Saturday, February 7th, 2009

The Logic of Failure

It is far from clear whether ‘good intentions plus stupidity’ or ‘evil intentions plus intelligence’ have wrought more harm in the world. People with good intentions usually have few qualms about pursuing their goals. As a result, incompetence that would otherwise have remained harmless often becomes dangerous…Failure does not strike like a bolt from the blue; it develops gradually according to its own logic. As we watch individuals attempt to solve problems, we will see that complicated situations seem to elicit habits of thought that set failure in motion from the beginning…We can learn, however. People court failure in predictable ways.

Because planning involves only imaging our actions, we are essentially free from the irksome conditions of reality, and nothing prevents us from simply ignoring the conditions necessary to carry out an operation. Since we human being tend to think in the abstract anyway, ignoring those conditions comes quite easily.

‘Catastrophes’ seem to hit suddenly, but in reality the way has been prepared for them. Unperceived forces gradually eat away at the supports necessary for favorable development until the system is finally unable to resist any longer and collapses.”

– Dietrich Dörner, The Logic of Failure

With the impending demolition of Columbus, Ohio’s failed downtown mall, it is worth taking a moment to reflect on all of the urban planning failures of the past, and all of the things that, while they were successful in a sense, had serious unintended consequences: urban renewal, pedestrian malls, highway mania, single use zoning, federal housing subsidies, etc. It seems to me that almost every urban planning approach du jour ends up, over time, either not accomplishing the things it was touted as delivering, or brought serious negative side effects. Why is this?

The answer is easily supplied by German cognitive psychologist Dietrich Dörner’s seminal work, The Logic of Failure, which is an absolute must-read for anyone in any field. The answer, simply, is that humans are extremely poor at decision making in “complex” environments, and fall prey to a series of well-understood decision making traps.

The human brain is a marvel. It excels at all manner of tasks. For example, the human brain seems to be extremely good at solving problems involving simple linear cause and effect type relationships. That is, problem of the “if A, then B” variety, or what Jane Jacobs would have called a “two factor” problem. This is easily extensible to multiple variables if they behave in well defined ways. Thus humans are extremely good at things like shooting a basketball through a hoop, designing bridges, determining the orbits of planetary objects, shooting pool, programming computers, balancing a checkbook, following an algorithm, process, or instruction set, or even putting a man on the moon.

We also seem to be great at problems that involve pattern matching or processing and analyzing large amounts of sensory input into a sort of gestalt state. Thus we clearly recognize and understand shapes that are incomplete or which are rotated in space, scaled up or down, or deformed. We can also do extremely demanding things like drive a car or fly and airplane with relative ease once we learn a task. Pretty amazing if you think about it.

But what we seem to have an incredible difficult time doing is solving complex problems, and unfortunately cities are a complex problem. What is a complex problem? Complex problems have attributes like the following:

  • A large number of interdependent variables that affect each other, potentially leading to long chains of inter-related events.
  • Evolution over time, not just a simple one-step and done situation
  • Effects act with lags, so the results of an action are not always immediately apparent.
  • Variables that act dynamically, in response to external or internal stimuli, even if we take no action at all.
  • Unclear, conflicting, or tacit goals and objectives about what is really to be achieved
  • Intransparence – we do not always know all the variables, their values, and how they relate to each other.
  • “Chaotic” behavior, where very small changes in the initial state or seemingly tiny actions can have dramatic consequences downstream.

Clearly, problems of this nature are extremely difficult to solve. It should come as no surprise that we don’t do a very good job at them. Still, it seems many proposed urban policies fall prey to the types of problems Dörner outlines. Some of these are:

Failure to properly deal with lags. I’ll put this one first since it is arguably no one’s fault. Just look at Washington, DC today. People are debating a stimulus package. Everyone knows that a stimulus acts with a lag. The question is, how much stimulus do you apply and when will you know if it worked or if you need to do something else again? Hard to say. Nevertheless, in a system with lags, we are extremely prone to “oversteer”. We make decisions based on the present situation, without regard to the fact that our previous actions will have the intended effect in a future period.

The employment of “methodism” in response to uncertainly. This means that people have a tendency to try strategies that were successful at dealing with something in the past. This can have its uses, but it has a tendency to decay into formula and ritual. Like most of us, planners have an attachment to the tried and true. But that might not be the right strategy.

De-contextualization of solutions. I consider this an extension of methodism and one of the most serious problems I see in practice. That is, solutions are proposed or implemented without concern to the context in which they are to be applied. You see this all the time in “school solutions” that people with a particular policy preference are pushing. Deregulation was a good thing in the past, therefore continuous deregulation of the financial services industry was a good thing. Uh, sorry. The classic example is light rail. Light rail was successful in Portland, so light rail advocates propose it in almost every city they come to. But the vast bulk of cities are not Portland. It’s not so much that rail is per se the wrong idea (though sometimes it is). But the simplistic arguments in favor of it rarely have anything to do with the actual city in question. It’s dogma – the recitation of cant. Let’s ask the right questions: what are the facts on the ground in my city? What would a city that had a successful transit system look and function like? What type of solution would be needed to make that happen? What other things would need to be in place? What would we have to do to make it a reality? Is the change we would have to make as a city worth it?

