Jumping off yesterday’s post on a mixed strategy for acquisition, Arnold Kling argues in a different post that most people, including economists, see the success of folks like Jeff Bezos to be luck. The idea of Amazon was “natural” and if not for Bezos, someone else would have done it.
I strongly disagree that all Bezos had to do was notice a niche. That is like saying that all Dwight Eisenhower had to do to make D-Day a success was pick Normandy as the landing spot.
When Bezos was building his business, I noted that in order to compete with Wal-Mart, he would need to match their logistical system. All they had to do to compete with him was build a web site. And yet he won! It took incredible skill to do what he did. I don’t have space here to list all of the management practices and company capabilities he needed to develop. I give zero credence to the suggestion that if Bezos had never existed, someone else would have built Amazon.
I have encountered this view in personal conversations numerous times. Most people believe that technological growth does not require markets or the entrepreneurial spirit. That the industrial revolution was completely separate from Britain’s liberalization of commercial activity. It would have happened anyway. They adopt historical inevitability, a very Marxian concept without admitting as much.
Individual skill and responsibility matter. They matter more than anything else, save an institutional system that protects property rights and provides for the common defense. This is the foundation of Western society. Provide space for people to “have a go” as Deirdre McCloskey says.
Defense acquisition is weird because it is inherently a non-market process. But it is embedded in a market system which generates the vast majority of technological and social progress.
Yet still, the military emphasizes individual responsibility. Military historians understand that when General Mark Clark took over from General George Patton in the Italy campaign of World War II, that Clark’s personal decisions had negative consequences. Conduct on the battlefield was not independent of leadership, and so training, moral responsibility, and leadership weigh heavy in military education. Preparing individuals for the weight of command.
In defense acquisition, there is only lip service to individual responsibility. Really, the whole system is designed so that is goes according to plan regardless of who the program manager or contracting officer is. They are interchangeable. Documentation and process substitute for knowledge and leadership.
Think about acquisition. Everything is based on the program lifecycle and documentation, not the career lifecycle. Acquisition is incidental to most careers, and even with dedicated paths like Navy Engineering Duty Officers it is viewed as a limitation to the higher ranks.
Acquisition needs to reorient itself to one of personal leadership. Discipline must be levied on individuals. There is no such thing as disciplining a program. A Nunn-McCurdy breach may make people document and testify and pull their hair, but it certainly doesn’t punish a program. Programs don’t exist. They don’t feel or act. They are concepts around which people work. Only people can be rewarded or punished.
It is from here most of the problems of acquisition starts. Until acquisition realigns around individual responsibility rather than programs of record, little progress can be made.
Some may think that democracy means we cannot have strong bureaucrats.
First, a strong bureaucrat doesn’t mean a lack of checks and balances. A strong Program Manager can still be fired. A strong Secretary of Defense can be reined in by the President, by Congress, by the Courts.
Second, the history of the United States from the founding fathers to the 1960s saw delegated authority in acquisition to military and civilian leaders. It is not inconsistent with American traditions.
The very idea that we can “democratically” select weapon system specifications is absurd. The average person in the street knows nothing of weapons. The average congressional member is the same. The average oversight official or news commentator as well. Myself included. But we are smart enough to look at outcomes and judge, “Did this program manager make good use of resources?” Maybe we disagree. Disagreement is good because nothing is clear-cut.
The hard part is collapsing time to generate feedback to make such judgments. The average person looking at Bezos’ business plan in 1994 would have thought it silly or stupid. Amazon was a loss-maker for years until it was obvious in the 2010s that Amazon was a huge success.
Is the acquisition process a non-market? What does operating in a non-market entail? How do you operate market-based tools (contracts, specifically) in a non-market?