Monday, July 16, 2007

Why I am a Libertarian

Admittedly, I am borrowing someone else's words here, but this idea captured so succinctly why I am a libertarian: I am just naïve enough to believe that the Constitution of the United States was supposed to guarantee and secure the rights of the individual endowed by the Creator, rather than beat into submission any individual who disagrees with the democratic will of the majority.

Saturday, July 14, 2007

George P. Burdell's Recommended Reading List

Here’s a short excerpt of my recommended reading list that I frequently suggest to clients and other professionals. Some of the texts don’t necessarily speak directly to day-to-day business, but the applications of them to business are profound in many ways. This list represents some of the most helpful books to my own professional growth as well as the most enjoyable to read. An asterisk marks those I regard most remarkable. I will update this list from time to time.

By far, some of the best business books are biographies about the successes and failures of people in diverse arenas.

Theodore Rex
by Edmund Morris

John Adams *
by David McCullough

The Education of Henry Adams *
By Henry Addams

MY BRAIN IS OPEN: The Mathematical Journeys of Paul Erdos
by Bruce Schechter

A Beautiful Mind
By Sylvia Nasar

Incompleteness: The Proof and Paradox of Kurt Godel*
by Rebecca Goldstein

The Autobiography of Benjamin Franklin *
by Benjamin Franklin

Benjamin Franklin: An American Life
by Walter Isaacson

Boyd: The Fighter Pilot Who Changed the Art of War *
by Robert Coram

Few people understand that there is a well understood science behind effective decision making. If you learn this methodology, you will always make a good decision. Over time you will increase the likelihood of experiencing desirable outcomes, too.

Decision Traps *
by Dr. J. Edward Russo and Dr. Paul J. H. Schoemaker
Few people have the training they need to make good decisions consistently. Becoming a good decision-maker is like training to be a top athlete: Just as the best coaches use training methods to help athletes develop proper techniques and avoid mistakes, Dr. J. Edward Russo and Dr. Paul J. H. Schoemaker have developed a program that can help you avoid "decision traps" -- the ten common decision-making errors that most people make over and over again. It is extremely well written and simple, yet it is very powerful. The basic concept of the book is: if you want to mess things up, then think this way.

Smart Choices : A Practical Guide to Making Better Decisions*
by John S. Hammond, Ralph L. Keeney, Howard Raiffa
Combining solid research with common sense and practical experience, this user-friendly guide shows readers how to assess deep-seated objectives, create a comprehensive set of alternatives, determine likely consequences, make tradeoffs, and grapple with uncertainty. Not only will readers learn how to make decisions, they will learn how to make the smartest decisions. For anyone caught at a confusing crossroad–whether you’re choosing between mutual funds or deciding where to retire–the Smart Choices program will improve your decision-making abilities immediately, and make your life more rewarding and fulfilling. Look for other works by the authors. They are some of the thought leaders in DA. This book is DA 101, but I use it as a reference all the time. I also use it as a primer with people making personal decisions. Introduces a little math, but nothing complex.

Value-Focused Thinking: A Path to Creative Decisionmaking*
by Ralph L. Keeney
This book is a little more in-depth than Smart Choices. It’s basic idea is that every decision should be framed in part by goals and values of the stakeholders involved. Everything by this guy is worth reading. The material is important and profound, but his writing is clear, lucid, and free of jargon. Keeney gets into some mathematics that may scare some people off, but it is no more than algebra. For the most part, you can even skip the chapters that deal with math.

Making Hard Decisions: An Introduction to Decision Analysis (2nd Ed.)
by Robert T. Clemen
This best-selling and up-to-date survey of decision analysis concepts and techniques is accessible to a wide range of backgrounds. This is the Pentateuch of decision analysis. You must read this before you can enter the Temple.

Introduction to Decision Analysis (2nd Edition)
by David C. Skinner
David Skinner shares the wealth of his experience and expertise about decision making in a clear, practical way. This book is an excellent resource for managers, technical professionals, and decision analysts, regardless of your experience level with decision analysis. It tells you how you make the theory practical in collaborative decision-making environments.

Why Can't You Just Give Me The Number? An Executive's Guide to Using Probabilistic Thinking to Manage Risk and to Make Better Decisions
by Patrick Leach
An excellent book to give to your boss to explain why probabilistic reasoning is so important and powerful for generating deep insights and creative solutions.

Organizational Learning and Management
How to learn and lead within any organization is one of the keys to personal and professional success.

