Regular EconLog reader KevinDC wrote me last week with some interesting content from Slate and his own insightful comments. He has given me permission to quote.
Kevin writes:
I came across a story in Slate I thought you might find interesting. The author describes how food delivery apps similar to UberEats or GrubHub work in Indonesia. From a certain naive point of view, these sorts of services could be seen as successful instance of an algorithmic, central planning model of food delivery. But the author points out that these systems can work due only to the ability of the drivers to bring their deep knowledge of specific local conditions, the quintessential Hayekian point about “particular circumstances of time and place.”
From Rida Qadri, “Delivery Platform Algorithms Don’t Work Without Drivers’ Deep Local Knowledge,” Slate, December 28, 2020:
To do their jobs, they must think every day about which routes have the most potholes and which traffic signals stay red the longest. Their mental maps of the city note what places have unfriendly security, where they might encounter violent traditional motorbike drivers, specific agreements they have to comply by [sic], friendly roadside restaurants that would let them rest. They must compensate for inaccurate geolocations caused by GPS signals blocked by nearby infrastructure.
Much has been written about the frictionless technology of ride-hail platforms celebrated by customers and technologists alike…Yet their elegance is powered by and relies on the human mediations of the drivers on the street. It is the local markets they claim to replace that have often furnished drivers with the knowledge of local physical and social constraints.
Kevin then points out that this caused him to recall “a similar observation by James C. Scott about how apparently successful planning depends on the ability of people to ignore the plans and regulations, and follow their own evolved rules instead.”
Scott wrote:
Workers have seized on the inadequacy of the rules to explain how things are actually run and have exploited it to their advantage. Thus, the taxi drivers of Paris have, when they were frustrated with the municipal authorities over fees or new regulations, resorted to what is known as a grave de zele. They would all, by agreement and on cue, suddenly begin to follow all the regulations in the code routier, and, as intended, this would bring traffic in Paris to a grinding halt. Knowing that traffic circulated in Paris only by a practiced and judicious disregard of many regulations, they could, merely by following the rules meticulously, bring it to a standstill. The English language version of this procedure is often known as a ‘work-to-rule’ strike. In an extended work-to-rule strike against the Caterpillar Corporation, workers reverted to following the inefficient procedures specified by engineers, knowing that it would cost the company valuable time and quality, rather than continuing the more expeditious practices they had long ago devised on the job. The actual work process in any office, on any construction site, or on any factory floor cannot be adequately explained by the rules, however elaborate, governing it; the work gets done only because of the effective informal understandings and improvisations outside those rules.
I (this is David R. Henderson speaking) remember when I first heard, in my teens, about a work-to-rule strike and thought “What’s the problem? Isn’t everybody supposed to be working by the rules?” It might not surprise you to learn that I grew up in a family run by a man (my father) who was a high-school principal. Someone, probably my mother, who, OMG, was so much looser with rules, explained to me why such a strike would be effective.
Back to Kevin. He writes:
These (and other examples) are bringing into focus something that I’ve noticed for a long time but never articulated. “Planning” is most able to appear successful in places where people are most free to ignore or work outside the plan. Delivery drivers aren’t successfully allocated by algorithms crunching all the “relevant data” – the drivers use their own local knowledge, unaccounted for by planners, to determine what the most efficient allocation of driving resources will be. A de jure “well regulated” taxi industry can appear to work efficiently, but only to the extent that the taxi drivers are de facto free to ignore regulations and act instead by their own evolved order. In countries that were dedicated to the idea of “planned economies,” life was most tolerable in the places where the local authorities tacitly approved (or at least tolerated) the existence of black markets operating in parallel to allocate resources outside the dictates of the planners. The less effectual planning is, the more successful planning appears.
This is even true (in my experience) of what appears one of the most “command and control” organizations you can think of – the US Military. (I was in the Marine Corps for nine years.) On the one hand, there are the official rules, regulations, general orders, and standard operating procedures written up by people sitting behind desks and printed up in the official manuals. And on the ground, there is how stuff “really gets done,” which varies from unit to unit. (This phenomenon was made fun of in the Terminal Lance webcomic, where Marines fresh out of training are quickly advised to forget everything they were taught: https://terminallance.com/terminal-lance-character/itb/) There was also an informal understanding that “regulation thumpers” who insisted that everything be done “by the numbers” according to the official rules should never be allowed to be in charge of anything – because they were prone to substitute official rules for evolved unit level practices, and nothing would ever get done properly.
