(2018-07-09) Burja Functional Institutions Are The Exception

Samo Burja: Functional Institutions are the Exception. Within nearly every institution larger than a dozen people, insiders feel resigned about how hard it is to get things done. They complain, but don’t expect improvement. They maintain a coordinated competence only barely above the level necessary to keep the institution in existence.

Unprofitable companies and declining nations often last longer than their critics remain solvent.

in any given type of institution, be it state or church, for profit or non-profit, there are some organizations that outperform all others by orders of magnitude

An elegant explanation for this phenomenon is that everything is broken. When something works the way it should, it appears exceptional.

The machinery, if it functions, was assembled by someone with good judgment: the institution’s founder. (great founder theory)

The institution was also probably assembled properly from the start, rather than made functional over time.

This is not to say, however, that fixing dysfunctional institutions is impossible. A talented founder can do it, but it is hard. It is difficult enough to found a functional institution in the first place; to refound one, a founder must first defeat those opposing him in such a one-sided way that he establishes peace—a peace in which he can build—and then he must build well.

Most institutions are broken

Often, however, such as in education or medicine, this doesn’t appear to be the case. From afar, the institution looks functional.

Appearances are deceiving. The reality, under the organization’s facade, is by default one of a poorly run social club—a group of people with a no stronger drive than to fulfill some of their social needs.

In such an institution, efforts don’t multiply each other, but merely accumulate linearly. The sum of this activity is a noticeable but very weak optimization force.

When there appears to be an outgrowth of impressive order without impressive results, it is often a deception, though sometimes impressive results might not be immediately obvious. Depending on the scale, this deception is sometimes maintained by charismatic individuals, or by a smaller and less impressive order of coordinated deception.

The order around us is also fragile and often more an illusion than a reality.

Areas that rely only on the police for safety tend to be dangerous.

Why are there so few true founders that can assemble good institutional machinery? There are many preconditions, but I think the key one is planning, defined here as considering your actions in advance and improving the entire sequence, rather than just thinking one step at a time. Successful planning is the exception rather than the rule.

much of the thought we do engage in is about making other humans treat us nicely or give us the things we want, rather than about discovering what is true

Thus, the “plans” we do make are not maps of actual future action towards the goals they claim to have. Rather, they become an agreed-upon lie, aimed at solving the immediate political problems of the people collaborating.

How we control coordination costs

Uncertainty about people’s behavior is an obstacle to local planning. How can we overcome it without paying the high cost of deeply understanding others? We can sometimes work around the obstacle by simplifying our behavior.

One example is what is usually called professionalism, another would be courtesy, another, the notion of being law-abiding. The most developed form is virtue.

Politics? In such high-stakes contexts, where misplaced trust might cost us everything, we are forced to proceed as if others do mean us ill. It is a failure of due diligence not to. An interesting result of social science research is that different societies rest at different equilibria of such trust between their members.

We also put effort into standardizing other humans, either by capture or manufacture, with measures like schooling and rewarding conformity.

if no other means suffice, people reach first for local politics, and then violence.

Our coordination costs are typically high, and we pay them in forms so familiar that they are usually not noticed.

A great man is someone with a secret and a plan.

Those who find secrets—that is, correct and special knowledge about the world—and have the ability to plan, possess the building blocks of the next great machine.