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Doing Well by Doing Good

2014 May 16
by Ian Welsh

A simple formulation of how to create good society is summarized as “doing well, by doing good.”

When someone gets money for doing something, it sends a message: do more of this.

This is the fundamental money feedback loop. If  your feedback loop is telling people to do things that are bad, rather than good, the world will get progressively worse.

If you want a better world, you’d best be making sure that the people being told “do more of this” and the people being told “do something new” are being told “do good”.

It’s really that simple (and that complex.)


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12 Responses
  1. VRainov permalink
    May 16, 2014

    It’s a good post but : you have
    “to create good society is created”
    Otherwise excellent, and thank you for your blog.

  2. Hvd permalink
    May 16, 2014

    You are right that this is both a simple and complex notion. I have a business that we have always run by this principal. We put far more effort into our product than the market requires. We do this primarily because the work is satisfying for itself. But we also do it because we serve a not insignificant public function which we believe deserves and requires this effort. Incidentally and only incidentally it leaves us in a virtually unassailable position in our somewhat limited marketplace. We have all made a wonderful living at this endeavor. However we could likely have become extraordinarily wealthy by expanding our market by becoming managers rather than maintaining our roles as creators. It would however meant diluting the quality of our product to the minimum level expected by our market and would have meant embracing the role of profit maximizers rather than product creators. It would have meant abandoning our commitment to the public function we serve.

    Sometimes one has to be willing to accept a reasonable profit and great satisfaction in the job done in place of maximal profit. I am satisfied but I know there are many people who see the opportunity to profit and consider me a fool.

  3. Ian Welsh permalink
    May 16, 2014

    Woops, thanks for the edit.

    HvD: good work.

    This can be an individual decision, or it can be a social decision. It must, in effect, be both, to create a good society and not just pockets of good forever in danger of being overrun.

  4. Bruce Wilder permalink
    May 17, 2014

    Excellent.

    There’s an economic principle, called Gresham’s Law, which applies to precious metal currencies: “When a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation.” It is commonly stated as: “Bad money drives out good”.

    It can stand in, though, as a general statement of at least one aspect of the complexity.

    In a competitive society and political economy, there’s always pressure among competing values, and a real risk that rewarding expedience will lead to the bad driving out the good, disinvestment driving out investment, unethical practice driving out ethical practice.

    We like stories like Hvd’s, where an enlightened selfish leads to deliberate self-restraint in the interest of maintaining a competitive balance, in which the good can out-compete the bad. This is not something that we can count on happening “naturally”. And, getting people to see the value of enlightened thinking is a never-ending political struggle.

    Ian’s ethical voice is all the more valuable, because it has become so rare, in a noisy environment dominated by fops. I feel we’re all struggling against this tendency for the bad to drive out the good, in our thinking as well as our economy and our politics.

  5. Not Bill Black permalink
    May 17, 2014

    …”feedback loop .. telling people to do things that are bad,” is called perverse incentive. It is the obsession of the economist William K. Black and if any of you are interested in learning more than you need to know about it, I recommend his rantings on New Economic Perspectives which is listed to the right under BLOGROLL. He also wrote an excellent history of its role in the S&L crisis that provides an illumination of the “Whack-A-Mole” nature of greed over morality.

  6. May 17, 2014

    Keep fighting the good fight.

  7. oldskeptic permalink
    May 17, 2014

    Noticed this trend ages ago. The rise and rise of the sociopaths.

    Watched organisation after organisation being steadily dominated by them. Govt’s, corporations (public and private).

    In every case the internal and external rewards favour sociopathic behaviour and penalise competent and ethical behaviour.

    In the totally sociopathic organisation the consequences of the (multiple and repeated) incompetence always flows downwards (to staff and customers), while all rewards flow upwards, with the top levels isolated from the fall out of anything they do wrong.

    Sociopaths in large groups are interesting. They prefer chaotic environments, because in those their abilities to lie easily conceal their incompetence, therefore they create such ones. Their greatest fear is for their performance to be objectively measured.

    No sociopath is competent, or can be. Their basic emotional profile makes it impossible. Oh they can appear to be smart and/or charming… but they never are in actuality.

    Therefore every organisation these days goes through constant reorganisations (etc) all the time, there is never a period of stability allowed. Internal controls and checks and balances are gutted, unethical behaviour (one of the hallmarks of sociopaths) is more than tolerated, it is encouraged.

    Sociopaths all hate each other (they hate everyone except themselves ) , but they will work towards their common goal of creating a sociopathic favourable environment and against any threats to that. They will also gang up against anyone who is competent and ethical, as those people are their single greatest threat.

    So sociopaths will actually prefer to promote other sociopaths. This seemingly counter factual behaviour stems from the fact that they understand other sociopaths more and, though they know the other will will cut their throat as soon as possible, they feel they can deal with them. Plus their common interests have a greater probability of success they more of them there are in power.

    So as time has gone by I’ve watched level after level fill up with sociopaths. If you start with a sociopathic CEO, very soon the next level are all sociopaths, then the next level and so on. Very quickly you have to be one to thrive, or at least act like one.

