningly designed to make you want that product. You pay them to influence you to want their product instead of competing products, and a lot of what you pay for is zero-sum — they pay (and so you pay them) to pull you in different directions. Why would anybody expect that products would get “better” for consumers? You pay them to convince you it’s better. The better they do that, the more money they can spend to convince you more. Any objective measure of quality only comes into play when the difference between products is so large that it can’t be overcome by NLP mind control techniques.

So what’s the problem? Do you deeply believe in free-market theory? Hey, I’ve got a great deal for you in a slightly-used tooth fairy….

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Plume 06.26.14 at 3:52 pm

Anarcissie @128,

Why can’t we just cast it off?

Two movies I’ve watched recently illustrate why. “12 years a slave” and “The Magdelene Sisters.” The second one is a rewatch for me.

Powerful institutions can and often are structured in such a way that dissent is crushed almost immediately by a powerful minority, on a micro-level, on an every day level, as well as macro. The set-up can reach so far down that the victims end up bottling up their own dissent out of fear, and bottle up their fellow victims for the same reason. Fear of further punishment and loss. It becomes a situation where “the masters” have instilled discipline to such a degree, it works on the exploited even when the exploiters are not present. Exploitation is present, with or without the whips. And the majority stands by while their own members are brutally oppressed.

In the “Magdelene Sisters,” two girls finally reach the breaking point, but one of them is still on the fence enough to need the other to persevere. They leave behind a host of women, who remain slaves in everything but name. We might view the story as a hero’s journey, and cheer on the escape — as I did. But it also tells us how few actually do make their way out, and that leaving the vast majority behind means the exploitation, oppression and suffering remains.

Stories of heroes can be a pernicious reinforcement of that discipline in an indirect way. It can be a very subtle, perhaps even unconscious message to get out yourself, never mind the rest. Act as an individual, on your own, every man or woman for themselves, etc. etc. Which is pretty much exactly what that small minority of the powerful wants from us. Our atomization. Our self-segregation. Our being apart. Collective action, in solidarity — that they don’t want. The idea that we will emancipate everyone . . . . that is something they fear. Which is why they invented right-libertarianism and the “individual against the state” meme. Break us apart and force us to act alone, and they win.

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Plume 06.26.14 at 3:53 pm

That said, I agree with this 100%:

The situation would be more hopeful if we could count on capitalism finally disrupting itself into nonexistence before it destroys the world physically.

135

Ze Kraggash 06.26.14 at 4:37 pm

“Powerful institutions can and often are structured in such a way that dissent is crushed almost immediately by a powerful minority, on a micro-level, on an every day level, as well as macro.”

But this dissent is not (for the most part) of some philanthropic-communist nature. If dissent is not crushed, the dissenters will probably fight among themselves and those who win will soon reproduce the same (or very similar) structure. Human beings are products of their environment. The environment is changing: all those disruptions change it, little by little. We’ll see.

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Thornton Hall 06.26.14 at 5:01 pm

@129 the thing that does seem to have changed is the pace of change. There’s an interesting discussion about how this impacts business “moats” / monopolies / profits here: http://www.interfluidity.com/v2/5031.html

This stuff isn’t marginal, nor should we expect it to be. In fact, we should expect the prevalence of rent capture (or worse) as a source of economic profit to increase with technological progress. Why? Because, absent chicanery, technology increases the ease of production and the efficiency of distribution. As Schumpeter pointed out, the source of profit in real-life capitalism is the fact that monopoly power is ubiquitous because of natural barriers to competition. The corner store has a monopoly on the convenience of its neighbors, and so can capture some of the surplus that might otherwise be bid away to customers by competitors. On-demand delivery drones would eliminate that monopoly. Yet the corner store industry might lobby to prevent residential rooftop deliveries, in which case it is no longer exploiting a natural inefficiency but capturing a rent. In business school, students are taught that a successful business has a “moat” that makes it difficult for competitors to bid away ones margins. Technological progress renders moats that derive from nature harder to come by. Instead, successful businesses — and successful people (since under capitalism, a human is just a small business) — must rely increasingly on moats that result from social and political arrangements. We choose to grant monopoly rights to “creators” in the form of intellectual property and to expand their scope. We choose to limit the taxi business to medallion holders. We choose to prevent Indian doctors from competing in American hospitals, even though airplanes have eliminated locals’ natural monopoly. We choose to hire from the Ivy League. The distribution of profits is determined by social choices rather than by natural scarcities.

