[asia-apec 41] Globalization: Poor Design?

[RVerzola]

Globalization: Poor Design?
           by Roberto Verzola, Surian ng Reporma sa Lipunan

Most successful designers of complex systems follow basic rules of
design.

Whether it is a worldwide network of ten million computers such as the
Internet, or a huge computer program with fifty million lines of code,
or a tiny computer chip with two million transistors on it, or a
spaceship that will land men on the moon, the design rules are
surprisingly similar.

A basic rule in designing complex systems is modularization. The rule
says one should break up a complex system into smaller parts. These
smaller parts -- usually called modules -- should be more manageable
and relatively independent from each other. The modules should
interact only through a few well-defined interfaces. Each module
should have high internal cohesion. The coupling between modules
should be minimized.

A good example is the Apollo lunar mission. One of the most complex
systems ever designed, it used modules all through out, from the
design of the spaceship itself, to the electronic circuitry that
comprised much of its automatic intelligence. The mission's
spectacular success is a tribute to the effectiveness of modular
design.

Another example is the Internet, a computer network designed to
survive a nuclear attack. The Internet implements communications
through modular network layers which interact with each other only
through well-defined interfaces. Internet communications protocols
have also been broken down into simpler protocols -- one for
transferring mail, another for news, and still another for files.

Modularization is such an important concept in software engineering
that all computer languages facilitate writing software modules. There
is even a computer language called Modula.

In economics, modularization means that countries should try to become
as self-sufficient and as independent from each other as possible. It
means that interaction between economies should be minimized and
should occur only through well-defined regulations. Modularization
means that the coupling among economies should be minimized.

Globalization, currently the dominant trend among economic planners,
violates the design principle of modularization. By tearing down
"well-defined interfaces" between economies, globalization increases
the coupling among countries and makes countries more instead of less
dependent on each other.

System designers know that a complex system with high interaction
among its parts becomes more prone to failures. It is difficult to
modify and to improve. It becomes error-prone, yet the errors are more
difficult to identify and to correct. In a poorly-designed system,
attempts to correct errors often introduce more errors, making the
system even more failure-prone.

>From a systems view, a globalized economy is a badly designed economy.
It will be prone to errors and failures, and difficult to maintain and
to improve.

Look at the problems of today's globalized economy. Because of the
free movement of goods, diseases spread quickly from one corner of the
globe to another. CFCs produced in one country damage the ozone layer
and threaten the health of the citizens of other countries. Toxic
wastes produced in the North find themselves being dumped in the
South. Chernobyl's radioactive emissions threatened the dairy industry
of the rest of Europe. A stock market crash in the U.S. would probably
send stock prices worldwide tumbling. Because of the free movement of
capital, job insecurity as well as speculation has become a global
problem.

These are all the consequences of the bad design inherent in a tightly
coupled global economy.

Despite this, economists often insist that globalization is
inevitable, and the best we can do is to adjust to it.

For a designer's viewpoint, no design is "inevitable." Every design is
the result of a conscious or unconscious effort. Poor designs arise
because the designer relaxes on his rules, and adopts an "anything
goes" approach.

To economists, relaxing the rules is a good thing. They call it
"liberalization" and "deregulation". And "anything goes" is called
"free-market competition". To system designers, relaxing the rules
leads to violations of the basic principles of good design, and makes
globalization inevitable.

Who want the rules relaxed? These are mostly the global corporations,
the main beneficiaries of globalization. They are the equivalent of
global variables in software engineering.

But while software engineers try to eliminate global variables or turn
them into local variables, economists are awed by global corporations
and seek employment from them. When global corporations use transfer
pricing to maximize profits at the expense of the host country; or
when they switch to highly automated equipment and minimize local
employment; or when they compete with local entrepreneurs for skilled
labor or for bank loans; or when they suddenly pull out liquid assets
for some reason or another; we are witnessing what system designers
call the "undesirable side-effects of global variables." Thus, a
fundamental rule in software design is to avoid global variables.

Faced with a badly-designed, non-modular system, designers frequently
find it easier and more cost-effective to simply junk the design and
to start from scratch.

Perhaps, this is what we should do with globalization.