Thursday, May 28, 2009

Is Enterprise Going Non-Linear?

I just finished reading an older but still well-written book on American technology and enterprise entitled (appropriately enough), A History of American Enterprise, by John M. Dobson. Dobson was a professor at Iowa State University and he wrote the book in 1988 as a text for undergrads. Dobson did a great job of summarizing how technology and enterprise worked hand-in-hand from colonial days up to his time. Now that twenty more years have elapsed, it is interesting to see how the next couple of unwritten chapters have played out: the Gulf War, the Booming 90's, the dot com crash, 9/11, the Iraq and Afghanistan Wars, and now the bursting of the housing bubble and the deepest recession since the Great Depression. Clearly, this has not been a very stable period.

In reading this history, I was struck by how much more volatile recent times seemed to have been. Boom and bust cycles have always been a part of our history, of course. So have crooks, moguls, builders, and innovators. No, what struck me was that sometime around the 1970's, the system seemed to have moved from being reasonably understandable to being very volatile, almost chaotic in the mathematical sense of the term. The U.S. was moving into a post-industrial economy that was based more on imported products. Finance and services were rising as a total share of employment. Globalization was driving more and more businesses to outsource jobs and functions. In many ways, all these things were linear extensions of what had come before. Companies have always sought lower labor costs and more technology to automate their operations. Something else seemed to be happening that was quite different from the past.

I believe that the U.S. economy went into a new period in history because of two related things that reached some sort of critical mass in the late 70's and early 80's. The first (and the main driver) was the advent of ubiquitous, high-speed computer information networks. These networks not only opened the door to new financial products and services but they also allowed clever traders to generate profits on momentary differences in security prices across markets (arbitrage) that could never have been realized by human traders. These profits brought about the second change. The seemingly unstoppable ability to make easy money in financial trades invited huge sums of money into the market. More and more people and institutions felt like they were being left behind by traditional investment plans and the uncertain future of Social Security. The massive amount of money that was then traded in increasingly complex and split-second automated transactions essentially took us into a world where no one clearly understood or had sufficient control of business cycles. Some of this is becoming visible only now as people try to untangle the web of securitized mortgages and credit default swaps and other even more complex vestiges of the current melt-down.

I realize that there were dozens of other things going on during that time; Reagan supply-side economics, de-regulation, the explosion of wireless technology and the World Wide Web to name just a few. Part of complex, non-linear systems is that small inputs can create large and unexpected outputs. But I do believe that the system somehow slipped beyond the immediate control of real, breathing people. The question is not whether we will return to the "good old days". We will never go back to pre-automation. We wouldn't want to if we could. The question is whether future systems can be built with enough intelligence to limit the damage that can occur when huge sums are traded across the globe in microseconds. I believe that our systems will get smarter, partly because someone will figure out how to make a buck by helping them to do so. I also think that regulation is the human version of technology control systems. They are there to provide checks and balances to the operation.

I believe that the long view of history and technology provides us with a much needed antidote to the 24-hour business news cycle. When I read books like Dobson's, I see that there have been periods when we have accomplished great things and other periods when we seemed to have lost our rudder. Hopefully, we will be coming out of our current downturn soon. And you can be sure that technology will play a vital role as it always has.

[Photos: Top picture is a Lorenze Attractor from Chaos Theory. Bottom is a Televideo computer terminal. Both from Wikipedia.]

Friday, May 22, 2009

Michigan Central Station

UPDATE, March 6, 2010:  The New York Times today has another article with some beautiful photographs of the station.  Debate continues about the fate of this historic building which is slated for the wrecking ball if no one comes up with an alternate use. I found it interesting that the station has over 15,000 fans on some Facebook pages. I hope it survives.

I literally stumbled upon (via Stumble) some achingly beautiful photography by Kevin Bauman. The image below is one of his photos of the Michigan Central Railroad station in downtown Detroit. You can see others at the Behance Network and it is well worth a visit.

