Of Bananas and Industrialization

One of the chapters in the book project I am working on about the intangible economy talks about how traditional command and control is giving way to a more bottoms-up approach to organizations and management.

One of the conclusions generally drawn from the collapse of the Soviet Union was that its top-down centralized planning-based economy was a failure. Yet, we in the West should not dismiss this lesson. We are much more top-down than we realize. A great illustration of this came this week a post here by Johann Hari of the London Independent on the Huffington Post entitled “Why Bananas are a Parable for Our Times.

Hari explains that the industrialization of the banana over the past 150 years necessitated the breeding of a single, “standardized” banana from the numerous varieties that grew wild in a few parts of the world (not to mention the domination of third world economies, which we still often call, “Banana Republics”).

Dependency on a single species is not sustainable. In the 1960’s, United Fruit’s scientists had to develop a new species when the one they had been using for years succumbed to a fungus.

Today’s common species, the Cavendish, is now succumbing to the the same fungus. The monoculture model (like the centralized planning model) is reaching its limits. Hari observes:

Is there a parable for our times in this odd milkshake of banana, blood and fungus? For a hundred years, a handful of corporations were given a gorgeous fruit, set free from regulation, and allowed to do what they wanted with it. What happened? They had one good entrepreneurial idea - and to squeeze every tiny drop of profit from it, they destroyed democracies, burned down rainforests, and ended up killing the fruit itself.

As an aside: If this is interesting to you, I suggest the writings of Michael Pollan. His In Defense of Food is an enlightened source on the industrialization of food.

What does this have to do with intangibles? The rise of the intangible economy was fueled by new information technologies. IT has made us smarter and enables us to manage more complex networks, more diversity within those networks and, ultimately, fuels greater innovation.

If we can manage more complex networks, can we also manage more complex production? Could a multinational fruit company produce multiple kinds of bananas, keeping the species stronger and more robust? It just may be possible. I think this kind of thinking will roll slowly through a lot of industries.