Sunday, January 30, 2022

Embedded labor value in the Bible

At church today, in our session on Christianity and co-ops, we read a passage from James 5

Come now, you rich, week and howl for the miseries that are coming upon you. Your riches have rotted and your garments are moth-eaten. Your gold and silver have rusted, and their rust will be evidence against you and will eat your flesh like fire. You have laid up treasure for the last days. Behold, the wages of the laborers who mowed your fields, which you kept back by fraud, cry out; and the cries of the harvesters have reached the ears of the Lord of hosts. (James 5:1-4, RSV)

What's fascinating to me in this passage is that it basically describes the way the labor of workers is inscribed in goods and wealth, and that whatever exploitation occurred is fully captured there.  It may not be visible--it looks like a pile of gold and silver, but James looks at it and "behold," sees the hours put in, the wages associated with those hours, and the surplus value extracted or held back. 

This puts me in mind of alternate accountings.  Accounting measures value, and part of value is the effort put into production of the goods or service by people, the residue of the total value they produced less what was paid out to them.  Conventional accounting does not show this, but converts everything to dollars and cents which are abstracted from the physical value and physical conditions of the creation of value. 

I'm finally reading Tony Tinker's Paper Prophets, considered the origin for emancipatory accounting more fully elaborated by Sonja Gallhofer and Jim Haslam in Accounting and Emancipation.  Tinker describes several examples of alternate accountings provided by Ernst Mandel in his Treatise on Marxist Economics: a blacksmith caste in an Indian village which has land holdings and requires outsider who want their services to work the land for a number of hours equivalent to the time required to make the object they need; a Middle Ages Japanese village with a system of cooperative agriculture where villagers balance accounts with each other based on labor time; and a couple of others where the accounting system measures labor time. 

Tinker's point is that these aspects of the good or service can be tracked and made visible. Burchell, Clubb and Hopwood's landmark 1985 article discussed a time when conventional accounting moved in that direction by adding statements on value-added to financial reports (a short-lived experiment in Britain wiped out by the arrival of Thatcher). To me, the writer of the epistle was seeing through the surface of the treasure hoard to not just the effort put in, but the trauma and injustice there.  That would be go a step further, and I think Tinker does get there, I just haven't gotten that far in the book. 

This passage in the Bible would lead you not just to account for the effort put in, but to capture the qualitative, spiritual and moral dimensions of the hour of effort.  Was the labor hour one produced by a prisoner, a slave, or someone asked to work at danger to themselves?  This seems technically doable.  Not sure where you'd get a chance to give it a try and see what it ends up looking like.  

 

Burchell, S., Clubb, C., & Hopwood, A. G. (1985). Accounting in its social context: Towards a history of value added in the United Kingdom. Accounting, Organizations and Society10(4), 381–413

Gallhofer, S. & Haslam, J. (2003). Accounting and Emancipation: Some Critical Interventions (1st ed., Vol. 3). Routledge

Tony Tinker (1985). Paper Prophets: A Social Critique of Accounting.


The Sacred Canopy and the Bankruptcy of Religion

Sometime in the Summer of maybe 2019, in what was a different era in my professional life and for all of us, I started on a project to look into ideas of de-growth and low growth economics. Among the books I assigned myself was Tim Jackson's Prosperity Without Growth. Jackson is a British economist working on sustainable economics. I gather he's got a pretty high profile--Prince Charles wrote the foreword to the book. I started the book, it didn't catch me up too much, started a Ph.D. program, etc. But I finally went back and finished it this week.

The main reason to go back to this was because we're doing a study in church on co-op economics with our pastor's husband who is working on the idea through the Wendland-Cook Program at Vanderbilt Divinity School. Their basic hypothesis is that there is a deep connection between Christianity and cooperative economics. 

After going through quite a bit of analysis about the grip a growth imperative has on society and economics, and its detrimental effects, Jackson arrives at a vision of an economic focused on service to others--really care for other--rather than on throughput of materials. Then we talks about where we can see this sort of economy:

Perhaps surprisingly, the seeds for such a transformation already exist, often in local, community-based initiatives or in social enterprise: community energy projects, local farmers' markets, slow food cooperatives, sports clubs, libraries, community health and fitness centres, local repair and maintenance services, craft workshops, writings centres, outdoor pursuits, music and drama, yoga, martial arts, mediation, gardening, the restoration of parks and open spaces. (p 143)

The list is probably peculiar in several ways--it includes forms of organization and general activities for one thing--but for now note that it does not include churches.  Which exist in create number, involve great numbers of people, and should be about service to others. 

