Editor’s note: William Dunk is an international business consultant based in Chapel Hill and a frequent contributor to Local Tech Wire. To learn more about William Dunk Partners, see www.globalprovince.com/williamdunkpartners.htm
_______________________________________________________________________________________”The opening of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation…if I may use that biological term…that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and every capitalistic concern has got to live in.” – Joseph Schumpeter in Capitalism, Socialism, and Democracy.

The Austrian economist and minister Joseph A. Schumpeter (1883-1950) felt that a dialectic was built into our economic system that unleashed “gales of creative destruction” which almost mystically swept away antiquated business organizations and practices. For this, he has been canonized as the Saint of Free Markets and Strident Capitalism by those who believe in no-holds-barred capitalism, ranking higher with them than St. Jude (and St. Rita), the Saint of the Impossible. He spent the last part of his career teaching at Harvard, blown out of Vienna by another kind of destructive force about which he was much less sanguine…the Nazis.

The trouble, lately, of course is that we have had a lot of destruction…without the creative.

The recent tragedy in New Orleans and throughout the Gulf States has seen a breakdown of Federal, State, and local governments, and a giving way of everything from levees to telephones and electric systems to any pretence of civic order. F. Scott Fitzgerald would say that this was “a real dark night of the soul” when “it is always three o’clock in the morning, day after day.” It’s hard to point to anything that worked right. All and everything suffered from under-investment and political erosion. What, for now, will take the place of an infrastructure in disarray?

It would be a mistake, of course, to think this disintegration is limited to a few poor Gulf states walloped by a hurricane. Just a while back our national electric grid took a big hit with darkness even reaching into Canada, and more blackouts are on the way. Opnly days ago, Los Angeles dimmed during a Monday PM snafu, all brought about because of crossed wires at a utility

Our educational system, even where it is well-funded, is clearly dumbing the minds of America. The healthcare system, siphoning off another 10 to 15 percent of our wealth each year, is not making us any healthier, even if our expenditures, largely spent for the wrong things, are the highest in the world per capita. To use somebody’s quote, “There’s no there there.” Beautiful, wilted New Orleans is just a metaphor for our larger fragile estate.

Blogs and E-mails

We, as many, were tuned in to our TV sets and newspapers, wondering how the beset and bereft were making out in Louisiana and Mississippi, hoping the cavalry would arrive. The media has been very self congratulatory and puffed up about its coverage of Katrina, telling us it has done a wonderful job of following this story. This, of course, is largely a snare and delusion, since neither the broadcast networks nor the cable groups had much to say, though they said it at great length and repetitively. Would it be a stretch to say that less is more…that we know so much less now that we have 50 or 100 channels, instead of say 13? The professional journalists did not get the story, and their drivel is surely one reason why we don’t know how to repair things for now or the future.

But e-mails and blogs ran circles around the armchair, well-manicured newshounds. Very detailed information came our way through the computer, put together by concerned citizen reporters and relayed by hubmasters in Houston, California, New York, and elsewhere. That’s where we got very specific information, even block by block, of what was happening, with terrible detail about the depredations visited on the waterlogged by mindless authority. In light of the good accounts available from these sources, one would have to say that the national broadcasters and other established media are just part of our broken infrastructure. Oddly enough, the Times-Picayune staff still got out a newspaper that told an awful lot, even though the paper’s presses and building were laid low. But, in the main, it is worth understanding that our very expensive media doesn’t get it and so can’t convey it to us.

Personal communication systems do get the job done, a subject we will explore more in future letters, since it suggests that each individual must become his own self-contained information powerhouse in the 21st century. For years the computer and telephony people have been asking us to rely on the network: better that you put your faith in a digital wallet that you have in your hip pocket.

Today the consumer sits at the end of dumb or at least lame terminals that abet his appetites but do not give him the tools, content, and smarts to play his destined role in society. His I-Pod will carry 15,000 songs or 25,000 photos. With that kind of storage heft now available to John Q. Public, we have the capacity if not the insight or will to put some real horsepower in his hands. Right now we have become a global nation, but we are still struggling to become a strategically informed society.

Internet City Hall

What few of us knew was that Mayor Ray Nagin of New Orleans and his top aides were cut off for long periods of time from the city and the world, since the City’s circuits largely got whacked by the weather. The Wall Street Journal’s “At Center of Crisis, City Officials Faced Struggle to Keep in Touch” (September 9, 2005, pp. A1 and A13), captures the efforts of a very innovative staff to keep wired at the Hyatt, where the top team had decamped to, even with rising waters and rapacious looters. Basically most of the circuitry everywhere gave way very quickly because it was not on high enough floors. The disaster planning of the city assumed that the telephone system would work no matter what; it did not. City officials were forced to resort to some back-up radio channels of the police department, but these were much too crowded even for policemen who fell out of touch with one another. As Schumpeter was wont to say, “We always plan too much and think too little.”

What saved the day was that Scott Domke, a member of the City’s technology team, remembered that he had recently set up an Internet phone account. With his laptop he plugged top officials back into the phones. Greg Meffert, the chief technology officer, went a bit further, appropriating a server, with the local police chief looking on, from a nearby Office Depot. This gave the City the means to get email going. Interestingly, just as personal computer efforts got the real news out about New Orleans, instead of the networks, a personal system (an Internet phone account and a laptop) put the city’s top officials back in touch with the world. All the super systems failed, even if BellSouth proudly claimed that its “nearby telecom hub was operative throughout the crisis.” This is typical: generally utilities and telecom providers do a lousy job on the last mile or even on the small stretch from the curb into the house. In an age of broken infrastructure, the one thing that appears to work is guerilla innovation and personal communication systems that circumvent cumbersome companies and political morasses.

New Orleans, incidentally, learned in the middle of all this that the city’s website had gone from 70th to number one in the rankings among major cities. Further, Meffert’s team has created a wireless system weaving together open-air cameras with the Internet that has halved crime in some parts of New Orleans. It takes just one technology officer, even one with very slim resources, to make a very big difference.