Tag Archives: technology

What TalkTalk can teach us about the modern economy

I don’t often read George Monbiot. He is far too polemical for my taste. But for some reason I read an article of his last week in the Guardian, and I found myself mainly agreeing.

The article was an attack on the idea that Donald Trump’s victory will bring prosperity back to the rustbelt. Its conclusion was that war is becoming more likely. That was not what drew me to the article, though. It was the way he invoked society’s failure to deal with complexity as one of the real cause of its economic and political malaise. And here he is onto something very important. He links to an article by blogger Paul Arbair as his source, which he rates as “the most interesting essay I have read this year”. Well, see for yourself by all means, but I found that the article uses a lot of words to say not very much that is new. Attentive followers of this blog may remember that I have raised this issue myself, through the book by Cesar Hidalgo, “Why Information Grows”.

The thesis runs that the human mind can only handle a certain amount of complexity, and that we find arbitrary ways of trying to make our lives fit within that limit. The result is that we are continually hitting sub-optimal solutions, and we find the world running away from us. In Mr Arbair’s and Mr Monbiot’s view this human capacity to manage complexity is one of the main limiting factors to our current society’s development. I agree.

Let’s now try to make this less abstract. Over the last few weeks I have been trying to get a new landline installed for my 90-year old aunt, who lives on her own and has never succeeded in grappling with mobile technology. How she lost her phone line in the first place is another revealing story, but the issue for now is how to get a new connection. This has involved dealing with a major phone company, TalkTalk – though I am sceptical that their competitors manage these things any better. This initially involved an hour-long phone call, which I could only start by working out how to break the system so that I could talk to a human being – albeit that the human being only spoke with an accent that I could understand 75% of the time over my mobile connection (my aunt herself, when her consent was needed at one point, could understand almost nothing at all). Whether intermediated by a human or not, it meant navigating a set of pre-mapped options, without access to any real context. For example we were told that she could not have access to her old phone number – but I had no idea what the problem with this was. On the date installation was due I called again (even though the line offered to check progress required you produce a current TalkTalk number to proceed – before a number had been allocated!) and was then told  that the whole order had been lost. I started the process again, though, having thrown my toys out of the pram, I was talking to somebody more senior with a stronger command of English. I was given a distant future date for connection, which was blamed on BT Openreach, whose lines carry the calls. This date is later today; we will see what happens.

This story will be familiar to anybody who negotiates the modern world. At every turn you are made to conform to a simplified structure that makes as few concessions as possible to context. Navigation requires a degree of cunning on the customers’ part or  they end up in a dead end. It often takes the customer a lot of their time – though suppliers limit any time spent by their operatives. And disappointment is usually blamed on somebody else. Companies that use a more contextualised, intelligent approach can’t compete in the market, apparently – or else they only can do so if part of an exclusive service aimed at the wealthy. There is a limit to the complexity that a company like TalkTalk can handle, and you must pay that price if you want to use their services. Many people, like my aunt, could not hope to navigate this system without somebody to do it for them. The many failures that this approach leaves are simply shrugged off.

Now let’s reflect that so many politicians and economists tell us that one our society’s biggest problems is a lack of productivity growth. But more productivity means more experiences like ordering a new phone line with TalkTalk. To most people it is simply replacing one imperfect world with another that is not necessarily better. Is it really any wonder that progress is so slow?

In my view, this kind of problem – information processing and our capacity to deal with it – lies behind many of our society’s problems, including the rise of inequality between people and regions. It hollows out jobs while leaving many human problems unsolved. And yet amongst the intellectuals who analyse society’s problems it seems largely unrecognised. We lack a clear language with which to communicate and analyse it. One important question, for example, is how much artificial intelligence can help, or whether it can help at all.

What is the way forward? We need to recognise that limits to handling complexity affect how efficient political and economic organisations can be designed. You have to be able to manage complexity somehow. One favoured method, used by the likes of TalkTalk, is to create a system of simple scope but far reaching extent – able to deal with a small number of needs for large numbers, millions, of people. This thinking is grounded in the way modern societies have embraced the world since scientific discovery took hold in the 18th Century. You tackle a large scope by breaking it into pieces and then examining each piece in depth. This gets you a long way – but how do you fit the pieces back together again?

The other to tackle complexity way is to broaden the scope but reduce the reach – deal with smaller numbers of people, but handle a much broader array of issues. This is a commonly used technique in business and politics. The 1990s craze of “business process reengineering” was based on the idea – I built a large part of my professional career applying it to financial services. But it has fallen from favour. It would be interesting to understand why –  I think it is because there are strong incentives for business leaders to increase the size of their organisations, because their own wealth and prestige grows with it. This delivers a natural bias towards large organisations of narrow scope – even though these are not necessarily the most efficient. Our legal, political and regulatory systems have in inbuilt bias towards such large organisations too. When the BSE crisis hit the British meat industry in the 2000s, for example, the men from the ministry simply assumed that small abattoirs had to be closed down, and so produced regulations that made it virtually impossible for them to operate.

Which is not to say that the world does not need big businesses, and big government too – but we need to rebalance these to make small government and small businesses more viable – because these will deal with more complex problems more efficiently.

But what on earth will it take to make people realise that?