Some passages I like from “The Social Animal” by David Brooks

On intelligence and form of modern world:

“We are masters at structuring our physical and social worlds so as to press complex coherent behaviors from these unruly resources. We use intelligence to structure our environment so that we can succeed with less intelligence. Our brains make the world smart so that we can be dumb in peace! Or, to look at it another way, it is the human brain plus these chunks of external scaffolding that finally constitutes the smart, rational inference engine we call mind. Look at that way, we are smart after all- but our boundaries extend further out into the world than we might have initially supposed”

 

Varieties of Capitalism approach by Peter Hall and David Soskice argues that:

“Different national cultures have different motivational systems, different relationships to authority and capitalism. Germany, for example, has tight interlocking institutions like work councils. It also has labor markets that make it hard to hire and fire people. These arrangement mean that Germany excels at incremental innovation – the sort of steady improvements that are common in metallurgy and manufacturing. The United States, on the other hand, has looser economic networks. It is relatively easy to hire and fire and start new businesses. The United States thus excels at radical innovation, at the sort of rapid paradigm shifts prevalent in software and technology.”

Do you agree / disagree? Sure cant explain the whole Silicon Valley phenomena, but interesting perspective, huh?

 

Importance of emergent systems to understand human behavior:

“Emergent systems dont rely upon a central controller. Instead, once a pattern of a interaction is established, it has a downward influence on the behavior of the components.

Emergent systems are really good at passing down customs across hundreds or thousands of generations. As Deborah Gordon of Stanford discovered, id you put ants in a large plastic tray, they will build a colony. They will also build a cemetery for dead ants, and the cemetery will be as far as possible from the colony. They will also build a garbage dump, which will be as far as possible from both the colony and the cemetery. No individual ant worked out he geometry. In fact, each individual ant may be blind to the entire structure. Instead individual ants followed local dues. Other ants adjusted to the cues of a few ants, ant pretty soon the whole colony had established a precedent of behavior.  Once this precedent has been established, thousands of generations can be born and the wisdom will endure. Once established, the precedents exert their own downward force.

The brain is an emergent system. A marriage is an emergent system. Cultures are emergent systems.

And poverty is an emergent system, too.”

 

To be continued…

   “Social Capital and Capital Gains in Silicon Valley”

Social capital is a term that Robert Putnam used in his book to explain how economic actors in a local region develop trust from their shared history and experience. Network of Civic Engineering is the process making economic process in those local areas easier due to trust and cooperation among players.

But when these two concepts are applied on Silicon Valley, they fail to explain what has been going on in Silicon Valley or how this region has become somewhere so special and successful. Since the notion of social capital is supposed to be coming from trust through out shared history, Silicon Valley is far from having that kind of a ‘history’. Valley is a place where strangers all around the world is coming and did not know each other or have much in common etc. Silicon Valley is not an isolated place, always open to new comers and there is nothing like a community whether new comers will be accepted or not.

Thus, we need something different from Putnam’s classic social capital description to explain Silicon Valley’s social capital. Network environment in Valley is resulted from collaborations among entrepreneurs for innovation. Collaboration among those people, institutions like universities and firms created a commercialized innovative technology production. Starting with microelectronics and semiconductors, Silicon Valley is now specialized in hardware and software computer networking.

Main social capital networks in the area are composed of productive interactions among universities, venture capital firms, law firms. Also, labor market is attractive in terms of highly qualified people from all around the world and headhunters actually look for them and Valley offers opportunities to entrepreneurs even if they fail in their start-ups.

Another issue is link between economic performance and social capital as Putnam claims that there is a strong positive correlation. Social capital is a pre-condition for a region to have good economic performance. Marshall advocates that since concentration of firms in a specific region creates proximity and therefore those firms can easily find skilled labor, supplier and know-how from each other when they become clustered. Veblen goes one step further, evolutionary perspective in economic development of firms; whether they stay same or adapt to the environment. Adaptation enables innovation and brings economic development, she argues.

Michael Piore and Charles Sabel worked on Italian districts and come up with the comparison between former mass production and new trend of small companies operating in specialized areas. They support the idea small size companies are more innovative and flexible. Also Sabel claims that trust comes from mutual confidence they no one will ever exploit other’s vulnerability. Silicon Valley has been able to build trust due to mutual confidence to each other’s performance. So, trust is open to be extended and people are welcomed even they have different ideas, roots or cultural backgrounds in Silicon Valley

 

 

Sena Sari