The horizon is not so far as we can see, but as far as we can imagine

The Simplest Explanation for Western Decline

Is just…this:

Similar numbers can be found in most fields.

This is related to the computer productivity paradox: Computers and the telecom revolution have not noticeably increased productivity.

The reason is simple enough — they weren’t used to create productivity, they were used to create control, to allow managers to micromanage employees without actually being in the presence of the employee all the time.

No society can stay healthy with this sort of admin bloat; admin are support, meant to help the people who actually do the job. If your tooth-to-tail ratio is higher than 2:1 or 3:1, something’s probably wrong.

In my personal life, at my last megacorp job I saw multiple waves of computer “improvements.” Every single one of them increased control and reduced the workload employees could handle. I know this for a fact because I measured it, in part because it was my job, in part because management refused to admit that their shiny new programs were actually slowing productivity, and, until I forced them to admit it, they wouldn’t  hire more people.

Furthermore, each wave of “upgrade” de-skilled the job further, making the employees do what the computer said, and removing their discretion. All of this was intended to raise the bottom, but what it mostly did was lower the top; the most productive, most highly-skilled employees suffered the greatest productivity losses, were the most unhappy, and tended to leave, because the job had become semi-automated, and no longer involved actually doing the job.

As a general rule, no one should run something like a hospital who is not still involved in hands-on client care — probably a nurse or doctor. No one should run a university who is not either still teaching or an active student. This principle can be applied more generally, in that no one can properly manage anything they still don’t do. This is often recognized in the business literature, but, understandably, CEOs and executives almost never want to actually perform the real work of the business, nor will they excuse themselves from interfering with those who do and, thus, actually understand what is needed.

At most, upper management can set general goals. They should never be in charge of deciding how to achieve them. This is the opposite of how we run things, but it wasn’t always entirely so: Auto and plane companies used to be run by engineers, insurance companies by underwriters and actuaries, hospitals by nurses and doctors, and universities by Senates of Professors.

One issue is that front line workers often really want to do front line work: Professors don’t want to administer, they want to teach or do research, doctors want to treat patients, etc.

But if you give administrators power over you, you never get it back. University Senates hired administrators, and a few decades later discovered the administrators were running the show, were able to order profs around, and were the highest paid people in the university (outside of the football coach), while doing no actual teaching or research, and understanding little to nothing.

It is also important to understand that while it’s certainly better if you have done the front-line job at some point, that you lose that knowledge quickly. Ten years out, and you’re clueless — you’re just another administrator. Managers and executives have to keep their hands in, or they wind up clueless.

Bottom line: We can’t afford to let anything important be run by people who aren’t actually practitioners. They don’t know what they’re doing, and they spend most of their time building bureaucratic empires that do nothing but act as modern courtiers. In the best case, they do no harm other than sucking up resources, but in most cases they try to justify their existence by trying to tell the front lines how to do their jobs and make things worse.

If we want to fix our society we have to get rid of this admin bloat, along with the cluelessness it represents.

But what usually happens, instead, is some form of societal collapse, which strips out administrators in a more brutal and effective fashion.

That’s what where we’re headed.

(My writing helps pay my rent and buys me food. So please consider subscribing or donating if you like my writing.)


The Biden Presidency So Far


How Monopolies and Oligopolies Cause Shortages


  1. bruce wilder

    but it’s a “market economy”, Ian

    didn’t anyone tell you?

    administration became what we do, without anyone paying much attention and even using accurate descriptive language

    there is a link to ” sales” “marketing” “brand management” and finance (financialization) that ought to be explored

  2. Hugh

    I agree about senseless administrative bloat and flat out incompetence, but most of the medical doctors I ever met were self-important idiots and most of the university professors couldn’t organize their offices let alone a department or a university.

    I always thought it was funny that universities had the rep of being hotbeds of revolutionary ideas and intellectual questioning and skepticism. They are some of the most status quo and least intellectual places I ever saw. Nowadays they have become corporatized debt traps. Some good research still gets done at them but this is almost in spite of them.

