Many people think the financial crisis, Fukushima and the many Wutbürger (angry citizens) movements spreading all over the world are symptoms of a deep systemic problem. Protestors who also reject the too-big-to-fail argument might be glad to remember Leopold Kohr (born 1909 near Salzburg − died 1994 in Gloucester, England) Austrian philosopher, professor of economics, and winner of the Alternative Nobel Prize in 1983. Kohr was founder of the small-is-beautiful movement and his views on life and society are remarkably well-suited for the 21st Century.
Always crystal clear and full of up-beat humor, Kohr's advocacy of "human scale" can be summed up in three axioms:
Human beings are always able to surprise us and, as long as they are free, they would rather build than destroy, says Kohr. These traits are the source of human individuality and dignity, a safeguard against manipulation and they are also the basis for democracy. Thus Kohr may have an optimistic view of humanity, but one built on strict prerequisites: the open exchange of ideas with friends (in the informal-but-academic atmosphere he preferred, so our endless propensity to err can be mitigated), and his call for small and transparent environments that prevent people from hiding in the anonymity of the masses. After all, the ability to hide from accountability while comfortable is also dangerous: we must always be challenged to act as individuals.
A faceless mass can offer the individual intoxicating emotionality and a brief feeling of belonging, but the absence of comprehension and manageability of the whole on the individual level (Überschaubarkeit) comes at a high cost, namely, the loss of freedom, and ultimately can end in disaster. In conclusion, Kohr sees a strained relationship between two extremes: on the one hand, a utopian but desirable romantic-anarchism, with individuals liberated from violence and hierarchy, and at the other extreme, the lowest point, domination by others, where human beings become totally anonymous and predictable.
Kohr's warning against large-scale complexity is fundamental to his theory of society. It derives from his observation that while growth can often be advantageous it bears a cost of coordination that increases disproportionately with scale that, once a "critical point" is reached, adds an impossible burden. At that point as with living cells this will lead to spontaneous division and new organisms will emerge or else the whole will perish. As a consequence, Kohr proposed that politicians should divide up states and over-extended social entities into several small units of sub-critical size. Where the threshold actually lies depends mainly on the purpose of the group, but also on the quality of its organization, the population density, and its economic sustainability.
The nasty surprises that arise in units that are too big or too complex and thus impossible to understand must be seen within the context of Kohr's ideas on life and society. These surprises are 'nasty' because the consequences of excessive size will be totally unexpected; this also applies to abstractions: when we press complex matters into simple models, and project them onto other different and more complex scenarios, often relying on ideologies or 'great ideas' to do so. According to Kohr, Paracelsus's adage "The dose makes the poison" is valid here too. Ideologies built around nations, classes or markets may initially have a high explanatory value, but when applied wholesale they give rise to negative outcomes. Two current examples of such grand ideas running into trouble are cost-reduction by outsourcing and monetary union in Europe.
This is the city state, as it existed in ancient Greece, medieval northern Italy, and the German mini-states of the Holy Roman Empire. Here, culture and civil society prospered because things were small, transparent and understandable, and less resources had to be spent on military power (less power means much less mistrust: another aspect close to Kohr's heart). Consequently, he repeatedly praised Liechtenstein, and Switzerland for its cantonal constitution. Looking to the future, Kohr advocated the subsidiarity principle and strengthening of the historical and small regions of Europe: thus anticipating a de-facto disempowerment of large nation states. Only in this way could Europe achieve the necessary harmonization of supra-regional needs without marginalizing the minnows. Today, Kohr would criticize the EU above all for its fixation on standardization: as the expressway to large-scale failure.