Overcoming Organizational Defenses: Facilitating Organizational Learning
by Chris Argyris

Flawed Advice and the Management Trap: How Managers Can Know When They're Getting Good Advice and When They're Not
by Chris Argyris

Reasons and Rationalizations: The Limits to Organizational Knowledge
by Chris Argyris

The Trusted Advisor
By David Maister

Economics & Economic History
We live in an economic universe: unlimited demands on limited supply. It’s good to think about how best to allocate resources to achieve one’s goals. It’s also good to know how people can destroy good economic practice, especially through good intentions.

The Wealth of Nations
Adam Smith

Capitalism, Socialism and Democracy
by Joseph A. Schumpeter

The Road to Serfdom (Fiftieth Anniversary Edition) *
by F. A. Hayek and Milton Friedman

Free to Choose *
by Milton Friedman and Rose Friedman

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
by Steven D. Levitt and Stephen J. Dubner

Guns, Germs, and Steel: The Fates of Human Societies, New Edition
by Jared Diamond

Against the Gods: The Remarkable Story of Risk
by Peter L. Bernstein

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets *
by Nassim Nicholas Taleb

Armchair Economist: Economics And Everyday Experience
by Steven E. Landsburg

Hidden Order: The Economics of Everyday Life
by David D. Friedman

Basic Economics: A Citizens Guide to the Economy, Revised and Expanded *
by Thomas Sowell

Applied Economics: Thinking Beyond Stage One *
by Thomas Sowell

The Spirit of Democratic Capitalism *
By Michael Novak

The Long Tail
by Chris Anderson

Analysis for Financial Management
by Robert C. Higgins

Strategy Theory
If you don’t know where you want to go, how, and why, you probably won’t get there.

Competitive Strategy
by Michael E. Porter
THE Bible on strategy. No other substitute.

Certain To Win: The Strategy Of John Boyd, Applied To Business
by Chet Richards

Ender’s Game *
By Orson Scott Card
This is a science fiction novel, but Card accurately demonstrates in a compelling narrative how maneuver theory works.

Understanding how people think and perceive their environment and how this differs among individuals (even in abnormal and pathological ways) is critical to understanding how to work with people in organizations.

An Anthropologist On Mars: Seven Paradoxical Tales
by Oliver Sacks

The Man Who Mistook His Wife For A Hat: And Other Clinical Tales
by Oliver Sacks

Thinking In Pictures: and Other Reports from My Life with Autism
by Temple Grandin

Animals in Translation: Using the Mysteries of Autism to Decode Animal Behavior
by Temple Grandin, Catherine Johnson

Monday, July 02, 2007

The Boids and the Bees

I really thought this was an interesting article.

One thing that struck me about swarm theory is the lack of management hierarchy as an element of the system. That's probably the point. But why have humans derived management by command-and-control and management hierarchy rather than swarm approaches? Conversely, why doesn't a swarm include such a method? What are the benefits of either? The risks and costs? Could it be that dumb humans aren't as smart as ants, bees, and wildebeasts? Are there good reasons that we have developed command hierarchies in our organizations? Or does such a practice represent foolish consistency and social inertia? Might there be some conditions where one approach is more beneficial than the other, but we've failed to be flexible enough to recognize the differences in conditions that would prescribe one approach to prevail over another?

Part of the reason for such a lack of management hierarchy may be that the swarm focuses on relatively few well-defined activities: gathering food, securing and maintaining shelter, protecting the hive, and reproducing. So it’s not that hard to insure that each individual “knows” exactly what its task is. Secondly, the task assignments are probably hardwired in some way (whether determined by genetics or assigned during the development phases of the young. Alligators predetermine the gender of their offspring by controlling the temperature of their eggs, so it wouldn’t surprise me that bees and ants can determine the task assignment of their offspring by controlling temp, food content, etc.), so there is very little ambiguity about the nature and purpose of each task and the vital reason it needs to be done. Since humans largely join companies primarily to earn a living, the goals of their organization are largely secondary to them. Most people aren’t genetically predisposed to work in a given company. They may even switch frequently among employers. In the minds of the individuals, the survival of the firm or human species isn’t dependent on the actions of the individual, and individuals often overlay their agenda with the agenda of their employing organization, confusing the two. Hardwiring the agenda goes a long way to avoid this ambiguity of purpose.

