Elizabeth Holmes, Chairman and CEO of Theranos, is a living archetype for the modern age. Lauded by upmarket glossy magazines and heralded as a symbol of modern feminism, Holmes was the world’s first female tech billionaire. In the tradition of Apple’s Steve Jobs and Tesla’s Elon Musk, Holmes was a driven individual determined to push aside the bureaucrats and naysayers who stand in the way of progress. A university drop-out with no background in medicine nor tech, Holmes convinced some of America’s most powerful men – including Henry Kissinger, George Schultz and Bill Clinton – that she had succeeded where thousands had failed in developing a Star Trek-type non-invasive blood testing technology. But Holmes was closer to Elon Musk than to Steve Jobs, in that, like Musk’s hyperloops, solar roofs and Martian colonies, Holmes’ blood testing technology was a work of fantasy. Unlike Musk – so far at least – Holmes is currently on trial for fraud and faces up to twenty years in jail if convicted.
My interest here is less to do with Holmes so much as with the technicians and engineers who she employed to work on the development of a technology which all of them must have known could never work. Nevertheless, almost all of them continued to take their monthly salary in exchange for long hours and considerable effort which they knew could never pay off. John Michael Greer offers a plausible explanation for why this occurred:
“Crackpot realism is one of the downsides of the division of labor. It emerges reliably whenever two conditions are in effect. The first condition is that the task of choosing goals for an activity is assigned to one group of people and the task of finding means to achieve those goals is left to a different group of people. The second condition is that the first group needs to be enough higher in social status than the second group that members of the first group need pay no attention to the concerns of the second group.
“Consider, as an example, the plight of a team of engineers tasked with designing a flying car. People have been trying to do this for more than a century now, and the results are in: it’s a really dumb idea. It so happens that a great many of the engineering features that make a good car make a bad aircraft, and vice versa; for instance, an auto engine needs to be optimized for torque rather than speed, while an aircraft engine needs to be optimized for speed rather than torque. Thus every flying car ever built—and there have been plenty of them—performed just as poorly as a car as it did as a plane, and cost so much that for the same price you could buy a good car, a good airplane, and enough fuel to keep both of them running for a good long time.
“Engineers know this. Still, if you’re an engineer and you’ve been hired by some clueless tech-industry godzillionaire who wants a flying car, you probably don’t have the option of telling your employer the truth about his pet project—that is, that no matter how much of his money he plows into the project, he’s going to get a clunker of a vehicle that won’t be any good at either of its two incompatible roles—because he’ll simply fire you and hire someone who will tell him what he wants to hear. Nor do you have the option of sitting him down and getting him to face what’s behind his own unexamined desires and expectations, so that he might notice that his fixation on having a flying car is an emotionally charged hangover from age eight, when he daydreamed about having one to help him cope with the miserable, bully-ridden public school system in which he was trapped for so many wretched years. So you devote your working hours to finding the most rational, scientific, and utilitarian means to accomplish a pointless, useless, and self-defeating end.”
Holmes used non-disclosure legal agreements with former employees to ensure that they dare not speak publicly about the corporation or the work they had been engaged on. The result was that all but one remained silent despite knowing that billions of dollars of investors’ cash was being poured down the drain. And perhaps, in the post-2008 economy in which billions are poured down the drain by central banks and governments every day, it didn’t matter all that much.
But there is something far deeper in the human psyche going on here. At some point in their journey to stardom, characters like Musk and Holmes have to learn to screen out information from engineers and technicians telling them that their pet project is a non-starter. Someone has to be the first to be fired for speaking the truth to power in order that the rest learn to knuckle down and get on with the job… no matter how pointless the job might be. It appears to be a manifestation of a psychological flaw observed by Norman F. Dixon in Our Own Worst Enemy – the process of “trading safety for peace of mind.”
According to Dixon, our consciousness is wired to favour evidence which supports our pre-existing beliefs while rejecting anything which gives rise to “cognitive dissonance” – the discomfort which occurs when the evidence in front of us demonstrates that our ideas and beliefs are wrong. John Maynard Keynes may have remarked that, “when the facts change I change my mind,” but in the real world very few of us do. Indeed, Dixon references a string of disasters – including the ill-fated final voyage of the Challenger space shuttle – which resulted from operators sticking to their pre-conceptions even after compelling evidence was provided to the contrary.
The Challenger disaster was also something of a foreshock for a contemporary psychological disorder – the tendency to reach for a short-term partisan political explanation in preference to examining the evidence. As Niall Ferguson explains in Doom: The politics of catastrophe:
“Two months after Challenger’s destruction, a story surfaced that the White House had been applying pressure on NASA to ensure that the launch happen before President Reagan’s State of the Union address, originally scheduled for later the same day. This illustrates the ingrained compulsion of the Washington press corps to attribute blame, wherever possible, to the occupant of the Oval Office. In reality, a proposed draft of the speech that mentioned Christa McAuliffe had been discarded before it even reached Reagan’s desk. Pressure from the top was most certainly not the reason Challenger blew up.”