Then to explain what it would take to move from a society of growth and affluence to one that defines prosperity as "the ability to flourish as human beings" (p 212) he talks about the need for a framework that gives meaning and identity, and "relates our temporal existence to some higher 'sacred' order" (p 214).  Money and goods have become that in a consumer society, and do a very poor job of providing that spiritual and psychological support and ground. You would expect religion to come in here, but not for Jackson:

Religion may offer some defence against his threat [of a meaningless void that threatened to overturn our hopes and derail our best intentions]. But what should a society do, when religious belief is harder to come by? Or when its intellectual foundations have been shaken? Or when its manifestation entails increasingly fundamentalist (and inhuman) ideals? Is it so unlikely to suppose that some of these vital social functions are taken on by consumerism itself? (p 214)

So for Jackson, religion doesn't have credibility.  It's not really worth considering.  Contrary to the argument in our Sunday program, churches aren't prime examples of a service and care economy,  I do in fact disagree with that, and for me churches leap out as organizations Jackson should look at.  It could be that he's in England, and maybe he just thinks of the Church of England and its large bureaucracy--but then again, the former Archbishop of Canterbury, Rowan Williams, blurbed Jackson's book.

While I see the promise in making this connection, I do wonder if the church has damaged itself so much that it cannot play this role outside of a small band of devotees, and that it cannot form the basis for large numbers of people to change their relationship to growth and consumption.  The church broadly defined does shoot itself in the foot regularly, and has significant branches that stake out position that aggressively feed the fires of dead-end consumption.  There's some groups out there trying to make different connections, but at this point I don't know if we're talking about a handful of people with Twitter accounts, or something with more and growing tendrils. Can they build enough muscle to take religion out of bankruptcy? 

Tim Jackson (2017). Prosperity Without Growth: Foundations for the Economy of Tomorrow (2nd ed).      

Friday, December 31, 2021

The subsidiary status of language

Last year I got introduced to the idea of mimesis as a political and psychological phenomenon. I was more familiar with the way the word has been used in aesthetics to talk about art's ability to copy nature, but in political theory in political theory it describes an unconscious identification with a crowd or a mimetic leader that trumps political discourse and reason. I'm spending more time with this idea right now in Nidesh Lawtoo's book The Phantom of the Ego. Lawtoo traces the idea back to Plato, with his distrust of the actor or rhapsode's ability to arouse the passions of listeners/viewers, but really starts with modern development of the idea in Nietzsche, who criticized the effect as practices by Wagner, who had a "magnetic" effect on followers. 

The discussion of mimesis brought up the discovery by neuroscience of mirror neurons, which cause people to mirror or experience sensations of others. It's a fascinating idea, but it seems like the specific cases where these neurons fire might not explain the range of mimetic effects. Nietzsche observed effects more broadly, arguing that it was a predominant mode of existence the ego gets surrendered to the influence of the crowd and to the influence of persuasive figures.

My take on language philosophy such as Wittgenstein--maybe not the best informed take--is that it becomes very difficult to identify how common meaning can be achieved. In an encounter long ago with Paul DeMan, me and some undergraduate colleagues, after a long dinner challenging him on the slipperiness of meaning, in the end asked how a simple conversation is then even possible and he answered something along the lines that communication nevertheless does occur. It could be that it is all mimesis. A mirroring, surrendering the ego in order to identify with the other or something beyond, through which comes implicit agreement on meaning, or near meaning. 

Starting with the Reagan era, I was struck by how little words themselves mattered, replaced by communications that privileged images, juxtapositions rather than logic. When I went to business school, a professor there, Tom Mahoney, gave me some reading assignments before classes started. One book was about South African termites (I think it was The Soul of the White Ant by Eugene Marais). It took me many years to understand why he assigned that, but I think I get it now. The book was particularly interested in the way termite colonies coordinate activity in complicated ways without language or obvious signals. As I recall it is done through chemical releases. Tom wanted me to think about the way coordination in human organizations escapes reduction to simple techniques, the mystery of it. Nevertheless, communication occurs. In his novel The Overstory, Richard Powers describes the work of Suzanne Simard, who found that trees emit chemicals as a form of communication among themselves about dangers and environmental changes. 

All of these describe different non-verbal forms of communication--visual images, pheromones, chemicals, mirror neurons. It's a battery of mechanisms that may be less visible but more effective than words. In the world today, the power of mimesis is primarily threatening. Everything points to Trump and versions of Trump in every country. My wife and I went to bowl game this week, and the sense of contagious anger was palpable with every disputed call. Even the moments of joy had a violent, angry quality. Any ruling or result that went against the home team (this was effectively a UT home game) got people around us to talk to each other, about how the fix was in with bias against the home team and incompetence bordering on criminality. The more furious emotions seemed to have more ability to replicate themselves around us. 

