Posts Tagged ‘institutions’
“Individuals may form communities, but only institutions can create a nation”*…
Good institutions are social technologies that scale trust from personal relations to entire nations. Game theorist and social scientist Julien Lie-Panis unpacks the extraordinary phenomenon of human cooperation to explain how– and why– institutions work…
Every human society, from the smallest village to the largest nation, faces the same fundamental challenge: how to get people to act in the interests of the collective rather than their own. Fishermen must limit their catch so fish stocks don’t collapse. People must respect others’ property and safety. Citizens must pay taxes to fund roads, schools and hospitals. Left to pure self-interest, no community could endure; the bonds of collective life would quickly unravel.
The solutions we’ve devised are remarkably similar across cultures and centuries. We create rules. Then we appoint guardians to enforce them. Those who break the rules are punished. But there’s a problem with this approach, one that the Roman poet Juvenal identified nearly 2,000 years ago: Quis custodiet ipsos custodes? Who will guard the guards themselves?
Fisheries appoint monitors to prevent overfishing – but what if the monitors accept bribes to look the other way? Police officers exist to protect everyone’s property and safety – but who ensures that they don’t abuse their power? Governments collect taxes for public services – but how do we stop officials from diverting the funds to their own accounts?
Every institution faces the same fundamental paradox. Institutions foster cooperation by rewarding good behaviour and punishing rule-breakers. Yet they themselves depend on cooperative members to function. We haven’t solved the cooperation problem – we’ve simply moved it back one step. So why do institutions work at all? To understand this puzzle, we need to first ask what makes human cooperation so extraordinary in the natural world…
[Lie-Panis explores human cooperation, and examines the ways in which, while it follows the same evolutionary rules as cooperation among other species, humans have expanded the ambit of their coordination. He explains the ways in which institutions depend on “a present-future trade-off,” on its constituents’ patience as it works through problems. And he illustrates the ways in which constituents’ concerns with material security and social capital can generate that patience. He concludes…]
… Institutions can thus be understood as social technologies. We engineer them constantly, often without realising it. When neighbours organise to maintain a shared garden or playground, they appoint a small committee to manage funds and decisions. The arrangement works because it transforms the hard problem of coordinating dozens of contributors into the easier problem of trusting a few visible people who can be praised for diligence or blamed for misuse.
Like any tool, institutions cannot create what isn’t already there; they can only amplify existing cooperative capacity. Institutions rest on the conditions that make cooperation rational: material security and social capital. Where those conditions hold, reputation can work at scale. One layer of accountability supports the next, until cooperation extends far beyond the limits of familiarity. From the same force that binds vampire bats and coral reef fish, we have built cities, markets, and nations. Institutions are how trust is scaled to millions of strangers.
Eminently worth reading in full: “Guarding the Guardians,” from @jliep.bsky.social in @aeon.co.
Apposite (albeit a bit orthogonal): “Culture Is the Mass-Synchronization of Framings,” from @marco-giancotti.bsky.social.
* Benjamin Disraeli
###
As we get along, we might recall that it was on this date in 1938 that a film poking fun at a plethora of institutions, Howard Hawks’ comedy Bringing Up Baby, premiered at the Golden Gate Theater in San Francisco. Featuring Cary Grant, Katherine Hepburn, and a leopard, the film earned good reviews but suffered at the box office. Indeed, Hepburn’s career fell into a slump– she was one of a group of actors labeled as “box office poison” by the Independent Theatre Owners of America– that she broke with The Philadelphia Story (again with Grant) in 1940.
As for Bringing Up Baby, the film did well when re-released in the 1940s, and grew further in popularity when it began to be shown on television in the 1950s. Today it is recognized as the authentic screwball classic that it is; it sits at 94% on Rotten Tomatoes, and ranks among “Top 100” on lists from the American Film Institute and the National Society of Film Critics.
“A republic, if you can keep it”*…
Nathan Gardels on one of the deepest issues at play in the social and political sphere in the U.S and around the world…
It is a mark of just how deep the crisis of governance across Western democracies has become that conflict irresolvable through political competition is giving way to the reconsideration of founding constitutions and the institutions they invest with legitimacy.
