If you’re reading this blog, you likely know the narrative we apply to capital investments. Projects coming from the top down tend to be orderly but dumb while projects coming from the bottom up tend to be chaotic but smart. We all prefer smart to dumb, but we Americans have a really strong preference – and have established systems that enable bureaucrats and elected officials to ensure – that we get orderly over chaotic, even when it means accepting dumb as a result.
A recent example of some chaotic street art is a case in point. When I shared this story in our social media feed, even members of our audience gave some pushback. People can’t just go painting flowers on manhole covers. The notion offends our affluent sensibilities, perceptions of our success that begin and end with the orderliness of the world around us.
I’ve also pointed out that it is really difficult for local governments – even those desperate for innovation – to embrace a chaotic but smart approach because we – American society – have little tolerance for the chaos and failure of experimentation. We accept a beta version of the next iTunes with all of its flaws to be worked out, but government had better deliver flawlessly on its promises (and with the money they already have).
Enter the megaproject; the least-dumb idea that consensus provides.
A recent article in the New Yorker on megaprojects is a treasure trove of quotes. Americans scoff at the lonely bureaucrat tasked with painting crosswalks or fixing sidewalks -- so little glamour in such modest work -- but we culturally admire those who dream big and, like a finely pruned peacock, display the confidence comensurate with their vision.
Engineers are delighted to develop new technology, politicians revel in the visibility they reap from building monuments to themselves, and everyone else—developers, bankers, lawyers, consultants, landowners, contractors, and construction workers—is happy to claim a share.
And unlike the beta version of iTunes and the software patch that follows, megaprojects are designed to excuse their own failures. According to the article, nine out of ten go over time and over budget. The story of Pakistan’s Tarbela Dam is the example they use. Unanticipated delays intersected with unexpectedly high inflation rates quadrupled the cost, but those things are out of the control of project advocates, so no lessons are learned.
“Time is like a window through which black swans can fly,” Ansar told me, alluding to the so-called black-swan theory, which explains how unexpected events shape history. “The bigger the window, the more likely the birds fly in.”
I love this reference to the Patron Saint of Strong Towns Thinking, Nassim Taleb, and the notion of a black swan. The “theory” (it is actually more of an observation) is not that unexpected events shape history, but that we humans believe we know more than we actually do, that we can look at all the white swans around us, know that for thousands of years we’ve only seen white swans and then confidently conclude that all swans are white. Our hubris prevents us from not just anticipating a black swan but from even acknowledging that there are things we can’t anticipate. (There are actually black swans, by the way.)
Doing so – acknowledging our limitations – would shatter our sense of being able to bring order to chaos in the same way Hurricane Katrina did in 2004 and, more close to home for me, flooding in the Red River Valley did back in 1997. We look back at those events as failures of systems – we didn’t build the dike high enough, strong enough and thick enough – as opposed to failures of imagination; we didn’t consider that we could be wrong so we felt confident building in areas historically devastated by flood and hurricane.
This failure to be honest with ourselves – to believe there is order when there is actually just suppressed chaos – allows others to be dishonest with us. Our preference for the order of the megaproject creates opportunities for politicians, bureaucrats, corporations and labor unions to create a nice glide path for these projects to follow. From the article:
He [Flyvbjerg] writes that megaproject planners are often outright dishonest, systematically overestimatin benefits and underestimating costs. He cites an unusually candid comment that Willie Brown, a former speaker of the California State Assembly and mayor of San Francisco, made in a 2013 newspaper column. Referring to huge cost overruns during the construction of San Francisco’s four-and-a-half-billion-dollar Transbay Transit Center, Brown wrote, “We always knew the initial estimate was way under the real cost…. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.”
Don’t be offended by this; we actually prefer it this way.
So what is the alternative? What does chaotic but smart look like? Our friend, former Mayor of Seattle Michael McGinn, gives a rough sense of what this approach means. Again, from the article:
In 2009, McGinn, a Sierra Club activist with little political experience and modest financial backing, was elected mayor of Seattle. He had campaigned against the tunnel, arguing for a cheaper option: a plan, already found feasible by an advisory council of city and state stakeholders, to develop the city’s light rail, expand bus service, and repair and reorganize streets.
Feasible, but messy. McGinn’s approach would have meant a lot of trial and error. It would also have meant some uncertainty in how traffic patterns, and subsequent investment, would adapt to the removal of the elevated highway. Changes would ultimately be needed to zoning codes, tax systems, street standards and other systems of government to respond to an evolving reality. Today these changes would be unknown – unpredictable – because they would be incremental reactions to conditions as they happened. Some of the changes would be bad; they just wouldn’t work and would need to be undone or changed in some other way. This would all be really messy with lots of uncertainty and, in a word, chaotic.
Nassim Taleb has said that, in complex systems, we need to use incremental change to probe uncertainty. However, if you personally are so confident that you have no uncertainty, or if you believe that uncertainty can be overcome through better planning (or a bigger budget), Taleb’s valuable insight will be lost on you. Sadly, you will most likely be part of the orderly but dumb problem systematically destroying our cities.
What results, Flyvbjerg says, is the “survival of the un-fittest”: the least deserving projects get built precisely because their cost-benefit estimates are so misleadingly optimistic.
Admit you don’t know. Embrace the chaotic but smart. Understand that a strong town is built with a thousand competing ideas instead of one master vision. A lack of resources is forcing us there anyway; let's get started now.