Kohr does not see smallness as an end in itself: after all, at the heart of his philosophy is the welfare of the individual, not the collective or great idea. In aphorisms and striking comparisons he may blame large-scale growth as the root of most troubles in the world, but what he really criticizes is not size itself, but rather mankind's inability to understand the complexity that usually (but not always) goes with it. Human scale implies an ability to at least roughly understand the causal relationships. As already implied in the three axioms, Kohr's warnings not to cross the "critical point" are built on three different arguments:
|socio-political||based on the hard facts of cost-benefit analysis|
|philosophical||based on empirical psychological knowledge of the necessary social framework for individual human development|
|rational||by keeping on challenging the abstractions behind great ideas (this approach is quite revolutionary, countering the methodology of the enlightenment: where simple models are developed from abstractions, as in laboratory experiments, and then applied by linear projection onto more complex scenarios).|
The financial crisis that began in 2008 seems to confirm Kohr's warning: even the financial industry itself did not fully understand derivatives, and the unbridled greed of neo-liberalism drove us like reckless motorists at full-speed into a fog bank. However, it is not only the financial sector which failed due to its own complexity: it is the whole philosophy behind globalization that must now be reappraised.
Prince Hans-Adam II. von Liechtenstein describes in "Der Staat im dritten Jahrtausend" (The State in the Third Millennium) a triumvirate as old as human history: monarchs (hereditary or elected), oligarchs (formerly nobility: now party bosses and doubtless bankers) and the common people. Today, it is the all-powerful oligarchs who must be checked in favor of the people and monarchs. If these oligarchs are so powerful because, as they claim, they are better able to handle complexity, then the best way to keep a check on them is by reducing this complexity.
Nassim Nicholas Taleb argues in his book "The Black Swan" how the probability of rare events is non-computable and how supposedly extremely unlikely risks very often have drastic consequences.
The theory of evolutionary epistemology (R. Riedl, H. v. Ditfurth, G. Vollmer, also A. Dijksterhuis and myself) explains why for biological reasons our ability to understand complexity is limited. It is especially dangerous when rational people fail to recognize their own limitations as well as the grave risks that exist beyond focused awareness. Biological evolution means we can recognize these risks only with the help of irrational means: firstly by instinctive information-analysis that spontaneously informs us, through our senses, of all remarkable events in the outside world, and secondly by consulting irrational but holistic sources of cognition such as religion, desire for harmony, sustained customs and traditions. Today in our apparently enlightened world, to have abandoned these holistic means of protecting our flanks and instead to rely solely on rational thought is worn as a badge of honor, and yet this presents us with an awful dilemma around the globe as, due to globalization and new technologies, we project ever wider webs of purely rational abstractions.
Sometimes things work out, even when driving into a fog bank, and globalization could yet have other benefits: the unlimited exchange of information, universal recognition of human rights, a new awareness of the global causality needed to protect the world's climate. But insofar as globalization is a rational project, with Kohr's nasty surprises still lying in ambush, we need to be particularly careful when stepping outside familiar territory. We must first try to establish that our actions have no catastrophic consequences and check the corresponding burden of proof, before we speed into the next fog bank.
The need for a paradigm change is clearly felt today. In many fields, from religion to national security, from energy policy to democratic legitimacy in the financial sector, there are contemporary trends that clearly relate to Kohr's ideas. While none of these separate trends have been widely adopted so far − after all, they emerged and developed independently − it is only a matter of time before they will be linked politically and a new dynamic of regionalism develops.
I have great confidence in the internet and new social media such as Facebook. This is where new networks are being created with the same holistic quality as the city-states that Kohr so admired. The real potential of these networks has yet to be seen, but they could give birth to completely new models of political interaction: over and above the utopian cosmos of mini-states and the failing reality of large and increasingly impotent nation states.
A tip for angry citizens: use Facebook, read Kohr, support liquid democracy and study at www.lietaer.com how holistic resilience trumps complex efficiency. The soft landing of the economy and politics might depend on it.
Dr. Michael Breisky, former Austrian ambassador (www.breisky.at) "Gross ist ungeschickt, Leopold Kohr im Zeitalter der Post-Globalisierung" (Big is Clumsy. Leopold Kohr in the Age of Post-Globalization.) published 2010.
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