Mimesis also seems like compassion. Mirroring should also be able to inspire care for others. The trick with mimesis may be to set up situations that allow room for compassion and avoid or deflect furor. 

If mimesis is so critical to communication which nevertheless occurs, can administrators use mimesis to build the institutional community? Instead of more traditional tools? Alongside them? 

Language still matters. If you've ever graded student writing, you will see students using words that seem to fit but you can't help thinking they chose not because of the precise connotations of the word, but because the word makes them seem smart or hip. My stepson used the word "praxis" this morning in a context where "political action" would have sufficed, but praxis sounded more sophisticated. The ability to make those distinctions should matter, but it is not obvious in what context. That fine use of words will not by itself rule the day.

Saturday, September 11, 2021

Self-enclosure of the commons close to us (part 5 of 4)

Just as I was wrapping up my little series on the way insurance as an instrument of governmentality insinuates itself into local decisions, I ran across an article by David Bollier about Ivan Illich and the commons, which provides another way of talking about what we do when we act as good, well-governed subjects. What follows depends completely on Bollier's piece, and I need to go to the source, but the ideas connect too closely with what I was just writing on governmentality for me to wait.  No way I'll be able to do justice to Illich or Bollier.  

For Illich, the commons was "that part of the environment which lay beyond [people's] own thresholds and outside of their own possessions, to which, however, they had recognized claims of usage, not to produce commodities but to provide for the subsistence of their households" (Bollier quoting Illich). Classic examples include the organization of pre-modern communities in Britain, where manorial tenants shared grazing rights.  Another key idea for Illich was the vernacular domain, which is "the realm of everyday life in which people create and negotiate their own sense of things – how they learn about the world, how they find meaning and spirituality, how they manage the resources they love and depend upon" (Bollier). It is importantly a non-market domain.  

I see the commons as the informal spaces where people are allowed to be active and engage in the work of the vernacular domain. I think of spaces where friends, associates and I have been able to engage in creative and communal activities.  For instance, the HotHouse in Chicago opening up for panel discussions on a Saturday afternoon. One of my favorites was the space Stuart McCarrell had in Wicker Park.  He owned a building at the corner of Damen and North, the Lodge Hall, where he had the offices for his engineering company but also housed an independent press and provided storage for artist associates. For a time my friend Warren lent me a key to the building, and I was able to go there late at night to woodshed and write music.  I went up to the open top floor, which was filled with stage sets and costumes from independent theatre and dance productions over the years.  The building was old, and it breathed.  You  had to love its location--it backed on the El, the building across the El housed the Busy Bee, a venerable Polish restaurant, and across the street were the Coyote Building and the Flatiron Building.  These buildings served as locations for a beautiful temporary commons, the Around the Coyote festival. Every imaginable space was opened up for artists to show their work and throw together experimental projects and temporary installations, and you wandered from one space into the next and then the next. It seemed endless in a good way. A deep well.  

Downtown Presbyterian Church's art studios have some quality of the commons.  And we have in our best times embraced the church as commons, and let space all over the building be used for concerts, performances, exhibits, discussions, and planning. Churches have a long history of being a commons, with open doors and offering sanctuary. The commons quality has been contested for sure.  Notably during the 80s when the Sanctuary movement would have opened churches to refugees from conflict in Central America.  My understanding is that a former minister of DPC, Rev. Hogan Yancey, was forced out for sympathy to these ideas.

Historically, the commons such as land where all members of a village shared grazing rights gives way with modernism to enclosure, through which common land and resources are split up, each parcel or piece established as the property of an individual. Ownership documented in a legal deed, rights defined by contract. What was a common resource became one person's capital. And the owner of that capital would need insurance to protect their ownership and rights.   

The insurance negotiations at DPC would have us in effect enclose the art studios, remove any trace of the commons. What is interesting to me is that the process entices us to do it to ourselves.  The impulse is already there among (like a reverse Spirit of God)--the impulse for clarity, for good business-like practices, for modeling responsible subjecthood. It is not imposed, but comes about through a collaboration within this disciplinary system, within this risk dispositif. We experience a kind of solidarity within the disciplinary system--we are being responsible together--at the same time we truncate other forms of solidarity. 

