Musings on Strategy, Tactics, and the LFPR

Much of today's economic confusion, concerns individuals who aren't certain how they might expect to be meaningfully employed in the near future. Yet much of this particular discussion has been derailed, given the positive statistics which suggest we're in a good place economically. Many are convinced that societies can ultimately adjust to increasing automation without substantive unemployment issues, just as has occurred in the past. After all, why would discussions about unemployment be relevant, if corporations are having problems finding suitably skilled employees?

Labour force participation "facts" often depend on where one is actually standing, and yet these logistical issues are part of a larger structural story which is not yet well understood. One can almost imagine an economy which "cries out" for more dynamic markets that actually serve as sources for wealth origination. In spite of all the statistical "good news", we could all breathe easier if there were even one plan B waiting in the wings, as protection for unforeseen economic problems.

All too often, societies lack adequate means to respond when substantive economic issues come to the fore, and such moments are often notorious for quickly changed economic circumstance as well. Once real problems do arise and become evident to all, it's difficult at this point to "think straight" in terms of a well considered response. Given the fact we need strategies that are macroeconomic in nature, far more is involved than simply the logistics of time and place. This is a historical moment when we need to take a closer look at what we actually consider to be wealth, which is why monetary policy is also such an important part of the process. Almost the entire twentieth century served as a preparatory phase for the kinds of work many individuals imagined was actually possible to achieve.

A recent post from Farnam Street, "Strategy vs Tactics: What's the Difference and Why Does it Matter?", triggered my own musings. Shane Parrish writes:

In order to do anything meaningful, you have to know where you are going...Strategy is overarching plan or set of goals. Changing strategies is like trying to turn around an aircraft carrier - it can be done but not quickly. Tactics are the specific actions or steps you undertake to accomplish your strategy.

He continues:

Whatever we are trying to do, we would do well to understand how strategy and tactics work, the distinction, and how we can fit the two together. Without a strategy, we run the risk of ambling through life, uncertain and confused about if we are making progress toward what we want. Without tactics, we are destined for a lifetime of wishful thinking or chronic dissatisfaction.

Strategy revisions become necessary, once a given path is no longer straightforward. However, thus far re economic uncertainties, we've mostly discussed a range of policy tactics (such as UBI and public assistance as an option for the already employed) which not only contradict one another politically, but lack any coherent long term strategy. Again, Parrish:

To achieve anything we need a view of the micro and the macro, the forest and the trees - and how both perspectives slot together. Strategy and tactics are complementary. Neither works well without the other. Sun Tzu recognized this two and a half millennia ago when he stated, "Strategy without tactics is the slowest route to victory. Tactics without strategy are the noise before defeat." We need to take a long-term view and think ahead, while choosing short-term steps to take now for the sake of what we want later.

Let's hope that tactics presently being bandied about by governments in general, won't just be the "noise before defeat". Meanwhile, in the U.S. we're mostly left with the usual suspects arguments how government can alleviate low labour force participation via policies discouraging economic dependence, while others continue to hope governments will be able to reimburse those who lack sufficient economic access.

Parrish also mentioned Richard Rumelt ("Good Strategy, Bad Strategy") who wrote, "A good strategy doesn't just draw on existing strength, it creates strength". When thinking about economic uncertainty, Rumelt's insight also helps to explain why new forms of wealth creation are so important - not just to generate a rising labour force participation level, but also to reduce our long run fiscal burdens. The connection between fiscal realities slowly spiraling out of control, and the fact many of us go too long in our lives without meaningful economic connections, has become too important to miss.

Perhaps we're also left without any coherent strategy, since so many of us became worn down from competing theories and mountains of "war chest" statistics after the Great Recession. Like others, I became overwhelmed by statistics in particular - so much so that it finally became difficult to think about employment issues on those terms. Even authors who spoke so eloquently about the need for broad strategies, such as Charles Handy in "The Hungry Spirit" and Ryan Avent in "The Wealth of Humans", weren't able to generate a sustained public dialogue. Not only have many observers long since "moved on" from these discussions, our growing fiscal burdens didn't became a constructive part of the debates. Perhaps it's the fact no coherent long term strategies were created, that we've ended up with political leaders ready to claim victory from tactics which are just protectionist enough to add to the cost burdens of general equilibrium. Let's hope those additional costs for getting things done, aren't mistaken for renewed economic dynamism.

It's perfectly understandable that people grew weary of debating long term economic strategies. At times I've felt just as overwhelmed, as anyone. That said, the political climate is increasingly in tatters, since we gave up on the process in the very years when everyone still had the impetus to take constructive action.