Why on earth this book?

Why would anyone want to write a book about society and the economy? There are already a lot of books about this subject. Do we need another one? Is this book any different? Does it add anything new?

This book has been more than 40 years in the making. The first draft of this book goes back to 1987, and much of what was written then remains valid today. It did not get to the publication stage because I wanted to propose solutions and not just to redescribe the problems. I started to rework the manuscript after the events of 9/11 in 2001. The failure of development suddenly became an issue with practical security implications in the United States. It is now in its fifth iteration, and maybe this time it will get published.

This book reflects years of personal exposure to issues in global society and the economy. It builds on the incredible potential for ordinary people to do amazing things, and now the enormous power of technology to solve problems and manage resources.

I like to think this book reflects some 40 years of exposure to people, society and economics. However, I remember the story of an old farmer in Malawi who made much the same claim. “I have 40 years farming experience” said the farmer. To which the young agricultural expert replied “No sir, in fact you have one year's experience 40 times”

I hope I have done better than the old farmer, but I know that in some ways I am like the old farmer and quite stubborn and set in my ways.

This book tries to go beyond a description of problems. I am trying to get to get into the specifics of things that can be a solution. If the goal is to improve the performance society and the economy, then success is going to be a significant improvement in the performance of society and economy, if not everywhere, in a good number of places. The book identifies initiatives that are central to this goal. In this regard this book is very different from most other books that identify the issues without getting engaged with the needed solutions

This book was not a “labor of love”, but more the product of long and profound frustration. There is no reason for the global economy and society to be 'in a funk' when so many good things are possible. Technology enables amazing things to be done, and there is a population of educated youth bigger than at any time in history. This ought to be the setting for a world society more prosperous and peaceful than at any time in history. Since this does not seem to be the state of affairs, what is the systemic dysfunction that has to be addressed, and how can this be done.

I used to think that more money would make society successful until I started working in places where there was a lot of money available, but little of it was getting to be used to benefit society. The divide between rich and poor has been increasing, and not closing. There should not be huge wealth and death from poverty in the same economic community. I have seen this in India. I have seen this in Nigeria. No shortage of wealth. No shortage of poverty. In both place, people dying prematurely because of a systemic failure of society and economics.

This book does not focus just on simply describing the poverty and the crisis of failing society, but asks the big extra questions of 'How do we have this situation?' and 'Why?'

The book does not stop with the “How?” and “Why?” but keeps on going to describe how society and the economy can be improved significantly. This book is about solutions and reflects an approach that is more engineering and accountancy than policy and economics. It is a management approach more than academic, legalistic or bureaucratic.

This book will be a success if it helps to get changes made that improves the state of society and the economy.

Failure

Socio-economic progress in much of the world and especially in Africa has been a failure. Society and the economy has been in a failing mode for years, as long as three decades. In the post war 1940s, 50s and 60s there were huge changes and a colonial world became independent. A new world order came into being. The pre-independence expectation was that post-colonial independence would result in socio-economic progress with peace and prosperity.

As it turns out this was wishful thinking.

My first experience of death from a failing socio-economic system was in Nigeria. Nigeria was in the process of becoming one of the richest places in the world as a result of the oil shocks of the 1970s. It had become the largest market in the world for Mercedes cars, ahead of the United States. But one morning when I was going to our lawyers office in Western House on Broad Street in the middle of Lagos, there were two dead undernourished children on the steps of the building. Clearly, money alone did not ensure development success.

Taken as a whole, the allocation of resources driven by the prevailing socio-economic system has resulted in a trajectory towards disaster. The following are some of the big issues that show the scale of this failure:

1. Global hunger and famine (food, water and basic necessities)

2. War, insecurity and violence (refugees, IDPs and victims of trauma)

3. Poverty, economic value destruction and the distribution of wealth

4. Balance of trade, currency crises and government insolvency

5. Health pandemics

6. Human trafficking and economic migration

These few “big issues” incorporate hundreds and hundreds of other discreet issues. They all add up to a global picture of socio-economic failure. There is a pattern that emerges. There are problems related to people, resources, the process and the information. In all of these areas there are major constraints to success.

There has been little socio-economic progress. There has been a huge amount of death and destruction: more in the second half of the 20th century than in the first half of the century which included two World Wars and the Holocaust. There have been changes, but the aggregate result has been continuing, actually growing, poverty and hunger around the globe. Rich parts of the global society have been able to increase their wealth and make use of modern technology to create even more wealth and wonderfully productive industries, more and more are left out of the success.

However, over the years, I have kept coming across little things that make me very optimistic that there can be amazing socio-economic progress. I have also become very determined to get the message out that the way resources are now used means that society will never be successful. What is being done now just does does not work. The 'numbers' that are talked about by all the business news services show that today’s global society is heading towards a socio-economic disaster of historic propportions.

Why is the socio-economic system failing?

We really need to understand why the socio-economic system is failing. If we do not know why there is failutre and how this failure has come about, then we will not know what to fix.

There is an enormous need to get answers to these questions. Almost all the writing and socio-economic analysis describes the status of society which confirms in no uncertain terms that a systemic failure is in progress. But none of the writers and analysts seem to want to explain why it is that there is such a failure or how it came about.

Until the questions of why and how the socio-economic system is failing are asked and work is done to get answers, there is going to be a continuation of the practices that have produced 'failed' results in the past and will do so again and again until they are fixed.