137

roger gathmann 06.26.14 at 5:02 pm

J. Thomas, I don’t think your first two paragraphs are right.

1. :Disruption at the technology level is a somewhat important concept. Incremental change will get you closer to your local optimum. It’s fairly obvious how to do it, and the rewards decline logarithmicly — usually the closer you get, the smaller the improvements still available.”

This is only true if you are dealing with something that has only one affordance. But the whole deal with incremental advance is that, working on one affordance or face of the technology often takes you to another face of the technology, another affordance space – in other words, incremental innovation is not a distinctly different type of innovation than disruptive, and I’d contend that sui generis disruptive innovation is extremely rare. Mostly, it comes out of incremental innovation, for the obvious reason that those technologies with one affordance are rare. Now it may be true that the organizational management of innovations that aren’t plugged into a certain pre-planned path make it difficult for organizations to understand what they have done – as per the transistor case at AT and T, or the numerous innovations at Xerox’s Parc. On the other hand, there is no hard and fast rule about this. By basically franchising their transistor licence, AT and T lost the profits that would have come from monopolizing it, but benefited from the network of new companies that started improving, changing, and developing the transistor. And certainly society as a whole benefitted.

2. When you switch to a new local optimum, all the incremental changes you made approaching the old optimum are wiped away. Maybe you can still use some of them, and the methods you used to make them may still be valuable, but everything you put into getting closer to the old local optimum is now obsolete. But of course you have something better, and since you’re lower on the learning curve you can probably improve faster…. There’s something there.

I’m not sure what this means. If you can still use “some of them”, then all the incremental changes aren’t wiped away. In other words, disruption here is simply a rhetorical exaggeration; the historical actuality is that it doesn’t work that way. You can’t have, on the one hand, degree zero, with all previous innovations wiped away, and, well, maybe that isn’t true completely. Which is of course Lepore’s point. When autos replaced horses, did blacksmithery get completely wiped away? No. Instead, the first auto mechanics generally came from the rank of the blacksmiths, because the innovations in metalwork and familiarity with the stresses of transportation, the road system, etc., were still valuable. Organizationally, the blacksmith shop had an advantage. Again, the idea that there is something existentially different about disruptive innovation proves to be not really the case at all. In case after case, both techologically and organizationally, the culture of incremental innovation makes “disruption” work.

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John Redford 06.26.14 at 5:18 pm

I have a rather personal stake in this issue because I worked at the ur-example of a disrupted company, Digital Equipment Corp. I was a chip designer there from 1981 to 1992. DEC’s collapse in the early 90s was a huge blow to Massachusetts, and was very much on the minds of people like Christiansen. It really did get un-done in the way he describes – it kept building better mini-computers as the far worse and far cheaper PCs overtook it during the 80s. DEC did take a stab at the PC business with the Rainbow line in the mid-80s, but the margins were awful and it was abandoned. The company itself was a great place to work and was wildly innovative, largely because of the workplace democracy mentioned above. “Those who propose, dispose” was the motto, and that meant that people worked on a huge range of technologies. Many have done stellar work elsewhere. Dan Dobberpuhl, for example, formed the processor team at PA Semi that now does Apple’s core chips.

So it’s not surprising that Christiansen and others looked for lessons in this disaster. It wasn’t the quality of the engineers and managers – those were both good. It wasn’t that the market was poor, or that the technology failed. It was just that they were too good at something that was becoming obsolete.