    Of course the organisations suffer, hence the failure (or near failure) of so many of them, the only ones that survive are because they have a monopoly/oligopoly/Govt subsidy. Think how many US (or for that matter UK or Australian) corporations would survive without one or all of those conditions applying.

    This is important to understand at the political levels too, because they will favour buying off sociopathic politicians. Firstly they are easier to buy off (duh being inherently more corrupt by nature) plus we are back to that ‘understanding’ thing again.

    So in countries where this has been going on for awhile now (eg US, UK… etc) the top political classes are now also all sociopaths.

    What we call ‘neo-liberal’ economics (which is purely a political and sociological ideology, not an actual theory of economics) provides the perfect ‘fig leaf’ to justify sociopathic behaviour by our elites. To give but a simple example, when the GFC hit the US Govt and Fed had many alternative ways of dealing with it… but they chose the most expensive, least efficient but most rewarding to the sociopaths who created the whole mess.

    The fact that those cumulative decisions destroy the economy matters little to sociopaths, firstly they are arrogant enough to believe they can escape that, secondly they like other people suffering and being powerless. They are the ultimate in the behaviour of ‘relativity’, if someone is suffering they get pleasure, therefore they will work hard to cause suffering in others.

    They are truly horrible people, they like have the power of life and death and terror over others, they like to use it, to make people suffer….it makes them feel good. And the more they are let off the leash the worse they become. At the limit, if they can achieve it, they move to psychopathy where they kill and torture lots of people.

    And when a psychopath has that power they will use it endlessly, because it gives them pleasure to do so. There is no rationality in this behaviour, we are talking about basic emotional drives and while all humans have a tendency towards cognitive dissonance, in my experience sociopaths are at the extreme limit of this (as you might expect, a very small step from easily lying to others to easily lying to yourself).

    And they wont stop, any more than an alcoholic or a paedophile* will, as long as they are allowed to do it, they will continue to do it, it gives them too much pleasure.

    As a thought experiment pick current or recent US/UK/etc political leaders who were clearly sociopathic and then moved to psychopathy.

    * Personally I think there is a strong link between those two disorders.

  8. oldskeptic permalink
    May 19, 2014

    Actually my experience is that the sociopaths lower profits, because they are so inefficient and self centered (except when they fiddle the books). Take the ultimate example, the Wall St banks, they are all bankrupt, still. They all went bankrupt at the GFC (actually many before in 2007). Only the US Govt and Fed bailed them out, with trillions and also allowed them to fiddle their accounts.

    But even with all that endless money pumped into them, if the dispensation on their accounting ended and they had to report truly on their liabilities, then they’d be seen as insolvent and go under within a few days.

    Sociopaths kill companies. In one I worked for our sociopathic CEO tried to blow $600M. I managed to stop him. Later I failed to stop another ‘initiative’ that cost the company $1.4B….

    And I have seen that sort of thing everywhere I have worked.

    Sociopaths cannot do the key things that a successful organisation needs. Like being rational, planning well, executing plans well, thinking longer term, being well organised, managing staff well, having good teamwork, continually improving things … and so on. Their nature is the opposite of all that. They can sometimes make good salespeople …. if held on a very tight leash that is….

    But they can’t lead and they are terrible with people. Superficial charm wears off real fast when you need continuous good management.

    I had a young guy once who was in another dept with a female sociopth as a manager (she actually tried to abuse my staff still I stopped her….). He literally begged me to get him into my area.

  9. Formerly T-Bear permalink
    May 19, 2014

    @ oldskeptic (above and immediately above)

    Kevin Dutton has published: “The Wisdom of Psychopaths, Lessons in Life from Saints, Spies and Serial Killers”, ISBN 978-0-434-02067-6 which you may find of interest given your comments above. Sacar provecho de!

  10. stirling permalink
    May 19, 2014

    second on recommending Kevin.

  11. oldskeptic permalink
    May 20, 2014

    Hmmm, I think he is being way too kind… taking one example I suspect that the surgeons that score high on the sociopathy/psychopathy score are the least effective. Either being poor at their jobs and/or doing unnecessary procedures that maximise their income. I’ll speculate that they are extremely resistive to objective or scientific medicine.

    I am reminded of all the vast numbers of useless back surgery undertaken here in Australia under workers compensation some years back, the probability of success (ie the person being better off) was close to zero, the probability of things getting worse was very high.. the money made insane.

    Ditto the other professions mentioned. Again I suspect that these people are very good a ‘blowing their own trumpets’, but a proper analysis of their performance might show the exact opposite.

    One of the main reasons I say this is my own experience of watching them. They are very good (the high functioning ones) at redefining reality for other people, but they do the same to themselves. That is, they are much more prone to cognitive dissonance and when people start doing that they drift further and further from reality. It is impossible to function at a high level if you do that.

    Their unrestrained (or at least less restrained) ego means they actually believe that their (nearly always self serving) ‘interpretation’ of reality is real… even though it may be the exact opposite. Sadly they are all too good at convincing (at least for awhile) the ‘norms’ that this is the case.

    The ultimate public example of this was the famous neo-con statement (Feith I think) “we are an empire and create our own reality….”.

    So a term like the ‘wisdom of the psychopath’ is for me an oxymoron. I’ve never seen one that is even marginally effective at anything and in most cases are downright disruptive and dangerous.

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