Last week, one private company’s incompetent software upgrade caused massive breakdowns in the global economy. Airplanes were grounded, banks couldn’t function, and research labs and businesses had to pause their operations. The cause of the problem was not a cyberattack or terrorism but corporate incompetence. According to a report by David Streitfeld and Kate Conger of the New York Times:
“CrowdStrike, a Texas company, specializes in protecting corporate clients from cyberthreats. It has been very successful at this. This time, though, the threat came from CrowdStrike itself, a problem for which it seemed unprepared. The trouble began with a small Windows software update CrowdStrike sent to its customers on Thursday night. For some reason, this crashed every computer it touched… CrowdStrike likely failed to do its due diligence, programmers said. Trying the patch out on a variety of Windows machines before sending it out to customers could have helped detect the issue.”
Fortunately, the major impact was inconvenience and not death, although a few hospitals suspended some medical care because they could not access the records of their patients. What are the lessons of this little episode? One might be the need to allocate resources for redundant systems so that when one fails, there is a backup. Another might be our need to regulate software upgrades to require adequate testing prior to adoption. The corporate drive for efficiency and profit can lead to ill-advised shortcuts. Crowdstrike and Boeing are not outliers, although we don’t really know how typical they might be.
Redundancy or regulation adds to the cost of doing business, and even a casual review of the recent Republican convention should cause one to doubt the political feasibility of a regulatory solution. The political climate in the United States refuses to acknowledge the reality of global technological interconnectedness. The illusion of an isolated fortress America persists and is as strong as it has been since the 1930s. We are willing to accept the benefits of a global economy and focus on the imaginary rather than the real risks of global interconnectedness. We create myths about immigrant crime and the causes of deindustrialization instead of developing strategies to ensure we attract talented immigrants and build the competitive businesses of the 21st century.
Another actual risk of interdependence is cost-cutting corporations with massive economic power taking shortcuts that can cause a jet to fall from the sky, a toxic train to derail, or the global data system to collapse. The global economy causes some jobs to be exported, but far more jobs are created via globalism than are lost. It is true, however, that technological advances mean that many of the jobs created require new skills and education, and many Americans are left out of that growing economy. While public policy can help remedy that problem with job training, infrastructure funding, and better unemployment insurance, our politics and warped tax policy make it difficult to address the fundamental issues of technologically induced economic change.
The United Nations Development Program’s (UNDP’s) Human Development Report for 2023-2024 details the continued growth of the global economy and increases in global interdependency. According to that report:
“By some measures global interconnectivity is at record levels, even as the pace of economic integration stabilizes… Altogether, goods today travel twice as far as they did 60 years ago, and cross more borders, before final consumption. The production of smartphones, for example, looks nothing like last century’s assembly line. Various inputs, from mined cobalt on up to batteries and camera modules, crisscross the globe, sometimes retracing their steps and too often leaving avoidable social and environmental scars along the way. Global financial interdependence remains high, even if the pace of integration stalled somewhat following the 2007/2008 financial crisis… Cross-border flows of information break records every year. Digital services exports now account for more than half of global trade in commercial services.”
The share of Global GDP due to exports and imports has stabilized at over 50%. Nation-state sovereignty remains strong, ensuring that our interdependent global economy is not subject to any rules other than tariffs, unenforceable treaties, and the rule of the marketplace. This leaves us vulnerable to mistakes from cost-cutting or simple incompetence. The UNDP report notes the increase in warfare and immigration and discusses the growth of anti-globalization and mistrust of institutions. This distrust is well founded but puts us at risk of events like the computer meltdown we experienced last week.
Political polarization and the fact-free hunt for blame for economic failure characterize elements of American politics these days. The mistrust of institutions is compounded by the mistrust of science and expertise. We saw this with COVID-19 and the movement against vaccination, masks, and isolation. Some of this mistrust was due to overreach by scientists who refused to acknowledge scientific uncertainty fearing it would undermine their influence. Paradoxically, as scientific knowledge grew, and previous policy proposals were discarded, confidence in science declined due to the failure to be honest about uncertainty. The public correctly saw the inconsistency in scientific proclamations. (Remember six feet for social distance and wiping down surfaces for a virus that we later learned was transmitted through the air?) The visible signs of deindustrialization and its uneven distribution of costs and benefits further undermine confidence in institutions.
