Tuesday, April 16, 2013

Understanding Organizational Stupidity

Shintaro Kago
Is it morning in America again, or is the bubble that is the American economy about to pop (again), this time perhaps tipping it into full-blown collapse in five stages with symphonic accompaniment and fireworks? A country blowing itself up is quite a sight to behold, and it makes us wonder about lots of things. For instance, it makes us wonder whether the people who are doing the blowing up happen to be criminals. (Sure, they may be in a manner of speaking—as a moral judgment passed on the powerful by the powerless—but since none of them are likely to see the inside of a jail cell or even a courtroom any time soon, the point is moot. Let's be sure to hunt them down once they try to run and hide, though.) But at a much more basic and fundamental level, a better question to ask is this one:

“Why are we being so fucking stupid?”

What do I mean when I use the term “fucking stupid”? I do not mean it as a term of abuse but as a precise, if unflattering, diagnosis. Here is as good a definition as any, excerpted from American Eulogy by Jim Quinn:
If you had told someone on September 10, 2001 that ten years later America would be running $1.5 trillion annual deficits, fighting two wars of choice in countries that despise our presence, and had not only not addressed the $100 [trillion] of unfunded welfare liabilities but added billions more with Medicare D and Obamacare, they would have thought you were a crazy doomster predicting the end of the world. They would have put you away in a padded cell if you had further predicted that politicians would cut taxes three separate times, that the Wall Street banks that leveraged themselves 40 to 1 and destroyed the financial system [would be] handed $2 trillion of taxpayer funds so they could pay themselves multi-million dollar bonuses, and that the Federal Reserve would triple its balance sheet to $2.45 trillion by running its printing presses at hyper-speed and handing the money to those same Wall Street Mega-Banks.
Well, the evidence is in, and that crazy doomster in his padded cell has turned out to be amazingly prescient, so perhaps we should listen to him. And what would that crazy doomster have to say now? I would venture to guess that it would be something along these lines:
There is no reason to think that those who failed to take corrective action up until now, but remain in control, will ever do so. But it should be perfectly obvious that this situation cannot continue ad infinitum. And, as a matter of general principle, things that can't go on forever—don't.
Back to the question of stupidity: Why are we (as a country) being so fucking stupid? This question has puzzled me for some time. It appears that the problem of stupidity is quite pervasive: look at any large human organization, and you will find that it is ruled by stupidity. I was not the first to stumble across the conjecture that the intelligence of a hierarchically organized group of people is inversely proportional to its size, but so far the mechanism that makes it so has eluded me. Clearly, there is something amiss with hierarchically organized groups, something that causes all of them to eventually collapse, but what exactly is it? To try to get at this question, last year I spent quite a while researching anarchy, and wrote a series of articles on it (Part I, Part II, Part III). I discovered that vast hierarchies do not occur in nature, which is anarchic and self-organizing, with no chains of command and no entities in supreme command. I discovered that anarchic organizations can go on forever while hierarchical ones inevitably end in collapse. I examined some of the recent breakthroughs in complexity theory, which uncovered the laws governing the different scaling factors in natural (anarchically organized, efficient, stable) systems and unnatural (hierarchically organized, inefficient, collapse-prone) ones.

But nowhere did I find a principled, rigorous explanation for the fatal flaw embedded in the very nature of hierarchical systems. I did have a very strong hunch, though, backed by much anecdotal evidence, that it comes down to stupidity. In anarchic societies whose members cooperate freely, intelligence is additive; in hierarchical organizations structured around a chain of command, intelligence is subtractive. The lowest grunts or peons are expected to carry out orders unquestioningly. Their critical faculties are 100% impaired; if not, they are subjected to disciplinary action. The supreme chief executive officer may be of moderately impaired intelligence, since it is indicative of a significant character flaw to want such a job in the first place. (Kurt Vonnegut put it best: “Only nut cases want to be president.”) But beyond that, the supreme leader must act in such a way as to keep the grunts and peons in line, resulting in further intellectual impairment, which is compounded across all of the intervening ranks, with each link in the chain of command contributing a bit of its own stupidity to the organizational stupidity stack.

I never ascended the ranks of middle management, probably due to my tendency to speak out at meetings and throw around terms such as “nonsensical,” “idiotic,” “brainless,” “self-defeating” and “fucking stupid.” If shushed up by superiors, I would resort to cracking jokes, which were funny and even harder to ignore. Neither my critical faculties, nor my sense of humor, are easily repressed. I was thrown at a lot of special projects where the upside of being able to think independently was not negated by the downside of being unwilling to follow (stupid) orders. To me hierarchy = stupidity in an apparent, palpable way. But in explaining to others why this must be so, I had so far been unable to go beyond speaking in generalities and telling stories.

