Systems Thinking – Part 2
Jim Schibler
Product Management Leader & Career Consultant — Bringing Clarity to a Complex World
In Part 1 of this series, I offered an overview of Systems Thinking, and discussed examples of how it can provide a better understanding of the market for gasoline, the U.S. political system, government policy questions (such as ones involving illicit drugs and abortion), and the U.S. medical system.
In this episode, I’ll share examples of systems thinking as applied to Internet usage, cryptocurrency, and free news services.
Hidden Costs of Internet Usage and Cryptocurrency
The ease with which we can access information today would astonish our ancestors. “Information at your fingertips” is no longer just a metaphor; it’s a reality. ?If a question comes up while we’re having dinner at a restaurant, we can pull out a smartphone and get answers in seconds — how to pronounce that unfamiliar menu entrée, where the world’s best saffron is grown, what other paintings have been produced by the artist whose work graces the walls. It seems magical that a pocket-sized device can quickly satisfy our desire for knowledge whenever it arises.
Well, it’s not magic. The pocket-sized device, though impressively capable, couldn’t possibly store all the information we seek. The information it delivers comes from data centers full of servers running around the clock, and is transferred through various networks (both wired and wireless). All of that back-end infrastructure is energy-intensive, and accounts for a significant fraction of total world power consumption and greenhouse gas generation. According to one estimate, the amount of carbon dioxide generated by powering a single Google search is 200 mg, or about as much as a human exhales in 4 ? hours. Put another way, performing 5 Google searches a day emits as much carbon dioxide as a person releases in a day just through metabolism. That may not sound like much, especially when you compare it with the quantity of carbon dioxide emissions tied to our transportation, heating, food production, and electricity usage, but when you consider that about 8.5 billion Google searches are performed every day, it adds up to daily emissions of about 1700 metric tons of carbon dioxide.
The impact of streaming media is worse. According to another estimate, the power required to deliver streaming media currently accounts for about 1% of global greenhouse gas emissions.
Even more sobering are the impacts of cryptocurrencies. These only exist in the cyberworld, and consume massive amounts of power. According to the University of Cambridge (https://ccaf.io/cbeci/index), Bitcoin currently consumes about 150 TWh of electric power per year—about as much as Poland or Egypt—and the consumption trend is clearly rising. Most of the power consumption is attributable to “mining”, the calculation-intensive process of “minting” a new Bitcoin by solving complex mathematical problems, a process upon which the entire currency system is based. According to Digiconomist, the carbon footprint of a single Bitcoin transaction equates to about 1200 kg of carbon dioxide, comparable to 2.7 million Visa transactions or 203,000 hours of watching YouTube. A Harvard Business Review article challenges claims like that, but acknowledges that Bitcoin does consume a lot of power.
Of course, greenhouse gas emissions are not necessarily proportional to electricity consumption; the climate impact depends on how the electricity is generated. If Bitcoin mining were done in places where hydroelectric and solar power dominate, there would be little concern, but much of the mining is done in China, where coal burning is the primary way electricity is generated.
Costs of climate changes due to greenhouse gas emissions are becoming impossible to ignore. Since 1997, average global temperatures have consistently exceeded the 20th century average, and the 10 hottest years on record have all occurred since 2013. The higher temperatures are causing visible changes: shrinking glaciers and polar ice caps, melting permafrost, increases in extreme weather events (droughts, floods, hurricanes, tornadoes, extreme heat, extreme cold), changes in rainfall patterns, rises in sea levels, and climatic shifts that will drive many flora and fauna to extinction. Regions that used to have well-defined fire seasons now experience catastrophic wildfires year-round.
In the Himalayas, in the Indian province of Uttarrakhand (just west of Nepal), a hanging glacier broke off on February 8, 2021 and dammed a river, causing a devastating flood that killed over 100 people and wiped out a bridge and a hydroelectric dam. Meanwhile, shrinking glaciers have led to decreasing overall water flows in Himalayan rivers, leading to shortages of irrigation water in the state of Punjab, known as India’s breadbasket due to the importance of its agricultural production. The shortages threaten livelihoods of Punjabi farmers, and also increase India’s dependence on imports of key staples like wheat, rice and cotton.
