Refuting Peter Buffett’s ‘New Code’

July 30, 2013

Massive social change requires massive social investment


So, what should we make of Peter Buffett’s op-ed against “The Charitable-Industrial Complex“? I’ll confess, I’m confused by his argument. Buffett begins by railing against something he calls “Philanthropic Colonialism,” which he describes as the hobby of philanthropists who want to improve the world by meddling with farming methods, education practices, or job training. There’s a legitimate argument to be made about how misguided philanthropic endeavors in local communities can go awry (and Buffet is hardly the first to make it). 

But if that’s your position, you might not want to suggest – as Buffet does a mere 10 paragraphs later in his piece – that what’s needed instead is a “new operating system” that will “shatter current structures and systems.” The logic here is all but impossible to follow. If you distrust micro projects because they don’t take into consideration local conditions and cultures, why would you promote a massive macro project designed to fundamentally reorder those very same local ways of life? Frankly, it wasn’t that long ago that many societies experimented with a “new code” that was premised on the same skepticism for market-based solutions to public policy issues that Buffet advances throughout his essay. We called this “Marxism” and it didn’t work out too well for the local communities that adopted – or were subjected to – the new code.

I find Buffet’s arguments particularly troubling because his dreams for a new “humanism” aren’t just misguided, they’re dangerous. For proof of this, I would point the very example of philanthro-colonialism that he cites with disapproval:

“Often the results our decisions had unintended consequences; distributing condoms to stop the spread of AIDS in a brothel area ended up creating a higher price for unprotected sex.”

This is mystifying. One of the most basic insights of economics is that if you raise the price of something, you decrease the quantity demanded of that something. So, if distributing condoms in brothel areas raises the price for unprotected sex, it will reduce the quantity demanded of unprotected sex. If you believe that unprotected sex increases the risk of HIV transmission, raising its price isn’t an unfortunate byproduct of your policy intervention – it’s the goal. And this isn’t merely theoretical. We have good evidence that the distribution of condoms is having an extraordinarily positive effect at reducing the spread of HIV in Africa, a fact the NY Times might have mentioned in a sidebar.

What this article really illustrates, in my view, is the dangerous seduction of Scale. Successfully transforming a society to improve its quality of life, to create “greater prosperity for all,” is extraordinarily difficult, arguably the most difficult thing we undertake as humans. We get frustrated at the slow pace at which this transformation takes place and therefore we seek radical solutions that will scale quickly, usually involving some sort of technology. Yet, as Atul Gawande illustrated in The New Yorker recently, in so doing we may be short circuiting the hard work that’s necessary to build sustainable institutions that foster justice, opportunity, and health.

This passage encapsulates the challenge, and is worth quoting at length:

To create new norms, you have to understand people’s existing norms and barriers to change. You have to understand what’s getting in their way. So what about just working with health-care workers, one by one, to do just that? With the BetterBirth Project, we wondered, in particular, what would happen if we hired a cadre of childbirth-improvement workers to visit birth attendants and hospital leaders, show them why and how to follow a checklist of essential practices, understand their difficulties and objections, and help them practice doing things differently. In essence, we’d give them mentors.

The experiment is just getting under way. The project has recruited only the first few of a hundred or so workers whom we are sending out to hospitals across six regions of Uttar Pradesh in a trial that will involve almost two hundred thousand births over two years. There’s no certainty that our approach will succeed. But it seemed worth trying. 

Reactions that I’ve heard both abroad and at home have been interestingly divided. The most common objection is that, even if it works, this kind of one-on-one, on-site mentoring “isn’t scalable.” But that’s one thing it surely is. If the intervention saves as many mothers and newborns as we’re hoping—about a thousand lives in the course of a year at the target hospitals—then all that need be done is to hire and develop similar cadres of childbirth-improvement workers for other places around the country and potentially the world. To many people, that doesn’t sound like much of a solution. It would require broad mobilization, substantial expense, and perhaps even the development of a new profession. But, to combat the many antisepsis-like problems in the world, that’s exactly what has worked. Think about the creation of anesthesiology: it meant doubling the number of doctors in every operation, and we went ahead and did so. To reduce illiteracy, countries, starting with our own, built schools, trained professional teachers, and made education free and compulsory for all children. To improve farming, governments have sent hundreds of thousands of agriculture extension agents to visit farmers across America and every corner of the world and teach them up-to-date methods for increasing their crop yields. Such programs have been extraordinarily effective. They have cut the global illiteracy rate from one in three adults in 1970 to one in six today, and helped give us a Green Revolution that saved more than a billion people from starvation. 

In the era of the iPhone, Facebook, and Twitter, we’ve become enamored of ideas that spread as effortlessly as ether. We want frictionless, “turnkey” solutions to the major difficulties of the world—hunger, disease, poverty. We prefer instructional videos to teachers, drones to troops, incentives to institutions. People and institutions can feel messy and anachronistic. They introduce, as the engineers put it, uncontrolled variability.

But technology and incentive programs are not enough. “Diffusion is essentially a social process through which people talking to people spread an innovation,” wrote Everett Rogers, the great scholar of how new ideas are communicated and spread. Mass media can introduce a new idea to people. But, Rogers showed, people follow the lead of other people they know and trust when they decide whether to take it up. Every change requires effort, and the decision to make that effort is a social process.

To address most of the world’s most pressing problems, we don’t need “new codes” or “operating systems.” We instead must recognize, as Gawande does, that massive social change requires massive social investment, sustained over time, that spreads new and existing innovations that are proven effective.