And so I was happy when I recently came across an article which goes beyond such “hand-waving analysis” and answers this question with some precision. Mats Alvesson and André Spicer, writing in Journal of Management Studies (49:7 November 2012) present “A Stupidity-Based Theory of Organizations” in which they define a key term: functional stupidity. It is functional in that it is required in order for hierarchically structured organizations to avoid disintegration or, at the very least, to function without a great deal of internal friction. It is stupid in that it is a form intellectual impairment: “Functional stupidity refers to an absence of reflexivity, a refusal to use intellectual capacities in other than myopic ways, and avoidance of justifications.” Alvesson and Spicer go on to define the various “...forms of stupidity management that repress or marginalize doubt and block communicative action” and to diagram the information flows which are instrumental to generating and maintaining sufficient levels stupidity within organizations. What follows is my summary of their theory. Before I start, I would like to mention that although the authors' analysis is limited in scope to corporate entities, I believe that it extends quite naturally to other hierarchically organized bureaucratic systems, such as governments.

Alvesson and Spicer use as their jumping-off point the major leitmotif of contemporary management theory, which is that “smartness,” variously defined as “knowledge, information, competence, wisdom, resources, capabilities, talent, and learning” has emerged as the main business asset and the key to competitiveness—a shift seen as inevitable as industrial economies go from being resource-based to being knowledge-based. By the way, this is a questionable assumption; do you know how many millions of tons of hydrocarbons went into making the smartphone? But this leitmotif is pervasive, and exemplified by management guru quips such as “creativity creates its own prerogative.” The authors point out that there is also a vast body of research on the irrationality of organizations and the limits to organizational intelligence stemming from “unconscious elements, group-think, and rigid adherence to wishful thinking.” There is also no shortage of research into organizational ignorance which explores the mechanisms behind “bounded-rationality, skilled incompetence, garbage-can decision making, foolishness, mindlessness, and (denied) ignorance.” But what they are getting at is qualitatively different from such run-of-the-mill stupidity. Functional stupidity is neither delusional nor irrational nor ignorant: organizations restrict smartness in rational and informed ways which serve explicit organizational interests. It is, if you will, a sort of “enlightened stupidity”:
Functional stupidity is organizationally-supported lack of reflexivity, substantive reasoning, and justification (my italics). It entails a refusal to use intellectual resources outside a narrow and “safe” terrain. It can provide a sense of certainty that allows organizations to function smoothly. This can save the organization and its members from the frictions provoked by doubt and reflection. Functional stupidity contributes to maintaining and strengthening organizational order. It can also motivate people, help them to cultivate their careers, and subordinate them to socially acceptable forms of management and leadership. Such positive outcomes can further reinforce functional stupidity.
The terms I italicized are important, so let's define each one:

Reflexivity refers to the ability and willingness to question rules, routines and norms rather than follow them unquestioningly. Is your corporation acting morally? Well it doesn't matter, because “what is right in the corporation is what the guy above you wants from you.” The effects of this attitude tend to get amplified as information travels (or, in this case, fails to travel) down the chain of command: your immediate superior might be a corrupt bastard, but your supreme leader cannot possibly be a war criminal.

Justification refers to the ability and willingness to offer reasons and explanations for one's own actions, and to assess the sincerity, legitimacy, and truthfulness of reasons and explanations offered by others. In an open society that has freedom of expression, we justify our actions in order to gain the cooperation of others, while in organizational settings we can simply issue orders, and the only justification ever needed is “because the boss-man said so.”

Substantive reasoning refers to the ability and willingness to go beyond the “small set of concerns that are defined by a specific organizational, professional, or work logic.” For example, economists tend to compress a wide range of phenomena into a few numbers, not bothering to think what these numbers actually represent. Organizational and professional settings discourage people from straying from the confines of their specializations and job descriptions, in essence reducing their cognitive abilities to those of idiot-savants.

Functional stupidity can arise spontaneously, because there are many subjective factors which motivate people within organizations to narrow their thinking to the point of achieving it. A certain amount of closed-mindedness can be helpful in furthering your career. It helps you present yourself as a reliable organizational person—one who would never even question the validity of the organizational or occupational paradigm, never mind stray from it. At the other extreme, your refusal to stray beyond a narrow focus may be prompted by feelings of anxiety, insecurity, and fear of jeopardizing your position. And while, just as you would expect, functional stupidity produces negative outcomes for the organization as a whole, it provides for smooth social functioning within the organization itself by suppressing dangerous or uncomfortable questions and by avoiding the awkwardness of calling into question the judgment of your superiors.

But such subjective factors are dwarfed by certain stupidity-generating features of organizations. At their highest level, organizations tend to focus on purely symbolic issues such as “strong corporate cultures and identities, corporate branding, and charismatic leadership.” Corporate (and other) leaders try to project an identical internal and external image of the organization, which may have little to do with reality. This is only possible through stupidity management—the process by which “various actors (including managers and senior executives as well as external figures such as consultants, business gurus, and marketers) exercise power to block communication. The result is that adherence to managerial edicts is encouraged, and criticism or reflection on them is discouraged.”