As bad as these problems are for India, the bigger picture is far worse. Major rivers serving a vast swath of Asia, from the Indus in the west to the Yellow, Yangtze, and Mekong in the east, all originate in the Himalayas and are showing declining flows. The resulting water shortages will directly impact billions of people, causing increasing conflicts, migration, and other bad consequences.
I’m not suggesting that all these problems can be blamed solely on Internet usage or cryptocurrency, but it’s important that we recognize the impacts these technologies have when viewed as part of a greater system. Hopefully, having greater awareness will lead us to be more thoughtful about our usage, and to push for changes in how the technologies are powered so that climate impacts are greatly reduced.
Hidden Costs of Free News
A few decades ago, if you wanted to keep up with current events, you’d read a newspaper, listen to the radio, or watch TV news broadcasts. Nowadays, a large proportion of people are getting their news on the Internet, mostly through free aggregator services like Google News or Facebook. Of course, though you don’t pay directly for those services, they have costs, and the sites that deliver the content to you cover those costs through advertising.
Because so many people have moved from traditional news media to the unpaid services, the advertising money that used to pay for the traditional news media is now collected by the news aggregators, who don’t pay the news generators for the content they create. Revenues at traditional media outlets have plummeted over the past two decades, leading to severe cutbacks in staffing, coverage, and overall quality. Hundreds of independent local newspapers have shut down, leading to a proliferation of “news deserts”—areas that have no coverage of local topics of importance to residents, such as analysis of governmental proposals or investigations of elected officials. Major consolidations among the surviving news generators has led to greater use of the same news content across broad geographies—again as a cost-cutting measure—and news consumers are deprived of the opportunity to hear multiple perspectives and opinions.
With all the cutbacks, the jobs of professional journalists have come under threat. The news that you get is being produced by fewer and fewer people, and the amount of high-quality journalistic research behind the news is declining. Much of what is now posted on the Internet as “news” is the work of amateurs who lack the training and discipline to vet content, confirm sources, and ensure that what is reported is as reliable as possible. Our ability to trust news reports is declining.
Another trend that’s making matters even worse is the phenomenon of “filter bubbles”: the narrowing of news feeds for individual consumers such that they receive ever-smaller sets of topics and perspectives. Driving this trend is the profit motive; news aggregators are motivated to keep you on their sites as long as possible, so that they can maximize revenue from advertising. Using complex (and quite opaque) algorithms to process information about you collected on their site and across the Internet, they serve you content that is most likely to keep you engaged. Every article you click on adds?detail to their profile of you, and increases the likelihood that they will serve you similar content in the future.
What we lose from this hyper-personalization of news is a shared understanding of reality as a basis for rational conversations and informed debate. If we can’t even agree on a common set of facts from which to start a discussion, it’s clear why political polarization has increased significantly in the 21st century. Such polarization leads to rifts that can weaken society and increase the risk of turmoil.
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Addressing these issues will not be easy. Few consumers will pay for content when they can access similar content for free; many news outlets tried erecting paywalls, only to find that consumers simply went elsewhere for news. The U.S. Congress is considering legislation that would require aggregators to pay fees to news generators for use of their content, but even if such a law gets enacted, news generators wouldn’t recover anything close to the revenues they’ve lost in recent years, and the issues related to news deserts and filter bubbles would still persist. It’s unrealistic to hope that consumers will somehow look beyond what’s fed to them and seek out news sources that present alternative views; consumers tend to do what’s easy, and confirmation biases will tend to make them reject information that conflicts with their worldviews.
One organization, Allsides.com, is attempting to address the filter bubble problem by showing how left-leaning, right-leaning, and centrist media sources present the same headline stories in current news. Allsides was founded in 2012, and strives to avoid influences that could drive it in any particular direction; what’s not clear is now much impact it has been having on the news bubble problem.?
Ultimately, the future of journalism will be driven by the choices made by consumers—for better or worse.