When one thinks of enclosure of the commons, you think of elites seizing resources, but I believe there has always been this element of action upon the self.  Nietzsche saw human potential arising from "imposing a form on onself" (Nietzsche, Genealogy of Morals).  While Bollier says "Enclosure is not an abstraction. It's the great, unacknowledged scourge of our time," and I don't disagree with that--I mourn the loss of these spaces--it's important to recognize the extent to which most of us collaborate in the process. 

Stuart McCarrell died in 2001, not long after I was the beneficiary of his radicalism as second nature. I'm sure that the Lodge Hall got sold on his death and has been converted into private residences. I don't know where I would go to practice today. But to honor Stuart, let me give you one of his poems.  Stu was best known in Chicago as first a buddy to Nelson Algren and then a champion for his work. (Algren is a story for another time, but everyone should at least read Chicago: City on the Make, and a good source for information is the doc by Dennis Mueller, Ilko Davidov, and Mark Blottner, Nelson Algren: The End is Nothing, The Road is All.)     

Nelson Algren

I gave the city what it needed:
compassion, humor, rage.
I saw her suffering, struggling,
dancing on a noisy, smoky stage.
But the decades grew greedy, dark--
the battles seemed vain.
Cruelty, callousness ruled
and mocked at the pain. 
I turned a wry joke here,
a lusty one there,
to ease the anguish
and tame the terror.
So now, to their taste,
each reader can choose
soft flecks of laughter, 
or hard midnight news.

Stuart McCarrell, from Voices, Insistent Voices (Xenia Press)

David Bollier. (2013)  "Ivan Illich and the Contemporary Commons Movement."  https://www.resilience.org/stories/2013-08-05/ivan-illich-and-the-contemporary-commons-movement/

Friday, September 10, 2021

Insurance telling us who we are (part 4 of 4)

I've been writing on risk and insurance to get to a story about some events at my church that show in its granularity the way Foucauldian discipline operates, and provide some view on its detail as experience. 

Our church, Downtown Presbyterian Church in Nashville (DPC), has taken otherwise unused space and turned it over to artists to use as studio space.  We have done this for about 25 years.  Over the years, the character of the program has evolved and shifted--initially a member asked to use space, the church said yes, and then he asked if some friends could join him, and received another yes.  Most of the artists today are people whose primary relationship with the church is their use of this space, and our new minister is exploring new possibilities in this relationship. 

What I want to discuss is the nature of the relationship between the church, a group of individuals, and these artists, and the pressures on what that should be which come from the risk dispositif--the collection of "discursive, administrative, technical, legal, institutional and material elements" through which social phenomena are governed (Lupton 2013 p 240). 

To me, the artists are members of our community, sharing the space with us to engage in work and exploration that will intersect with the work and exploration of the congregation in ways we cannot foresee.  To some extent this view is shared by others, as evidenced by the way DPC includes the artists on its website.  

To others, these artists are tenants who happen to have an extremely good deal--we don't charge rent, just ask a small contribution towards the cost of utilities.  But some members of our congregation and staff refer to this payment as rent. That word matters. It describes a specific relationship between a landowner and a tenant, governed by contract and defined by a transaction.  Tenants have defined rights under law.  They are reducible to the rights and obligations of tenancy. 

Defining the artists as tenants--not community members, artists, or program contributors--involves creating firm organizational boundaries. The inside of the organization is defined as people we pay--staff--and people we consider part of the worshipping congregation--formal members, regular church attenders, or regular contributors. We often have very involved conversations about the member roll, a formal way of defining the organizational boundary. I have very little patience for this exercise, due to my sense that organizational boundaries will always be fluid, and my desire to cultivate that fluidity as something potentially creative and generative. 

The artists are outside the cleanly defined formal boundary. That definition leaves them as building users. What they are doing with the space doesn't matter. We simply have a transactional relationship.  Because of financial pressures on the church, we seldom let people just use the space, but get building use fees, or rent, in exchange.    

For a long time we have sustained a tension between treating the artists as community members, colleagues, brothers and sisters or as transactional building users. On balance we have probably actually favored the more personal relationship.  But then enter insurance

We have an old, precious building.  It is very vulnerable to damage and it is easy to imagine a conflagration consuming the whole thing.  The annual insurance renewal process is fraught.  Sometimes the price goes up a lot.  Sometimes carriers decide they no longer want to work with churches.  We are nothing but risk.  The building could burn down.  People could get injured on old, narrow steps. There could be abuse of children under our care or harassment of women.  Each year, very responsible members and staff work with an insurance agent to get the renewal done. 

