Where is Your Tent City?

I learned most of what I know about innovation during the 15 years I spent living and working in the former Eastern Bloc.  People are surprised when I tell them that and I admit, it’s a strange thing to say.

After all, the Soviet Union failed miserably.  It was a drab place, filled with heavy tractors and people with gray clothes and dour looks on their faces.  Innovation isn’t the first word that comes to mind.

However, while the system was crumbling, people still had to get things done.  They needed housing, food, electricity and means to entertain themselves.  Officially, these things weren’t a priority and the power structure put forth little effort to provide them. When leadership fails, innovation goes underground and people learn to hack to get by.

A Short Economic History of the Soviet Union

In 1956, at the height of the second red scare, Soviet Premier Nikita Khrushchev famously said, “We will bury you!”

He meant economically, of course, and he had good reason to be optimistic.  His country had achieved an economic miracle, moving from an agrarian to an industrial society in a single generation.  They had no Great Depression in the ‘30’s like the West had, economic output was growing and unemployment was nonexistent.

Yet things were not as they seemed.  Underneath, the system was crumbling. Economists now know that total factor productivity, the ratio of capital and labor to output had begun to fall in the 50’s and would become negative during the 70’s and 80’s, meaning that what they put into making a product would be worth less than what they got out of it.

That’s no way to run a society.  It was only a matter of time before the system collapsed under it’s own weight and, in the end, it didn’t matter how many tractors they built, because measuring total output doesn’t tell you whether you are building the right things or not.

Warning Signs

There were, of course, early signs of trouble, including the Hungarian uprising in 1956, the erection of the Berlin Wall in 1961, the Prague Spring in 1968 and the Polish Solidarity movement of the 1980’s, just to name a few.  To meet these challenges, Soviet military spending grew to almost 15% of GDP.

They fell prey to what is known as a “Hobbesian paradox.”  Any law that the majority of people aren’t voluntarily willing to follow is ultimately doomed, because enforcement costs exceed any benefit  When you have to expend enormous effort to keep your people in line and they, in turn, spend their days trying to break the yoke, very little gets done.

You have to wonder what would have happened if someone stopped and said, “Hey, it seems like we have serious problems that we need to fix,” and some did, including Khrushchev himself, but their first loyalty was to the ideal and the leadership as a whole was convinced that it would win out in the end.

They also had some successes they could point to; tanks put down the uprisings, the Berlin Wall kept the East Berliners from walking across the border, there were political triumphs in the third world and scientific achievements like Sputnik.  All of these things helped obscure the uncomfortable fact that core needs were not being met.

Hacking Things Together

Above all there were shortages.  Top officials could shop at special foreign currency stores, but most could not, so they had to find another way.  The Poles called it “kombinować” and it worked like this:

If you wanted to build a house and needed bricks, you couldn’t easily buy them, so you might get a bicycle instead.  You could then trade the bicycle to get some chocolates and bring those chocolates to the lady at the meat store.  With that invaluable extra ration of meat, you could get your bricks.  You then repeated the process for nails, wood, etc.

And so, in the end, you got your house built.  It was all an incredible waste of time and effort, but when there is no official way to get things done, people will go to great lengths to get what they need.  They learn how to hack the system and pretty soon, the system itself becomes a hack.

The Orange Revolution

I learned all of this second hand.  Some from researching the history of the region, but most over beer and vodka, listening to old stories my friends would tell me.  What struck me about the stories was how much fun everybody had scamming for toilet paper and other necessities.  In a world of absurdity, there is always room for laughs.

However, I did have the opportunity to witness a major historical event first hand, Ukraine’s Orange Revolution in 2004.  To the outside world it looked like this:
 

 
That’s the conventional view of a revolution, an inspirational leader unifying the people and driving them towards their objective.  However, the truth is that the leaders are often the beneficiaries, rather than the drivers, of the movement.  The real changes happen in places that look like this:
 

 
This was the tent city, which lay just down the street from the stage at Independence Square.  There were no celebrities there, nor were there speeches, just students in the freezing November cold, living in tents.  Many came and donated blankets, warm food and other things, but it was mostly a mixture of frustration and hope that sustained them.

It had started from a student movement called Pora, which was inspired by the Otpor movement that overthrew Slobodan Milošević in Serbia and the Kmara group that led to the Rose Revolution in Georgia.  While most of the country had just joined the revolution, the students had been organizing long before.

Anywhere you see immense change, somewhere lurking behind the scenes is a group of young revolutionaries on the fringe, meeting in anonymous, out of the way places.  Few care to look and history often forgets them.  Everybody knows Steve Jobs, hardly any have heard of the Homebrew Computer Club; LOLCats are famous, 4Chan is not.

Potemkin Villages and Tent Cities

In 1787. Catherine the Great travelled to visit Crimea by train.  Her adviser, Grigory Potemkin, had facades of villages built so that the new conquest would appear prosperous to his Empress as she travelled past.  It was that elaborate ruse that inspired the phrase “Potemkin village.”

The term has resonance because it points to a truth that we all know but often forget. Bosses want to see results and everybody wants to impress them.  However, it is often easier to create the illusion of success.  Tractors and railroads provide concrete output, but they often obscure the fact that people need to hack to survive.

And it is the hacking that produces change.  There is no plan to guide it nor a metric to evaluate it, because it arises when plans and metrics leave needs unmet.  People do what they need to get by, often under the guise of secrecy.  Leaders are always the last to know that their private carriages are passing by Potemkin villages.

So, if you want to create an innovation revolution, don’t go in search of a messiah, find your tent city instead.  You can be sure it is close by, but it is usually hiding, waiting to be set free.

– Greg