Dec 9, 2008

Future of objectivism...

I was reading an interesting article by Ard Huizing yesterday... some quotes below. Beware, these quotes should not always be considered as opinions of the author (or me), sometimes as observations;

The only real knowledge is considered to be objective, rational knowledge, for which we need science’s drive towards precision and timeless truths. Science allows us to abstract experiential knowledge from practice in such a way that ultimately correct, general and definitive accounts of reality can be given that are objectively, universally and unconditionally true.

The prospect of value realization and economic growth through efficient exchange explains not only the generally strong appeal of transactional thinking to decision makers in both private and public sectors, but also the logic behind bjectification, or codification, as it is called in the knowledge management literature.

The consequence of this prevalent view is that the subjectivists’ perspective of information and knowledge residing in human minds and relationships that cannot be disembodied into distinct objects is ignored in economics. What cannot be quantified is consistently assumed away.

The logic behind objectification furthermore drives attention towards exploiting what we have or know rather than towards exploring what we do not have or understand.

By its very nature, ICT aids in enhancing the availability and accessibility of information and knowledge and contributes little towards making sense of the messages conveyed.

Consequently, economic reasoning stimulates information management to choose the supply and exchange of information as its domain of expertise and the promotion of this exchange by helping to remove any barrier that prevents information from flowing as freely as possible as its rationale. In theory and practice, therefore, information management is generally described in terms of acquiring, refining, storing, preserving and disseminating informational representations of practice and its goal is described as getting the right representations in the right form to the right person at the right time (Gurbaxani and Whang, 1991).

The promise of economics is: the more closely information and knowledge management adhere to the neoclassical assumptions and the organizing principles implied, the more perfect the established information and knowledge markets will be, and the more efficiently information and knowledge will be distributed. This appealing promise, however, obscures other aspects of reality that have been effectively wished away in economics’ drive towards theoretical rigor. Once captured by economics’ attractiveness, these other aspects of reality run the risk of getting ignored or downplayed, in theory as well as in practice. It is precisely at this point that the theory of the perfect market can become a market ideology.

The assumptions in neoclassical orthodoxy have been designed in such a way that prices contain all information and knowledge for transactions to take place efficiently.

If prices are unknown, why would anybody consider sharing information or knowledge? Extending the neoclassical assumption that rational people always maximize their self-interests and personal welfare, this issue can be solved by assuming that rational people will readily objectify and exchange their information and knowledge through market mechanisms other than price if they expect to be proportionately rewarded with tangible or intangible returns such as pay, promotions and bonuses or reputation, respect and prestige. Google and the many social networking sites available such as LinkedIn exemplify how deeply the market metaphor can inform the shaping of information and knowledge exchange.

Hence, neoclassical orthodoxy provides a static equilibrium model characterized by supply and demand forces that ignores any influence of context, time and immaterial values such as imagination, creativity or trust on people, relationships and transactions. The focus is entirely on the objects being discretely transacted, here and now, which is the aspect of reality the market metaphor exposes and
emphasizes. What it hides are the relationships between people engaged in exchange, their history and future, their affiliations with the objects exchanged, the interaction of which the exchange of objects is just a part, the context in which transactions take place and the dynamics of the organizational processes involved. Economics is a science of nouns, not of verbs. It deals with static objects rather than with dynamic subjects, with information, not in-forming; with knowledge, not with knowing or learning.

The implications for management and organization are straightforward: for information or knowledge management actions taken or technologies implemented, we should maximize the availability, accessibility and use of information and knowledge by attracting as many participants as possible and by avoiding creation of any entry barriers.
This is the economists’ way of presenting markets as non-hierarchical and powerless institutions, where everybody can and should find whatever one is looking for. Praising intranets or virtual community, for instance, for their capacity to cross vertical and horizontal organizational boundaries clearly hinges on this element of the market metaphor, as does the alleged social nature of wikis and other social software tools. Moreover, all these instruments express the belief that group consensus on the basis of free exchange discloses a more objective and thus more accurate analysis of reality than any individual ever could. ‘Crowds’ are assumed to be unconditionally wiser than any single expert could wish to hope for. What this supposed non-hierarchical ‘wisdom of crowds’ conceals is that all kinds of monopolies and power structures are at work in all information and knowledge ecologies. It also hides the fact that the participation of more people or availability of more information may not necessarily translate into higher-quality decisions or superior knowledge creation (Choo 2007). More is not always better.

standardization permits counting and measurement, which is needed to set equilibrium prices for the relevant commodities. It also allows quantitative evaluation of performance and value realized, which adds to economics’ theoretical and practical attractiveness. Commoditization furthermore entails that the identities of the exchange parties and their relationships can be considered irrelevant for economic analysis, because if goods are homogeneous, it does not matter who the buyer or seller is. Under these conditions, the price is the only factor remaining in deciding with whom to trade. Moreover, these conditions allow parties to transactions to be treated as mere producers or consumers, anonymous atoms who do not interact with each other in any other way than by exchanging standardized objects. Finally, commoditization enables organizations to be maximally streamlined, with optimized business processes supported by ICT enhancing organizational efficiency.