For a long time the insurance companies did not worry much about the artists, and just chalked it up as one of a bunch of activities we had going on in the building.  In recent years the current carrier has taken more interest in this.  The carrier felt they needed a very clear understanding of the church's relationship with the artists, and that it really needed to be defined contractually. 

From the perspective of governmentality, what jumps out at you is that the insurance company is entering into the question of relationships within this community. In order to be acceptable to the insurance company, it is required that our relationships take certain forms that are recognizable to the company, that are visible actuarially.  Like the Chicago city officials who insisted that the residents of the Bloomingdale Arts Building could not combine as a coop but had to be coming from the position of individual property owners contractually tied together for specific and limited shared services.

In this case, the insurance carrier could not deal (transact) with a non-contractual, communal relationship between the church and the artists.  It cannot imagine community and fluidity. It demands the depersonalization of the relationship. What is more it defines our identity to each other as parties to a contract, or dismisses the relationship as illegitimate. It impinges on an intimate part of our interpersonal experience.   

Why did the church let the insurance company dictate our relationships? To a great extent what you saw was people of good conscious striving to act responsibly. They wanted to bring sound business-like decisions to the benefit of the church.  This was not a matter of ideology--the people involved were not self-consciously trying to promote a neo-liberal agenda, and in other situations the very individuals involved would resist effects of those systemic forces. But they all knew intuitively what responsible adult behavior looked like.  It looked like showing the insurance company that we could conduct our business properly.  It looked like making sure all the right insurance was in place and not letting it lapse. 

In this encounter with the insurance company, certain relationships and identities had validity.  The insurance company didn't really define them. The models existed before the encounter. A valid subject is the kind of person we would do business with.  We all want to be the kind of person someone wants to do business with. 

But the insurance company is not teaching us this.  We are all well acculturated.  The insurance company is reminding us of what we know.  As Deborah Lupton puts it, "risk dispositifs contribute to the configuring of a particular type of subject: the autonomous, self-regulating moral agent who voluntarily takes up governmental imperatives." (2013, p. 143)  

The insurance company had us over a barrel, but there was an alternative--we could go without insurance.  In some ways the promise of insurance is empty.  If a bad fire starts, this church will probably be destroyed.  No insurance payout is likely to cover the costs to rebuild this historic monument or replace it with a building worth the bother.  And if there is the slightest slip-up on the part of the policy holder (the church) we may get nothing--the insurance company will not pay out reflexively. 

None of that matters. To be a responsible person means to understand risk, take it seriously, and work within the techniques provided as responses.  We are considered "covered" if the policy is in force, even though we don't really know what will happen.  This is part of the self-regulation. 

What will DPC do?  We have drafted contracts, and I'll finalize them in the coming weeks and get them signed.  We will still not call the artists tenants, and we will do everything we can to make sure our conversations are about our human concerns.  Their work, the exhibits they want to do, the church's worship life and mission outreach, updates about spouses, kids, family and loves, the challenges of day jobs.  

Deborah Lupton (2013). Risk (Second edition).  Routledge.

Thursday, September 09, 2021

What comes out of allowing for a little over-complication

I was going to title this post "Someone who overcomplicates everything makes an arguably self-justifying case for doing so."  That impulse tells a lot. 

I tend to see myself as someone who gravitates towards complexity, often in ways that I or others find problematic.  It seems like the world more often needs the people who can quickly break things down into very simple pieces, rather than those who see the richness of the experience. Higher education administrators are certainly looking for let us say clarity.  From a critical perspective, you could say that this tendency, this character of "good management" is part of the habitus of the current social order, that allows unspoken values to have definitive, locked in control of actions in an organization.  That is, part of the vehicle through which governmentality acts.

I did a webinar yesterday with a colleague, a smart, experienced, witty, thoughtful man. Our paths crossed years ago briefly, and it was a pleasure to do some work with him.  We were asked by a participant about what assumptions one uses about revenues and expenses.  On one level this is a tough question because different institutions face different contexts--they have different sources of revenue, different spending issues. Nevertheless there are some answers.  Everyone needs to have some way to talk about what enrollment might be in the future, and in most cases there are places to go for some leading indicators.

My colleague talked at one point about activity drivers for costs.  This idea from management accounting is that behind any activity, something drives costs.  For instance, if you manufacture something, the number of units will determine how much materials you need, how many workers on the line.  Theoretically simple--it gets a little complicated, which is part of the fun of operations management.  You have fixed, periodic and continuous costs on a production line, and you can do math to calculate each and bring them together. 