The images made me curious about this grand old railroad station. Wikipedia has a nice write-up on it here. The station was built in 1913 by the same architectural firms that built Grand Central Terminal in New York City. The main waiting area was designed to replicate a Roman bath house with grand ceilings and walls of marble. It was built some distance from the (then) Detroit downtown to encourage building out to meet the station. Two things happened to defeat those plans. First, the station was built for an era when passengers came and left the station by trolley and interurban electric cars. The station had very limited parking for automobiles. Second, Detroit expanded northward and not towards the station, leaving it marooned in the less trafficked part of the city.

Railroad passenger trains are virtually gone now except in the Northeast Corridor. The last Amtrak train left the Michigan Central Station on January 6, 1988 and the building was closed that same afternoon. During the 1990's, the station was heavily vandalized and was gutted by thieves looking for materials to sell. It is now owned by the same company that owns Detroit's Ambassador Bridge. Virtually every plan to restore the station has fallen through and just within the last month, the Detroit City Council asked for emergency funds of $3.6 million, not to preserve the building but to tear the old station down (even though it was placed on the National Historic Building registry in 1975). A gentleman in Detroit sued the city to block the demolition of the building and that is where things stand at the moment.

I can't help but think of the contrast between the fate of this beautiful old station and the busy and prosperous Grand Central Station. The comparison is as stark as the comparison between Detroit and New York City. Detroit was built by the automobile. Ford's town. General Motors and Chrysler, too. With all the terrible automotive news of late, a betting person probably wouldn't put much money on the revival of the auto industry...or Detroit.

Another interesting look at the station just before it started to go downhill can be seen on this YouTube video taken in 1987. It gives you some idea of how beautiful the station was even late in its active life.

Time passes and technology changes. The architecture that served that technology passes with it. Still, there is beauty in the past and perhaps a way will yet be found to save the old station. We can hope.

Saturday, May 2, 2009

Technology Revolutions Redux

The future of the newspaper was the topic of a post I wrote about a month ago. Clay Shirky has written a great article on the topic which I featured in my blog. Recently, I read a corresponding article on the future of the book (or e-book). Steven Johnson wrote this one for the Wall Street Journal and I highly recommend taking a few minutes to read it. The future of the book seems to me to look much like the future of the newspaper: smaller and smaller chunks of content sold piecemeal rather than as a whole unit, writing that is directed at least as much at ensuring that it hits the top of Google search results as about the content itself, not to mention the disappearance of a physical world of packaged printing.

I am proud to be a bibliophile. I love books and I love bookstores. I love the feel of books and I love having a nice satisfying pile of unread books ready to be savored. But, I also admit to being a gadget geek. I love my iPod Touch with its ability to download e-books from Project Gutenberg (free via Stanza) and now even from Amazon (not free) with their Kindle App. There is something to be said for the ability to have a library in my pocket. I am even toying with the idea of buying a Kindle 2, but that might be pushing it a little too much.

Given my dual loves, it probably isn't surprising that I feel ambivalent about all of this deconstruction of the book. I see e-books as simultaneously a step forward and a step back. Is the gain from broader access offset by the cost of a more fragmented attention span? Who will have the time or attention to read a five-hundred page work of history or a great novel? How will we cope with an ever-increasing number of book options available both digitally and in good old fashioned paper?

While the winds of change seem to be blowing us in the direction of fragmentation, I am actually optimistic about the future of the book. I think both the printed book and the e-book will continue to grow and complement each other. That is not to say that publishing will remain what it has been. I think the whole domain of printing-on-demand, self-publishing, and micro-presses will continue to grow. But books as we know them will not disappear any time soon. Remember the much-hyped "paperless office" of a decade ago? Office printers have never been so busy.

We are in the midst of a technology revolution and any sort of new quasi-equilibrium is still in the distant future. When it does arrive, we can be sure it will not be what we might predict today. That is the whole fun of living through a revolution. At least on my better days it seems that way. On my conservative days, I grumble and rant about how it just isn't what it used to be. But it never has been what it used to be and for that we can count our blessings.