All Things Considered: January 2009

Let’s Try Pragmatism

For the past several decades efficiency has been on Olympus. It has been worshipped in economic texts, managerial tracts and preached from podiums in inspirational seminars.

It has become the be all and end all. The mantra “If we can just become a little more efficient” has become the modern, morning recitation.

Excuse my skepticism, but I’m beginning to wonder if efficiency is all it’s cracked up to be or if pursuing efficiency to the exclusion of all else isn’t a mistake.

For example, a recent analysis of the Prairie cattle industry has noted that in the last several decades the industry has become much larger, capturing economies of scale, the small packing plants are gone, wages have fallen dramatically in real terms and the producers are making less money for much more work.

That doesn’t seem particularly efficient.

In my industry – the newspaper industry – the last three decades has seen computers replace typewriters, hot lead type disappear and more recently the introduction of black box technology that allows pages to be set on a computer screen and transferred directly to a high-speed press and then onto paper. We’ve even gone paperless with entire publications now available only on the World Wide Web.

There is no doubt that electronic publishing matches the traditional definition of efficiency. It’s fast, cheap and hits a universal market. There is only one problem – no one is making any money at it. The rule of thumb in U.S. publishing is that 90 per cent of their readership is online and generates 10 per cent of the revenue. The print product has only 10 per cent of the readership but generates 90 percent of the revenue.

As far as the efficiency of the paper product: there are far fewer people, more machines and yet it seems to take longer to get it from the desktop to the street. This is supposedly more efficient, but newspapers are less profitable than they’ve been in more than a century.

Then there is the whole worldwide food system. The drive for trade and Ricardian efficiency has been relentless. Everyone was to specialize and do what they did best. Grain reserves were deemed inefficient – especially in developing countries – and dumped on world markets.

Setting reserves aside for a rainy or droughty day was seen as a waste. Agriculture was steered to the just-in-time system that prevails in manufacturing.

Developing countries were also directed by the International Monetary Fund and consultants from developed nations to get rid of even tiny subsidies for fertilizer and tear down tariff barriers that protected local producers. In exchange, they got subsidized grain from do-what-I-say-not-what-I-do-developed nations and faced tariff barriers when they tried to sell to those developed countries.

On the grain front, the market-driven changes were supposed to boost crop yields. They appear to have accomplished this in the wealthier countries where farmers can afford the newest seeds and pesticides and pour on the fertilizer. But in poorer nations none of that holds and global crop yields rose less in developing countries between 1990 and 2007 than they had in the preceding, protectionist 20 years.

The bad old days of policies aimed at ensuring food security may have been economically inefficient, they may have diverted resources from potentially more productive uses, but when things went bad at least there was locally produced food around that they could afford.

The problem with efficiency, at least as used by economists, is that it is a soulless exercise that works well on paper, but not so well on the ground. What we likely need is a broader goal that includes efficiency, but also other goal-oriented factors such as security and sustainability. In effect, we are looking for something that will work in good times and bad and does no harm.

In a word we are looking, or should be looking, for pragmatism. Figure out what the goal is and the best way to get there. Forget all the pet prescriptions and cast aside ideological determinism. Knowing the answer before the question is asked or having the solution before you know the problem is impractical, inefficient and gets in the way of progress.

It is also a major problem for our politics. We have become almost tribal in adherence to a particular party and specific philosophy. Barack Obama, for one, is convinced that partisanship makes government less effective.

In his book The Audacity of Hope, Obama writes: “it’s precisely the pursuit of ideological purity, the rigid orthodoxy and the sheer predictability of our current political debate, that keeps us from finding new ways to meet the challenges we face… .”

In recent weeks Canadians have seen “the rigid orthodoxy and the sheer predictability” and it failed us. In these times we need a pragmatic course that will get us through the economic turmoil and parliamentarians that can deliver it.