    We assume that universities make sense mostly because we grew up with them being there all that time. But they really don’t. What’s their mission? Education? Research? Credentialing? Networking for future careers? Glorified vocational schools (with apologies to vocational schools)? Or laughingly, self-fulfillment and one way to create an informed citizenry?

    If it’s education, why is it at so many big universities most classes are taught by grad students and adjunct faculty (what happens to many grad students after they finish their degrees). If it’s research, well, that’s often how professors get to be professors and advance. But in the sciences, even with a blinded process, pretty much anyone on a grant reviewing committee can look at a grant and know whose lab it came from. And the results are often BS. I remember a pretty established math professor pointing to someone and saying the huge number of papers he had written. And then adding, he felt lucky if he came across even one or two papers a year worth reading. In some fields, often in the humanities, the question is how many papers do we actually want or need on a subject. Almost none will add anything new or as sometimes happens they merely follow some new approach/fashion guaranteeing jobs and advancement to a few before fading into a well deserved oblivion.

    And all this before we get to Ian’s topic of rudderless, self-aggrandizing bureaucracies where so much of the money ends up. I remember at a school I went to, they used to say that it had 34 vice chancellors, each pulling down hundreds of thousands a year, and except for a couple of them, nobody knew or could find out what the rest did.

  3. Bill H.

    Indeed. The idea of doctors running any kind of business is hysterical.

    On the other hand, when top management at Boeing went from engineers to administrators, Boeing went into the toilet very rapidly.

  4. Hemming

    It’s a bit weird following the debates on the internet lately. Denmark has already had these debates several decades ago and we came to the very same conclusions you have come to here.

    We came up with the concept of DJØFification, which acknowledges that a line of edcuations, training managers, are the root cause of most woes of our society.

  5. rmon

    Here’s a YouTube vid that shows how it used to be.

    We threw it all away. Because markets. Global markets.

  6. Mark Pontin

    rmon: “We threw it all away.”

    _You_ didn’t throw it away. America’s owners — an ‘elite’ of bankers, c-suite inhabitants, financial asset holders, HBS graduates, and McKinsey consultants have greatly enriched themselves — have made out like bandits, as they used to say.

    Christopher Lasch laid all this out back in 1994. So did many others, some far earlier than that.

    From a historical perspective, of course, America looks pretty much like the stupidest empire in human history, handing its manufacturing capacity and technology over to its replacement, stupidly expecting China to be a subservient little subaltern state doing the grunt work when it’s the oldest culture on the planet.

    That said, in the even longer-term historical picture, the U.S. has mostly been ruled by a kleptocratic oligarchy always looking for a labor force to cheat, enslave, underpay, or otherwise screw: when white indentured servants from Europe and Native Americans turned out to be problematic, the colonial oligarchs imported African slaves; when those became problematic — and make no mistake, the ‘War of Independence’ was primarily about preserving slavery and the oligarch slaveholders’ wealth, and Washington was a land-swindler and Jefferson the Trump of his time — there was the ‘send us your poor, huddled masses’ phase; and nowadays, as I write this I’m in the outer SF Bay Area and five miles from me is a town that’s 80 percent inhabited by H1B visa holders that were imported from India because Silicon Alley could pay them much less than American engineers.

    Yes, for a brief interregnum of about 30-40 years in the wake of the Great Depression, one of the U.S. oligarch class happened to be intelligent enough to try something different.

    And so, yes, for the period that FDR’s New Deal pertained, the vast mass of Americans had the highest standards of living in human history and the U.S. went to the Moon.

    But America’s Owners couldn’t stand that and wanted ‘their’ country back. And now they’ve got it.

  7. Mark Pontin

    Many of you — most, maybe — will have seen this. But here’s an American citizen laying out in the simplest terms 4:25 of nonstop unadulterated truth about the US —

    ‘They don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interests.’

    ‘It’s called the American Dream because you have to be asleep to believe it.’

  8. Willy

    And to think that I used to wonder why the Ferengi were modeled after Milton Friedman. Back then, there were these old common culture catchphrases along the lines of “People buy on emotion and rationalize later” or “The informed consumer is the salesmens bane”.

