(Roughly) Daily

Realizing an institution is near failure is a difficult epistemic problem. There are many outwardly visible pieces of institutions that do not reflect their actual health.

Before the collapse of financial institutions starting in 1929, naive observers were optimistic on the basis of soaring stock prices. Even after the Black Tuesday stock market crash, most observers expected a normal depression and recovery. Instead, the system continued to deteriorate, bank failures wiped out savings, the gold standard was abandoned internationally, and the Great Depression ensued.

Particularly in mature organizations, many automated systems handle tasks. Such systems can persist and even fulfill their function, while the institution as a whole is failing.The default is decay, maintenance of old abilities is difficult, and growth of new abilities is rare. One must look at what features of an institution indicate the current health of the core organization itself, while carefully distinguishing these from features reflective of past health and support from outside institutions.

From these signs, it’s possible to discover whether an institution has the ability to face new threats or is merely trudging through a slow process of decay. If an institution is unable to adapt to meet new challenges, it will lose again and again. Enduring defeat can only last for so long, no matter how large or well established the retreating organization. Eventually the inability to win dooms all institutions…

Samo Burja (@SamoBurja), from whom we’ve learned before, on the future of the social, political, commercial, and cultural organizations on which we depend: “Institutional Failure as Surprise.”

See also: “How Do You Know If You’re Living Through the Death of an Empire?” (Spoiler alert: it’s the little things…)

* P.J. O’Rourke, Parliament of Whores

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As we think systemically, we might recall that it was on this date in 1912 that the RMS Titanic, a state-of-the-art steamship, set sail from Southampton on its maiden voyage, bound for New York City.  Four days later, after calls at Cherbourg in France and Queenstown (now Cobh) in Ireland, the “unsinkable” Titanic collided with the iceberg that sent it under in the North Atlantic, 375 miles south of Newfoundland.

RMS Titanic leaving Southampton

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