Societal Costs of “Lowest Price” Retail Stores
The U.S. retail landscape has changed significantly over the past two decades. Price-focused retail chains like WalMart and dollar stores have grown dramatically and gained market share by undercutting prices of other retailers. They have minimized their costs not only through economies of scale and operational efficiencies, but also by shifting costs to external entities in ways that smaller retailers cannot:
As these price-focused retail chains have grown, they have forced many small local retailers out of business, reducing the choices available to consumers. Decent-quality full-time local retail jobs with benefits have been replaced with low-wage, part-time retail jobs with few or no benefits. Good-quality jobs in on-shore manufacturing have been lost, replaced by low-quality jobs in other countries. And taxpayers now subsidize the preferential treatment of major retailers by local governments, as well as the healthcare costs of low-paid employees who do not get employer-sponsored healthcare. Overall, the benefits consumers gain by availability of low-priced goods are often accompanied by very high costs to society overall.
Ironically, many people who complain about the loss of good manufacturing and retail jobs in America frequently shop at the discount chains “to save money”, and either fail to see or choose to ignore the connection between their shopping choices and the lost jobs they lament.
Societal Costs of Online Shopping
Another major change in the retail world is the rapid growth of online shopping, a trend that was greatly accelerated by the COVID-19 pandemic. On-line retailers have brought new levels of choice and convenience to shoppers, along with competitive prices; consumers are no longer limited to retailers within their own geography, and don’t need to leave their home or office to shop. If all you look at is the buyer’s experience, it’s amazing and wonderful, but there are definite negatives when you look at the bigger system.
Some negatives that are fairly obvious are direct consequences of switching from in-store shopping to home delivery: increased traffic and pollution from all the individual delivery trips, a significant increase in the amount of packaging materials consumed, and significantly greater volumes of packaging waste. Other obvious impacts are the price pressures put onto local retailers, who often cannot compete effectively with online businesses.
Many other negatives are a result of the rise of Amazon to dominance in online retailing. Its dominance as not only a direct retailer, but also as a platform for other retailers, has given it unprecedented market power. Every retail business now has Amazon as a competitor—a daunting competitor that sets the rules of competition.
The growth of Amazon has led to replacement of many jobs in retail sales, shipping, and distribution with warehouse and delivery jobs in the Amazon ecosystem. Though Amazon pays better than the discount retailers discussed in the previous section, abundant news reports indicate that the quality of those Amazon jobs is questionable. The company demands extremely high throughput from workers, lest they be fired, and many cases of injuries and burnout from stress have been reported.
Like WalMart, Amazon has used its market power to pressure municipalities into give it preferential treatment as enticement to set up facilities (and thus create local jobs). When Amazon requested proposals for a location for its second headquarters, states and cities clambered all over each other trying to create the most enticing deal. One hypothesis suggests that Amazon had already largely decided on the greater Washington D.C. area before the bidding began, and used the process mainly to collect information on how far different local governments would go to entice Amazon to set up facilities in their jurisdiction.
But Wait — There’s More!
In Part 3 of this series, I discuss systems thinking as applied to the COVID-19 pandemic, to some chronic problems faced by people in low-income countries, and to the interactions between the elements that make up a healthy forest.
Jim Schibler leads product management teams that deliver software experiences customers love, and he coaches professionals on job search and career management. He writes on a broad range of topics; see more of his articles at his website.
Copyright ? 2022 ?Jim Schibler — All rights reserved
Image credits: Untitled Mobile by Alexander Calder courtesy Widewalls.ch; Server Room courtesy NYC DOITT at flickr.com; Bitcoin Energy Consumption Index chart courtesy Digiconomist.net; Coal Power Plant at Lengshuijiang, Hunan courtesy Wikimedia Commons; Uttarrakhand Flood courtesy AP; Himalayan river basins courtesy National Geographic; Newsstand courtesy Gerd Altman at Pixabay.com; Always Low Prices courtesy Katherine Johnson at flickr.com; Going Out Of Business courtesy Jonathan Cutrer at flickr.com; Amazon Packages courtesy Amazon.com.