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Intervention by Denise Caruso Read Intervention by Denise Caruso, Executive Director of the Hybrid Vigor Silver Award Winner, 2007 Independent Publisher Book Awards; Best Business Books 2007, Strategy+Business Magazine

'Policy and Decisions' Archive


by ~ December 14, 2011

It is five years almost to the day since I published Intervention, my book on genetic engineering and risk. And I am more convinced than ever that everything I wrote about was spot-on. It seems like every week there is a new revelation about harmful consequences of living biotech products in the wild — consequences that were predicted by so-called activists, but totally dismissed by the industry and regulators.

For example, genes from engineered plants do spread, despite industry’s early and repeated declarations that they cannot. One result? Superweeds that now have built-in resistant to several herbicides.

What’s more, insects are adapting quickly to transgenic plants with insecticide genes. In Illinois and Iowa, a new generation of insect larvae feeds on the roots of genetically engineered corn. And in India, the pink bollworm is unaffected by the insecticide growing in the cotton plants it is eating (for which Monsanto blames the farmers).

And it seems that eating transgenic food may not be so harmless after all.

Yet nothing changes. In fact, the Obama administration is supporting the planting of genetically engineered crops in more than 50 national wildlife refuges across the country.

So … I think it’s time for me to start researching a sequel to Intervention, focused on exposing the dangerously cozy relationships between industry and regulators that ignore scientific common sense and put all of us at risk.

But I’m going to need your help — and I’ll send you a gift, or even many gifts, in thanks for your generosity.

Here’s the deal: For every $20 you donate to Hybrid Vigor, we will send a free copy of Intervention to you, or to anyone you’d like. Signed and inscribed, if you choose.

You also can have your gift copies sent to libraries. Just specify in the instructions that you want to donate your gift(s) to a library, of your choosing or ours, and we will take care of the rest. We can also donate your book(s) to or companies or non-profits or corporate libraries — say, for example, to venture capitalists that are funding biotech startups …

Just click here and merrily Paypal away (you can use a credit card at this link also):

Your generosity will be much appreciated, and put to good use.


by ~ June 1, 2010

Today is the first day of my month-long fellowship at the STUDIO for Creative Inquiry, in the College of Fine Art at Carnegie Mellon University.

I am here at the invitation of Golan Levin, director of the studio and, back in the day, a former colleague at Interval Research. The fellowship is funded by the National Endowment for the Arts.

Golan told me I could do anything I wanted, and so I invited Robin Gianattassio-Malle to come work with me on inventing a better way to help people learn and think about the consequences — both risks and benefits — of innovations in science and technology. We want to go beyond the usual binary, “fawning or damning” approach that dominates media coverage today, to actually informing people about these incredibly complicated issues.

I’m really excited about this project. It’s the first time in a long time I am going to have the opportunity to roll up my sleeves and do what I do best: to help people understand complexity in a way that is engaging, helpful and accurate. We are going to have to confront some tough design issues, but between us we have an amazing network to draw from.

Robin and I will be working at the STUDIO with two other fellows — Kyle McDonald and Jacob Tonsky — both of whom are wicked smart and from whom we expect to learn a lot.

We will be building a prototype over the next few weeks, and I will be posting updates about our progress. Yeehaw!


by ~ January 21, 2009

According to the Identity Theft Resource Center (ITRC) and datalossdb.org, about 250 million credit cards were compromised in the last two years. Analysts estimate that only about half of compromised cards are reported, so the actual total may be well over 500 million.

Add to that number Tuesday’s revelation that more than 100 million credit cards were compromised by malicious software at Heartland Payment Systems and the total exceeds 600 million. That’s roughly the same number as bank cards in circulation in the U.S.

So hackers can now hang “Mission Accomplished!” banner ads on Amazon.com and eBay. There are no more credit cards to steal. To co-opt that lovable phrase from Zero Wing, “ALL YOUR CREDIT CARDS ARE BELONG TO US!”