    I once told the story of my local brand name medical clinic, where the published news scandal was that their highly recruited superstar surgeon was being paid $1M/yr to supervise other lesser teams of surgeons, instead of actually doing the surgeries himself as his patients had been led to believe. What had actually shocked me, IMO was the actual scandal, was that his salary had been only 1% of the actual billed amount for those surgeries.

  9. Chipper

    Mark Pontin: Thanks for the link. So many people love George Carlin, and yet so many of those same people don’t seem to understand this (from 01:24 of the video):

    “I’m talking about the real owners now. The real owners: the big wealthy business interests that control things and make all the important decisions. Forget the politicians. The politicians are put there to give you the idea that you have freedom choice. You don’t.”

  10. nihil obstet

    Administrative bloat is the price of an oligarchy. The propaganda is that children will “do better” (i.e., make more money and not use muscle power) than their parents. To make that true often enough to make the propaganda work, you have to keep increasing the number of administrative jobs. You have cheap labor to do the work — you make the labor cheap with discrimination, legal and illegal immigration, requirement for unreasonable credentials, and active oppressive policing. You set up the jobs so that people compete for the administrative jobs that pay more and demand little.

    So everybody goes to college, although apprenticeships would work much better for most jobs, even professional ones. (I’m a fan of college for educating an enlightened citizenry, but who else thinks that way?) And college has the recently added benefit of trapping everybody in debt.

    Reason about bloat will not end this. It will end when administrative positions do not provide better benefits than work positions. We should consistently resist the talk that assumes that higher positions should pay more than lower ones.

  11. Adams

    Great post. David Graeber would be proud of you.

    In my spare time I run a small non-profit that houses homeless families with children. You probably wouldn’t be surprised at how impossible it is to get the board of directors to understand that the computerization of everything puts these families further and further behind the curve.

    On-line learning during the pandemic should be a benefit to them, they say. They just sign on and they’re equal to everyone else in the “classroom.” Well, yeah, for instance they can just sign on when their parent, who happens to be one of the few with a functioning vehicle, drives them to the nearest Starbucks parking lot so they can try to do their homework on an out-of-date cellphone. Or they can go to the nearest library and wait two hours for a terminal to open up, with a 15 minute time limit.

    I’m reminded of the time Ted Turner attended a conference on development of impoverished regions of Africa also attended by the likes of Bill Gates. The crowd was hyped about how making online access available to all would lead to development that would, in time, overcome grinding poverty. Turner replied (serious paraphrase, sorry) that these people were watching their children die of malnutrition, lack of potable water, various epidemics and absence of health care. They didn’t need a computer, they needed access to the most basic services. In real time.

    Extraordinary Popular Delusions and the Madness of Crowds obviously applies also to the well educated, influential and powerful.

  12. Chris


    Humans are part extractive animal and part productive animal.

    The extractive side is proving to be a “better business model” for those with the leverage.

  13. Hugh

    Jack Welch, a chemical engineer, worked/failed his way up to the top of GE, an iconic American goods producing company, and managed to run it into the ground. So having a background in the field is no guarantee of good or smart leadership.

    American healthcare was mostly non-profit into the 1990s. Thanks, Bill. What these two things have in common is that they reflect the financialization of the American economy. It ceased to be about the production of goods and services by Americans for Americans, and became about the money. So we imported doctors and programmers from India and exported production jobs to China. It wasn’t about what made us a better and fairer country. It was about what looked best on the bottom line, baby. And the Fed which creates the money keeps doubling down on and bailing out this hollowing out of the industrial base and the country because it’s what looks good on paper that counts.

  14. John Emerson

    This reminds me of a theory of the rise and fall of Chinese dynasties. The first emperor of a new dynasty would find plum positions for his uncles, brothers, brothers-in-law, and probably cousins. In each successive generation there would be more imperial descendants and clansmen on the gravy train, and by the seventh generation, say, there’d be a huge parasitic mass, most of whom were only very distantly related to the sitting Emperor. There were also large non-kin bureaucracies and their families to keep happy. Eventually the combination of parasitism and paralytic inability to govern would lead to an ineffective response to a disaster or a military threat, and there’s be a war and maybe a new dynasty.