As the people within the organization internalize this message, they begin to engage in stupidity self-management: they cut short their internal conversations, refusing to ask themselves troubling questions, and focusing instead on a positive, coherent view of their environment and their role within it. But stupidity self-management can also fail when the mismatch between the message and reality becomes too difficult to ignore, ruining morale. The suppressed reality (“The king is naked!”) can spread as a whisper, resulting in passive-aggressive behavior and deliberate foot-dragging all the way to sabotage, defections and resignations.

The functions of stupidity management are to project an image, to encourage stupidity self-management in defense of that image, and to block communication whenever anyone lapses into reflexivity or substantive reasoning, or demands justification. Communication is blocked through the exercise of managerial power. The authors discuss four major ways in which managers routinely exercise their power in defense of functional stupidity: direct suppression, setting the agenda, ideological manipulation, and fetishizing leadership. Of these, direct suppression is by far the simplest: the manager signals to the subordinate that further discussion will not be appreciated, threatening or carrying out disciplinary action if the signaling doesn't work. Setting the agenda is a more subtle technique; for instance, a typical ploy is to require that all criticisms be accompanied by “constructive suggestions,” placing beyond the pale all problems that do not have immediate solutions (which are the vast majority). Ideological manipulation is more subtle yet; one common technique is to emphasize action, at the expense of deliberation, as expressed by the corporate cliché “stop thinking about it and start doing it!” Finally, fetishizing leadership involves splitting each group into leaders and followers, where the leaders seek to make their mark, whatever it takes, and to get promoted quickly. To do so successfully, they must suppress the critical faculties of those around them, compelling them to act as obedient followers.

Functional stupidity is self-reinforcing. Stupidity self-management, reinforced using the four managerial techniques listed above, produces a fragile, blinkered sort of certainty. By refusing to look in certain directions, people are able to pretend that what is there does not exist. But reality tends to intrude on their field of perception sooner or later, and then the reaction is to retreat into functional stupidity even further: those who can ignore reality the longest are rewarded and promoted, setting an example for others.

But the spell can also be broken when the artificial reality bubble protected by the imaginary film of functional stupidity is punctured by a particularly contradictory outcome. For an individual, the prospect of unemployment or the end to one's career can produce such a sudden realization: “How could I have been so stupid?” Similarly, entire organizations can be shaken out of their stupor by a painful fiasco that subjects them to a barrage of public criticism. Public hearings in which industry leaders are forced to appear before government committees and answer uncomfortable questions can sometimes serve as stupidity-busting events. A particularly daunting challenge is to pop the functional stupidity bubble of an entire nation, since there is no public forum at which objective outsiders can force national leaders to take part in a substantive discussion. Bearing witness to the fast-approaching end of the nation as a going concern may be of help here. How could we have been so fucking stupid? Well, now you know.

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void_genesis said...

I have witnessed this to a highly developed degree in research groups. Such groups rely on securing funding by finding a niche in a particular area of study and developing a story justifying why the research in important.

Suffice to say I learned the hard way the consequence of suggesting experiments that could only give results that would damage the justification for doing the work in the first place, but are necessary to demonstrate if an idea will actually work. This kind of approach means that enormous resources are wasted because no expert has an incentive to critically test their own pet theories.

John Hemingway said...

Very interesting, bravo!

Andy Brown said...

Wow, that's a pretty convincing analysis. It does more to describe our predicament than anything else I've come across. To the extent those of us on the outside actually look around and try to grasp what's going on in our country (and can you really blame the majority of people for NOT doing so -- after all there's very little upside to it) we see an array of shambling, idiot behemoths (the Washington power elite, the military, the media corporatocracy, the banks and multinationals, etc.) who seem beyond all reason and accountability. Fucking stupid, as you say, and moving us inexorably to some future ruin.

Randall Collura said...

Thanks for another insightful post. I have been thinking a lot about the importance of ideology lately which is only partly related to corporate stupidity, perhaps more to governmental/national stupidity. We humans tend to be quite vulnerable to ideological indoctrination early in life - which is why many religions do their best to get us when we are young. The "my country can do no wrong" attitude comes from the same kind of early conditioning as well, I believe. A certain percentage of people will be more resistant to this ideological thinking and I would suggest that they are the ones who don't do as well in a corporate hierarchy either.

A more important question might be how maleable is this and other aspects of human nature? It seems that our educational systems are set up in part to ensure conformity - enhancing the tendencies towards obedience in a hierarchy and reenforcing ideology. One could argue that the mass media also serves to enhance the same goals either by design or practice. You state that "natural systems" are "anarchically organized, efficient, stable" which is true but national and corporate systems exist because they solve the "collective action" problem and can be quite efficient at achieving certain goals. So we have landed on the moon and explored our solar system only a few generations after the invention of the steam engine yet we also have massive wars and global pollution. The long term question is; can we ever construct systems and a society that can reap the benefits of efficient collective action without the associated stupidity?

