Improving the Process Is No Improvement


Making the Future Work, by John Diebold, New York: Simon & Schuster, 466 pp., $18.95

I began reading Making the Future Work with high expectations. I was deeply disappointed by the time I finished it.

Why the high expectations? Author John Diebold has long been one of the nation's most prominent futurists. In 1952 he achieved public notice with his book Automation: The Advent of the Automatic Factory. He served on the Secretary of Labor's Advisory Commission on Manpower and Automation from 1962 to 1964. Since 1969 he has been a member of the US Chamber of Commerce's Council on Trends and Perspectives. He founded and heads the Diebold Group, a successful management consulting firm. Surely when such a person writes a book subtitled "Unleashing Our Powers of Innovation for the Decades Ahead," it deserves attention.

Diebold's competence in the areas of automation and technology shows clearly. He is one of the few futurists who understands that no one was killed at Three Mile Island. He writes convincingly of the need for corporate managers to take technological change into account. He explains clearly how foolish it is to spend more money eliminating the last 10 percent of pollution than it cost to eliminate the first 90 percent. He discusses knowledgeably the problems of workers in an era when old job skills are becoming worthless. With justifiable pride, he points out that he was one of the first to say that automation wouldn't cause unemployment but would require workers to be retrained.

Moreover, Diebold writes some very exciting things about the role of private enterprise in performing "public" functions. He discusses the successes several cities have had in switching to private collection of garbage and even private police forces. He writes favorably of educational vouchers and the possibility of private schools competing on equal financial terms with the public school system. He states, "The time for non-collectivists to press home their case has never been riper. I believe the business community should seize with both hands the opportunity presented by public disenchantment with bureaucracy and big government." In short, there is much here to delight a lover of freedom.

Why, then, was I disappointed? Because these things really aren't what the book is about. On the very first page, Diebold states, "This is a book about big societal problems, but addressed from the standpoint of process, function, structure, and management" (emphasis in original). That is, he intends to address those big problems that concern society as a whole, and to do it from the standpoint of the processes by which those problems can be solved.

Diebold writes, regarding computers, information technology, and rational analysis: "If we can get our policy formulation process right, we will find at our disposal [these] extremely powerful tools." He states that this process should be "a way to bring into account all the factors in a decision—pros and cons, costs and benefits, risks and rewards—and evaluate them fairly and impartially." Moreover, this process should be "a way to settle an issue—and keep it settled—by making a tradeoff among existing alternatives and then setting a time limit for possible vetoes."

Diebold's view here is essentially that this policy process should allow us to treat problems as technical matters, devoid of politics, to be settled rationally on the basis of facts alone. He cites several examples to illustrate the kinds of problems with which he is concerned. One example concerns a river and associated wilderness area in Washington state. In 1959 a flood "destroyed two small towns, washed away acres of farmlands, and damaged $8 million worth of crops." The farmers wanted a flood control dam. The US Army Corps of Engineers was prepared to build one. However, the governor would not approve the dam because of objections by white-water kayakers who used the river, hikers who wanted to preserve the forests along the river, and environmentalists who feared the dam would be a prelude to further urbanization.

Diebold decries the lack of a rational process by which these conflicting interests could be reconciled permanently. He then describes how, after a 14-year deadlock, outside mediators helped the participants reach a solution in which the farmers got their flood-control dam but had to accept land-use controls that protected the wilderness areas.

Diebold looks upon this process as necessarily involving government. While saying that he favors the free market, he considers past government interventions beneficial and favorably quotes Alexander Hamilton: "In countries where there is a great private wealth, much may be effected by the voluntary contributions of patriotic individuals; but in a community situated like that of the United States, the public purse must supply the deficiency of private resource." Diebold doesn't seem to mind the government intervening; he simply wants it to do so rationally.

Why hasn't government solved the problems he writes about, then? The reason he offers is that government is not structured to provide the proper incentives to attract and keep competent people. His objective is to restructure government incentives. "What this book is about," he says, "is changing the system so that the incentives can be put in place to attract exceptional people to public service and to reward their exceptional performance."

The disappointing thing is that Diebold doesn't seem to realize that his proposed solutions are doomed to fail, because he looks in the wrong place for the source of the problem. Consider the river example. The issue arose at all only because none of the parties—white-water kayakers, hikers, or farmers—had secure and well-defined property rights in the land and water they were using. They could achieve their objectives only by convincing someone else to do or not do something. No "process" is going to alter this. In fact, the mediation process did not secure any of their property rights. The Army Corps of Engineers, not the farmers, controls the dam. The wilderness area is controlled, not by the hikers, but by politicians who put their own interests first. Moreover, the dam was paid for, not by the beneficiaries, but by the taxpayers, who didn't even take part in the negotiations. Hamilton's "public purse" ultimately had to be filled with private wealth. This isn't a "solution"—it is merely a scheme for hiding the problem for a while, at taxpayer expense. Yet Diebold praises it.

Diebold also echoes the familiar futurist complaint that people are shortsighted and fail to consider the long-term consequences of their actions. He blames the media for this. Again, he fails to recognize that the problem isn't shortsighted people but the perverse incentives that government establishes that reward people in the short term for actions that are destructive in the long term. Welfare is probably the most egregious example, but the low savings rate in America, which Diebold contrasts unfavorably with that in other countries, arises simply because the US tax system punishes saving and rewards borrowing (that is, using up other people's savings).

In summary, once he leaves the areas of technology and automation, which he knows well, Diebold stumbles badly. He identifies some genuine problems, but his proposed solutions miss the mark. This is because he fails to identify the true cause of the problems. Improving the processes by which the government intervenes in society can't help when the basic problem is government intervention itself. As economist George Stigler put it, "Whenever you see a problem which seems to cry out for government intervention, first look for the government intervention which caused the problem." Instead, Diebold looks for a more efficient process for government intervention.

Joseph Martino is a technology forecaster at the Research Institute of the University of Dayton.