After 250 years of American independence, a nation home to many of the smartest and most talented people in the world may have to choose as its leader one of two people, each of whom is in many ways worse than His late Majesty George III, the man whose role the entire system was designed to replace.
It is dangerous to assume that the more people who are involved in a decision, the better the outcome will be
The absurdity emerges from the nature of the system – which, like many such systems, works very well right up to the point where it suddenly doesn’t. Faced with an unexpected combination of events, even good systems can produce an outcome far sillier than any sane individual would choose when acting alone.
I have spent the past 15 years studying behavioural economics, which seeks to uncover the origins and consequences of human ‘irrationality’. Yes, there are many cases in which better-informed individuals might make better decisions, but on the whole most people make a pretty good fist of their personal choices.
One reason why our personal judgment may be rather good is that it is just that – personal: people are not forced to justify their choice of shampoo to a procurement officer, or reverse-engineer a pseudo-scientific optimisation model to pretend that their chosen sofa offers the highest possible ROI. They can hence quickly and intuitively make a decision which might seem irrational or suboptimal to an economist, but which is nonetheless well suited to real-world choices.
By contrast, when people have to make a decision in a collective setting, their first instinct may not be to choose well, but to avoid blame. It is dangerous to assume that the more people who are involved in a decision, the better the outcome will be. This is true only under certain conditions, when the process of decision-making is very well designed, otherwise a kind of collective insanity can arise. I recently met someone involved in selling an innovation to the NHS. Any purchase had to be approved by 11 separate people in sequence, any one of whom could veto it. I’d be willing to guess that only one or two of those 11 had any medical knowledge.
I once asked my daughter why she always ordered pizzas for her friends from Domino’s even though other options were available. ‘Because if they don’t like their Domino’s pizza, they blame Domino’s. If they don’t like their Papa Johns pizza, they blame me for not choosing Domino’s.’ A trivial anecdote perhaps, except that, at scale, such ‘accountability sinks’ explains the outsize popularity of the big four consulting firms, the Horizon scandal, the overweening influence of HR, procurement and finance departments, the appalling decline in customer service and much more besides.
It is extraordinary how little is written about this. Other than the German psychologist Gerd Gigerenzer, who coined the phrase ‘defensive decision-making’, I knew of very little thought given to the problem.
Thankfully there is now a wonderful book which covers this topic. Dan Davies’s The Unaccountability Machine: Why Big Systems Make Terrible Decisions – and How The World Lost its Mind is all the more fascinating as it tackles very contemporary problems by reviving the discipline of cybernetics and the work of Stafford Beer, with passing discursions involving squirrels, Brian Eno, Milton Friedman and a well-deserved kicking delivered to the discipline of modern economics.
Dan is perfectly qualified to write this book, not only because he is a recovering Bank of England economist, but because he’s part Welsh. One strange aspect of complexity thinking is how many of its practitioners are either Welsh or else migrate to Wales. My own theory is that our dismal Saxon occupiers are simply too uncomfortable with magic and mysticism to accept the world as it really is.
Comments
Comment section temporarily unavailable for maintenance.