At its heart, this crisis is about trust. As the political scientist Francis Fukuyama has argued, “Belief in the corruptibility of all institutions leads to the dead end of universal distrust. American democracy, all democracy, will not survive a lack of belief in the possibility of impartial institutions; instead partisan political combat will come to pervade every aspect of life.” And so it has.
The ongoing populist surge of recent years did not cause the crisis. It is a symptom of the decay of democratic institutions that, captured by the organized interests of an insider establishment, failed to address the dislocations of hyper-globalization, the disruptions of rapid technological change and the attendant creep of widening cultural cleavage. Too many were left behind and struggled while others prospered and played.
Adding danger to decay, the fevered partisans of populism are intent on throwing out the baby with the bathwater, assaulting the integrity of the very institutions which protect republics from themselves through checks and balances, or that are critical to the fair administration of complex societies. The rebellion against a moribund political class has become a revolt against governance itself and the infrastructure that goes with it.
Populists who fashion themselves as tribunes of the people have never met independent and impartial institutions they can happily abide. Believing they are the embodiment of majority will, any constraint on their power is portrayed as a contrivance by elites to keep the masses down. When cemented with cultural resentment against those at the top who look down on the unsophisticated rabble living in the sticks and outside the fashionable status sphere, anti-elitist sentiment has enough truth value to stick.
We’ve seen versions of this over recent years where the previous governments in Poland and Brazil, as well as the present government in Israel, have sought to politicize the top courts and limit their independence from the powers that be. Hungary under Viktor Orbán, an outright proponent of illiberal democracy, has done the same, seeking further to stifle independent media, think tanks and civil society organizations for good measure.
In Mexico, Claudia Sheinbaum, the president-in-waiting elected by a landslide earlier this year, has pledged to continue pursuing President Andrés Manuel Lopez Obrador’s plan for popular election of that nation’s Supreme Court, thus making its slant coincide with the interests of the ruling party. Sheinbaum, like her predecessor, is also bent on disempowering the independent electoral commission that oversees the polls and certifies voting outcomes.
With the U.S. Supreme Court already dominated by ultra-conservative judges, partisans of Donald Trump have turned their attention to slashing the powers of what it calls “the administrative state” — those agencies with the discretionary authority under legislative mandate to regulate private sector activities in realms from environmental impact to food and drug safety to publicly traded securities to the monopolistic conduct of large companies. Most of these agencies have been in place since the early 20th century as the Progressive Era’s response to the vast inequality, child labor, unsanitary industry, crony corruption and robber barons of the unregulated Gilded Age.
The aim of modern-day populists is to both diminish and politicize the regulatory technocracy to fit their agenda. The famous Project 2025 plan prepared by the Heritage Foundation in anticipation of another Trump presidency has gone so far as to propose the abolition of the National Oceanic and Atmospheric Administration — the key body monitoring climate change, which they don’t believe in. My colleague Nils Gilman aptly calls this endeavor “institutional vandalism.” [See here for a taste of Gilman’s sharp thinking on the more general issue at play.]
Though the Trump campaign has sought to distance itself from the details of Project 2025, which may scare sensible voters in the runup to the November election, few have any doubts that it provides the essential roadmap for action if Republicans come to power.
Following verdicts to overturn Roe vs. Wade on abortion, blunt the scope of regulatory agencies and codify presidential immunity, the realization of what a stacked Supreme Court means has prompted President Joe Biden to engage the battle over institutions head on.
As his last stand after bowing out of the presidential race, the president is embarking on a quixotic quest to undo the impact of recent rulings and seek a constitutional amendment to reform how the Supreme Court works. First, arguing that “no one is above the law,” he would repeal the presidential immunity recently granted and impose a “binding code of conduct” with strict ethics guidelines prohibiting political activity by justices and requiring transparent disclosure of gifts.