Wolfgang Brinck said...

Having worked as an engineer in a number of businesses in size anywhere from a dozen people to GM, I have run into a good deal of this functional stupidity. The worst in my mind is the stupidity engendered in the brilliant leader e.g. Steve Jobs or Bill Gates. They are so brilliant as evidenced by the money their companies make that no criticism of their ideas is possible.
I would also like to point out another variety of organizational stupidity. I encountered this in a small private company that I worked for. The main reason for the company's existence was as a source of money for the owner to support his private airplane. The next most important reason for the company was to provide the owner's stupid relatives with jobs. As a consequence, everything we did had to be sufficiently simple not to challenge the stupidity of the friends and relatives that were employed there.
And I would like to suggest three hugely entertaining books that detail life in all its stupidity at the bottom of an organizational pyramid. All of them are in print. One is Rivethead: Tales from the Assembly Line by Ben Hamper. The others are by Charles Bukowski, Factotum and Post Office. What is interesting about these books is that they were written at a time when American industry was still going strong, but the stupidity that would eventually destroy it was already firmly engrained in the organizational structure.

Glenn said...

Hierarchies all move resources from the bottom to the top. When a new top floor is built using the bricks cannibalized from a lower floor, at some point the entire building becomes a castle in the air. And castles in the air will stay there only in cartoons and the common imagination of those who are building baseless towers and Ponzi schemes.

Wolfgang Brinck said...

The question we ultimately need to ask ourselves is not, how could we do this job smarter? but should we be doing this job at all?
Having been un/self employed for the last dozen years with financial help from my wife, I have the luxury of life outside of organizational pyramids where the question, "Why are we doing this?" never gets asked at least not at the levels that I worked at.
Capitalism as a way of organizing our society whether hierarchically or not is ultimately doomed not for going about the basic enterprise stupidly but because in pursuing its goal it depletes finite resources. Many people in America congratulate themselves on the collapse of the Soviet Union since to them it is proof of the superiority of the American system.
Capitalism may have had an edge over socialist schemes for organization but in the end, both the American and Soviet systems' approaches had the same net side effects, that is depletion of finite resources.
In my estimation, an anarchic approach to social organization would be better than an hierarchical approach only if it avoided the stupidity trap entirely, that is, by asking the question, should we be doing this at all, whatever this is. In the end, there is no virtue in doing a stupid thing smartly.

philsharris said...

I am thinking of European civilisation shambling towards stepwise catastrophe following the ‘progress’ and ‘reforms’ and increased ‘knowledge-base’ of the previous century – steam engines and all! One of course includes Russia, and I am thinking of pre-1914 and then of two world-wars and the rise of industrially powered tyrannies, and of the collapse of all European empires including the major world empire (Britain). (The issue of their replacement by a new hegemon and the re-arrangement of previous trading empires under new management in a ‘petroleum age’ merits continuing attention. The constructions of ‘stupid’ seem to have got a touch out of control.)

Phil H

vera said...

Brilliant. Here's a quote I've found pertinent: "A civilization based on authority-and-submission is a civilization without the means of self-correction. Effective communication flows only one way: from master-group to servile-group. Any cyberneticist knows that such a one-way communication channel lacks feedback and cannot behave intelligently." -- RAWilson

beetleswamp said...

glad to hear that you didn't get blown up at the marathon yesterday. I heard a great quote today: the best way to avoid getting killed in a terrorist attack is to find out when the next anti-terror training exercise is and get out of town.

Unknown said...

Dmitry, thanks yet again for the brain food. As thanks I have donated a portion of my meager finances in order to sustain you/me. Once your "collapse" ebook becomes available, I will purchase it as well.

Nate Mullikin said...

Unquestioning obedience may be a remnant of our bacteriological ancestry and it's penchant for throwing whole colonies into parasitic endeavors that kill the host. Star Trek's Veger description of human beings as carbon based infestations may not be too far off. We need to evolve new instincts.

Kevin said...

A fascinating article. It sets me to wondering whether stupidity may not also act in the organizational hierarchy rather as heavy metals do in the food chain, concentrating itself near the top of the pyramid. Leaders have ways of insulating themselves from unwelcome intelligence coming from beneath them, but perhaps instances of their own organizational stupidity reverberating back up at them suffer no such impediment. It might even be amplified as by an echo chamber.

latheChuck said...

Consider a biological analogy: independent, free-swimming microbes assemble into structures of specialized function, and in so doing improve their ability to exploit resources. Maybe it was "The Three Amoebos" who found that they could catch more food as a team, and stuck together in generations of increasing complexity until they could drill for oil and burn it in factory ships which strip the oceans of slightly-less complex organisms, such as tuna. The point is that specialization of function looks like "individual stupidity", but leads to collective reproductive success. That is, until it leads to disaster.