My initial reaction to the truck-to-ant analogy was that such an analogy is a false one. It seemed to me that the trucking company really just identified the right objective function (minimize cost, not minimize distance traveled) and acted accordingly. Maybe there is more to the swarm theory employed by the trucking company than revealed (or even understood) by the writer. In more general terms, an ant is an unsophisticated automaton, following a simple rule. The cases described in this article are frequently cases where the simple heuristic of following local price signals works well. This has nothing to do with pheromones, and it is nothing new. It is free (rational) enterprise, and its philosophical basis and empirical success are well established in the literature. I'm more inclined to see the telecommunications analogy.

It was the bees’ heuristics I more thought about as related to my own work in decision analysis. In fact, I wrote back to the friend of mine who alerted me to the article and noted that the odd thing about the bees was that they weren’t simple automatons, that they formed an “opinion.” What I found analogous to decision analysis in the example given by the bees was that the bees seek a diversity of options, allow the options to compete against some objective function, and then use some mechanism to narrow the choices. I don't think that the history of decision analysis includes consideration of swarm behavior as its inspiration. Rather, I think rational human intelligence discovered a means for solving uncertain, resource constrained problems through rational thought and experimentation, and nature converged on a similar solution through evolutionary means.

Of course, what is missing from the swarm approach is the means by which the diverse options are "considered." Unless bees are more sentient than I think they are (...which very well may be the case, but no bees have disclosed the level of their sentience to me yet. Many have indicated that I should leave their nest alone.), it seems that bees find their candidate solutions via trial and error, stimulus and response. But it seems to me that human creativity is a special kind of intelligence that may obviate swarm intelligence. Human creativity seems to be driven in virtual reality; that is, humans seem to create alternate realities for consideration. We can visualize a desired or undesired future, and then derive the mechanisms that facilitate or mitigate that conceived future state, and we can hybridize our original set of considered alternatives. In other words, human intelligence and creativity seem suited for strategic thinking. Swarm "thinking", on the other hand, seems to be the biological analogue to such mathematical processes as Metropolis and genetic algorithms, a means to solve well-defined yet mathematically intractable and computationally huge problems. If the situation is more ambiguous, such an approach may be quite brittle.

The closest example I know of a company that implements a hybrid of both approaches to solving problems is Oticon, a Danish company that makes hearing aids. The management team takes pride in its minimal interference with the actions of the work force. Teams are self-forming and self-dissolving. If a technical employee has an idea that he thinks is worth pursuing, it’s up to him to convince his co-workers to join the effort. If he can, the team is formed. If he can’t, then the consensus is that the idea isn’t currently a good one. At any given moment, a typical employee will be on several different teams, each at a different stage of the overall development process. The management team also takes pride in maintaining a certain level of chaos in the office. No one has an assigned office, employees keep nearly all of their information electronically on laptops, and most furniture is on wheels – all to encourage dynamic grouping and re-grouping. Getting back to my original questions, this is more than slightly different from the typical command-and-control attitude of many American management teams. The real questions in my mind are:

  • does such a "swarm" approach to management actually provide higher returns than the alternatives

  • under which conditions does one approach work better than others?

  • in what ways might aspects of command-and-control hybridize with "swarm" approaches to produce even better results?

It looks like I have more reading to do here

Oticon: unorthodox project-based management and careers in a "spaghetti organization"

and here

Swarm Intelligence: A Whole New Way to Think About Business.

The one last thing that I thought was interesting about the article was that the author tried to attach swarm theory to altruism in the end rather than the obvious: free market capitalism. I wonder why? The Wealth of Nations describes how capitalism benefits everyone in almost the same language as that used to describe swarm theory many years before swarm theory was ever conceived; i.e., individuals acting in their own local self-interests ultimately provide what the global market wants, increasing the value experienced by everyone.

The Necessity of the Electoral College

In preparation for the celebration of Independence Day, in which Americans (should) recall the sacrifices endured to create a homeland free from tyranny, I thought I would share a short meditation by George P. Burdell, visiting Constitutional Law Scholar, on the nature of the Electoral College and how it was designed to guard against political tyranny.

I recently overheard a frustrated and disappointed pundit cry in the wake of post 2004 election blues: "If the guy who got the most votes doesn't win, then IT ISN'T DEMOCRACY!"

How perspicacious of him. America never was, nor should it ever be, a democracy. America is a Federal Republic (US Constitution, ARTICLE IV, Section 4), a hybrid of democracy and monarchy, but not a strict representation of either. A Federal Republic retains the best elements of democracy and monarchy while disposing of their respective worst elements. Since a discussion of monarchy is not in context here, it will be pointed out exclusively that democracy itself is not so desirable. In fact, a strict democracy would never be palliative even for those who feel like their vote was cancelled by an electoral college counter swing for this simple reason: at some point, a popular vote may take place that by a simple majority installs a president with legislative intentions that is "harmful" to the desires of those who would now eradicate the electoral college. The electoral college was put into place to limit the power of simple majorities with minority concerns; i.e. special interest agendas. Special interest agendas, by definition, never accurately reflect the will of the people with such consensus that stability and order is maintained.