Back to David R. Henderson:
One of the funnest and most illuminating projects I gave my students for the last 15 years I taught was to discuss I situation they had confronted in the military and say acting according to local knowledge worked (or didn’t work) or why centralized decisions didn’t work (or worked.) We all agreed that a lieutenant should not start a nuclear war, but there were some really good examples far below that level of importance where local knowledge worked well (and some where it worked badly.)
I’ve sometimes thought to collect these in a book.
READER COMMENTS
Thomas Corbin
Jan 4 2021 at 7:48pm
Man plans, God laughs
KevinDC
Jan 4 2021 at 8:31pm
Thank you very much for the shout out David! 🙂
For the curious – the quoted section from James C. Scott is from his book Two Cheers for Anarchism, which is definitely an interesting read and one I’d highly recommend.
Also, on the subject of the military and central planning – Tim Harford’s book Adapt holds some interesting insights as well. He describes how things went worst in Iraq when the US military was operating on a central planning model. Several lieutenants would report information to a captain, who would create a synopsis of that information and pass it up to a major along with several other captains, and that major (along with many others) would compress all that info into a report that would go to a colonel, etc, all the way up to the level of the generals. Of course, by necessity, the amount of information that could actually make its way to the top level was only a tiny fraction of the relevant information. The generals would then use this severely limited information to create plans or issue orders for whole provinces. Things in Iraq improved significantly when this system transitioned toward a more decentralized approach where a given captain in charge of a particular district of a particular city was able to make their own decisions about how to handle things, based on their own direct, on the ground information that a general in central command just couldn’t account for.
I guess what I’m saying is…read Adapt too. It’s a fascinating book.
john hare
Jan 5 2021 at 4:22am
This applies all the way down to personal interactions as well.
One story I heard from a person in the Marine Corp unit involved is about an officer fresh out of OCS in the Korean war. Did an inspection just before leading 6 men on patrol. Shined boots, belt buckles etc. Sniper shot him 6 times over the first hill.
In my very small company I learned not to micromanage because when I had to be somewhere else, all work stopped while they waited for orders.
David Seltzer
Jan 5 2021 at 5:49pm
I served in SE Asia for 19 months, 1962 to 1964. How things actually run comes from experience. A good friend was a Hospital Corpsman stationed at Da Nang Air base, 1965. Also called rocket city. Any former devil dogs who served there know it well. My friend tells of a Marine, 0311, being severely injured when he stepped on a bouncing betty. He was ferried from the LZ back to a field hospital. The attending physician was a LTJG new to triage. He took one look at the injured Marine and froze. All the training drained from him. A Master Chief Corpsman with 30 years in the Navy settled the JG down. Master Chief Secor put his hand on the LT’s shoulder and calmly said, “Son, do what I tell you and you’ll get through this.” The next thing Chief Secor heard was, “Thank you Chief!” “Thank You!” Master Chief Secor was in WWII, Korea and Viet Nam! Much of it in country with Marines. One of the great honors for a Corpsman is being called “doc” a term bestowed by a Marine. Master Chief Secor was revered.
David Henderson
Jan 5 2021 at 7:38pm
GREAT story!
One of the tragedies of occupational licensing is that corpsmen can’t easily become doctors. In 33 years of teaching at the Naval Postgraduate School, I had a number of students who hadn’t been good enough at organic chemistry to become docs (or maybe they couldn’t afford tuition) but would probably have been great docs if they stuck to a set of ailments. I remember one student who told me that he delivered a baby at a base in Alaska.
Tom Means
Jan 6 2021 at 7:41pm
A couple of points. Some of this is normal. Like drivers knowing better routes than GPS routes. Not necessarily violating a rule. Violating actual rules, can come about because of poorly written rules that lead to “ black” markets developing. Like excessive planning regulations and sales taxes on marijuana stores.
My other point is that rules, regulations, or guidelines are like cooking recipes. They leave a lot to be desired and should not be taken as literally true. Try following the recipe for a French omelet or even better a Tornado omelet. First watch a YouTube video. Reading and following the directions in the video may look simple, but unless you develop the personal experience of making these omelets, you will likely fail several times before succeeding.
Municipal planners are like socialist artists. They believe they can plan the perfect development. Of course, they ignore the market realities, which is why they always return to the drawing board after a private developer comes in a project asking for exemptions.
Comments are closed.