It’s now clear that he over-generalized this one case. Intel also faced disruption from smaller firms, particularly those adopting RISC architectures, and beat them back by expanding the x86 architecture farther than anyone thought possible. IBM was undercut by basement shops assembling PCs, and so found new markets. DEC could have done that in networking, or disks, or printers, or processor chips, but couldn’t manage the transition.

Companies fail all the time, and fail for a host of reasons. Christiansen-ish disruption is a real cause, and should be paid attention to, but doesn’t actually seem as important as he describes. DEC at least failed in an honorable way, by treating its people and its customers well. Dishonorable failure is far more common.

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Zamfir 06.26.14 at 5:55 pm

The hill-climbing optimization analogy has its weaknesses. It’s based on optimization algorithms that only ‘know’ places they have already visited, but know the value of those spots perfectly.

That’s not really how complicated real-world problems are tackled, not even real-world hill climbing. We typically don’t know some perfect value even of situations we have been in, just disputed estimates. And we also have such estimates of untried situations, just less good ones. We incorporate all of that in decisions what to try next, in a far more complicated way then even sophisticated algorithms.

There are complicated optimization algorithms that work a bit more like that. They incorporate a range of models of the problem at hand, some better than others, some more time consuming than others, and they switch between those models to get a coarse idea of some regions and a more reliable idea of promising regions.

Such algorithms don’t really have the strong dichotomy between local (convex) optimiztion, and global optimization. A local optimum in one model might not be so in another model, and the best model is still not perfect. The outcome is often not even a ‘best point’, just the build-up map itself, some promising regions, especially unpromising regions to stay away from. And a promising region is not necesssrily one with the highest value, but an areas where values are fairly high overall, so you’re not sensitive to small errors in the modelling.

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J Thomas 06.26.14 at 7:15 pm

Roger Gathmann and Zamfir, thank you. Clearly there have been revolutionary developments in this area while I wasn’t looking. I think the old concepts are adequate for the point I wanted to make, but I need to look into the new ideas.

… incremental innovation is not a distinctly different type of innovation than disruptive, and I’d contend that sui generis disruptive innovation is extremely rare. Mostly, it comes out of incremental innovation, for the obvious reason that those technologies with one affordance are rare.

I’m guessing that what you’re talking about is like this — the old concept of hill-climbing pictured a simple solution space with a 2 dimensional domain and a 1 dimension range for goodness. When there’s an optimum it’s a finite optimum, and as you get closer you level off — if it’s very steep near the optimum that isn’t great because when you try to use your solution tiny changes could drasticly affect the “tuning”. But the new idea says that when you think you’re hillclimbing and it looks reasonably simple, particularly when there are many dimensions at any time you might “turn a corner” and get access to improvements you had no idea were there. What looks like slow small incremental improvement can suddenly blossom into something big.

My thought is that when that happens, a lot of what you thought you knew becomes no longer directly useful. That creates a kind of disruption.

When autos replaced horses, did blacksmithery get completely wiped away? No. Instead, the first auto mechanics generally came from the rank of the blacksmiths, because the innovations in metalwork and familiarity with the stresses of transportation, the road system, etc., were still valuable.

I was wrong to imply that all the old knowledge became suddenly useless. But I think usually some of it does.

I will make up a story about your blacksmith example. Since I am not a blacksmith I might get it all wrong, but I hope the story makes sense. There are various things people care about, about metals. Strength, toughness, elasticity, all within some temperature range, etc. So, imagine that as a blacksmith you have learned a whole lot about how to manage the metal to get a very good strength, toughness, elasticity, etc for horseshoes. You are an expert at doing things just right to create the best horseshoes. But now you want to work on automobiles. You have the opportunity to repair or perhaps replace auto parts. They each need a particular strength, toughness, elasticity, etc. Your skill at getting that just right for horseshoes might accidentally fit the need. But more likely the needs will be different. You must learn what properties are required, and learn how to provide those properties. The methods you used to find out what properties were required for horseshoes and how to provide them, might come in handy. The work you did to get it just right for the old case, will probably not be useful.