As long as the why and the how are missing, a useful understanding of failure is impossible. Errors of the past will be simply repeated. The sad fact is that in few leadership positions understand and accept that relief and development has failed. In the broadest sense the Adam Smith based laissez-faire capitalist market economy that has prevailed for the past three or four centuries just does not work any longer. Bits of it are fully functional, but most of it consumes resources and destroys economic value.

But it is not easy to get socio-economic leadership to answer these questions. The culture of corporate organizations has evolved in a way that makes it impossible to get answers. Individuals may acknowledge the issues of failed performance privately, but the organizations avoid the tough questions. This is not a failure of people, but a problem of the organization. The system is just not structured to allow performance question to get answered because it puts into focus too many issues that are best, for the organization, left undisturbed. Do not open “Pandora's” box. People know the answers, but they cannot put their careers at risk by raising questions about the failing socio-economic system of which their organization is a part.

Socio-economic performance is not going to get addressed within the corporate organizations. The phrase “conspiracy of silence” is a way to sound bite the issue.

Over and over again in my experience there have been cases of complete ineptness but the system protects its own. The system does not force these incidents of failure to be addressed. The system makes it difficult to have socio-economic efficiency as long as there is profit growth and stock price increase.

Criticism of corporate performance is not coming from the leadership of the corporate organization but is coming from others who can see what is going on, and do not like what they see. High profile corporate consultants are not part of the solution since they will not put their fee income flows at risk. The staff in the corporate organization will not put their salaries and pensions at risk. Others are going to have to take on the task.

I wrote this about two 2 months after the terrorist attacks of 9/11/2001. The ideas still apply more than a decade later later.

History seems to show that terrorism happens when there is a high degree of hopelessness and it is quite clear that the power structure has no intention whatsoever of a meaningful change in the status quo. These were arguments expressed over a century ago. Dickens did not like what he saw in the 'justice' of the capitalist society of the day. Nor did Karl Marx who argued that the capitalist system could only be reformed by revolution. Most of the terrorist situations we are looking at today have this element. Nobody needs terrorism. But sadly, we have got it and it will not go away until there is some positive and creative new thinking about how the global economy functions.

Is socio-economic performance merelye a matter of resources. If we think of resources in terms of money, the poor do not have enough. But the problem is not simply money. It is more than that.

REVISE Many of he problems of society are blamed on lack of resources, especially financial resources. There is a lot of talk about lack of resources, and the inability to improve quality of life because of resource constraints. Every needed resource is a constraining factor. Human resources are not good enough. Organizational arrangements are not good enough. Infrastructure is not good enough. Natural resources are huge, maybe, but that is not important for local development progress. Machinery and equipment is inadequate. Working capital in business is very limited. Financial resources are short. Knowledge is irrelevant.

What needs to be done?

There need to be initiatives that reaches the bottom of the economic pyramid. There needs to be progress from the perspective of the three billion or more who are terribly poor, hungry, diseased and dying, from the perspective of those that are affected by famine, disease, war and disruption.

The substantive changes needed in the way decision making is done in society have never been made. The problems that were in place in the 1980s are largely still in place 30 years later The problems continue on and on and on.

There need to be new approaches and ways of doing things, a respect that society is a complex system, with a lot of linkages and interrelated elements.

After years of academic study, ways to improve socio-economic performance should be known, and I think they are. The problem is that as things are today, corporate organizations cannot maximize profit and stock prices while making society better. Decision makers need a new way to measure their performance. This is not going to be done as part of an internally generated process of reform, but will have to be done by external actors.

But this requires more than just advocacy. It requires development of alternative organizations and structure, alternative systems and processes and procedures. It requires new ways of mobilizing resources and flowing the funds to activities that have benefit for people, place and planet.

Nothing in the way forward requires any breakthrough in science or technology. All that is required is getting the available resources used much more effectively. Everything we will talk about can be done, and in a modest way is already being done.

Time to make waves, time for change!

As a practical matter the need for change has been recognized for as much as thirty years, but change has not been achieved. This book shows how society and the econommy can be changed. This book is about systemic change that will improve socio-economic performance by an order of magnitude. Over and over again, the opportunity for change has been missed in favor of continuation of the failed status quo.

I expect there will be many critics of this book. The process of significant change has never been easy. Many experts want to ignore the numbers. People do not want to face up to the fact of a failing socio-economic system that value accounting will reveal.

There are powerful interests vested in the status quo. Change will not be comfortable. My hope is that by trying to organize my thoughts about the failing socio-economic system into a 'book', my arguments will be improved and my goal of effective change that improves socio-economic will have a stronger foundation.

Much of the writing about socio-economic performance is by people who have been paid to write in order to promote a political point of view or ideology, or maybe as part of of a consulting assignment, or as part of 'academic' research work funded by some 'grant program'. These writers cannot afford to upset the people that are funding the work ane enabling the writers to pay their bills.

Changes should have been made long ago. The socio-economic system was already moving into failure mode in the 1970s, four decades ago. The need for change has been apparent for a long time, but the changes that have been made aggravated the situation rather than making it better.

Now I am at a great advantage. At my age I do not have to reflect my employer's views and I do not have to safeguard a pension, or be careful about my next career step. I have the unusual freedom to write with complete objectivity based on the available data.

This book aims to help get changes made by describing ways out of the mess. The book is about people and resources and process and information. This book is about planning and organization and implementation and measurement and feedback. The book is very basic. The ideas are not new. They are all very basic concepts of organization and management that are relevant in the context of socio-economic performance.

It is time financial and economic and political leaders are challenged about the emerging crisis of socio-economic dysfunction. Billions of people are stuck in poverty because of socio-economic dysfunction. It is time to reform accounting and reengineer and restructure society and the economy.