Cochrane’s Law

Pamela Cochrane didn’t say this in exactly these words, but the message was clear and I certainly received it. It is particularly relevant while gathering requirements, specifications, plans of action.

The Law of Conservation of Confusion:

Unanswered questions do not go away.

Peter Coffee: about security and management

These two statements appeared in the same article in eWeek when Peter Coffee wrote for them.

Security isn’t about the misbehaviors that you prevent, but about the capabilities that you ensure.

Unlike some elected officials, enterprise management needs to lead by example.

I found both sentences to be thought-provoking. As a one-time follower of Mr. Coffee, I would like to thank him one more time for being a force for clarity in what would otherwise be a murkier world.

Limits to Growth: Implications?

There will be a small amount of mathematics in this post. Please bear with me. My dumb question is, as limits to growth exist, why don’t we as a population of humans “get with it” and focus on conservation and sustainability?

I recall I think Wall-Mart being criticized because their revenue had failed to grow at ten percent one year. This bothered me. Worse, the assumption is widespread that any endeavour that is not growing is bad. I maintain that steady-state is the ideal system end-point, whether an ecology, economy, or organization. Now for the mathematics.This should not hurt. {8;^>}

Assume there is some upper limit for inflation over all the time period we need to consider. Let that be i. Each year prices rise by a factor of 1+i. Assume there is some larger lower limit for the growth of “something”, eg W-M as an example. Let that limit be g. Each year the endeavour grows by a factor of 1+g. Taking out inflation, if we write r=g-i, in any year the “real” growth beyond inflation is r and the real size multiplies by a factor of 1+r.

Assume r is strictly > 0. Then if I want the endeavour to grow by some large overall factor L, I need to multiply by (1+r) some (large?) number of times. Here comes the mathematics.   I write (1+r)^N = L, that is, I apply the r-sized growth N times and claim I can make that as big as L. (You get to choose L, I have to find N).

Taking logarithms, N * log(1+r) = log L.     N = logL / log(1+r).

Any size L can be reached, in real, after-inflation terms, with a sufficiently large N – you just have to wait N years.       So if I set L to be the worth of the entire continent of North America, in real terms, today, I can get Wall-Mart’s revenue that large, eventually, by waiting long enough.I am not picking on Wall-Mart here, it’s just a business example I remember reading about.

One thing I learned from Didier Sornette (Why Stock Markets Crash) is that, when the mathematics gives an absurd result (infinity in his case, wealth of the planet in ours) there is something wrong. If you shift the focal point of a lever far enough, the math says you can get unlimited force – but really, the lever just breaks. Similarly, any endeavour that was able to grow in real terms with a definite lower bound of that growth, will eventually overwhelm everything else. This clearly cannot happen in the real world.

Thus nothing can grow, in real terms, forever. We cannot continuously make more energy. We cannot continuously make more profit. We cannot continuously increase world population. We cannot continuously increase wages – in real terms – overall. (We can increase the value of wages in “terms of trade” sense, ie get more for a buck due to smarter value creation – but we cannot keep increasing the level of consumption of anything. We will eventually run out.)

The point of all this is to ask this question. If unlimited growth is unsustainable, why do we insist on companies having it? Is it to make a quick buck this year, while admitting it can’t go on indefinitely?

The greeks had a single word which means, “greed for more than one’s share”. I think this is our problem too.