The US is a confederation of states, not a homogenous political body. These states are held together by a federal constitution " establish justice, insure domestic tranquility, provide for the common defense (i.e., the general defense), promote the general welfare, and secure the blessings of liberty to ourselves and our posterity..." However, each state has different resources (or lack of them), different populations, different economic concerns, and different social values. Yes, we are unified, but as a federal integration of differential units. I don't care that the president ever visit my state in a campaign bid. But I do care that the president accurately represents my constitutional rights to the benefit of everyone. Currently, the best expression of the popular intent is at the state level. Here the popular will of the people is appropriately heard, addressed, and reflected by the peculiar concerns of the people in their respective states. In presidential elections, this occurs with the electoral college "all or nothing" format. If it occurs that the will of Californians is commensurate with the will of Georgians, then that will is best known by the electoral college. Otherwise, why would Georgians (or even smaller states) desire to relinquish their concerns to the will of a body politic 2500 miles away with a different economy and differnet values? When each state has equal populations with equivalent economies and social values then an aggregate popular vote will begin to make sense. Otherwise, the only rational place for the national aggregate will of the people to be expressed is in the market place. It is here that all people can act in a self-determined manner to establish the prices for goods and services, respond to supply and demand, and achieve personal wealth.

The President is elected to represent the rights of ALL Americans (not simple majorities of them), to promote legislation to the Congress to further the general welfare of our country, to endorse or veto congressional legislation, and to be the Commander in Chief of our military that provides for the common defense. The electoral college ensures that the president who is elected most likely represents and understands the largest concerns of the country as opposed to the specialized and local concerns of a simple majority contained in only the most populated centers of our country. In other words, the electoral college actually ensures that, more often than not, the elected president fulfills the requirements of our constitution more generally than a president who wins 51% of the popular vote. Consequently, the president is not elected to represent the aggregate will of the people, but the will of the people in their respective differential states. In this line of reasoning, it is Bush who won the largest number of states, and thus represents the broader will of the people. In actuality, neither candidate won a simple majority since by now, the actual popular vote is split approximately 49% to 49%. Hardly an aggregate popular mandate for either candidate. In fact, Bill Clinton won even less popular vote, and he was elected into office by 42% of the popular vote cast. Again, hardly an aggregate popular mandate for him as president, but a decisive mandate from the electoral college.

From James Madison in the Federalist Paper No. 10: "Measures are too often decided, not according to the rules of justice and the rights of the minor party, but by the superior force of an interested and overbearing majority." The constitutional framers were astute students of political power. Consequently, they wrote the constitution with the idea that legislative deadlock should be the norm more often than swift legislative action. To accurately represent the real needs, concerns, and trade-offs of a large population of people requires ponderous rationality and discretion. The electoral college is part of this system of graded powers that prevents majority whim to enact changes that affect significant populations with less than majority influence. Our republic has lasted as long as it has, in part, precisely due to the annealing effect of the balance of graded powers. To change this now, particularly as information and MISINFORMATION are transmitted so effortlessly now, would be national suicide. Instability would become the norm rather than the stability that has been our nation's halmark. In other words, we need the electoral college and representative government now more than ever, not the opposite.

But let the exponents of the eradication of the electoral college be consistent in their desire for a pure democracy, if such a will truly exists. If they are going to decry the electoral college as anti-democratic, why don't they go the full measure and denounce the executive and representative legislative branches as being undemocratic also? Afterall, the various bills placed before both houses of Congress are never assessed and approved by the direct will of the people but by representative proxy. And what about Constitutional interpretation? Why have a judicial branch at all? After all, in a pure democracy, the will of the people should directly determine the appropriateness of legislation and the meaning of laws. Maybe the guilt or innocence of alleged criminals should be determined by national will as well. We could eradicate all branches of government and replace them with daily referendums. But we can see where this goes. One day, one law would be passed, and shortly thereafter another law would overturn it. All it would take is a simple majority in a pure democracy to introduce a yearly (if not monthly) switching dominance of one whim over another. This is the tyranny and quagmire of simple majorities that pure democracies introduce and that our founding fathers so rightly avoided by establishing a federal republic that includes the electoral college.