The core structural change of Biden’s proposal is to get rid of lifetime terms and limit them to 18 years, with staggered appointments every two years (when one of the terms expires) to avoid the enduring sway of justices chosen by one political regime and ideological persuasion. In short, a process which would perpetually unstack the highest court instead of invite and enable its stacking.
This is an uphill battle, for sure, since amending the constitution would entail a 2/3 vote of both houses of Congress and approval of ¾ of all state legislatures.
“Defend the institutions” is hardly a rallying cry that will stir the passions of the public in the same way as the instinctive appeal of demagogues who promise simple solutions to complex problems while blaming all misfortune on the world outside or perceived enemies within. But repairing and restoring the integrity of democracy’s infrastructure is the only path back to trust. That is a tall order in the short term.
Popular emotion is the Achilles heel of democracies. Institutions that temper emotion through the cool deliberation of disinterested reason are what make the system work to the benefit of all.
As Fukuyama rightly says, democracies can’t survive without at least a belief in the possibility of impartial platforms for the administration of justice and governance. That proposition will be tested as never before in the battle over institutions in the near years ahead…
A challenge to democracy’s infrastructure: “The Battle Over Institutions,” from @NoemaMag, with @FukuyamaFrancis and @nils_gilman.
* Benjamin Franklin’s response to Elizabeth Willing Powel‘s question in 1787: “Well, Doctor, what have we got, a republic or a monarchy?”
###
As we rally around the rudiments, we might recall that it was on this date in 1935 that President Franklin D. Roosevelt signed the Social Security Act, part of his New Deal program that created a government pension system for the retired.
By 1930, the United States was, along with Switzerland, the only modern industrial country without any national social security system. Amid the Great Depression, the physician Francis Townsend galvanized support behind a proposal to issue direct payments to older people. Responding to that movement, Roosevelt organized a committee led by Secretary of Labor Frances Perkins to develop a major social welfare program proposal. Roosevelt presented the plan in early 1935 and signed the Social Security Act into law on August 14, 1935. The Supreme Court upheld the act in two major cases decided in 1937.
The law established the Social Security program. The old-age program is funded by payroll taxes, and over the ensuing decades, it contributed to a dramatic decline in poverty among older people, and spending on Social Security became a significant part of the federal budget. The Social Security Act also established an unemployment insurance program [only a few states had poorly-funded programs at the time] administered by the states and the Aid to Dependent Children program, which provided aid to families headed by single mothers. The law was later amended by acts such as the Social Security Amendments of 1965, which established two major healthcare programs: Medicare and Medicaid.
“Tradition is not the worship of ashes, but the preservation of fire”*…
In the year 578AD Germanic tribes were warring over the remains of the Roman Empire, an eight-year-old boy named Muhammad was growing up in Mecca, the Mayan Empire was flourishing in Central America, and the world’s longest continuously operated business was founded in Japan. When Prince Shōtoku Taishi (572–622) commissioned the construction of Japan’s first Buddhist temple, Shitennō-ji, Japan was predominantly Shinto and had no miyadaiku(carpenters trained in the art of building Buddhist temples), so the prince hired three skilled men from Baekje, a Buddhist state in what is now Korea. Among them was Shigetsu Kongō, whose work would become the foundation of the construction firm Kongō Gumi.
In the centuries that followed, the maintenance, repair and reconstruction of Shitennō-ji (ravaged a number of times by wars and natural disasters) provided Kongō Gumi’s main source of income, but as Buddhism spread throughout Japan the scope of the company’s work also expanded to include contributions to other major temple complexes such as Hōryū-ji (607) and Koyasan (816), as well as Osaka Castle (1583). Kongō Gumi would continue to flourish under the Tokugawa shogunate (1603–1867), a period during which Buddhist temples received substantial financial support. The company weathered the pro-Shinto Meiji Period (1868–1912) and its often violent efforts to eradicate Buddhism from Japan, which included the destruction of tens of thousands of Buddhist temples. Kongō Gumi also survived the Shōwa Financial Crisis of 1927, keeping pace with economic and technological developments until it finally succumbed to financial difficulties and became a subsidiary of Takamatsu Kensetsu in 2006, after more than 1,400 years of independent operation.