Perhaps it's time to introduce a younger generation to "The Peter Principle" (which states that, within a hierarchical organization, individuals will get promoted until they reach a level at which they are incompetent... and then they stay there). Or, "The Paul Principle", which says that if you stay in any job long enough, you'll become incompetent in place due to a failure to adapt to changing conditions.

We might also consider the fact that money is made in markets by having better information than your trading opponent. You can gain an advantage either "the hard way": by wide-ranging data gathering and deep analytic effort, or "the easy way": by broadcasting plausible but erroneous information for adoption by the opponent. (A third way is to have sufficient control over facts that you can create facts to suit your needs, as central banks do.) So, some of us are stupid because we are led to stupidity; some of us aren't quite so stupid as we appear, but act that way to lead the sheep astray. And some of us have the power to bring ruin upon the wise.

One more factor supporting stupidity, is the creation of a kinder, gentler society which does not punish stupidity when it first appears, but lets it persist for a generation or two until it's got some serious inertia.

Anonymous said...

What a gem today.

Cut and paste the article and your column, sign and date, and resign.

"free at last, free at last ..."

Unknown said...

Either I am lucky or I am not cynical enough. I work for a company where people often ask the sort of questions that may be a bit uncomfortable. It is OK to ask these questions. And as an engineer I am required to think outside the box and to ask questions.

I do not think it is easy to organize large number of humans to accomplish something that can not by done by individuals. It is never done perfectly. Some hierarchy is needed.
That said, there are plenty of examples of hierarchies getting out of hand, This phenomena has been described as Parkinson's Law

Kristiina said...

A gem of a post, thank you.

Some commentors have said it takes hierarchy to accomplish certain things. But then there's something called swarm intelligence. A pretty complicated system of lunch delivery in India is rather famous for this - no hierarchy. Of course, there's those algorithm applications but I don't know if there's any research/experimenting going on with human intelligence being applied in this manner. Amplifying intelligence. That would be a bit more interesting that amplifying stupidity. We know everything about that, it seems.

Unknown said...

While I agree that we should recognize and ridicule stupidity wherever it lurks we should also look at intelligence and the application thereof critically and objectively.

Cos it has not been all a bed of roses. At this point it seems pretty clear that the application of intelligence to any set of problems creates at least as many problems as it solves. For every advance humanity has made from the application of fire, the wheel to modern sciences has carried with it a further acceleration in the trend towards further expansion.

Expansion and competition seems to be hard wired in our biology giving those who succeed in it an advantage to those who do not, thus selectively breeding those who can keep the expansion going. That is until there is nothing more to expand into at which point the advantage goes to those that can survive without it.

Paradoxically I think the only hope there is for intelligence is that more of it is required to survice in a world that it creates then is required to create the world in the first place.

Kevin Frost said...

America has long been a land of true believers. A country whose core value is faith entails salesmanship as it’s core competency.

May I make a recommendation? I found a reading of the Chinese classics in Legalism very helpful enabling a different understanding of modern capitalism. I’m referring to the Lord Shang, translated with intro by J.J. Duyvendak and also the Han Fei tzu translated with intro by Wenkui Liao. The intros are helpful, but do read the texts or at least the first four or five chapters.

You often have occasion to reference hierarchical, large scale command structures as the problem at hand. These texts spell out with the most ruthless clarity the logic of how our enemies operate. I don’t think there’s really anything comparable in the long history of Western literature treating such like subjects. Especially for someone steeped within the ideas and ethos of writers like Prince Kropotkin I believe you will find these readings helpful.

Nick Novitski said...

This isn't the full story: the people at the top foster stupidity in the organization by promoting the stupid (or more specifically, the predictably committed to the organization over their personal welfare) in order to have useful pawns and lightning rods. It's the core of what Venkatesh Rao calls The Gervais Principle.

Anonymous said...

Hierarchy evolves as a way to spread the stresses evenly throughout the system.

Hierarchy is found in nature all over though is far less stupid than those made by humans.

The stupidity tends to show up when evolved hierarchies aren't allowed to die as all are intended to do.

See Constructal Law: http://en.wikipedia.org/wiki/Constructal_law

Gail Zawacki said...

There are just too many of us to function effectively and especially to deal with long-term threats, see Dunbar's Number.

And then, the human animal is obsessed with status seeking, which eliminates cooperation.

A little humor helps: http://www.youtube.com/watch?feature=player_embedded&v=A-rEb0KuopI

If you like that, check out his other video, "Man"

Stacey said...


And the most hilarious thing is that the ad at the bottom of my screen is offering "Undergraduate and Graduate Leadership Degrees!" at my local Catholic University. Niiiice.

Spaz Galore said...

I think these systems or institutions are increasingly self-selecting for sketchy values, universities and companies are full of liars and corporate benefactors, extensions of empire, and profit almost exclusively off of greed, fraud, fear, death, and debt, and no one says a word about because everyone is censored more than they know.