Heartland Payment Systems was no TJX. The company had plenty of security and preventative systems in place. And yet the theft went undetected for more than a year. Clearly, something is horribly wrong with both the way the credit system works and with online security.

Compliance with PCI standards won’t prevent data breaches; it’s time to rethink the whole model. In particular, security architects need to pay greater attention to the role of social trust in online transactions and Internet security.


by ~ January 8, 2009

One thing’s for certain: Obama gives a great speech. And a good whooping. He gave Wall St. execs and politicians a public flogging today. Notably he blamed politicians who

spent taxpayer money without wisdom or discipline, and too often focused on scoring political points instead of the problems they were sent here to solve. The result has been a devastating loss of trust and confidence in our economy, our financial markets, and our government.

The spending proposals Mr. Obama outlined seem reasonable, although I have to suspend my disbelief (for now) about the proposed speed and value of moving health records online.

My only word of caution is that it’s much easier to find fault in others than to outperform them. It’s of course possible to raise the bar on efficiency and efficacy in government, but not by much. Democrat or Republican, in the final analysis we’re all limited by human frailty. But we can all endure hardship much better when we feel we haven’t suffered the insult of “a devastating loss of trust” in addition to our injury. So I hope the Obama Administration focuses on building the apparatus for trust in addition to rebuilding America’s infrastructure.


by ~ January 7, 2009

2008 will go down as the year the free market died. Deregulation in private capital markets has dealt itself a mortal blow. In the last few months, world governments have taken positions in private companies and banks, have decided which companies to rescue and which to let fail, and have adjusted currency prices across the globe. Over the next few months, lawmakers will draft legislation to more aggressively monitor, regulate, and restrain market activity.

In the face of such a massive implosion, we’re left to wonder where it goes from here. Do these developments vindicate Marx? Do they portend a transition in the U.S. toward socialism?

But in the aftermath of market disaster lies an opportunity to develop a more appropriate model for the market for the next century. This new market system won’t be a production of the actuarial-economist mind as much as of the social-scientific community. But before we build anew, let’s take a moment to reflect on some of problems last year’s reasoning.

1. In practice, free markets can never truly be free

Whenever the business cycle hits a major downturn, the rhetoric flies over how markets are efficient so long as they are free of onerous government intrusion. But this time around, Alan Greenspan apologized for that kind of irrationality.

… a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets…. Representative Henry A. Waxman of California, chairman of the committee [asked Mr. Greenspan:] “Do you feel that your ideology pushed you to make decisions that you wish you had not made?” Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.”

In economic theory, none of this was supposed to happen. Markets are supposed to be efficient at figuring out prices and thwarting wide-scale fraud. But the theory presumes the markets are truly free—something that they can never be—so we have no empirical evidence to support that assertion. Ironically, private companies are now pleading for government intervention, even at the cost of giving up shares of their companies and allowing tighter oversight.

2. Government regulation is neither the poison nor the remedy

If a government agency (the Fed) sets the financial crisis in motion through deregulation, can another government agency (i.e. Congress) restore order? It’s axiomatic that whatever private industry does, government does worse. Being bailed out by the government is as much a curse as a blessing. And who will bailout the government after it runs banks and car manufacturers into the ground?

3. Markets depend on trust, but self-interested egoists don’t engender trust

When it comes to social trust, free markets are freeloaders. Free markets are most efficient when a high degree of social capital exists, but the “flaw” Greenspan alludes to is simply the friction between egotism and trust. It turns out that trust, not egotism, is what keeps a market in check. But markets today encourage risky, self-centric, and flamboyant behavior. The Laws of Relation predict that relationships set up in this way result in everyone being worse off.

4. Markets don’t resolve social dilemmas collaboratively

Markets are attuned to transferring risks and setting prices, but they only exacerbate social dilemmas. A social dilemma is a situation in which all actors are motivated to pursue self-interest, but in so doing make the general environment worse off.

