Know-What vs Know-How
“As Socrates was passing through the fair at Athens, and casting his eyes over the shops and customers, 'how many things are here', says he, 'that I do not want!'” – Dr. Johnson, The Adventurer
A couple weeks ago, I received a know-how writing request from an old colleague, a person well versed in know-how. I replied if he looked carefully across these writings, like that crazy 19th century German I must be read carefully, you'd find plenty of know-how. However, if you first don't know-what, the know-how put forward is easy to ignore and disregard. I've taken strongly to Professor Norbert Wiener's admonishment that “the American worship of know-how as opposed to know-what” is the greatest obstacle to meeting the challenges we face, thus I’ve tried to focus writing on know-what.
Know-how is the objective ability to create and implement technologies. Know-what is a larger understanding of the greater environment(s) in which any know-how is implemented, a determining of which technologies should be created along with a subjective perspective concerning the various aspects of their implementation. Know-what provides general value for specific know-how. Our present valuation of know-how can overwhelmingly be summed up with one word – more – that is as in the more, the better. Today, if it wasn't always, it is an insufficient measure of value, while the established methods for measuring this one value upon which our culture is predominantly centered, increasingly fail.
Two recent articles in the FT graphically illustrate the problems. The first article is an interview with Stephen Chu, Obama's former Energy Secretary. Unfortunately, as is usual today, the energy discussion deals exclusively with the climate issue and not with a necessary larger perspective on energy, the economy, and the environment in general. Chu demonstrates an exclusive know-what understanding of climate problems leads to inadequate know-how solutions even in regards to the climate issue itself. It needs to be added, it's very difficult to take seriously any person from the Obama administration on anything energy related, most especially in regards to climate. It was after all with no caution or hindrance from Obama that the US shale patch went from producing almost nothing when he entered office to five million barrels of oil a day by the time he left. It was the greatest single source addition of global oil production in a half-century, but then no one gets elected president of these United States supporting eight or nine dollar a gallon gas.
Most distressing about Chu's interview is not once does he broach the subject of using less energy by reorganizing and restructuring America's economic infrastructure so it is less energy wasteful — the fastest and easiest way to dropping climate gas emissions. This is an essential know-what energy value opposed to the reigning industrial value of more is better. Chu simply advocates more know-how energy generation using non-fossil fuel sources. Automatically this makes Chu an advocate for more nuclear. If you're not talking about Americans using less energy while getting rid of fossil fuels, there's no way you can avoid more nuclear. However, he is honest saying nuclear is no fix for the current climate conundrum. It would take decades to construct enough nuclear to offset our current entrenched fossil fuel habits, longer if you're advocating electrifying established American car culture and exponentially expanding present compute technology know-how under the marketing slogan of AI. The FT notes Chu helped Tesla with an early $465 million federal loan.
Chu bemoans, “Renewables generate too much energy at some times and too little at others. That creates a need for storage.” Or, it requires a reshaping of modern society based on perpetual inexpensive energy on-demand to a smarter and in ways older one, to a culture where the vast majority of needed energy use met when the most energy is available – a fundamental know-what shaping new know-how.
By valuing with only the industrial measure of more “Chu has doubled down on science. He is seeking out the hard climate problems. He argues that further technology breakthroughs are needed ― in electricity distribution, batteries, fertilisers, buildings that last centuries, and more.” This isn't science, this is faith, a faith not in science but in know-how. Professor Wiener most prophetically warned 75 years ago there was absolutely no assurance any perceived needed technology, any necessary new know-how would arrive when needed to address the problems resulting from previously established know-how. Presently, the acutest difference between know-what and know-how offers itself repeatedly in the belief of perpetual energy on demand know-how as opposed to a know-what redesigning of the American economy, infrastructure, and culture to be more efficient, or even starting by being less grossly wasteful, in direct opposition to the dominant value of more.
Most helpfully, Chu states “old-school economists, with their unrealistic discount rates” don't appreciate climate risks, well, that and every other environmental impact resulting from industrialization. He mistakenly and rather naively believes the military has better understanding of these risks because of the great human migrations that will ensue changing climate patterns. The US military remains one of the planet’s single greatest consumer of fossil fuels. The National Security State has long liked to run all sorts of future scenarios based on various possible, horrific, destabilizing events, but the fact is they've proved incapable of meeting and more importantly avoiding all such conceived scenarios, while largely making worse the ones they've become involved. The military is no better at know-what than any other American institution, their know-how largely irrelevant or unhelpful in meeting the greatest challenges humanity faces in the 21st century.
Chu adds an unintentionally amusing in its obviousness comment, “'The Wall Street analysts . . . are totally amoral,' sighs Chu.” That’s a feature, not a bug as the FT writer editorializes, “Isn’t it their job to be amoral?” It's long been promoted as finance’s most valuable asset. If you want know-how be moral, Wall Street has little interest. Morality needs to derive from the greater issues of know-what. The entirety of capital economics value, from Econ 101 to 600, is measured exclusively by profit and more profit. Economics has little use for any other know-what.
Leading to the second article, which has no concern for the amorality of our dominant economics, but offers great alarm on its systemic corruption and inability of measuring more profit, resulting in a growing dysfunction of the entire economy. The piece titled, “What Went Wrong with Capitalism?” is written by Ruchir Sharma, chair of Rockefeller International, a wealth fund with the Rockefeller family fortune as part of its foundation. Mr. Sharma writes one of these pieces printed in the financial press every few years basically laying out why every other piece of analysis you read daily in the financial press either isn't quite right or is completely wrong.