  15. Hugh

    The Chinese are a surprisingly forgetful people. Look at how many times they lost the mandate of heaven. No, it’s in the other drawer. Wait, where did it go? I swear I put it in here.

  16. John Emerson

    There have been at least 5 Chinese dynasties since 200 BC which lasted longer than the entire history of the US so far, so we won’t be in a position to point fingers at them for awhie.

  17. StewartM

    Apply this to the entire US economy, and now replace “administrators” with “the capitalist (i.e., investor) class”. Maybe not in terms of people employed, but in the profits to be had and in who gets to make decisions.

    It is the simplest reason to explain our near-universal incompetence at everything, as the people who make all the important decisions have never ever done the real work they supposedly are responsible for; more often than not they either skimmed or skipped entirely any entry level positions where they might have had to do the real work.

    At my company, when I hired in, everyone who sat on the corporate board had an engineering or other technical or scientific degree; it was their original degree, they may have gotten an MBA later but they were first technical people. Now it’s all MBAs, no technical background whatsoever. This is being repeated at nearly every company I watch, and these MBA-types: who value paper profits over real things–are the biggest reason why US businesses increasingly cannot compete with companies (often Asian) who focus on real things. To use a well-worn example, Japan overtook the US auto industry and surpassed it not because our engineers are stupid and our front-line auto workers lazy (the standard RW explanation) but because our MBAs focused on entirely on current profits and didn’t care if the quality of their cars suffered, while the Japanese focused on making better cars because making better cars is the surest way to long-term profits even if it’s not the surest way to short-term profits.

  18. StewartM


    I always thought it was funny that universities had the rep of being hotbeds of revolutionary ideas and intellectual questioning and skepticism. They are some of the most status quo and least intellectual places I ever saw. Nowadays they have become corporatized debt traps. Some good research still gets done at them but this is almost in spite of them.

    My impression too. Odd how academia tries to tell the rest of us to ditch our stupid ways when academia is one of the most tradition-bound hierarchies that exist in our society.

    I agree more with Camille Paglia: universities are there primarily to teach. Research is good, but it’s icing on top of the cake. Students in many cases barely know their professor as they professors are busy getting funding for research projects and working on publishing (“publish or perish”). You shouldn’t allow companies to outsource their R&D to unpaid grad students, the companies should have to do it themselves. Similarly, the Federal government should stop cutting the budgets for the national labs and instead get them back to speed .

    And as for “publish or perish”–Paglia said (paraphrasing) “one good book in an academic lifetime beats a whole dump of crap published as books or journals”. Publishing should NOT be allowed to get in the way of a professor’s primary goal, which is to teach.

  19. Temporarily Sane

    Hugh: you seem like a sharp enough dude and you make some good points but you lose the plot when it comes to foreign policy. (You also give the Democratic Party way too much credit but we’ll leave that for another time).

    Simply put, you are extremely antipathetic toward any political party, country or culture that is condemned by the DC foreign policy blob as one of its “adversaries.” Like a good establishment Democrat (or Republican for that matter) you repeat the blob’s human rights/humanitarian intervention line verbatim.

    Given the violent and racist history of the United States and its harmful and dysfunctional economic policies, all of which you acknowledge, what on earth makes you support the DoS, Treasury and US military and their covert and overt assaults on countries like Iran, Iraq, Venezuela, China and Afghanistan and their people? All it takes for you to jump on board the regime change bandwagon is for the USG to label a country’s government as authoritarian or to concoct a “WMD threat” or “genocide” for which there is no credible evidence.

    Why do you hate the people in countries the US wants to destroy or “contain”? Do they not have a right to live in piece and prosperity? Given your (ostensible) empathy with African Americans and other people in the US who have suffered due to this country’s backwards and misguided policies, wishing a live of misery on people in other countries makes no logical sense.

    Whether, for example, the Chinese government is authoritarian or the Taliban follows a vicious Old Testament-style moral code is neither here nor there. These are issues for the people of those countries to deal with if they so choose. Or maybe you would be cool with China bombing the US or feverishly working to keep its people in poverty and misery in order to “punish” America for its horrific history of human rights transgressions, destructive fantasy economics and vicious foreign policy?