The New Market

Over the last few decades, researchers have uncovered a great deal of information about what enables people to trust and cooperate. New Market rules should take note of these developments.

While some dismiss words like “trust” and “social capital” as vague, emotional concepts that don’t produce measurable results, new approaches to social trust make these terms palpable. Here’s an excerpt from one of my previous posts on restoring social trust:

What the world needs now is a renewed social trust. Until recently, social trust seemed like an intangible commodity with a will of its own; it couldn’t be systematically cultivated, measured, forecasted, or valued. But a growing canon of research into successful resolutions of social dilemmas demonstrates that collaborative arrangements are more likely to emerge when certain conditions are met. It’s time to develop mechanisms that foster pro-social behaviors by supporting natural processes of recognition, reciprocity, and community awareness. Most of the fundamental research is available to build such a system, so it’s more a matter of applying these ideas to real world relations, institutions, and markets.

The first step is to revisit free-market theory, as Greenspan suggested, and recast core concepts around self-interested parties. Can we conceive of a marketplace in which parties’ self-interest aligns with the common good?


by ~ December 30, 2008

Going through old files the other day, I came across a MacArthur Foundation Occasional Paper that had a profound effect on my thinking about interdisciplinary research and collaboration.

Now 15 years old, An Experiment in Scientific Organization by Robert L. Kahn, is finally available online. It details the history and practices of the MacArthur Foundation’s long-running Research Networks — “a sustained experiment in the organization of scientific research,” as Kahn states in the paper’s introduction.

His observations are just as fresh and important as when An Experiment was published in 1993.

Anyone who has had difficulty making an interdisciplinary or cross-sector collaborative project work should prepare to have their mind blown by this paper. While there’s a lot of talk about the importance of collaboration across disciplines, there’s very little research activity that delivers on the promise. Interdisciplinary research is difficult, messy, and operates on an entirely different set of cultural rules than traditional research.

But through years of trial and error, the MacArthur Foundation finally hit on a network design that reliably produced significant results. Kahn’s paper details the process by which the Foundation came up with the right elements for a successful collaboration.

He also lists the developmental stages that a collaborative network goes through in order to hit its stride and start producing useful results, as well as the elements of a collaboration that have proven to be critical success factors.

No one really argues against Kahn’s point that “collaboration, within disciplines and between them, can enlarge scientific understanding, accelerate scientific achievement, and increase the contributions of science to well being.”

But while others pay lip service to the concept, his paper provides the guideposts for  designing a successful collaborative endeavor. It’s a tremendously useful document for anyone who is serious about making an interdisciplinary collaboration yield fruit.


by ~ December 13, 2008

In the media coverage of how Bernard L. Madoff pulled off a massive Ponzi scheme, the references “trust” and “loyalty” border on the gratuitous:

“For Investors, Trust Lost, and Money Too”

“Thirty-six years of loyalty, through two generations, and this is what we get”

“People came to trust him so much that, eventually, they trusted him with everything.”

“Madoff’s betrayal imperils a generation of trust”

Unfortunately, this yet another $50 billion wake-up call that our instinctual ability to trust is completely overwhelmed by modern institutions. Not even the smartest people in the room caught on to Madoff. I think Charles Green summed up the problem as well as anyone:

How? How could some of the world’s supposedly smartest investors … have been hoodwinked by something that, in the rear view mirror, was a blatant scam?

The answer reveals a common myth about trust in business. The myth is that good businesspeople make rational decisions about trust.

But let’s look at the problem from a different angle: who better to defraud wealthy, intelligent people than a $50 billion confidence man? Only trusted individuals get that kind of privilege! It usually takes an entire industry of lesser fraudsters to come up with that kind of cash.

Madoff as Archetype

It’s obvious now that Madoff is a particularly evil and odious man. But that doesn’t explain how he was able to pull off such an enormous fraud or whether such tragedies can be averted. Clearly there were others who helped him stage this Royal Nonesuch, many of whom were unwitting participants.

