Reflections: Centralized Authority
What is the nature of centralization in authority?
As with essentially anything in this strange, wonderful realm where we find ourselves, centralization exists as a matter of degree and seeks a dynamic equilibrium through unending flux. By its nature it cannot be realized in an “all or nothing” state. There is a continuum which exists where the least possible centralization sits upon one side, and the most possible centralization at the other, moving asymptotically toward infinity at both ends.
At any given point in time regarding any given issue, we find ourselves located somewhere on that continuum.
I’ll take the United States as a case in point since I’m located here for the time being and I’ve grown up here.
There are very few humans remaining alive from this time, but once, early in the 1900’s, it was legally prohibited to make and sell alcohol anywhere in the country. You would be punished by the government if you were caught doing so.
In the 1930’s, the Federal Communications Commission was created and exists to this day. This organization uses the physical might of the government to determine which media companies are allowed to work together, to impose restrictions and licensing requirements on anyone who wants to disseminate information on a mass scale, and to filter/block information coming from other countries such as China.
The Affordable Care Act, introduced a little less than 100 years later, lays down a great deal of legal obligations for the practice of medical care everywhere in the country. Under penalty of fines, imprisonment, deprivation of livelihood, and other unpleasantries, both people who administer medical services and people who receive them are obliged to perform these actions in a prescribed manner.
These are all cases of moving very far toward the centralized end of the continuum.
What Happens When We Centralize Authority?
What does it really mean to centralize authority? What happens as we do it? Centralizing authority is centralizing choice. Having authority means being the author, making the choices.
Effect on Psychology & Morale
Look at large manufacturing companies today. In most of these companies, the pattern is as follows: the CEO and the small handful of other executives make the important choices about the company’s path and future. The other thousands of people in the organization may have different opinions but they don’t get to make those choices.
Some of these companies have a very high degree of centralization. There is a method prescribed by upper management for dealing with suppliers, dealing with customers, launching new products, cleaning the bathrooms, how many hours to work, and even solving problems in general. Even relatively small decisions require approval from someone in management.
Other companies in various industries are relatively decentralized. Smaller startup companies often acquire a reputation for this. An owner or company leader will set a vision, yet the different departments and people have a large degree of autonomy in realizing the vision.
Contrast the two basic examples. The more decentralized a company is, the more the employees are empowered to pay attention to what’s going on around them and make choices that lead to achieving the company vision. Each person is encouraged to engage their own unique genius to create a playbook that works, and to solve problems as they arise.
The more decentralized the company, the more employees will feel responsible to achieve the results they are there to achieve. The more they will feel and know that their choices and creativity matter.
The more centralized a company is, the more the employees are encouraged and incentivized to follow the playbook laid down by company management. The degree of centralization of authority exists in an inverse relationship to the amount of creativity applied by employees.
It’s typical that the longer a person works at a company like this, the less they feel like their own unique creativity matters. Responsibility tends to deteriorate because it matters relatively little to the end result what choices each person makes. They can simply go along with the program and keep their job for 15 years.
Normally, the more decentralized companies seek people with a strong desire to express their creativity. They focus on paying for performance/results and want people who are willing to step in and create their own path to success. These jobs are naturally more demanding because they come with greater responsibility. This is why startups attract people looking for a challenge and a chance to develop their skills.
Effect on Productivity
In any company, the individual employee is the smallest node in the network. Individuals are what you have the most of. Then you’ve got teams like sales, purchasing, production, quality, etc, then your upper management. Each individual deals with achieving certain results and is constantly collecting information in pursuit of those results.
Owing to the nature of intelligence and experience, the individual will always possess the most granular level of detail related to her work. No one else will know everything she is working on and all the information she has collected. She is the “boots on the ground,” the closest to the reality. To the degree she is skilled, she can solve problems in real time as they arise, provided she is empowered by the organization to do so.
This frees up other team members to focus on their results and solving their problems. Managers have more free time to create and express the vision for the path forward. Unnecessary headcount and waste are removed as each individual finds their groove maximizing their productivity.
If the department is heavily centralized with one overbearing micromanager, even small problems have to be reviewed and decided upon by this manager. Bigger problems will have to be reviewed by another level of management, and so on. Under these conditions, individual productivity is capped before it finds its natural groove, extra managers find roles in the organization just policing peoples’ work and not doing much else, and decisions can take a very long time. Additionally, when individual productivity is given less encouragement, license, and recognition, power politics tends to set in as employees realize this is a more viable strategy for advancing up the chain in the company.
In this way, more centralized is slower and more unproductive. More decentralized is faster and more productive. Relatively centralized companies have a hard time adapting to change. Relatively decentralized companies adapt more easily.
As more decisions become centralized with less people, less creativity is unleashed. Even if these few people are extremely talented, a great deal of innovation will be foregone. It becomes more of a blunt, one-size-fits-all approach to solving problems and moving forward, curved around the contours of these few minds.