The two biggest issues Sharma addresses are the increasing inability of the financial system in providing any real measure of value and the resulting disappearance over the last sixteen years of the business cycle. In regards to the first, Sharma writes, “By the 1980s, fearful that mounting debts could end in another 1930s-style depression, central banks started working alongside governments to prop up big corporations, banks, even foreign countries, every time the financial markets wobbled.”
He continues,
“Following the stock market crash of 1987, the Fed under a Republican appointee, Alan Greenspan, delivered its first public promise of support to troubled financial markets, and the next decade joined the constant stimulus project with the first rate cuts to speed up ― and later prolong ― a recovery. By 2008, the Fed could not lower its own rates much further, so it tried lowering borrowing costs a new way, by buying bonds and other debt in the public markets, in multitrillion-dollar bulk.”
The result he writes,
“Including equity and debt, the size of financial markets grew from slightly larger than the global economy in 1980 to almost four times larger today. This worldwide boom fed the illusion that markets were running free and wild as governments retreated, when in fact the driving force behind the runaway “financialisation” of capitalism was easy money flowing from the government.”
Here, Shamar does what any good Rockefeller of the last century and half or any meeska-mooska free marketeer of the last half century would do and blames the government for the corruption of money, not the financial system and its various “innovations” over the last decades, derivatives the easiest example, and the resulting exponential increase in leverage. Not to say the government shouldn't be faulted for allowing and encouraging it, but then the financial industry, just as every other industry, does control the government.
The most important point here is our “amoral” and quite dysfunctional financial system is no longer capable of even providing accurate numeric measures of more. American know-how can no longer be adequately measured by the inputs and outputs of what's become perpetual financial motion. Mr. Sharma should have gotten a quote from Dr. Chu about the value of perpetual motion.
Tied directly to this financial malevolence is the disappearance of the business cycle. Without getting into great detail, the business cycle was considered a “natural” component of the economy, though never a well understood one. In fact, the economist John Kenneth Galbraith wagged back a half-century ago if no one can explain what it was, what good was it?
Economists claimed the business cycle provided a necessary cleansing of economic dead weight, a clearing from the books of nonperforming assets. Yet since 2008, for an historically unprecedented period of time, the US has seen no recession, with the exception of deliberate shut-down of the economy in reaction to Covid. While articles on the last-half century's unhealthy mutations of the financial system are uncommon, the disappearance of the business cycle is almost never remarked upon or its departure tied to financial dysfunction rarer still. “The pre-Depression instinct to “liquidate” weak companies in a crisis gave way to the opposite excess: ‘liquefy, liquefy, liquefy’. Why not rescue everyone, all the time, when governments can borrow for free?”
Sharma explains the results,
“Easy money also spawned the 'zombies', a class of companies that don’t earn enough to cover even interest payments on their debt, and survive by taking on new debt. They are hard to identify and track, and estimates vary, but zombies barely existed outside Japan before 2000, and now account for as many as one in five public companies in the US.”
One in five is a low estimate, most especially if you use a favored economist concept of a “multiplier effect.” In which case, those one in five zombie companies multiply their walking deadness across the breadth of the economy. The present financial system can't even value what's considered economically healthy, or, live or dead for that matter, even when this value is limited to providing simple numeric measurements of implemented know-how.
If you take Chu's and Sharma's pieces together, a clear picture is drawn of an entirely dysfunctional system. Sharma's financial system is incapable in anyway of effectively or efficiently implementing the know-how Chu advocates. While Chu's know-how is an entirely inadequate response to the know-what environmental problems resulting from the previous two centuries of industrial know-how.
Today, know-what means understanding both the physicist's and economist's know-how are inadequate. Both deal only in gross numeric values, which without a doubt have proved enormously valuable to know-how, but are by themselves inadequate measures of know-what. Most especially, with our present dominant valuing, all information must be provided a know-how numeric value for it to be utilized, a complete devaluing of information know-what. Information needs to be better utilized more effectively in our use of resources and energy, not in a simplistic measure of more, but a complex measure of greater good.
We need to develop new organization – economic, cultural, political, and government – that can value information without having to transfer it into numerical values. Or in the case of democracy, revive and reform ancient measures of value. Processes of creating, editing, communicating, and implementing information are all aspects of know-what value. The value of information can be gained not only with the industrial know-how measures of more and consumption, but in the know-what subjective measures of design and participation. In the case of American energy usage, know-what is a restructuring and reorganizing from the bottom-up around using less energy.
Wiener's understanding of know-what came from his understanding of feedback. Industrial know-how has been overwhelmingly a linear, one direction process, based and measured on one value – more. With feedback, information, technological know-how is valued by a greater multidirectional environment, its interpretation demanding measures beyond simply more. Its measures need to include know-how's systemic impact on numerous other systems, returned via feedback. Yet, the greatest social invention of industrialism, the corporation—by design, the corporation is a simple and extremely proficient know-how system—and our agrarian era structures of government with only direct citizen feedback coming from elections every two and four years, leaving aside how corrupt and dysfunctional this system is today, are both completely inadequate feedback systems.
Know-what systems need to be created to incorporate feedback to as great a degree as know-how. It is clear from nature, from everything from bacteria to the human body and the greater ecological systems which they incorporate, are distributedly and complexly networked, capable of not just know-how, but know-what by incorporating multifarious and continuous feedback.
As Wiener warned, know-what is largely alien to American culture, in fact it is met with hostility and quickly dismissed by dominant know-how culture. However, it was clear to Wiener seventy-five years ago and becomes clearer every day to those who look, the dismissal of know-what makes American know-how increasingly destructive, existentially so. Such are the greatest ironies of history, a culture's once greatest value becomes incapable of adapting to the circumstances it created, becoming its inalterable nemesis.