As a society, our understanding of Madoff is a categorical imperative, because Madoff isn’t an aberrant freak of nature. Madoff is a representation of what’s wrong in society. Madoff the man is irrelevant; Madoff the archetype is terribly frightening. Consider Milan Kundera’s analysis of “eternal returns” in the first chapter of “The Unbearable Lightness of Being”:

If the French Revolution were to recur eternally, French historians would be less proud of Robespierre. But because they deal with something that will not return, the bloody years of the Revolution have turned into mere words, theories, and discussions, have become lighter than feathers, frightening no one. There is an infinite difference between a Robespierre who occurs only once in history and a Robespierre who eternally returns, chopping off French heads.

Will there be another Ponzi? Another Madoff? Of course! In fact, there are already many more of them in existence than we realize. Forget Madoff the man. How do we take down the Achetypal Madoff?

The “How” is in the Structure of the Relationship

The Laws of Relation are my attempt to analyze these breach-of-trust phenomena and how hopefully to improve the structure of relations. I think they provide a lot of clues in outing the world’s Madoffs.

Clue # 1: Asymmetric relationships inexorably lead to exploitation

Asymmetrical relations are exploitive relations by their very constitution. This is true even when the participants have a high degree of good will toward each other. The structure of the relationship is an environmental factor that necessitates exploitation. In short, absolute trust corrupts absolutely.

This is even more true when people interact with organizations, institutions, business, and governments. In the book “The Asymmetric Society,” James Coleman distinguishes between natural persons and organizations, and then discusses how rules of interpersonal trust don’t apply to organizations. For example, you can be loyal to your employer, your union, and your brokerage. But these institutions aren’t human, so are incapable of loyalty, love, and caring. Of course, organizations really want your loyalty and trust, because it’s great for business. But organizations don’t have the “empathy gene” that makes them want to protect you in a crisis.

Imagine this: What if Madoff was an honest man early in his career and never thought he’d become the world’s biggest Ponzi? But slowly Madoff comes to see real-estate boom, credit default swaps, and the Nasdaq itself as enormous Ponzi schemes. Almost serendipitously he finds himself inextricably linked to a system of Ponzism, with himself holding all the strings. He holds all the money; he sets all the rules; he runs the circus… and people all trust him with their money. He also realizes that creating asymmetric relationships with his clients provides him unprecedented leverage. He allows people to believe that multi-generational loyalty matters in their relationship, when in fact in their loyalty only plays into Madoff’s master plan.

Clue #2: Disproportionate Risk

The Law of Relational Risk says that “contribution to the relationship that is not met proportionally by the other participants is a loss to the contributor.”

It’s telling that Madoff made the $10 million bail. He even talked about distributing the $200 million or so left in the fund to close friends and relatives. Didn’t he “lose everything?” Well, Madoff lost his reputation and his ability to do “business.” He’ll probably spend some time in jail. But he’s no Dr. Faustus. After all wouldn’t most people line up to spend a few years in jail and suffer a public humiliation if they could spend 30 years as a billionaire? Just look to reality TV to see what people are willing to suffer in hopes of winning a few bucks!

Here’s the point: If you contribute something to a relationship and the other party doesn’t reciprocate with a proportional degree of risk, you’re doomed. Think of your contribution as a charitable contribution.

Clue #3: High security

If good fences make good neighbors, then what do high security fences make? There are lots of people that would like you to believe that strong security is the pathway to confidence, safety, and trust. In my previous post, I commented briefly on how the CSIS panel’s focus on security was well meaning, but off base. A security apparatus is more effectively used as tool of exploitation than as a pathway to trust. Institutions that thrive on secrecy, high security, and controls are most likely unworthy of trust.

Clue #4: Shallow signals

How impressed should you be that someone has a lot of money? Or that they have a position of power? Or that they’re a Harvard grad? Does it follow that people with diplomas, position, and wealth are trustworthy? History proves otherwise.