The more choices individual employees are empowered to make, the more acute and precise the decisions.
Centralizing with Government
Regardless of which kind of company you work for, these are all authority structures in which people voluntarily participate in the US. You can’t change the CEO’s mind about opening that new division, but if it bothers you enough, you can just quit and go to another company. If you feel bored or stifled and want to use more of your unique genius, you can go work for a startup or other company that’s more decentralized.
The government and the law is an authority structure which is involuntary. It is enforced by physical might and violence. Centralization of authority with government officials affects people along some of the same patterns described above, only in a more profound way as it lives in a deeper, more inescapable layer of society.
Effect on Psychology & Morale
Human beings respond to incentives. When someone trusts us, they tend to bring out the best in us. This is the opening of the door to goodwill. We tend to rise to the level of the responsibility and expectations placed on us, either by ourselves or others. The highest degree of freedom is the highest degree of responsibility.
The more choices left to individuals and outside the realm of government, the more we engage our unique creativity in our lives and work to solve our important problems and those of our community in real time. We know that our choices matter. This is not a drill. It’s up to us to adapt to change, solve problems, and increase our thriving together.
Using violence (the law) to achieve results is the ultimate negation of goodwill. It is the most complete demonstration of mistrust. Using violence tells a person that you believe they will never do the “right” thing unless they are forced to do it.
When the government intervenes in healthcare such as with the Affordable Care Act, violence is used to force certain behaviors on people. The introduction of this act stripped essentially all healthcare providers of many responsibilities and choices that they had before. Their creativity was deemed no longer necessary to solve the problems they experience in real time. The solutions would now come from a tiny selection of bureaucrats in Washington, DC.
Of course, government had been interfering with healthcare for decades prior to Obamacare. The result is that people have become used to it. As with employees in a large, highly centralized company, they became accustomed to being told how to do 50% of their job or more by someone else, and going through the motions until they’re ready to retire.
It’s like this in every area where government intervenes and seizes authority, from manufacturing to education to welfare to the size of toilets. Only the effect is far more than the sum of its parts; it is nonlinear. As government intervenes progressively in more areas, the responsibility of the citizens deteriorates exponentially. It becomes generally accepted that we are not fully autonomous humans. We need to be told what to do and forced to do it at gunpoint as well. It’s not that important for us to be creative. In effect, adult humans are infantilized.
Effect on Productivity
The human mind is an infinite resource. We owe the comfort we enjoy in 21st Century America entirely to the brilliance of this resource combined with the bounty of nature. I’m sure we cannot imagine the comforts that will be enjoyed by people 300 years from now if we don’t blow ourselves up or get The People’s Elbow from a giant comet.
Centralization by violence hampers the expression of the human mind. If centralization in a large company is stifling, imagine what centralizing an entire industry does. When the government moves in, the natural incentives to be productive and creative move out. Things are done one way – the way dictated by bureaucrats. Everyone is forced to comply with the same standards. There is no need for reputation, and there is no need for good will.
When the industry or field experiences low government intervention, people associate as they please and compete to make the best products, get the best employees, and earn the most profits.
As government intervention increases, competition and creativity become less and less necessary. It’s more and more about complying with dictates to avoid fines, jail, and other punitive measures. Even more importantly, it becomes progressively important to have the government on your side. No need to wonder why billions of dollars are spent lobbying legislators and politicians every year.
100% of the efforts that go into compliance and bribing politicians are wasted energy in the grand picture. They offer no true benefit to humanity, no progress toward making anyone’s life better. Just siphoning away time, energy, and intelligence that could actually be used productively. Think about that. It’s that much less innovation in the world.
As we centralize to government officials, we take the opportunity to create and innovate out of the hands of individuals. There are about 347 million people in America right now. Some industries employ more than 10 million people. No matter how smart a selection of bureaucrats may be, it is simply impossible for them to effectively replace the intelligence of millions of other human beings. It’s a losing proposition.
Bureaucrats are typically very far removed from that which they regulate. They collate reports about the industry to guide their decisions. By the time they get enough data, things have changed so much that new studies are needed. They are just about the bluntest, slowest, least adaptable instruments possible, even if they have good intentions.
Conclusion
The more decentralized the society, the higher the morale and the higher the productivity.
The potential for the creation of the airplane existed millions of years before anyone created it. So it is with the automobile, modern buildings and plumbing, and the internet. The structure of reality always allowed these potentialities, we just had to go through the long journey of realizing them. The potential for instant teleportation, giant spaceships, time travel, perpetual energy, 3D printed houses, and other technologies we haven’t even dreamed of yet, also likely exist in reality at this moment, waiting to be discovered and realized.
The more we decentralize authority, especially from government to individuals, the more we unleash the full power of the infinite human mind, and the more of these potentials we will get to experience.
https://www.worldometers.info/world-population/us-population/