    Didn’t think so. Yet you have no problem with the US doing unto others things that no American would accept if it was the other way around. This puts you squarely in the American exceptionalism camp, same as Donald Trump and all those retrograde Republicans you claim to abhor. (Incidentally, remember that memo from the Trump administration reminding everyone that the human rights angle is designed to undermine America’s “enemies” only and not to be taken at face value?)

    The cognitive dissonance you suffer from must be enormous.

  20. different clue

    @Mark Pontin,

    How can we, the owned of America, make ourselves less valuable to our owners? What degrees of freedom do we have to do this or that? If George Carlin was able to think critically, logically, etc. in the teeth of the same Owners’s effort to prevent the Owned in general from being able to do that, how was he able to do that? How many owned-majority people are able to do that? (Clearly, the Owners aren’t bothering to read/write/comment on blogs, so someone is still getting through the anti-thought filters.)

    Are these questions worth having asked? Are they worth working out actionable answers to?

  21. Ian Welsh

    If you don’t want doctors to run hospitals, have them run by nurses.

    But being forced to run things tends to concentrate the mind.

    The original Medieval universities were run by the masters or by the students. They did, in fact, tend to be wild places (but then Middle Ages cities were wild, period) but they also, in a two hundred year span, systemized law, philosophy and theology, which was their program.

    One thing is that even in master run universities (most of them) masters (profs) were judged on their teaching and had to dispute with other masters regularly. Students weren’t forced into particular masters courses, if they didn’t think the master was good, they went to other masters.

    You can see this sort of thing, I understand (could be wrong, need to research the later period) even in the time of Kant and Hegel in the German universities.

  22. Ian Welsh

    Welch was terrible and unlike most, I called him out as crap at the time. Nothing is an assurance of good leadership, but still doing or at least having once done the work increases the odds a lot and that’s all you can ask.

  23. Hugh

    Thank you, Temporarily Sane, for that completely off-topic, irrelevant screed. From what you were saying, I take it you have not been taking your meds for a while.

  24. Ché Pasa

    Byzantine. Positively Byzantine.

    I was around when the MBA/Admin type started worming their way into the non-profit hospital realm promising all and sundry, but especially the doctors, of the amazing financial wonders to come. Oh my yes.

    And now, some decades later? Doctors (except in-demand specialties) are generally paid less than they would be in inflation adjusted dollars. Nurses and the rest of the staff struggle with insane schedules and in many cases lower pay. “Paperwork” overwhelms patient treatment. Offsets include technological fixes and medications. So that’s good, right?

    I know a few docs who have been made department heads “to do the admin” and universally they hate it. Much like professors who wind up department chairs. They hate it.

    I’d never seen that chart that graphically displays the administrative overburden that ultimately we all carry. Sick-making.

  25. Mark Level

    Thank you, Temporarily Sane. If I had more respect for Hugh’s ability to question his own assumptions (& the bright glare of hatred/fear of “the other” which may even be race-based) underlying his patriotic love for the Empire (if not its leaders) I would’ve bothered to write something similar to what you did. But I knew it would be a waste of the skin on my typing fingers . . . I do note that he is unable to reply in a meaningful way to your points, and resorts to simple ad hominem attack and a claim that you are “off your meds.” This is rather Trumpian as well, & speaks for itself. Anyway, you’re a bigger and more gracious person than I am for making the effort, though on the down side perhaps a touch naive to expect any cogent reply beyond defensive smears.

  26. Hairhead

    I once read an article on Dupont, you know, the makers of napalm and teflon? Seems that from its inception it was run by, guess what, chemical engineers and chemists. Until the -70’s, when they capitulated to what I call the Cult of the CEO. They hired an MBA.

    Well this hotshot MBA got reports every three months from every division of the company. And every division which did not maintain or increase profits had their budget cut. And so, every three months, he cut the R & D department’s budget. Why? Because the R&D on a new, commercially-viable chemical usually takes 3 – 12 years. That doesn’t show up at profit on quarterly reports.