Give me the most selfless billionaire on the planet and I’ll give you Gandhi. It’s much more difficult to live the life of Gandhi than the life of Madoff. Too bad Gandhi wouldn’t take a Wall Street job. He might have a few things to say about the way Wall Street ought to be run.

In conclusion, I’ll reiterate something from my October 12 post, “Money Can’t Buy You Trust: What We Won’t be Getting for $1 Trillion“:

Yes, good bankers do know how to manage risk—their own risk. Which is why the best investment bankers view a recession more like a sabbatical, while the rest of us have to figure out how to keep food on the table.


by ~ December 11, 2008

A few days ago, the CSIS Commission on Cybersecurity released a report urging the Obama administration to take immediate corrective action in securing online systems. It’s a bold move and I’m thankful that the committee members, some of whom I know, have been able to raise awareness and the level of discussion on this important issue.

Major media covered the release of the report, including a New York Times report that began “License plates may be coming to cyberspace.” Although the CSIS report didn’t call for “surfer licenses,” the Times analogy is apt (more on the analogy in a moment).

I agree with a lot of what’s in the report, but I’d like to call out a few things.

  • Must we call it “Cyberspace”? That’s so 80’s!
  • If we abolish the word “Cyberspace,” then we don’t have to refer to the new “National Office of Cyberspace” as the “NOC.” This is important because anyone in the tech industry already thinks NOC means “Network Operations Center.” It’s also the stock symbol for Northrop Grumman.
  • There’s a good list of contributors on this work, but they’re missing the people who really kept us safe during the cold war. Where are the Robert Axelrods in this group?
  • The suggestions on “regulating cyberspace” and authenticating digital identities are well meaning, but off-base. Consider the following text from the very first post I wrote for Hybrid Vigor:
Government regulators are bullish on the “war on fraud” approach-a crackdown on critical systems. The Bush administration has already budgeted $6 billion for hardening online systems against terrorist attacks. And a war on fraud might actually be effective, if we could identify the fraudsters.
But unfortunately, fraudsters by definition use false identities, so to engage that battle, we’d need to beef up the security infrastructure of the Internet by orders of magnitude. We’d have to do background checks on users, issue “surfer licenses” to all the Internet users, lock down points of access, and hire a bunch of cyber-cops. We’d need to hire another set of people to regulate the cyber-cops, and another set of people to govern the regulators.

That’s why ultimately, the “war on fraud” approach is untenable, because it require levels of sophistication and precision well beyond our abilities — and it demands that well-doers willingly capitulate to a painfully asocial system.

I’m hoping also to hear from my friends at Burton Group and from the Identity Gang on this report.


by ~ December 7, 2008

A few posts ago, I made a plea for the Obama administration to include social scientists in the mix as it moves to return science to its rightful position of inclusion and respect in the public policy sphere. If you want just one real-life example of what’s at stake by not doing so, read this letter about the “updated” Technical Assistance Document on anthrax contamination, proposed by EPA and several federal agencies after the 2001 and 2002 attacks.

It’s written to EPA administrator Stephen Johnson, from my colleague Baruch Fischhoff, the Carnegie Mellon risk expert and professor who’s chair of the Homeland Security Advisory Committee for the EPA’s Scientific Advisory Board.

Fischhoff wrote:

[S]everal Committee Members, myself included, were distressed at the lack of systematic, scientific attention to communicating with the public.  … It is not unique to this anthrax project, but reflects a general problem in our national emergency planning … As we saw in 2001, a b. anthracis (“anthrax”) attack has enormous potential for achieving our enemies’ goals, even when causing relatively few casualties … Much of that damage came from our own inability to communicate credibly, causing needless concern and distrust that persists to this day.

With its rigorous methodologies and an impressive body of academic literature supporting it, risk communication represents the bounty of wisdom that can be found in the applied social sciences, from fields including psychology, communications, decision analysis, rhetoric, sociology, political science, law, ethics, linguistics and anthropology.