This example is pretty simple conceptually.  Any enterprise, particularly a bureaucracy, has a lot of activities removed from the production line, or the classroom. Administrative and support activities, overhead. Budget people have been thinking about the drivers for these activities for a long time, and at this point there are some basic starting points--you use things like the number of staff, students, accounts, or square feet--and my colleague made that point and gave the example of a registrar's office where you use number of students as the activity driver. 

The registrar's office does a number of critical things.  They register students for courses.  They receive and record grades.  They issue transcripts.  They maintain the systems through which instructors are assigned to classes, and I think in most cases manage the schedule of classes and classrooms.  They also do some more arcane things that are critical to having a good record of student performance, such as deciding on course numbering conventions and coding courses for things like instructional method, prerequisites, and whether it fulfills specific curricular requirements.  Since it depends on student records, they work on systems to track student progress, which are critical to other units like advising and financial aid. 

All of this activity is related to the number of students.  If you're a little older, you remember standing in line to register.  More students, longer lines, more staff needed at the other end.  Pretty simple. A school with more students will have a bigger registrar's office.

But wait. I was working on identifying critical metrics for administrative functions at Portland State, and started with number of students.  Thing was, the registrar--again, an experienced and effective administrator--pointed out problems with this.  Thanks to automation, their staff can handle more students with zero to little marginal additional effort.  And if enrollment goes down, their effort does not go down.  There is some step function, but it's at a pretty dramatic level, maybe a 25% or 50% change in enrollment.  The registrar made the case that what consumed staff resources was developing, implementing and maintaining their core systems, and helping on projects, something the office was asked to do frequently. The registrar argued that the function is essentially a fixed cost, and any effort to incrementally decrease ran into that problem.  

At the end of the day I was determined to have some metric to frame budget conversations for every function, and we didn't come with anything better than number of students. Within the framework of simplicity-privileging values, this was wasted effort. To me, the results of this side trip into alternatives shows the problem with a cut to the chase approach. The back and forth on my arguably heavy-handed question brought out much more about the economics and operations of this unit, at least for me, and the emphasis the registrar put on systems and projects rather than transactions is very important. 

I don't know if the registrar felt the discussion was useful and felt their perspective was given real voice, but I have no doubt that direct imposition of the simple metric would have had the effect of erasing the registrar as a voice.  The registrar would see this metric as a pure imposition, with no validity--not that the validity of it was very high in the end.  But for me, what is more important is that it would have undercut this person's person-ness in their organizational experience.  Someone else would speak about their work as if they did not exist and would not open the process to their experiential and cognitive contributions.  It would be dehumanizing.  

The dehumanizing effects of experience within organizations, these supremely human manifestations, are the result of many small actions like this which accrue profusely and quickly acquire heavy phenomenological weight.

This does connect back to the Pandora's Box problem or non-problem. 

Tuesday, August 31, 2021

Things That Risk Means (part 3)

Before getting to the next step in my discourse on insurance, I need to make a stop on the topic of risk. 

Like a lot of concepts big enough to organize experience, risk means different things simultaneously.  

One part is threat or peril.  You run the risk of something bad happening.  You want to minimize, mitigate, or shift risk. 

Risk also means the probability that something might happen.  I use the phrases "upside" and "downside" risk to indicate that something good could happen as well as something bad.  For most people, the word risk still leans towards the negative, but I can't help seeing it as symmetrical.    

In finance, risk has altogether different connotations. It refers to uncertainty, and gets factored into risk-reward calculations.  You trade uncertainty for the possibility of a greater reward.  You have a greater or lesser tolerance for risk. In this case, risk is largely something good.  We celebrate risk-takers.  Your investment advisor will encourage to accept more risk because of the potential for positive returns over time. Being willing to take risk is a sign of courage. 

In administration world, risk is largely the domain of "risk managers" who do things like conduct Enterprise Risk Assessments, which identify the big scary things that might happen and line up mitigation strategies to reduce their likelihood. They also manage your insurance programs.  Insurance is one of the primary mitigation strategies.

At KPMG, I was introduced to a risk framework. It identified all the functional parts of an enterprise using Porter's 5 Forces model.  This was primarily for designing audits, where the auditor's job was to identify the risks associated with each of the elements of the enterprise and develop an audit strategy to determine the degree of exposure in each and suggest procedures, policies, and systems to reduce or manage risk. But it also has been useful for making sure you see each part of an enterprise, and think through the specific features of each. 