My unfortunate experience working for universities and several famous large corporations is that you are treated like a blue collar foot-soldier where not only is there no real education there is no empowered way to defend yourself if you piss off management, or if they take credit for your victories or blame you for any defeats, or if you default on student loans, etc.
Isolating culture.

Plus there is so much contracting going on where you can do a great job and people don't even think to offer you a reference. And if there are gaps in employment people are suspicious that you aren't an obedient automaton whose dream is to have a career for the sake of having a career.

Plus there isn't much cooperation going on these days in software teams from my experience. People test each other more and are more about securing a domain and reputation than teamwork or open environments. Although, I have had to take a lot of shitty jobs and I didn't always have the skills that I have now.

In biology the 2nd best product is willing to be more ruthless partly because they feel they have to among other things but also because it reflects sexuality which is about winning. Women like "winners and their resources to brag about" though they usually don't question the means. Yet, as Chris Hedges mentions the moral life is often hard and alienating leading to poverty. Some of us aren't about compromising morality for material gain at the expense of values. This attitude has cost me a lot of money being born into captivity.

forrest said...

Seriously, attributing the ongoing crash of the US social machine to "unfunded welfare liabilities" is not prescient, but absurd. First of all, what gets called 'welfare', even if it were entirely parasitic, is a minuscule inefficiency compared to the enormous dead weight, often actually pernicious, of what does get funded.

We'd all be better off if the people assumed to benefit from these 'liabilities' were both paid better and recruited into constructive activities (wherever possible) because they do buy real goods (rather than merely bidding up an unstable pyramid of 'investments' in financial scams.) As it stands, their main function is being targets for the misguided envy of people who are objectively better off than they... so scapegoating them as Quinn does here is just another contribution to the atmosphere of public stupidity you and he are decrying.

If you want to know where the resources are leaking out of the system: Look to where they have accumulated.

If the relevance of this was unclear the last time, how would you rather have me say it?

Dmitry Orlov said...


I think you are a bit confused. The "welfare liabilities" are actually old-age pensions that people paid for already but won't get because the money has been mis-spent, and a gigantic subsidy to the medical-industrial complex. In either case, it's about breach of contract between the people and their government.

forrest said...

Ah, thanks for clarifying!

"Liabilities" has an unfortunate usage as applied to human beings; while moneys defrauded from pension funds aren't precisely "welfare liabilities" so much as "stolen savings."

Anyway, said money is missing (though we've got some good hints where to look) and not likely to be repaid -- while I wouldn't bet that anyone currently employed would some day be able to live on his pension -- or his savings. Which is a problem, but isn't destabilizing the ongoing operation of the system except for those immediately affected.

The wars and medical-insurance subsidies are destabilizing -- in cost, scale, and sheer gall -- but hardly in the same category... while a government deficit is not in-itself dangerous, but the corruption involved in how & where the money gets used, and the power imbalance that comes of borrowing and paying interest (imagining that this somehow "covers" the cost instead of adding to it!) [It isn't bad to pull money out-of-the-air; John Law's land-based money was eventually turned into wastepaper by speculation, but so long as people were merely spending and accepting it, it permitted more people to buy things and more people to make them; so that the initial result was a period of prosperity, which did not necessarily "cost more" than the depression France might have remained in otherwise. While economists are definitely good examples of institutionalized stupidity, this doesn't mean that laycritters' 'common sense' works much better.]

Sid said...

Hi Kollapsnik,

Are you familiar with John Gall's Systemantics? An early version is available here: http://www2.ece.ohio-state.edu/~fasiha/systemantics/#CH1.

More generally I think that this 'stupidity' function embeds itself in members of all societies as an instinctual 'adaptive' mechanism to tame what is otherwise an extremely powerful but also potentially very destructive force that is the human brain. Many if not most of the great so called 'geniuses' whether religious or 'scientific' have often been outside of their respective societies. As for 'stupidity' in science, have you read Wallace's 'Farce of Physics'?

P.S.(not sure what syntax you use for embedding links, so they are naked)

Sid said...

Hi again,

The Ro/Rs formula is certainly relevant to your thesis here:
(from: http://www2.ece.ohio-state.edu/~fasiha/systemantics/#CH1)

The observant Systems-student will no doubt be able to supply a number of variant readings of the same Law, gleaned from the newspapers and his own observations of government officials, corporation executives, et al. The net effect of this Law is to ensure that people in systems are never dealing with the real world that the rest of us have to live in but with a filtered, distorted, and censored version which is all that can get past the sensory organs of the system itself.

Corollary No. 1:
A System Is No Better Than Its Sensory Organs.

This Corollary, the validity of which is crystal clear to you and me, is viewed with perplexity by the personnel living within the system. For them, the real world is simply what their intake says it is, and any other world is only a wild hypothesis. A true Systems-person can no more imagine inadequacy of sensory function than a Flatlander can imagine three-dimensional space.