Although Japan boasts six of the world’s oldest companies and an estimated 20,000 firms over 100 years old, Kongō Gumi’s longevity is certainly remarkable and worthy of study. Fortunately, the principles that guided the company over the centuries have been preserved by the Kongō family itself. The 32nd leader of the company, Yoshisada Kongō, writing during the Meiji Period, left a creed, later titled Shokuke kokoroe no koto, or ‘family knowledge of the trade’, a list of 16 precepts distilled from the company’s successful past and intended to guide and preserve the family’s operations into the future. Western observers might be surprised to discover that while the creed addresses ‘business’ subjects such as quality control and customer satisfaction, it puts equal emphasis on ‘personal’ issues such as how to dress (in keeping with one’s station), how much to drink (in moderation) and how to treat others (with utmost respect). Indeed, the first article of the creed states that minding the precepts of Confucianism, Buddhism and Shinto, and training to use the carpenter’s rule are ‘our most important duty’, suggesting that the standards against which a Kongō measures his life are as critical to success as the instrument by which he measures his work…
Learning from the long-lived: “Building on Tradition — 1,400 Years of a Family Business.”
See also: “The Data of Long-Lived Institutions” from @zander at The Long Now Foundation.
* Gustav Mahler
###
As we take the long view, we might recall that it was on this date in 1911 that RMS Titanic was launched from the boatyard in Belfast in which it was built, the largest passenger ship of its day. A state-of-the-art steamship, it set sail from Southampton on its maiden voyage on march 10th of the following year, 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.
“Nothing turns out to be so oppressive and unjust as a feeble government”*…
Yes, the private sector deftly turned publicly-funded technologies into commercial successes, and there was a place for individual genius in that. But those successes were also built on long hours by tens of thousands of engineers (many of them immigrants, many of whom went to public schools). The Ayn Rand image of the solo entrepreneur — Hank Reardon toiling alone in his laboratory to invent a new kind of steel — is a pernicious deception.
Myths have their place, and America’s worship of individual innovators inspires real achievement. The opportunity for success attracts the ambitious and those willing to work hard, like my parents, along with millions of others who land on American shores. But the myth becomes a liability when society becomes so enamoured with the idea of individual success that it forgets, and even attacks, the very institutions that enable it…
The efficiency of public-sector programmes can be seen all the time. An American family with an annual income of $52,000 per year pays approximately $16,000 a year in federal, state, and local taxes. In exchange, that family gets roads, public schools, environmental protection, national security, fire, and police. Try assembling that as a package of private services and see what it costs.
Antipathy to government institutions is often called “conservatism,” but it bears no resemblance to any principled tradition by that name. Conservatism is rooted in a respect for institutions. Its intellectual founding father, Edmund Burke, wrote, “Nothing turns out to be so oppressive and unjust as a feeble government.” The observation comes from his most famous work, a criticism of the anti-institutional, pro-individualism of the French Revolution and the bloody terror that followed. There is plenty to criticise about the American administrative state, but idolatry of the individual is hardly a true “conservative” critique.
Nor can the current, degraded notion of freedom be found in the works of America’s founders. The premise of the Declaration of Independence is not simply that our rights are “self-evident” but that “to secure these rights, Governments are instituted among Men.” This is to say, the founders respected “government” — they saw the state as a vehicle to guarantee freedom. In the years after the American Revolution, those who fought for liberty spent the rest of their lives progressively strengthening the central government they had formed in order to secure that freedom. Their legacy is the stability and prosperity we have come to take for granted. The exaggerated emphasis on individualism imperils their achievements.
In the U.S., Covid-19 did not find an exceptional country. Instead, the virus found a land of individuals — too many of them poor, overweight, under-educated, and overly imprisoned. It found underfunded institutions and a population teeming with a sense of entitlement rather than community.