Similarly, a secretary who developed a powerful set of macros to help her do her work in WordPerfect, will have it all to do over again when she is required to switch to Microsoft Word. (That isn’t very disruptive so she has a clear idea what functionality she needs, and only needs to figure out how to make Word let her do it.) An engineer who has developed a complex set of shell scripts in Linux to link together simple routines into an efficient way to access oil well data, has it all to do over when his boss requires him to switch to Windows.

And when your whole thinking has to change, it’s harder.

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MPAVictoria 06.26.14 at 7:25 pm

“The work you did to get it just right for the old case, will probably not be useful.”

This is why providing job training for layedoff factory workers is just not good enough. Very few people can make the jump from assembly line worker to public relations consultant or whatever. I know I couldn’t.

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Trader Joe 06.26.14 at 7:34 pm

Thanks to several for a variety of good ways to think about disruption. I guess the thing I struggle with, and its a point made several times, is why disruptive products have to be inferior, cheaper or otherwise destructive to the underlying product categorty.

I gave examples earlier with cable TV, let me try a different one – graphite shaft golf clubs. Prior to the use of graphite shafts a golfer had to make a trade off between straight shafts which afforded accuracy and flexible shafts which could produce distance.

The introduction of graphite shafts by Ping and others vastly improved the optimization between these two trade offs and over a fairly short period of time completely eliminated the prior technology. What’s more, because graphite shafts are more forgiving (because of the trade off) it sparked an surge of interest in the sport bringing in more dollars from amatures taking it up and more for professional golfters because a greater fan base led to bigger purses, more advertising and TV revenues.

While no doubt there were a few companies that were harmed by the elimination of the old technology, incumbents mostly adopted and benefitted from it as well. The ‘distruption’ allowed the pie to grow and enhanced the sport for both amaturs and professionals. Am I missing something in how this could be deemed both distruptive technology – i.e. completely replacing the prior, but at the same time not creating obsolescence, failure or inferiority?

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Thornton Hall 06.26.14 at 7:38 pm

@138 Interesting piece in NYT about the struggles of Eastern Kentucky. Raised the question of whether we should help places (which includes job training) or instead help people move. I know that is the sort of accommodation that forestalls the fall of capitalism, but in addition to creating a more flexible labor market, subsidizing the move from rural to urban also helps on climate change. Indeed, finding ways to get everybody to move to our best cities would spur innovation, improve health, combat inequality and raise happiness. There’s a reason rural white America feels threatened: they know that they are basically worse at everything. The idea that “this couldn’t be what the founders wanted?” is obviously comforting.

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MPAVictoria 06.26.14 at 7:41 pm

@140

Your idea seems appealing in many ways but I am hesitant to break up communities/local cultures. These people may not want to just move to a completely new environment. Is there anything we can do to help them find employment near their social/family networks? I would support a huge infrastructure building program. Hardly a new idea I know but there are lots of useful things we could be building.

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Thornton Hall 06.26.14 at 7:56 pm

@144. That’s the cultural tension that has made the word disruption such a lightning rod. I learned recently (this may be screwed up) that when humans first migrated into northern Canada, the climate up there was rather more pleasant than it is now. Which explains why some people stopped there rather than make the nice costal stroll down to San Diego. In that case, the disruption happened at a literally glacial pace. The result: people stayed, even as San Diego remained uncrowded. It’s the kind of think that makes you think resisting disruption isn’t a case of false consciousness in service of our capitalist overlords; but rather part of the human condition.

Also, they wouldn’t admit it, but the Inuit really would have like San Diego!

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J Thomas 06.26.14 at 8:05 pm

This is why providing job training for layedoff factory workers is just not good enough. Very few people can make the jump from assembly line worker to public relations consultant or whatever.

Sure. This is a side issue, but it doesn’t work very well even when it works.

“Here’s a high-paying job. We estimate there will be 2000 new people hired doing this work by the time you are trained, so we will train 5000 unemployed people to do that job. The best of you will take jobs away from people who’re doing them now, by getting lower pay.”

