Adam Smith

Business & International Security

May, 2009

It was the first week of my first semester at MIT. At the time every class was full of excitement from the pass/fail grading, new friends, and fresh love interests. I went to my political science class, American Foreign Policy, and this one was no different. I spotted the cute girl from my dorm and took a seat.

The brilliant aprofessor, Stephen Van Evera, started talking about political science as a science. It’s a different kind of science, he said. In contrast to physics or chemistry, we’re dealing with:

  • Low “n” (few data points),
  • We cannot perform experiments,
  • Our independent and dependent variables are often qualitative, and not to mention
  • If accidents, personalities, and serendipity shape history, how can general theories explain the past?


“Consider Annie Oakley’s central role in world history,” our notes said. Annie Oakley was a famed rifle shooter; probably the best in the world in the early twentieth century. She was in Europe and Kaiser Wilhelm of Germany challenged her to shoot out a cigarette he was going to put in his mouth. She hit it right on target but supposedly regretted for the rest of her life not taking him out. He was largely responsible for World War I.

In such a science we’re basically left with history to learn from, and history is noisy. It’s a primitive science.

 

I noticed a parallel when watching Steve Ballmer’s talk to Stanford student entrepreneurs. Ballmer was talking about business strategy and mentioned a case study about the Kodak-Polaroid wars in the 1970s:

We studied some case about Kodak and Polaroid. And it talked about what the market leader should do versus the weak number two player in terms of how you vary cost and investment, and expenses and business models. I still quote from the darn case all the time to our people in high share businesses and our people in low share businesses.


It’s an interesting case. If you read it, think through your thoughts and then you can read on the web about what actually happened after 1976 where the case study leaves off.

But more than not I get the sense that business strategy and international policy are both hard.

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