What separated America from countries that staunched Covid-19 is neither size nor geography. China has the world’s largest population (Wuhan has more people than New York City). And though many countries that did well are islands, oceans offer scant protection from a pandemic. (The first person to die of Covid-19 in Iceland was an Australian, and the virus reached America from China and Europe, not Mexico or Canada.) No common political system or cultural tradition links the successful countries.
America’s response was inept because the institutions designed to protect the public failed or were enfeebled. At almost every level of society, people chose individual convenience over collective well-being.
What can be done to reverse the country’s self-destructive course, and to repair and prepare? America should use the pandemic as a turning point for renewal. Just as the human immune system develops antibodies from one viral infection to fight off another, Covid-19 presents us with the opportunity to build “societal antibodies” — practices to fend off the contagious disease of selfishness.
The country needs a “Corona Corps.” Similar to the armed forces or the Peace Corps, it would consist of people largely aged 18 to 24, trained and equipped to fight the virus. The Corps would conduct contact tracing, staff testing, and vaccination centers, and work with people required to isolate, providing anything from food delivery to a sympathetic ear. Corona Corps members could not only be paid but could also earn credits to reduce tuition and lower their debt — as well as gain experiences that serve as an on-ramp to jobs post-graduation.Once the virus is tamed, we should transition Corona Corps into a robust national service programme.
A second reform is our tax system — a government function that is fundamental to all public programmes, but which has been ravaged by our disregard for the state institutions. Allowing the super-wealthy 0.1 percent to enjoy a greater share of spoils while we cut their taxes is not the hallmark of a functioning society.
Regardless of the tax rules we adopt, administering them requires an efficient institution — and America’s Internal Revenue Service has been severely underfunded. A recent congressional report estimated that a $100bn investment in tax enforcement would take in $1.2trn — yes, trillion — in revenue over the next decade.
But the bigger point is that we must pursue a cultural shift: a renewed recognition of the value of institutions, and of the balance between the individual and the community in a prosperous society. Certainly, people should complain about the arcane and sometimes onerous regulations that hamper entrepreneurship — at the point of contact, institutions often feel like friction, like something to be avoided. Yet we must also recognise that beyond disagreements over the size and specifics of government institutions, those institutions are essential and honourable — as are the people who serve in them.
Individualism is embedded in America’s cultural identity, but it is a sign of national character to act together as a community.
An excerpt from an essay by Scott Galloway (@profgalloway): “Institutions,” eminently worth reading in full. Indeed, this piece is a slightly-abridged version of “Scott Galloway on recasting American individualism and institutions” in The Economist (but behind their paywall).
See also the apposite (but differently-focused) piece by Scott’s NYU colleague, Davis Stasavage: “Lessons from all democracies.”
* Edmund Burke, Reflections on the Revolution in France
###
As we seek a middle path, we might recall that it was on this date in 44 BCE, that Casca and Cassius decided that Mark Antony (Marcus Antonius) should not be killed with his ally Julius Caesar in the assassination planned for the next day; rather, that he should be waylaid so as not be in Senate at the time. It was the conspirators’ undoing.
They believed Caesar’s death would restore the Republic. But Caesar had been immensely popular with the Roman middle and lower classes, who became enraged upon learning a small group of aristocrats had killed their champion. Antony, as the sole consul, soon took the initiative and seized the state treasury. Calpurnia, Caesar’s widow, presented him with Caesar’s personal papers and custody of his extensive property, clearly marking him as Caesar’s heir and leader of the Caesarian faction. Antony negotiated a crafty compromise with the conspirators… then, on March 20th, gave his famous speech at Caesar’s funeral– which ended with Antony’s brandishing of Caesar’s blood-satined toga… Several buildings in the Forum and some houses of the conspirators were burned to the ground. Panicked, most of the conspirators fled Italy. The few remaining– including Brutus and Cassius– were assigned distant (and relatively menial) posts in Sicily and Asia by Antony “for their own protection”; insulted, they fled instead to Greece.
“If you want to know what an institution does, watch it when it’s doing nothing”*…
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…)
* Parliament of Whores
###
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
You must be logged in to post a comment.