Organization Abolishes Scarcity
ARTICLE | November 3, 2011
Society is an intricately complex web of mutually beneficial, productive and collaborative relationships between people, activities, institutions, laws, ideas and values. Ideas and values determine the breadth, depth and heights of civilization and culture to which society attains. Organization constitutes the warp and woof of that web and determines its strength, quality, amplitude and capacity for accomplishment.
The progressive development of organization is the means for the continuous evolution of civilization. Organization permeates all fields of human existence and exists at multiple levels. The emergence and development of language, military, agriculture, markets, cities, government, money, nation states, industrialization, technology, education, and internet are important landmarks in the evolution of social organization.
Organization eliminates scarcity. In 1943 Bengal was struck by the last great famine in modern Indian history, in which two to three million people died. The cause was initially attributed to a massive crop failure and resultant food shortages. Amartya Sen found that food availability was actually slightly higher than previous years, but that hoarding and price factors were responsible. The British inquiry commission highlighted the absence of a single coordinating authority. The crisis abated when the British administration and military organized a massive mobilization of food grains from other parts of India and overseas and distributed more than 100 million free meals. Organization eliminated the scarcity.
Organization generates surplus. Higher levels of organization are capable of coordinating a wider and more complex array of activities, resulting in higher productivity and greater abundance. The remarkable achievements of India’s Green Revolution were the result of multidimensional coordination of activities related to food production, distribution and consumption, including breeding and production of high yielding varieties, production of fertilizers, expansion of warehousing facilities, and coordination of research among all the national agricultural research labs. But two other strategies were of paramount importance. The first was the introduction of a guaranteed minimum floor price for foodgrain. The second was establishment of the Food Corporation of India to purchase surpluses and distribute them to food deficit areas, bypassing speculative middlemen. Together they provided farmers with an assured market and psychological incentive to maximize production. This comprehensive strategy enabled perennially food-deficit India to raise food production by 50% and achieve food self-sufficiency in five years. Within a decade food production had doubled and the country was exporting surpluses. That surplus also became the foundation for the expansion of manufacturing, marking the real beginning of India’s industrial revolution in the 1970s.
Integrated organization converts problems into opportunities. The foregoing are examples of coordination focused on a single or related group of activities. But the power of organization extends still further until it has integrated virtually all aspects of social existence. Money is a striking example of integrated social organization. Originally intended as a medium for the exchange of goods, it has evolved into a store and measure of comparative value; and acquired the capacity to convert any type of social value into any other type, thus evolving as the ultimate symbol and instrument of economic, political and social power. With money a person can procure any product or service, obtain any type of information or technological capability, travel around the world or into outer space, gain access to the highest centers of political power or get elected to public office, hobnob with the social elite or become one of them.
Micro-credit is an innovative organization first introduced by Accion and Grameen Bank in 1978 as a means to extend the power of money to the poor in developing countries who fall beyond the radar of traditional commercial banking institutions. Its success results from the effort to integrate banking with the livelihood opportunities and social structure of the poor. Since then, this organization has spread globally and grown exponentially. An estimated 10,000 micro-finance institutions now reach about 150 million people globally, three-fourths of them women. Yet despite this remarkable performance, the untapped potential is estimated to be more than three times greater than the present coverage. In India only about 5% of the 350 million people living below the poverty line have access to micro-finance.
Integration is a concept more frequently used than understood. The performance of a symphonic orchestra is coordinated by the conductor, but not integrated. Individual musicians do not have the power to compensate for errors of rhythm or meter by their colleagues. In contrast, the performance of the human body is so fully integrated that each cell, organ and system has the capacity to respond to local stimuli, to compensate for changes in the functioning of other parts of the body, and to also accept instructions from the central nervous system. Integration converts a mechanical organization into a living organism.
The Internet is the first globally integrated social organization, extending beyond the monetarized sectors of the economy to encompass our most intimate personal interests and global human aspirations. Spanning the earth, it masters space by bringing the most distant corners of the planet within reach. Moving at the speed of light, it masters time by acting instantaneously across the world. Today the internet makes it possible for more than a billion people to accomplish from their own homes and offices, feats unimaginable even for large corporations and national governments a few decades ago. It makes available at our fingertips in an instant knowledge previously denied to all but a rare few by years of arduous labor. It makes possible instantaneous exchange of ideas and information and collaborative endeavors involving huge numbers of people. It levels the playing field between infinitesimal individuals and mega institutions. It can empower the ordinary citizen to topple an authoritarian regime or release a global movement to fashion a better world.