This is where government policy can actually have an unintended negative effect. President Obama clearly understands the importance of cities and plans to establish an office on urban policy. It is the nature of government to promote uniform laws and policies – which is a good thing in many contexts. But it would be a disastrous thing from an urban policy perspective because our cities are so diverse. They don’t all need the same thing. They need different things. Even in the Midwest, consider just Chicago, Detroit, and Columbus. What do these cities have in common? Well, some things, but they are radically different places with very different challenges, opportunities, and needs. There can certainly be a role for federal policy and money, but the key is to get it right. This means looking at where common policies and programs are necessary, but also understanding where it is important to devolve decision making and policy setting to the local level. It also means staying engaged with “the field” to understand what things are working or not, and why.

Over-emphasis on the present conditions and extrapolating them into the future. Again, we see this all the time. A current trend or fashion arises, and people suddenly assume that is the future. We saw it with the dot com bubble. We saw it with structured finance. One area we see it in spades is globalization. I happen to think globalization is real, is here, and isn’t going away. But, it is going to evolve over time. Almost all responses to globalization assume that the way it is shaping the economy and cities today is the way it is going to do so tomorrow. That may be true, but it may not be. That’s why I advocate that even cities like Chicago which are doing well should be thinking seriously about what the future might hold and what they need to do to get ready for an uncertain future, not just rest on their present success. It’s about where the hockey puck is going.

Reductivism. This model of thought attempts to deal with complexity by simplifying the causal mechanisms to one variable. Again, we see this all the time. For example, things like transportation, energy, or climate are often posited as a primal force shaping a city or driving behavior. These are influential and important to be sure, but are they the only things?

Repair service behavior. People have a tendency to fix what is broken. That’s also what politics generally demands. But often the serious, catastrophic problems were long present in the system, but no one noticed them until it was too late. “Management by exception” is a valid philosophy, but you’ve also got to pro-actively be probing, questioning, and thinking about where tomorrow’s problems might be before it is too late to do anything about them. We spend all of our focus on the problems of now without considering the future. It’s a about what’s important, not just what is urgent.

Solving problems in isolation. When we do see a problems, we tend to view them in isolation and develop problem-specific policies. But most problems are linked in a complex system. It’s like squeezing a balloon. Fixing one problem may exacerbate another. Things like brain gain, immigration, economic development, land use, and transportation aren’t separate problems to be solved separately. Approaches to them have to be part of a holistic approach to the city.

Forgetting about what’s right in the world. Again, by nature we focus on what is wrong and what we want to change. We often forget about what we want to keep. I think in general most of us tend to under-value the environment we live in and the way that it actually functions well. To a great extent, well functioning urban systems are invisible. This is where unintended consequences can come and bite you big time. We once saw a problem with crowding and such in the city and wanted people to be able to own a single family home with plenty of space. So we subsidized the heck out of that. But we forgot about the values of the city, and that there was a lot in the city we actually liked. Unfortunately, in the mad rush of suburbanization, we destroyed a lot of that in most places.

This should give you a flavor. What are the lessons we can draw from this? I think there are a few.

The first is simply to approach urban policy and urban planning with humility and rich understanding of the limits of what we can accomplish. This I think is desperately needed. There are so many policies out there that are promoted with almost messianic zeal by their advocates. It never ceases to amaze me that after all the failures of the past, all the unintended consequences, people are still ready to attempt to radically remake our cities on the basis of fairly simplistic policy approaches. By all means let’s try things, but let’s be cautious too.

Along with this I think we need to be very skeptical of dogma and silver bullet solutions. I’m all in favor of looking for the best ideas out there, and think we ought to be looking at places to find out what worked elsewhere. But we also need to have a rich understanding of our own city and our own circumstances to evaluate what is appropriate here, and what we need to do to achieve true and lasting success without all the unintended side effects. A great city, like a great wine, has to express its terroir. How should we cultivate our own unique soil to bring forth that full flowering and unique character?

Diversification. Cities can’t put all their eggs in one basket. It is just too risky. We need to cast a wide net and be willing to try lots of things, knowing some will fail. Dörner talks about efficiency diversity, or having many different possibilities for actions that have a high probability of success. This is exactly what we need.