Objectivists focus on extracting information and knowledge from people through standardization and centralization processes to transform them into disembodied, de-contextualized commodities. Such standardization and centralization turns information and knowledge into economic values that can be hierarchically controlled ‘from above’ and measured in quantitative terms. Commoditization enables that, for example, information management’s contribution to organizations can be evaluated in terms of its storing and processing capacity. Interestingly, contributions to the information supply side are easier to quantify than those to the demand side, which adds to information management’s inclination to specialize on the supply side as its sole domain of expertise.

Put differently, information’s value is fully dependent upon the meanings people attach to that information and to the contexts they live in. That makes information subjective rather than objective and heterogeneous instead of homogeneous, implying that there is no fixed relationship between economic value and informational content. When a one-to-one relationship between value and informational content is missing, it is impossible to set equilibrium prices. And without equilibrium prices, the entire neoclassical edifice collapses.

Ideas and knowledge are increasingly seen as if they are tradable objects, the
effects of which are spread globally by modern communication.

The first core problem of objectivist economics is that dynamic processes are beyond the analytical reach of economics because they do not demand an exclusive focus on the exchange of static objects and they are not required to conform to rigorous quantification requirements.

Secondly, the emphasis in objectivism on discovering universal truths precludes context as a factor important to economics.

Thirdly, truth and meanings are relative not only to context, but also to people’s mental frameworks or conceptual systems of how the world works. For both reasons, human beings cannot act differently than to impute their own meanings to information. Hence, it is also possible that different people attach divergent interpretations to the same information or that the same person interprets the
same information differently when faced with a different context. Economists cannot deal with such divergent sense making behavior. Information is supposed to help bring supply and demand together in an equilibrium price.

..the so-called information or knowledge economy still misses one of its critical cornerstones - an economic theory of information, knowledge and learning.

..information management with its choice for objectivism and microeconomics as its foundation has precisely selected a philosophy and theory that are incapable of justifying and grounding the very heart of its existence: information. This conclusion also means that an integrative approach to information management should entail more or something different than ‘the management of information as a business resource.
Especially, the conclusion that we need a new economic theory of information, knowledge, and learning, is something that really appeals to me. I have once made an overview of a system I would like to see emerge, which in fact deals with these issues.

It is a bit messy, but it covers my initial ideas.

Below, a nice overview of objectivism and its relation to knowledge/information management and microeconomics is shown;

  1. Information and knowledge are granules of understanding representing objective realities.
  2. Learning is a step-by-step process directed towards the constant refinement of objective representations.
  3. Communication is the transfer of granules of understanding from a sender to a receiver.
Information (and knowledge) management
  1. The domain of information (knowledge) management is the information (knowledge) supply side, culminating in the moment of truth.
  2. The rationale of information (knowledge) management is promoting unfettered information (knowledge) exchange.
  3. The goal of information (knowledge) management is getting the right information (knowledge) in the right form to the right person at the right time.
  4. Information (knowledge) management is the gathering, refining, storing, preserving and dissemination of information (knowledge).
Organizing principles
  1. Shape information and knowledge exchange as a market and create effective mechanisms to fully exploit the market’s self-organizing capacity.
  2. Maximize participation, discourage erection of entry barriers, and promote competition among participants.
  3. Commoditize information and knowledge to render economic power.
Core assumptions in objectivism
  1. Human behavior is determined by forces in the external world.
  2. People cannot control these external forces and find them difficult to comprehend.
  3. People should therefore be provided with truthful knowledge to help them master their environment.
  4. Mastery over the environment leads to successful performance.
  5. For developing relevant knowledge, we should focus on these external aspects of understanding.
  6. Understanding depends on truth.
  7. The environment consists of distinct objects that exist independently of human cognition and use.
  8. People understand the environment when they have knowledge of these objects.
  9. Such knowledge is developed by studying objects’ inherent properties.
  10. These inherent properties can be objectively known through codification and abstraction.
  11. Objects’ inherent properties are fixed and objective; meanings are therefore also fixed and objective.
  12. The only real and truthful knowledge is disembodied, abstracted and objective.
  13. Only positivist science produces real, truthful knowledge and reliable, prescriptive theory.
  14. Objectivity promotes fairness and impartiality in social matters.
Additional assumptions in microeconomics
  1. Successful performance is defined by its economic value.
  2. Efficient exchange maximizes economic value.
  3. Hence, efficient exchange at the moment of truth (transaction) should be the focal point of attention.
  4. Transactions stand on their own, implying that context, time and people’s identities, values and beliefs are irrelevant for theory and practice.
  5. People are economically rational and maximize their personal welfare.
  6. Competition among large numbers of non-hierarchical participants enhances market efficiency.
  7. Maximizing economic value requires commoditization of information and knowledge.
  8. Commoditization enables measurement of performance and management control.
  9. ICT is a neutral medium.

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