Puzzles and Mysteries

The Enron story seems to be everywhere at the moment. The movie was on the TV the other night, the papers all have bits about the sentencing of various lesser players and Malcolm Gladwell has written a piece for the New Yorker which he describes on his blog as a ‘semi-defense’ of the company. His basic argument is that the investment and business journalism communities were just as much to blame because they didn’t spot what was going on.

The piece isn’t purely about Enron though. He describes information problems as either ‘puzzles’ or ‘mysteries’ and gives a number of other examples of approaches to solving them, including how to find Osama Bin Laden and how the Allies worked out that the Nazis were developing the V1 bomb during WWII.

It made me think back to The Long Game which I helped write along with Paul Skidmore and Jake Chapman. Jake is a professor of systems theory and he encouraged Paul and me to think of regulation as a complex problem rather than a complicated one.

A complicated problem is one where if you understand the constituent parts you can make an assessment of what’s going wrong. A complex problem is one where you can’t; you need to look at the way that the parts are interacting and even then it will be difficult. In the pamphlet we called complicated problems ‘difficulties’ and complex ones ‘messes’.

Regulators are part of the systems that they are trying to regulate and don’t have the level of perfect control that they (and other actors) sometimes try to portray. This is one of the reasons you often get unintended consequences of regulation and why almost all policy dilemmas are messes rather than difficulties.

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