Book Review: Adapt

Charles Darwin, were he still alive, would obviously be a fan of Google’s business practices. Google has a ’20 percent policy’, that has become quite famous and is rooted in evolutionary theory. Any engineer at Google is essentially allowed to spend one fifth of their time exploring any project they think is worthwhile, without fear of failure. This policy has birthed some wildly successful products (Google News and Adsense) and it has also expectedly produced a large portfolio of failures too. Sounds akin to the biological evolution Darwin documented, right?

Google seems to be one of the few companies in today’s world that understands how to incorporate the power of evolutionary forces into their innovation-encouraging business practices. Darwin may have written the Origins of Species without the economic implications of the Internet in mind, but his contributions to economics are visibly apparent in Google’s business practices.

How these evolutionary forces shape our economic and political life is the subject of Tim Harford’s (aka, the Undercover Economist), new book called Adapt: Why Success Always Starts With Failure. Mr. Harford argues that government leaders, military strategists, CEOs, and even academics could learn a thing or two from Darwin. Mr. Harford, armed with some compelling statistical evidence, solidifies this argument in a rock-solid fashion.

Anyone who is familiar with the work of Joseph Schumpeter will quickly realize that Mr. Harford is singing a familiar tune. Creative Destruction (originated by Karl Marx, but popularized by Joseph Schumpeter) is the force that sustains long-term economic growth in capitalistic economies. Analogous to biological evolution, the destruction of companies that fail to drive innovative progress are replaced with creative new ones who provide innovative ideas through the use of Darwinian selection. The late Professor Schumpeter, like Karl Marx, understood that evolutionary applications were necessary to understand capitalistic economic life. In his book, Capitalism, Socialism, Democracy, Professor Schumpeter wrote: “This process of Creative Destruction is the essential fact about capitalism.” It’s also, as Mr. Harford elaborates on in Adapt, an essential fact about life in all spheres.

Throughout Adapt Mr. Harford tells many stories from economic and political life about things gone horrifically wrong or amazingly right. He then analyzes these situations using an evolutionary microscope.

One example comes at the beginning of the book when Mr. Harford exposes Donald Rumsfield’s poorly chosen top-down commanding style in the Iraq war. American officers, situated on the front-lines, realized that Mr. Rumsfield’s theoretical plans failed to account for the actual complexities of the war. In rogue fashion, General David Petraeus chose to embrace dissenting opinion instead of following the top-down orders. Ultimately, he observed what was working in the heat of the battle and provided a much better counter-insurgency strategy than any “expert” behind a desk could conjure up.

This example I’ve just mentioned brings up another central theme of the book, i.e., is that we over-rely on experts in situations in which there can be no experts. Nassim Nicholas Taleb’s wonderful book, The Black Swan, harped on this point as well. Complex problems, Mr. Harford argues, simply have too many moving parts. He cites a famous essay Hayek wrote in 1945, that things like economies and wars can’t be dictated from a central expert. In short, there’s simply too much vital knowledge that is not capable of being centralized. “What Hayek realized,” writes Mr. Harford, “was that a complex world is full of knowledge that is localized and fleeting. Crucially, the local information is often something that local agents would prefer to use for their own purposes. Hayek’s essay pre-dated modern computers, but his argument will retain its force until the day that computers can read our minds.”

All in all, Adapt is a delightfully wonderful read. The prose is captivating without being too pedantic or patronizing, which is a difficult task for a book of this nature. By the end, I was reminded that failure is a key to innovation. However, for the sake of Mr. Harford’s future writings, I wish this book hadn’t been so well written.

[click the following for amazon.co.uk and amazon.ca copies of the book]

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