This search for blame for the injustices of the past has undermined our traditional faith in America’s future. David Brooks of the New York Times expressed it well when critiquing the MAGA mindset. According to Brooks:
“The American consciousness has traditionally been an abundance consciousness. Successive waves of immigrants found a vast continent of fertile fields and bustling cities. In 1910, Henry van Dyke, who later became the U.S. ambassador to the Netherlands and Luxembourg, wrote a book called “The Spirit of America,” in which he observed that “the Spirit of America is best known in Europe by one of its qualities — energy.” In the 20th century, Luigi Barzini, an Italian observer, argued that Americans have a zeal for continual self-improvement, a “need tirelessly to tinker, improve everything and everybody, never leave anything alone.” Many foreign observers saw us, and we saw ourselves, as the dynamic nation par excellence. We didn’t have a common past, but we dreamed of a common future. Our sense of home was not rooted in blood-and-soil nationalism; our home was something we were building together. Through most of our history, we were not known for our profundity or culture but for living at full throttle.”
“Living at full throttle” in the modern world requires engagement with the world, scientific literacy, and vastly improved civil society institutions. Isolationism, xenophobia, and conspiracy theories are antithetical to that engagement. To demonstrate the benefit of that sense of engagement, let’s compare the economic and cultural dynamism of New York City to the economic depression of parts of the industrial Midwest. In the 1960s and 1970s, New York City lost a million manufacturing jobs and nearly went bankrupt. But its government, unions, business leaders, and public came together to save the city. The energy and dynamism of New Yorkers could not be denied. Nor could our love of our hometown. We didn’t focus on the demise of the past two decades but on rebuilding the future. Central Park, Times Square, and many neighborhoods were revived. Industrial spaces became artist studios. Punk rock and hip-hop were born. Immigrants from other parts of the United States and other parts of the world brought their dreams and energy to the city, and our manufacturing city was transformed into today’s global service-based capital of the brain-based economy. Meanwhile, abandoned industrial towns all over the Midwest were starved of leadership, capital, and energy and lost faith in their institutions and themselves. This crime-infested dystopia I kept hearing about last week in Milwaukee bears little resemblance to the high-energy city I call home. While data was out of style at the Republican National Committee, here are the most recent facts of crime in New York City according to Rocco Parascandola of the New York Daily News:
“Through July 14, there have been 195 murders in the city, 15% fewer than the 230 in the city last year at this time. And the 580 people shot is a 9% drop from the 638 last year, with police seizing more than 3,600 guns this year alone. On top of that, subway crime, which spiked sharply during the pandemic, is down 15% since last June, with six straight months of double-digit decreases — though many New Yorkers remain worried about random attacks. The continuing problem of ghost cars — vehicles with fake or stolen plates — and unlicensed scooters and mopeds has been met with repeated enforcement operations that have led to the seizure of 5,200 vehicles.”
There is certainly crime in New York City, but let’s remember that in the early 1990s, over 2,000 homicides took place each year. The benefits of complexity and globalization are coupled with costs. We need to balance private enterprise with public policy to maximize the benefits and minimize the costs. The policy side must be pursued with humility and care, and the private side must be reminded at times of the public interest and the importance of the rule of law. We need to learn how to ignore the social media disinformation machine that presents an imaginary world where data and facts are replaced by moving and still pictures edited to destroy context and distort reality. Interdependence is central to our way of life, but it is fragile and can be disrupted by design, accident, or incompetence. Complexity cannot be managed by over-simplified bromides. It requires sophisticated, fact-based, strategic thinking and action. Our polarized politics seem incapable of producing this type of governance. Polarization is a luxury we can’t afford.
Views and opinions expressed here are those of the authors, and do not necessarily reflect the official position of Columbia School of Professional Studies or Columbia University.
About the Program
The Columbia University M.S. in Sustainability Management program offered by the School of Professional Studies in partnership with the Climate School provides students cutting-edge policy and management tools they can use to help public and private organizations and governments address environmental impacts and risks, pollution control, and remediation to achieve sustainability. The program is customized for working professionals and is offered as both a full- and part-time course of study.