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MPAVictoria 06.26.14 at 8:25 pm

“Also, they wouldn’t admit it, but the Inuit really would have like San Diego!”

Ha! Probably.

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MPAVictoria 06.26.14 at 8:25 pm

@146
100% right, 0% wrong.

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Thornton Hall 06.26.14 at 8:28 pm

I think that one of the criticisms of “disruption” is actually a more far reaching criticism of how “market think” has infected our view of each other and caused many people to take up a theory of human motivation that is flatly contradicted by the evidence.

The world view asks, what would happen, but for disruption? And says: nothing, nothing would happen, the world would stagnate. They apply the same idea to individual people and conclude that people would basically turn into the folks on the spaceship in Wall-E if they were allowed to. Thus, tax cuts for the rich stimulate the economy and a Universal Basic Income would lead to sloth and drug abuse. The data contradict this at every turn: in 1979 we you paid 70% on income over $600k (2012 dollars) and yet, with no incentive, executives ran companies that invented everything that gets called “disruptive” and had the economy at full employment. The rich and poor abuse drugs at equal rates. More prime age French people get off their ass and go to work everyday than in America.

At a more macro level, there’s all the incremental progress discussed above.

The bottom line is this: disruption is neither a force for good or evil, but the belief that progress would never happen or that people would never get out of bed *but for* disruption, that idea is evil and it was put in our heads, against the evidence of our own eyes, by unpleasant self interested people.

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Bruce Wilder 06.26.14 at 8:43 pm

Somewhat counterfactually, “disruption” could be public entrepreneurship on behalf of expanding the scope of the commonwealth, using or reviving “the language of public trust, public interest, public service.”

It doesn’t always have to be in the direction of “privatizing” wealth and socializing losses.

We don’t have to look on, as at a car wreck, and say, oh well, accidents will happen. We could greet a financial crisis, for example, with a determination to exercise the bob mcmanus option.

I find I agree with almost everything Plume says. I don’t think we can actually do away with hierarchy in the economy or wipe social domination out of the genome, but we can oppose it, and in opposing, tame it. The political pathology of our times isn’t the strength of the right so much as it is a product of the weakness of the left. Many of the impulses that seem to threaten the survival of civilization do so, only because they are so little constrained. They are part of a natural ambivalence in human nature, and useful when constrained and compromised.

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Matt 06.26.14 at 8:56 pm

“Here’s a high-paying job. We estimate there will be 2000 new people hired doing this work by the time you are trained, so we will train 5000 unemployed people to do that job. The best of you will take jobs away from people who’re doing them now, by getting lower pay.”

You’ve nicely identified one of my pet peeves. I love (hate) this variation even more:

“I taught myself computer programming from a library book and now I make 6 figures. If your working conditions suck or you’re unemployed, you should just do what I did.”

This is a Klein bottle of callous stupidity. If everyone could write decent software with the aid of a library book and a year of plinking away on a computer every evening, then it wouldn’t be a desirable job niche. “Software developer” would near-universally become a low-pay low-stability job like freelance journalist. Of course the pontificating adviser doesn’t really fear that the millions of unemployed can swoop into his role after a year of retraining or self-study. The only reason to give “advice” of this sort is to tell a story about how awesome you are, and to leave the idea unsaid but hanging out there that anyone whose job prospects are terrible deserves it.

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MPAVictoria 06.26.14 at 8:58 pm

“The only reason to give “advice” of this sort is to tell a story about how awesome you are, and to leave the idea unsaid but hanging out there that anyone whose job prospects are terrible deserves it.”

Well said!

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Thornton Hall 06.26.14 at 9:22 pm

@151 It turns out that libraries were created by Andrew Caenegie for exactly this purpose. He extorted communities to commit future tax dollars to support the buildings that he built. If building learning palaces cured poverty, then Afghanistan would have it made! Europe has no libraries and more social mobility, we have billionaires comforted by the ability to point to buildings that could serve a million better purposes.