Corollary No. 2:
To Those Within A System, The Outside Reality Tends To Pale And Disappear.

This effect has been studied in some detail by a small group of dedicated General Systemanticists. In an effort to introduce quantitative methodology into this important area of research, they have paid particular attention to the amount of information that reaches, or fails to reach, the attention of the relevant administrative officer. The crucial variable, they have found, is the fraction:


Ro equals the amount of reality which fails to reach the relevant administrative officer

Rs equals the total amount of reality presented to the system.

The fraction Ro/Rs varies from zero (full awareness of outside reality) to unity (no reality getting through). It is known, of course, as the COEFFICIENT OF FICTION.

Positive Feedback (P.F.) obviously competes with Reality (R) for input into th.e System. The higher the P.F., the larger the quantity of Reality which fails to gain entrance to the System (Ro) and the higher the C.F. In systems employing P.F., values of C.F. in excess of 0.99 have been recorded.[*] Examples include evangelistic religious movements, certain authoritarian governmental systems, and the executive suites of most large corporations.
[Footnote. In theory the C.F. may attain 1.00, but in practice removing the last shred of reality from the sensory input becomes increasingly difficult.]

A high C.F. has particular implications for the relationship between the System and an Individual Person (represented by the lower-case letter i).[*] We state the relationship as follows.
[Footnote. In mathematics, i represents an imaginary quantity.]

Corollary No. 3:
The Bigger The System, The Narrower And More Specialized The Interface With Individuals.

In very large systems, the relationship is not with the individual at all but with his social security number, his driver's license, or some other paper phantom.

In systems of medium size, some residual awareness of the individual may still persist. A hopeful indication was recently observed by the author in a medium-sized hospital. Taped to the wall of the nurses' station, just above the Vital Signs Remote Sensing Console that enables the nurses to record whether the patient is breathing and even to take his pulse without actually going down the hall to see him was the following hand-lettered reminder.

The Chart Is Not The Patient.

Unfortunately this slogan, with its humanistic implications, turned out to be misleading. The nurses were neither attending the patient nor making notations on the charts. They were in the hospital auditorium taking a course in Interdisciplinary Function. [*]
[Footnote. Interdisciplinary Function: The art of correlating one's own professional activities more and more with those of other professionals while actually doing less and less.]



Sid said...

Here is a link to a readable copy of the "Farce of Physics:

"I expect that the average scientist would agree with the
following argument presented by Dr. Michael A. Seeds:

...A pseudoscience is something that pretends to be a science
but does not obey the rules of good conduct common to all
sciences. Thus such subjects are false sciences.
True science is a method of studying nature. It is a set of
rules that prevents scientists from lying to each other or to
themselves. Hypotheses must be open to testing and must be
revised in the face of contradictory evidence. All evidence
must be considered and all alternative hypotheses must be
explored. The rules of good science are nothing more than the
rules of good thinkingÄÄthat is, the rules of intellectual
honesty.[8 p.A5]

This brings up an interesting question; Do scientists actually
practice what they preach? The evidence clearly shows that the
average scientist tends not to use the rules of good science. In
fact, it appears that Protestant ministers are inclined to have
more intellectual honesty than Ph.D. scientists. To document
this fact, I will quote from an article titled "Researchers Found
Reluctant to Test Theories" by Dr. David Dickson:

Despite the emphasis placed by philosophers of science on
the importance of "falsification"ÄÄthe idea that one of a
scientist's main concerns should be to try to find evidence
that disproves rather than supports a particular
hypothesisÄÄexperiments reported at the AAAS annual meeting
suggest that research workers are in practice reluctant to put
their pet theories to such a test.
In a paper on self-deception in science, Michael J. Mahoney
of the University of California at Santa Barbara described the
results of a field trial in which a group of 30 Ph.D.
scientists were given 10 minutes to find the rule used to
construct a sequence of three numbers, 2,4,6, by making up new
sequences, inquiring whether they obeyed the same rule, and
then announcing (or "publishing") what they concluded the rule
to be when they felt sufficiently confident.
The results obtained by the scientists were compared to
those achieved by a control group of 15 Protestant ministers.
Analysis showed that the ministers conducted two to three times
more experiments for every hypothesis that they put forward,
were more than three times slower in "publishing" their first
hypothesis, and were only about half as likely as the
scientists to return to a hypothesis that had already been



Lucas Durand said...

I recently came across this book "The Authoritarians":

It seems like "organizational stupidity" is enabled in both directions - top down and bottom up.
There appears to be an identifiable proportion of any population that seeks to submit to and support agressively "legitimate" hierarchies.
Not only that, such devoted followers seem to have an ingrained belief that everyone else should see things just like they do.

Awaiting the arrival of your book in my mailbox with anticipation...

David said...

