Efficiency is killing America

America’s economy is so rigid it is doomed unless it can allow tweaking. Ideologies such as strictly “free” markets hold back any attempt to make the economy flexible, responsive or resilient. It must be completely one way or the other in the USA and everything must be locked down and tamperproof with rules and laws. This kind of thinking is ripped to shreds in Roger Martin’s When More is not Better, an eloquent and timely look at the decline and fall. It is filled with innovative ideas that are working elsewhere, and plenty of ideas that need serious consideration.

Martin says all models are wrong. They attempt to mimic a natural, complex, dynamic and adaptive system that is tied up in absolutely everything going on on the planet. So naturally, they can’t account for every event, every variable and every happenstance. The result is usually one economist out of thousands being right about the coming year.

Imperfect models and rigid ideologies mean a change from the bell-shaped Gaussian curve to the rather ugly Pareto curve. In the Gaussian, he says, the distribution of wealth, income or production, peaks in the center, and the extremes get or achieve less. In the Pareto curve, the rich 1% are at the very tip on the extreme right, will all the success and no competitors. This is also where the one or two companies that control a market find themselves. Almost everyone…