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roger gathmann 06.26.14 at 9:25 pm

142, the history of the development of the graphite club seems to me to be a classic instance of incremental innovation. First you have wooden shafts, then in the twenties you have steel shafts which simply replace wood and do not call for any redesign of the club, then in the seventies you get the flex, parallel tip shaft which is especially designed for metal – which means that wood and steel shafts are no longer inter-substitutable – and finally you get experiments with less weighty shaft materials, like aluminum, until the kinks were worked out of graphite. There wasn’t, in the meantime, a whole lot of change in the courses or the game. According to wikipedia, the number of people playing golf twenty five times a year has actually decreased since 2000.
The result of incremental change can be largescale change, but the problem with the disruptive model is it picks one event out of a series of events and ignores the other events in the series, as well as the structures – which are themselves constructed – in which the event takes place. Is the graphite shaft more revolutionary than the parallel tip shaft? How could it have even happened if it weren’t for the former change?

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liam 06.26.14 at 10:14 pm

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JimV 06.26.14 at 10:32 pm

Like a lot of bad ideas, I think “disruption” might have been popularized by Neutron Jack Welch, who boasted of taking a staid, reliable, R&D-based, manufacturing company (GE) and turning it into something exciting (a stack-ranked, financial/insurance company with permanent floating layoffs), and is said to have whispered to his successor Immelt, “Blow it up!”

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Bruce Wilder 06.27.14 at 12:17 am

Thornton Hall @ 153

You’re against public libraries? Really!?

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MPAVictoria 06.27.14 at 12:54 am

“You’re against public libraries? Really!?”

Hmm. I read him not as being against public libraries but as saying that building libraries doesn’t solve the problem of social mobility.

/likes libraries
//also buys WAY too many books.

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Del Cotter 06.27.14 at 12:15 pm

He wrote that public libaries were buildings that could serve a million better purposes. A million sounds pretty “against” to me.

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hix 06.27.14 at 6:59 pm

Europe has no libraries, really? Germany spents over a billion a year on them (not even counting the scientific ones which are open with no charge to non students)

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The Temporary Name 06.27.14 at 7:03 pm

I’m also thinking Thornton Hall is overestimating the palaces of learning in Afghanistan. They’re really in terrible shape.

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MPAVictoria 06.27.14 at 7:25 pm

“He wrote that public libaries were buildings that could serve a million better purposes. A million sounds pretty “against” to me.”

Good point. I probably read him wrong.
/Still likes libraries.

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roger gathmann 06.27.14 at 9:00 pm

160 – I have a card to the Paris public library. These libraries are scattered about the arrondissements, with a few of them having special collections – the Truffaut, for instance, which specializes in film, natch. It is open stacks and all that.
Of course, you don’t get to check books out of the really big libraries, like the Beaubourg, but you can go in there and read to your heart’s delight.
R

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Thornton Hall 06.27.14 at 11:49 pm

I spent all my summers growing up spending a lot if time in the public library. It was great. Of course, where I should have been was in school. As a result of the policy choice of public libraries and summers off school, poor kids fall behind and the rich (like me) have a parent or nanny at home to drop them off at the library.

And when in the past I commented that libraries were ubiquitous, I was corrected by several international people. And I think they were basically right: the American obsession with a public library in every town is unique and down to the benevolent choices of one of the most powerful men in the history of the world who decided he knew best and bought the right to spend my tax dollars.

Libraries are great! They are where homeless people apply for jobs and health insurance. But they are an example of private money inefficiently and artificially directing the spending of public funds. On process alone they are horrible. And when you think about a century of opportunity cost that could have been spent democratically, really it’s too bad.

I feel the same way about disease charities and their awareness campaigns. I’m not pro-breast cancer. But private money created a demand for a lot of public money to be spent on mammogram for perfectly healthy young women. When you look at the science: false positives, no change in survival down to early detection, and you remember that a certain percentage of surgery patients die from complications, you realize the net effect is actual an increase in deaths. If we are going to kill people with public funds, at least we could vote on it, yes?

Thanks to those who thought the best of my unclear writing, but on balance, despite the great memories, I think I am against public libraries.