But the scientific aspects of risk communication are often entirely overlooked or dismissed by technical experts and authorities in both emergency preparation and response. Instead, they assume that  their knowledge of technical details, their intuition about what to say to the public, or their charisma (this being the politicians) will give people enough information to respond to emergencies.

Call it ignorance, arrogance or denial, but that attitude is a big mistake, and it has real consequences.

Look back at Hurricane Katrina for some horrific examples. Not only did authorities fail to get the frail and the poor out of New Orleans, it utterly failed to persuade tens of thousands of them who could evacuate the city to do so.

And recall the disaster that one risk expert called the “Duct Tape Risk Communication” emergency preparation strategy, proposed by the White House in 2003, which immediately was turned into a lampoon to skewer the U.S. government, rather than inspiring citizens to take useful action.

People need to trust their leaders and technical experts to tell them the truth in emergencies, in ways that actually answer their questions — questions which will be different for business leaders than for schoolteachers — and address their fears. Without that trust, the public isn’t going to follow instructions.

As Fischhoff said in his letter to EPA, the only way to prepare for emergencies is to have an inventory of scientifically sound risk communications on hand — pre-scripted press releases, print and electronic explanatory materials, guides to self-testing, FAQs and the like — ready to be adapted to specific circumstances. And,

Communications research planning is not expensive.  However, it requires a skill set that is not represented in the anthrax [Techical Assistance Document] task force.  Nor is it present in most other parts of our national response effort [including the Emergency Consequence Assessment Tool and the WaterSentinel Program (PDF)].  As a result, much of what passes for risk communication advice has no scientific foundation.

Thankfully, compared to some of the other problems facing the Obama administration, this is an easy one to fix. And given the nature of some of those problems, they may want to fix this one now.


by ~ December 6, 2008

The New York Times ran a story today on a truly recession-proof industry: computer hacking. The article cites a study by the Organization for Security and Cooperation in Europe that claims the underground industry grossed more than $100 Billion last year—enough to bail out the U.S. auto industry and Citigroup with money left over for alternative energy initiatives.

Sadly, the best our computer security experts can offer is an honest attempt to keep up. The first sentence of the Times article makes this chilling assertion: “Internet security is broken, and nobody seems to know quite how to fix it.”

But the article goes on to shift the discussion from security to trust:

Beyond the billions of dollars lost in theft of money and data is another, deeper impact. Many Internet executives fear that basic trust in what has become the foundation of 21st century commerce is rapidly eroding.

This is precisely the point! Our security online depends greatly on our ability to trust online. But today’s Internet security experts have shamefully little understanding of social trust, so today there simply is no model for social trust on the Internet. I’ll say that again: there is no model for social trust on the Internet today.

Here’s a case in point:

Recently, Microsoft antimalware researchers disassembled an infecting program and were stunned to discover that it was programmed to turn on the Windows Update feature after it took over the user’s computer. The infection was ensuring that it was protected from other criminal attackers.

Why were the Microsoft researchers stunned at this development? Perhaps because they thought they had written unhackable code? Or that a wolf would never don a wool coat? If these guys are experts, shouldn’t they anticipate what hackers will do? Apparently, Microsoft could use a few social scientists, evolutionary biologists, and game theorists on the security staff.

The Laws of Relation predict this kind of behavior, because the relationship between Microsoft, the PC, and the user is asymmetrical and therefore exploitive. Because the relationship is structured without regard for principles of social trust (reciprocity, awareness, consent, etc.) the relationship becomes easy prey for hackers.

But are businesses motivated to really fix the problem? Here’s the rub:

  • To fix the security problem, you have to fix the trust problem.
  • To fix the trust problem, you have to restructure the relationship.
  • To structure the relationship for resilience against invaders, you have to adjust the business model and empower consumers.

And businesses are unlikely to relinquish their exploitive relationships with consumers.