"...Look at any large human organization, and you will find that it is ruled by stupidity... The intelligence of a hierarchically organized group of people is inversely proportional to its size, but so far the mechanism that makes it so has eluded me."

I know of one reason this happens. In any organization, there are members who don't like other members. The larger the organization is, the larger is the percentage of members who have personal dislike for some of the other members.

Organizations need internal communications to function properly. But the rivalries and animus between individuals sets up a conflict of interest in which crucial information is withheld, or not communicated in a timely manner, in the hopes that the person who is left out of the loop will screw up, look bad, and maybe get kicked out of his office.

When authority comes to investigate a problem, it usually does the easiest thing, instead of getting into the complicated actual cause. The boss just fires the guy who screwed up, and ignores the person, or persons, who made the problem inevitable by withholding vital information.

There's a variation on this idea. When several people don't like the same person, they will each contrive to have a "problem" with him. On Monday, one member of the conspiracy will go to the boss to say that the disfavored coworker had said a rude word. On Wednesday, another member of the conspiracy will report seeing the disfavored employee using the copy machine for personal reasons. On Friday, yet another member of the conspiracy will say that the disfavored employee has a naughty magazine in his desk drawer. And so it goes. The boss doesn't know that all of these reports are orchestrated and incorrectly assumes that he has only this one problem employee to deal with. He doesn't know that the FOCUS of the problem isn't the same as its CAUSE.

Peter said...

I'm sure the article you cite (and precis' here) has the right of the matter, as to _why_ organizations are inherently and inevitably stupid, but I don't think we need overlook the simple explanation that in ANY organization job #1 is to perpetuate the organization, and job #2 is to make things easy for those in positions of power within the organization--with the call for greater conditional ease (and comfort) being greater for those holding more power. Add to this Dr. Lawrence J. Peter's not-so-tongue-in-cheek-as-not-to-be-spot-on notion of promotion within an organization to Final Placement at one's natural level of incompetance, and I think we begin, as it were, To See.

Peter said...

I would also add, in response to Kevin Frost's remark, "...these texts [Lord Shang, Han Fei Tsu] spell out with the most ruthless clarity the logic of how our enemies operate...." the following: Having, like him, also read these texts, I suggest they lay out how ANY authoritarian system of governance operates--including (and especially) ours.

The only "enemies" I see that are "ours" I see--the ones which most stand to wreck us soonest--are the the enemies right here at home, in Washington, in the various State capitals around the nation, and in the high and worshipful halls of Corporate Office.

Note that I refer, here to a "system of governance" and not merely the right-wing's verbal bugaboo, "the government." In a world in which corporate meta-nationals wear governments like gloves (including our own), we need the larger term, with all that it implies.

Unknown said...

This post deserves an extended (maybe a few years)discussion. The problems it highlights are fundamental to our common future. In particular our ability to turn our present system around to cope with global warming in time seems slight in this context. But important.

A few comments on various aspects from one who is working on the critical role of information in creating and maintaining life, particularly living systems such as human bureaucracies.

1. Bureaucracies were invented to make things regular and predictable - to cure the ills of feudalism, which rested on the whims of aristocrats who inherited their offices and their privileges. In that regard it has worked perhaps too well. But it is smart to remember at least that older alternative.
2. Not all systems in nature are anarchic or chaordic, although all are self-organizing (or not, depending on your reading of Genesis). My understanding of the animal kingdom includes a central nervous system in each critter that makes decisions about more or less of its behavior. That stands in contrast to a regional ecosystem, for example, or a cell that may look like a scale-free network with some large hubs and many smaller centers - the same structure the internet has - or the system of world multinational corporations. So I am suspicious of that argument. Hierarchical systems, as you observe, are absolutely wonderful at preserving the routines that already exist.
3. Information itself seems to build hierarchical structures. Russel's comments in the Principia Mathematica about logical types pointed this out. Summaries and meta-messages (tags) are examples of this. So any organization that processes information, takes in indications of changes in its environment and summarizes a number of them (e.g., my nervous system reading the temperature of my room and transmitting messages to my brain) requires a hierarchy to make sense and then make the conclusions about how to deal with the changes. Information overload (was that by Miller?) screws up the ability of a system to interpret signals from its environment, and may even cause paralysis. Many or most of our institutions seem to suffer from that condition - e.g., the U.S. Congress. But since the universe may consist of information (where we thought it consisted of energy), we can expect our institutions to reflect that; it's built in.
4. You might be interested in the work of a wise writer who sees possibilities where you and I see hopelessness around this. Rob Abromowitz' blog, http://www.narrative-leadership.com/ explores his idea of narrative leadership - that in an institution both leadership and individual members are following stories that they have created about who they are and what they do. They may or may not match. Rabbi Rob's quest is to create ways to measure the differences, to bring them into alignment (for the sake of truth and happiness as well as corporate success), and to overcome stupidity. Like any experiment, this one is subject to verification. But in any case, I recommend reading what he has done so far.