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Main Street Muse 06.28.14 at 1:45 am

I do not view this article with the reverence others seem to view it. I have not read Christensen’s book; from Lepore’s book review, it seems he views some product evolutions (disk drives) as disruptive – I would say the initial concept of writing to a disk instead of printing to paper was (and remains) disruptive; that the size of the disks changed was evolutionary, not disruptive. But again, I have not read this book that occupies so much of this essay. From Lepore’s review, it sounds like some of Christensen’s research may be a bit shoddy (the part about hydraulic shovels as an example.)

The name may be newish, but “innovative disruption” is not new. The printing press was disruptive technology. Industrialization was disruptive. The Internet has been enormously disruptive of virtually every sector in business and academia. Apple’s products – from the initial desktop computer to the sleek computers they sell today to the iPod to iTunes to the iPhone to their stores – this is a company that has massively disrupted so many industries.

If b-schools are implying they can provide a code to determine future disruptive technology, that’s their egos talking. But true innovation inevitably brings disruption.

From Lepore: “When the financial-services industry disruptively innovated, it led to a global financial crisis.” I do take issue with Lepore’s definition of what happens on Wall Street as “innovative disruption.” Wall Street bankers are using some of the oldest tricks in the book – packaging snake oil as something “good for you.” There is a level of corruption in finance that simply is not reflected in the idea that CDOs, CDSs etc are part of a benign goal to “disruptively innovate” the financial sector. They were created to disseminate risk by obscuring the risks inherent in these products. (See Kenosha County school district for more on this “riskless investment” http://bit.ly/1aBPZgS)

From Lepore: “Disruptive innovation goes further, holding out the hope of salvation against the very damnation it describes: disrupt, and you will be saved.”

Are business leaders throughout all sectors preaching this idea of disruption brings salvation? The business people I’ve worked with have not shouted out this buzz-word to their audiences at the corporate meetings. If academics/writers/b-school visionaries are preaching this gospel of disruption = salvation, then how silly! Perhaps this is why our economy is in the toilet now…

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The Tweets of the Gods 06.28.14 at 3:19 pm

> Are business leaders throughout all sectors preaching this idea of disruption
> brings salvation? The business people I’ve worked with have not shouted out this
> buzz-word to their audiences at the corporate meetings. If
> academics/writers/b-school visionaries are preaching this gospel of
> disruption = salvation, then how silly!
In Silicon Valley, this buzzword is all the rage now.

> Perhaps this is why our economy is in the toilet now…
At Harvard Business School, it is even worse. If you dare suggest that the theory of disruptive innovation is old hat, just old stuff, Christiansen (pronounced sometimes with accent on “Christian”) and his acolytes will not just disagree with you, they will actually punish you.

In an indirect way, it is indisputable that this is why the economy is in the toilet. These fellows as well as many other professors who have acquired their own little kingdom of minions won’t let any actual research get done at the Business School. Business research is chiefly about monkeys throwing c**p at the disciples and leaders of rival factions.

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Thornton Hall 06.28.14 at 4:43 pm

@The Temporary Name 161: I have no idea what kind of shape the things we have built in Afghanistan are. The point I was making was this: empirically it’s been shown that building schools is worse than useless because of the money it wastes. Poor folks don’t need buildings for their teachers, they need money to pay their teachers. Or, if it turns out they are starving, money to feed themselves. Building schools is literally the least we can do, the least effective use of our money. It has been demonstrated many times that poverty is a condition defined by the absence of money. The way to cure it is to give people money. See this piece by Dylan Matthews in Vox: http://www.vox.com/2014/6/26/5845258/mexico-tried-giving-poor-people-cash-instead-of-food-it-worked

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UserGoogol 06.28.14 at 8:46 pm

Speaking of Dylan Matthews in Vox, he has another article where he uses the language of disruption to argue on behalf of prison abolitionism. (House arrest disrupts prison, basically.) Which aside from being an interesting idea, I think shows that disruption doesn’t really have to be a dehumanizing way of thinking about things.

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