We need to constantly be looking for feedback about how we are doing. Again, let’s try things. But then let’s see if they are working. This is very hard because practically speaking most policies are promoted by people in the context of a political process. This means the leader who promoted it is personally invested in the program and his or her enemies will pounce in the event there is a change of direction or, horror of horrors, an admitting of a mistake. This is where great leadership in a city comes into play. The reality is, a lot of what we do runs the risk of failure, or at least will need tweaking. That’s ok. Most business ideas fail. But without an entrepreneurial culture, our economy eventually will stagnate and die. Failure isn’t necessarily bad, particularly if we are able to fail quickly and cheaply. The best cities are willing to try things, knowing that some won’t work out. But occassionally there will be a home run.

And we need to think about the goals we have. The real goals. When our policy is successful, what will the city look like? What is that shared vision of the holistic end state? It’s not about the solution, it’s about the results.

This one bears repeating: states and the federal government need to recognize the diverse needs of our cities, and not promote or require one size fits all solutions. This can be hard to do. When you give cities home rule power and money to spend at their discretion, it is inevitable that there are going to be blow-ups. But if we over-compensate by putting our cities in a straitjacket, we do more harm than good in the long run.

Lastly, we need to be clearly aware of the fact that with urban policy, we are dealing with a complex, dynamic system. Since people fall into predictable thinking traps, forewarned is forearmed. I believe we can rise above our own human limitations to make dramatic improvements in the quality of our decision making and achieve, if not perfection, at least a reasonable chance at true long term success.

Topics: Public Policy

4 Responses to “The Logic of Failure”

  1. David says:

    This article sums up one of the main reasons I read your blog constantly. You take issues (for instance light rail) and take a step back and analyze them with an objective stance I rarely see. You look at things very rationally and don’t reiterate the shrill emotional arguments that we hear time and time again from advocacy groups. It’s very refreshing and rare to read those types of articles.

    Let me end with a paraphrased quote from Thomas Sowell: “It is important to analyze not only the intentions of a policy but what the actual result of that policy was.”

  2. thundermutt says:

    This post expresses a really good argument about attempting systemic change in urban affairs: the cityscape as it exists is an expression of a multitude of systems playing off each other.

    Often it takes a generation or more to see (much less understand) the unintended consequences of altering one system.

    And it is absolutely necessary for someone to say “hey wait a minute” and argue against the prevailing cookie-cutter solution to the problem-du-jour.

  3. Randy Simes says:

    It is a natural process that humans create a new problem for each current problem they solve. For each of the urban issues you mentioned they did solve a problem at that particular time. They did create a host of new problems, but urban renewal did provide lots of affordable housing, green space, and new road connections.

    I could debate all day that the implementation of the housing was a miserable failure while citing Jane Jacobs. I could talk about how poorly executed the green spaces were while channeling William Whyte. And I could babble on and on about how the interstate system fundamentally changed the way people conduct their daily lives in a negative way.

    The point is that we solve the problems we know how to solve and have the ability to do so. It’s easy to point out the problems of the past because we aren’t living in it, but there was as much public push for these things to happen as there was outcry against it from neighborhood activists.

    Plus, if we solved all of our problems then us dreamers would be out of jobs.

  4. SpeedBlue47 says:

    Wow, now I’ve read it all. A Thomas Sowell reference on a urban affairs blog? No wonder I feel most at home here. There have actually been many great books written about this phenomenon, and directly how it relates to planning and its failures. Some examples would be “Blight Ideas” which I pimp around the development circle often, as well as “The Best Laid Plans” by Randall O’Toole(Cato Institute). Thomas Sowell and Walter Williams both spend much of their writing exposing the folly of planning hubris.

    It is refreshing seeing someone that is taken seriously in the development community is trying to introduce a little sanity to urban policy.

    Oh, and Aaron, thank you for introducing me to land value taxation. I have no idea how this idea had never been presented to me before, but this is close to what I believe is the best possible way to tie policy to direct feedback within a compulsory tax regime. Though I have to say that as a government revenue policy, it may be a tough sell politically. Unless there are extreme exceptions made, this could cause sudden huge development shifts and demographic changes throughout the city due to people being “tax priced” out of their homes and being forced to sell their properties to developers of either higher-end or higher-density development. Which is not necessarily a bad thing, but pictures of old ladies being “forced” to sell the family home to a “greedy” developer to build a “high rise” would hamper political support for such a plan. I think that LVT districts in high impact neighborhoods could be a great way to test the concept, and to make headway towards developing underdeveloped property in those areas.

    Maybe we could move to a LVT system gradually? Say commercial properties will switch immediately, but residential properties will switch to LVT once they change title after a certain date(or after 15 years max)? I don’t know if that would be too slow of a transition, but surely the details could be manipulated. My main concern would be the LVT tax rate having a lot of variability over the transition. And also, I hear that LVT causes a one-time sometimes substantial dent in property values, which might cause many people to balk. But I think it would be hard to argue with a tax system that doesn’t penalize those that invest in their properties.

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