    So the MBA cuts R&D for 10 years straight. Suddenly, Dupont’s gross revenues and profits fall catastrophically. Why? Well, the competition were “sucking up their milkshake.” Due to there being no new products to sell, they had to rely on old products, and, guess what, the old products had run out of patent protection and generic producers were killing them.

    Finally the Board of Directors got the idea, fired Mr. MBA, and promoted a chemical engineer who’d been with the company decades. Even so, Dupost almost went down, and it took about 10 years to recover, fully financing their R & D Department.

  27. Trinity

    What great comments in this thread. It’s always good to read about reality, and hear how many (with notable exceptions) see what I see. It’s nice to know I’m not crazy alone. Kudos to Mark Pontin for such a readable summary, thank you for that.

    Love the article, Ian, but would quibble with this being the “simplest” explanation. It’s more like the transparent, barely visible tip of a massive iceberg built of bloat, chicanery, and in many cases outright financial fraud.

    The problems with hierarchies … The newly added admins become both gatekeepers, controlling information (and who gets what resources) both downward to the workers, and upward to their bosses, so it’s also a control mechanism to ensure the “right” outcomes. But it’s downright funny how often “priorities” change now. And how many “initiatives” are started and then disappear completely. And how much they troll workers for “innovative ideas” to reduce costs or make work easier, and then ignore the ones that actually make sense, because someone, somewhere in the muddle would probably lose their reason to exist. And all those middle managers have some kind of mandate that overlaps or competes with someone else’s. The outcome then is that nothing changes except more layers keep getting added to solve the increasing number of problems, it gets more and more difficult to get anything done at all, and the quality of the output product drops significantly.

    These (hidden) costs increase exponentially as layers continue to be added, because endless economic growth, amiright? It can’t last forever, but those inside it think it will, and act accordingly. They don’t seem to realize their portion of the “pie” is merely being sliced into smaller and smaller slivers, and that the vast majority of the “pie” still ends up at the very, very top.

  28. Astrid

    Temporarily Sane,

    Thanks for that. I’ve made peace with Hugh’s presence. He is the the unrestrained id of the PMC blob, even if he claims to hate it.
    He has internalized all its prejudices and assumptions, and don’t even try to make arguments for them anymore. Really all he has is hate, hate for Trumpers, hate for anyone who deviates from Neoliberal orthodoxy such as Dore and Gabbard, hate for anyone even making a partial case for leaving China or Syria or Afghanistan or Russia alone, hate for anyone questioning the completely incoherent case for mandatory mass vaccination and “let it rip” policy…

    I fear that this is will manifest more and more amongst my PMC friends and acquaintances, once nth wave of Covid completely obliterates the purported efficacy of the mRNA vaccines and they’re stuck with kids at home for a third year.

  29. Mark Pontin

    Hugh: ‘It was about what looked best on the bottom line, baby’

    What looked best on the bottom line on the three-month earnings report and thereby immediately benefited the current occupants of the c-suites, Hugh.

    For instance, consider the downfall of Boeing. The U.S. used to understand that its dominance in the aviation industry was a vital infrastructure component of its global hegemony. A couple of instances:

    [1] In the air warfare part of the Korean War — a singular period in itself because it was the first and last time fighter pilots had dogfights at jet speeds and at 30,000 feet by line of sight alone (no onboard radar then) — the Russians and Chinese used to blood their fighter squadrons by sending them to Korea and initially MIG jets could fly higher and faster than the US planes. This was because the British, strapped for cash after WWII, had sold Rolls-Royce jet engines — then the best in the world — to the Russians, supposedly for civil jet transport.

    The U.S. government went straight to the British and closed that down with all due prejudice.

    [2] Similarly, when the Anglo-French built the Concorde SST, the Nixon administration refused permission to let it overfly the continental US.

    Now compare that with the last couple of decades of the neoliberal/HBS managers’ program of goosing the stock price of Boeing by not investing in R&D — and thereby killing people — and spending profits on stock buybacks instead because that boosts executive pay. The result is that Airbus now pretty much owns the global aviation industry and Boeing has destroyed its business.