The productive powers of society can never be exhausted. The more they grow, the more capacity they acquire. Organization fully utilizes the available energies and releases fresh expansive and creative energies, the way scientific societies stimulated the development of science in recent centuries. The creative powers of society have the capacity to elevate productivity into creativity, the way the Internet is now changing how the world’s work is accomplished.
If organization is so very powerful, why does humanity still suffer today from seemingly insoluble problems of poverty, unemployment, social unrest, terrorism, nuclear proliferation and climate change? These problems can best be understood as expressions of incomplete, fragmentary and inadequate organization. They cannot be effectively addressed by partial, piecemeal strategies. The world is evolving and our social organizations have not kept pace with the demands for globally integrated solutions. The broadening of the base of human activities from the national to the global level necessarily compels a commensurate reorganization at the global level and all the levels below it. Mere coordination of activity between points in space can never be optimal, any more than the states of the USA or the millions of nodes on the Internet could function effectively through bilateral and multilateral arrangements.
Governor of the Bank of England, Mervyn King, stated in October 2010, "Of all the many ways of organising banking, the worst is the one we have today".1 Finance has become divorced from mainstream economics. Trillions of dollars circle the globe daily in search of higher speculative returns, denying the capital needed by the real economy. Economics and finance must be reintegrated for productive purposes. Rising levels of income inequality aggravate the shift of capital from production into speculation. Improved communication systems make the impoverished far more conscious of the life styles of the growing middle class, raising their expectations and frustration to the point where it spills over into social unrest, violence and terrorism. A nation-centered, competitive security system encourages militarization and nuclear proliferation, thereby increasing the insecurity it was intended to reduce and doing so at a cost many times greater than what would be required by an effective global cooperative security system.
So too, ecological problems can best be understood as the result of a misguided organization of the world’s natural resources and productive capacities driven by the wrong values, ideas and priorities. Unidimensional technological solutions will never suffice. Regardless of the technology employed, growth for growth’s sake divorced from human welfare can only deplete and destroy the environment. It is not unlimited growth the world needs, but unlimited human development. Rightly organized, the world is abundantly capable of securing an ample measure of human welfare to all human beings.
Unemployment resulting from an increasingly globalized labor market continues to be viewed and addressed by fragmentary national level policy instruments – tax cuts for the wealthy, monetary policies, macro stimulus packages – which never address root causes. It is aggravated by financial instability arising from the channeling of resources into non-productive speculation. Even unidimensional coordination of education and employment to meet skill shortages and promote self-employment and entrepreneurship would be sufficient to dramatically reduce unemployment in most industrialized nations. A coordinated global employment strategy to match emerging opportunities with human capabilities would eliminate it completely. An integrated strategy relating employment to education, complementary global markets, the untapped potentials of the Internet, financial regulation, demographic trends and other factors can generate an abundant, perennial source of new employment opportunities for all job seekers.
The crises we face expose our blind spots and failure to evolve with the need of the times. Each conceals a potential for converting scarcity into surplus, conflict into cooperation, wastefulness into more for all, growing threats into greater security. Individuals and organizations that are able to think freshly and act creatively will be the catalysts able to envision further levels of organizational development and integration needed to convert crises into opportunities. The individual is a miniature of the society, integrating within his own personality personal and collective aspirations and transcendent values. The individual who can think freshly and act creatively is the catalyst for social evolution.
The articles in this issue of Cadmus point out organizational insufficiencies and organizational opportunities that can convert these global challenges into creative opportunities for humanity. The power of organization to ensure global food security is discussed in the next Seed Idea. In the modern service economy, the production of wealth (and economic value) is increasingly related - and almost totally dependent on the evolution of more complex and integrated organizations for delivery of social services. Roberto Peccei calls for a reformulation of economics based on the conception of a single global economy which integrates economic and ecological factors to maximize employment generation and human welfare. Mike McManus’ article on mediation and arbitration illustrates one of the many untapped potentials for extending simple mechanisms to improve governance. Ashok Natarajan’s article on rising expectations proposes economic strategies to address social unrest and terrorism.
- Mervyn King, “Banking: From Bagehot to Basel, and Back Again”, The Second Bagehot Lecture, Buttonwood Gathering, New York City, October 25, 2010 http://www.bankofengland.co.uk/publications/speeches/2010/speech455.pdf.