I've used this framework to argue that we can describe each element of an enterprise in terms of the risk that it is meant to respond to, in this case meant in terms of probabilistic outcomes.  At a university, some functions are clear--the police force is in place to protect against crime, injury, and loss of property.  I did some work at UC Santa Cruz, which had an on-campus fire department.  The UCSC campus is sited beautifully, nestled in a forest.  The fire department protect the campus from burning down on a red flag day.  But you could also see the academic departments in terms of a kind of risk--what would happen if you don't fund the English department adequately? The English department is there to make sure you offer the programs and courses students need and want, thereby increasing the probability of them coming to the campus and succeeding there. You also have an English department so you won't lose ground to the alternatives those students have.  Degradation of academic programs is a serious risk. Maybe students and other stakeholders (alumni and donors, legislators, the community, faculty) don't care if you have a good English department. But do you want to risk that?      

I've always wanted to get a client to let me work with them to use a comprehensive risk framework like this to set priorities and allocate resources. So far no takers. Starting from something like the KPMG framework I would kick off conversations that are informed by a risk tolerance orientation. There is always risk in life.  It's worth understanding the risks (probably, although you could make the case for the benefits of heedlessness and recklessness).  I like the question what risk is this function (position, office, policy, etc., etc.) designed to deal with.  I like the phrasing "deal with"--not necessarily reduce or mitigate.  You ask what risk is the HR department designed to deal with, and what would happen if you didn't do it, or did less or more of it. And you ask the same question of the English department. 

If you did this you'd have the start for comparison across activities, onw of the hardest things to do. Comparison is still hard. The outcome of the risk takes disparate forms--emotional trauma (loss of a loved one), reputational damage, social insecurity, and finally financial loss. Insurance has an answer.  Convert losses and gains into dollars (currency), the universal expression of value, value reduced to commodity. This of course shows that the danger (risk) in risk framing is to exacerbate the financialization of all relationships. 

A couple more points to make.  First, people are very bad at evaluating it. Decision theory has catalogued many errors people make in evaluating the probability of a result.  They give more weight to the possibility of loss.  They don't take into account sample size. They reason by analogy. They don't recognize randomness. They respond more strongly to vivid examples and to the most available examples.   

Like a lot of potential organizing concepts, risk is mutable. A risk starts by taking one form and before you know it takes another. A university has to decide how many police officers to hire.  Hire more, and you have better chances of preventing incidents or responding more quickly. But you may find that crime incidence does not require the number of officers you have--you might be located in a safe area and can have the same results with half the officers.  Which would allow you to hire more English faculty. But if parents get wind that you cutting back on police officers, you'll be pilloried on social media.  So what started as a technical risk of crime morphed into a concern about perceptions on the part of people loosely affiliated with the organization and the place. 

There is a reductio ad absurdum problem lurking around the corner.  If having an average number of police officers is good, wouldn't double be better?  Why stop there? Eventually you end up with a college that is all cops and no teaching. Of course it doesn't get that far, but do have any basis for knowing when the balance has gone too far. There is every reason to think that biases in assessing risk almost guarantee the balance will be out of whack.  

Saturday, August 28, 2021

Insurance and me and us (part 2 of something)

Insurance seems like the last thing anyone with imagination would talk about.  The very definition of bloodless bureaucracy, mundane minutiae.  It's also been part of my family history.  My grandfather was a "life insurance man"--an executive at a small company in Nebraska, with the letters CLU after his name, a lot of his identity drawn from the role and experiences he had with that company. My father-in-law was an accomplished and successful actuary, and his work experience lent weight and wisdom to his progressive convictions. In my role as a consultant and administrator, insurance and actuarial science come up pretty regularly.  We don't always think about insurance, and part of its significance is that you want to know insurance is in place and then not think about it. You want to know that it is a solid part of the infrastructure of experience, taken for granted, invisible. 

It came as a surprise then to see insurance enter into the discussion of governmentality, which seems to be the primary intellectual framework for Foucault's huge influence on organization and administration theory. Foucault saw a society as being controlled by a "triangle" of sovereignty, disciplinarity and government, with government understood as the general exercise of control--government of one's self, government of children in education, the government of souls and lives by children, and the government of a population by the sovereign. Governmentality is the set of methods in place for managing a population and the bodies of knowledge seen as necessary to do that.  It is different from government, because it is not limited to specific organization or legal structures, but it a broader web of control techniques and a set of assumptions underlying most aspects of a period's social life.   

Risk is one of modern society's key knowledge bases, and insurance is the technical method of managing risk. 