  30. different clue

    About the Concorde SST, I have not looked anything up. I am only going on memory of what happened at the time.

    I don’t remember the NixAdmin as having denied Concorde permission to fly over continental US. I remember the NixAdmin as having denied it permission to fly at its supersonic speed over the US. And that was to make a show of “hearing the public” which was widely resentful at the thought of enduring sonic booms from a plane they would never be jet-set enough to afford to fly on. So Concorde itself decided not to fly over the continental US because why bother if you are speed-limited?

    But my memory could be wrong.

  31. different clue


    Is the org chart bloat you describe what the German Mittlestand companies have been able to somewhat avoid by staying “mittle” sized on purpose? Could that explain some of their maintaining high standards ( if indeed they really have)?

  32. Hugh

    What we need is to try to understand our world, its problems, and come up with reasonable solutions. But what so often happens looks like people arguing about whether 2 + 2 = 52 or 47. They tell us we shouldn’t believe the lies of the rich and powerful. We should believe their lies instead. Both are dead ends and get us no nearer the solutions we need.

  33. Synpotocon

    Endpoint sensitivity drives the enormous ramp up. Per the 1970 CPS there were 1,787 health administrators and 216,676 physicians; per the latest (2020) CPS there are approximately 711,000 administrators and 1,025,000 physicians. I haven’t done a comparative assessment by industry, but I’m pretty sure medicine is the worst by a large margin.

    FWIW, I’m told that back when dinosaurs roamed the earth, hospitals were commonly effectively run by a dyad consisting of the head of medicine and head of nursing.

  34. Trinity

    “hospitals were commonly effectively run by a dyad consisting of the head of medicine and head of nursing.”

    And overseen by a Board of Trustees (in the case of non-profits) consisting of retired physicians, bankers, and other small town elites, etc. At least in my small town this was true. But there was a non-physician hospital administrator who problem solved, etc., and answered to the Board.

    The switch to for-profit is the biggest problem in health care, but I agree that health care probably does have more layers because of all the money that flows from the government, making lots of opportunities for snagging “fees” from the constant flow of money. There’s probably an entire army now to deal just with Medicaid. And yet they keep telling us that technology is making our lives easier, so why are all these people even needed?

    Many rural areas lost their hospitals from the conversion to for profit conglomerates and I’ve heard that out west people sometimes have to drive for hours to get to a hospital for serious problems that can’t be addressed at a local clinic.

    DC: this is the first I’ve heard of Mittlestand, but the little I just read suggests perhaps not. Size has little to do with it, and how do we measure the size anyway? Number of employees? Area of influence (like Google)? My opinion would be it’s more about the insanity of the narcissists and sociopaths, who both seek control over other people in order to prove their worth, and making lots of money makes that goal easier to achieve. Basically adding new layers just gives them more control over more people, and makes the lower layers even “hungrier”.

  35. StewartM


    So the MBA cuts R&D for 10 years straight.

    At my company, when I hired in we spent ~10 % of either profits or sales (I forget which) on R&D. Now we spend like 2.5 %. Ditto with capital items (which are really expense, as the “capital” budget also includes replacing items that break or wear out. We, like most American companies, to use Ian’s phrase, are “burning down the house in order to heat it”.

    That is because in our now-unregulated financial system, companies like mine and others that actually have to sell products in competitive markets also have to compete with Wall Street fraud and ponzi schemes, and also companies like Microsoft, Google, and Apple in gamed markets, for capital. Where I grew up was once a textile industry center, and they made modest profits, but they too couldn’t make the profits to compete for capital where unrealistic expectations of 10 or 15 % were the norm. That is why they’ve all been shipped overseas.

    Remember when the US supplied uniforms to not only ourselves, but to the UK and the Soviet Union in WWII? We couldn’t do that anymore, because of our Wall Street geniuses.

  36. different clue


    Here is a promotional video from what I suspect to be one of those Mittlestaden. it is in German and I can’t understand any of it. But I sometimes watch it for a sense of inspiration anyway.

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