The technical reason for the Challenger disaster lay in the new O-rings which had been redesigned to save money, but which had a nasty habit of blowing out during flights… particularly in cold weather when the seals became brittle. But the failure was not so much in the O-rings themselves as in the inability of managers to hear the warnings given by the engineers and technicians. As Ferguson reports:
“At the first hearing of the presidential commission set up to investigate the cause of the disaster, under the chairmanship of former secretary of state William P. Rogers, McDonald [the director of the Space Shuttle Solid Rocket Motor Project at Morton Thiokol] dropped his bombshell: ‘We recommended not to launch.’ However, it took the seemingly unworldly figure of the Caltech physicist Richard Feynman—ably assisted by Air Force general Donald Kutyna and NASA astronaut Sally Ride, also members of the Rogers Commission—to establish beyond reasonable doubt that the O-rings (to be precise, the effect of low temperatures on their soundness as seals) were the cause of the failure and that NASA had been explicitly warned of this risk…
“For Feynman, the culprits were the midlevel NASA bureaucrats who chose to disregard the engineers. ‘If all the seals had leaked, it would have been obvious even to NASA that the problem was serious,’ Feynman wrote. ‘But only a few of the seals leaked on only some of the flights. So NASA had developed a peculiar kind of attitude: if one of the seals leaks a little and the flight is successful, the problem isn’t so serious. Try playing Russian roulette that way.’ The more he explored the way NASA worked, the more Feynman was appalled: a hierarchical command structure, a formalistic insistence on doing things by the book, even if the book was wrong, and above all a refusal to accept warnings about the risk of a disaster. At the heart of the matter, for Feynman, was the refusal of NASA managers to listen when they were told that the probability of a disaster was 1 in 100.”
The bigger the project and the more the vested interests, it seems, the greater the chance that decision makers will trade safety for peace of mind. Indeed, just months after the Challenger exploded, another explosion rocked the world on the other side of the planet. Again, midlevel managers insisted on going ahead with an operation which engineers and technicians had warned them was extremely dangerous but which a nightshift of inexperienced operators felt compelled to implement. The result was Chernobyl. And the authorities’ attempts at a coverup were a major reason for the collapse of the Soviet Union five years later.
Which brings us to our own – entirely predictable – energy difficulties. For while government ministers are not quite the charismatic figures so beloved of Silicon Valley, they have been granted the power to make crackpot decisions that can easily result in disaster for the rest of us. And in the case of energy – the very lifeblood of our civilisation – they have traded (our) safety for (their) peace of mind for the best part of a quarter of a century by buying into the entirely unfounded myth that it is possible to run a complex, fossil fuel-powered industrial economy on wind and sunlight.
It is not that non-renewable renewable energy-harvesting technologies (NRREHTS) are a bad thing in and of themselves. Although some very dubious modelling has been used to sell the fantasy that they can replace fossil fuels while maintaining our current way of life. Not least because wind turbines and solar panels depend upon fossil fuels at every stage in their manufacture, transportation, deployment and maintenance. Moreover, no serious grid-scale storage system has been invented which can iron out the seasonal and minute to minute intermittency of wind and sunlight. The main failure, however, lies in the way in which NRREHTs have been deployed and incorporated into our quasi-market system.
The system has been regulated – as is always the case when governments attempt to create quasi-markets – by a body which, in the UK, is charged solely with securing the cheapest energy for consumers irrespective of the impact on the grid infrastructure or on energy security. Adding to the problem, Blair’s New Labour introduced incentives for wind and solar to address carbon emissions without understanding that this was incompatible with holding prices down and threatened future energy security.
The consequence has been a dash for NRREHTs which has left the UK particularly dependent on gas and in great danger of shortages in the event that global gas prices begin to increase. This is because there is no requirement in the current set-up that an energy generator must provide firm electricity 24/7. As a result, while NRREHTs generators can afford to sell electricity cheaply on days when there is plenty of wind, they are under no obligation to supply equivalent electricity when the air is still. And so, the electricity must come from somewhere else. Years ago, that “somewhere” was the coal and nuclear power stations that NRREHTs were supposed to replace – although periodically even the corpse of coal has to be resurrected when the wind stops blowing. Gas though, has emerged as the most cost-effective means of bridging the intermittency gaps in NRREHTs supply within the current quasi-market structure.
In the UK, gas power operators struggle to sell electricity during periods when the wind is blowing and the sun is shining. The few remaining coal operators are in an even worse position since they are the supplier of last resort. Nevertheless, the entire system – and the wider economy – depends upon these fossil fuel suppliers to keep us switched on during the – many – days and nights when there is insufficient wind and sunlight to meet demand. This is why Britain has fared particularly badly in the face of the recent global shortage of gas as the economies of the world seek to emerge from the various pandemic lockdowns and restrictions. Not only do we need the gas for our heavy industry, domestic heating and cooking, but we depend upon it to keep our electricity grid operating. Where Belgium and France can turn to nuclear, and Germany can turn to coal power to mitigate the price increase, Britain has had no choice than to cough up the going rate.
The immediate consequence is that scores of supply companies have gone bust or face bankruptcy this winter. Consumer bills have increased, although the state-imposed price cap has deferred the worst of the price shock to next April. Businesses are not so fortunate, and the big increase in the cost of energy just as they are struggling with disrupted supply chains and still low consumer demand, points to widespread bankruptcy in the near future.
Whether energy ministers present and future will prove any more insightful than tech godzillionaires in understanding that they have been trading safety for peace of mind is moot. Not least because most of the early costs will be borne by the precariat. Those who actually understand the energy crisis – physicists, electrical engineers and technicians – seldom stand for election, still less become energy ministers (the current minister has a first-class degree in classics and history – not to be sniffed at, but not ideal for overseeing the biggest energy shock since 1973 either). Nor is the British civil service known for its grasp of so-called STEM subjects. And so, the short-term desire (peace of mind) to pursue policies popular with an equally detached media – no doubt egged-on by an increasingly out of touch green lobby – rather than engage in deep and difficult restructuring (safety) is likely to prevail irrespective of the growing chorus of better qualified voices pointing to the catastrophe looming over us. But as Feynman warned in the wake of the Challenger disaster:
“For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled.”
We should bear in mind that Nature seldom proves our folly in a pleasant manner.
As you made it to the end…
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