Risk emerges as an issue because modern society, with its loosening of traditional bonds of connection and social cohesion combined with technological advances unleashed new levels of peril and uncertainty. This phenomenon is at the base of Marcuse's passion, where he laments the irrationality of a technologically advanced society where those technological advances seem to have been oriented to delivering destruction and threats to existence at an unprecedented scale. This is the irrationality he sees as the end of rationality.   

Insurance emerged in the late 19th century in a society roiled by social, political, economic, and technological change.  Some of the writing that people draw on is from French scholars who address this is in a French context, such as the institution of social insurance established by the government of Napoleon III, which offered an alternative to more mutualist approaches that were emerging from a radicalized working class.  The context though was common to the industrialized world--a society reorganized into wage-dependent urban communities where people worked in mechanized environments with huge potential for injury and penury. Insurance programs were a way to compensate for that risk.  You might lose your ability to provide economic viability for your family, but we will set up a program where you will be provided compensation if that does happen.  At a different time, an injured person might expect support from a family with a more diverse household economy--some food from a garden plot, some household industry--or from their commune.   In the 19th century, it was possible that the workers themselves would make these provisions for themselves, but that would create a power center that would challenge other parts of society for legitimacy and authority. Instead, the state stepped in, 

A surprising extent of American life s governed by insurance of one sort or another.  We don't have a pension system--Social Security is an insurance plan, where you pay in for a time, with the promise of a payout/payback later based on what you put in and expectations about life expectancy--i.e., actuarial science.  In case of injury, you are covered by Workers Compensation Insurance--your employer either carries this insurance or pays into a state program.  You can barely have a place to live without out it--to buy a house, you have to have insurance covering the value of your home, some mortgages require insurance to cover repayment, and some landlords require renter's insurance.  You can't drive without insurance. And rather than a national health plan, we have health insurance.  We've created a healthcare system that will hit you with punitive charges if you use it, and your insurance is your protection against the threat that the healthcare system constitutes. Insurance is on offer for lost cell phones, defective products, flight cancellations and so on. Anything can be translated into an insurance contract.

Insurance does a bunch of interesting things from a theoretical perspective.  It has the effect of taking shared risks and converting them into individual, atomized transactions.  For instance, flood insurance takes the risk of a natural disaster, which would be shared by everyone sharing a geography, divides up the risk into parts that can be sold as individual transactions, thereby providing an individualistic way of responding to a shared threat. 

It also does create a kind of solidarity, but it is of an abstract nature unlike traditional solidarities such as family or community.  You replace what could be active forms of solidarity--say of union members contributing to mutual funds, or a community caring for the people it knows as its members--with one that is nothing other than a risk pool defined by a group of hidden technocrats.

It converts human life into a form of capital.  Life insurance is designed to recover the lost earnings/value of the life, and it encourages individuals and families to look at lives as a form of private capital stock.  Turning a life into capital makes them equivalent. Exchange value over use value. Economics over ethics. 

It converts social relations and actions into calculations, expressed in the common denomination of dollars. It implicitly makes the case that anything can be measured and financialized. 

Insurance is an extremely effective tool for training people to understand relationships is society as agonistic. An insurance policy is an alternative to a lawsuit.  

The insistence in the US on providing access to health care through insurance has an almost mind-boggling effect.  It means that for most of us, medicine is not cast in terms of health, but in terms of risk.  The point about medicine is that you have to protect yourself from it, because if you encounter it naked (without insurance coverage), it will destroy you financially.  The threat of a medical malpractice suit is the primary vehicle we depend on to provide an incentive for good care, and I'm sure hospital administrators if not providers treat each patient as a potential litigant.

The role of insurance means that relationships are defined in terms of their potential for conflict--the operating assumption that conflict is always just around the corner. Cooperation has no weight. 

One of Foucault's key arguments is that these structures get worked into the fabric of experience. They become common senses.  They become invisible. A historically specific invisible hand. 

    
Dean, Mitchell. (1999)   Governmentality: Power and Rule in Modern Society. Sage.

Defert, Daniel (1991)  "'Popular Life' and Insurance Technology" in The Foucault Effect: Studies in Governmentality.  Graham Burchell, Colin Gordon and Peter Miller, eds.  University of Chicago

Ewald, Francois (1991)  "Insurance and Risk" in The Foucault Effect: Studies in Governmentality.  Graham Burchell, Colin Gordon and Peter Miller, eds.  University of Chicago

Foucault, Michel (1991)  "Governmentality" in The Foucault Effect: Studies in Governmentality.  Graham Burchell, Colin Gordon and Peter Miller, eds.  University of Chicago.

Marcuse, Herbert (1964). One-Dimensional Man.  Beacon.