Thursday, October 25, 2012

Are Leaders Really in Control?

We live our lives enmeshed in complex adaptive systems. Our economy is just one example. Two fundamental properties of complex adaptive systems are that no single person or entity can exercise control over them and that their reaction to stimuli are largely unpredictable. Witness the self-immolation of a fruit vendor in Tunisia that set off revolutions that toppled governments across the Middle East. The previous president, George W. Bush, predicted that victory in Iraq would usher in friendly democracies across the region. No one predicted that a single merchant would be the match that lit the fire rather than the shock and awe of the U.S. military. Once alight, no one could write the script for where movement would go. Yet we readily expect our leaders to assert control and assure outcomes.

Our thirst for leader control arises from a need to believe that someone has a firm hand on the tiller. We usually know that it isn't us and so we look to someone in whom we perceive greater wisdom or power. The adulation of the master-of-the-universe CEO springs from the same well.

Politicians are not elected based on pledges to try really, really hard; candidates triumph through bold promises to deliver whatever it is voters seek: I will create millions of jobs. I will prevent Iran from acquiring a nuclear weapon. I will tame the deficit without cutting key programs or raising taxes. We believe that if we grant them the authority, they will exert benign control. This in the face of ample evidence that luck plays at least as big a role in success as anything the leader might do. We followers love to have a hero out front. We look for someone we think can make sense of a complex and confusing world.

When the news is good, leaders are more than happy to take the credit. When the Berlin Wall fell, President Reagan was happy if we believed that he personally shoved it over. CEOs are photographed for magazine covers, and collect big bonuses, based on the increased shareholder value attributed to them.

President Obama has learned (as have all past Presidents, no doubt) that that there is only so much that even the President can do to control a complex adaptive system. Admitting as much has his critics declaring him weak. Obama discovered that he couldn't control the economy as both stimuli and monetary policy moves failed to reduce the unemployment rate below 8% until just recently.

In making definitive pronouncements about future outcomes, Mitt Romney is making the same mistake that Obama did about unemployment. We watched him do it on Tuesday night. One example was his pledge to lower gasoline prices. Oil and gas are global commodities. U.S. policy has some influence on prices, but global supply and demand, including disruptions such as Hurricane Isaac wrought in the Gulf of Mexico this year are far more consequential to price fluctuation.

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