Institutional Dangers

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We have all seen stuffed animals in museums. They look real; their outer forms remain intact; they may even have scared us when we were small children. But something is missing. These creatures have no vitality; they do not move; they neither create nor reproduce; they are not responsive to their environments; their lives have gone out of them.

In varying degrees, institutionalized societies resemble these defunct forms. Institutions are systems that began as organizational tools through which men and women cooperated to achieve some common purpose. We are, after all, social beings whose lives are rendered both more productive and socially beneficial through associating with others. I would go even further and suggest that we can only discover a sense of who we are through our relationships with others; and that a socially isolated life can drive us into madness.

But the dangers of social isolation are more than equaled by the threats posed by an over-commitment to organizational systems. When we identify ourselves by our attachments to political, religious, economic, or ideological groupings, we may become participants in the kinds of collective madness whose malignancy continues to metastasize our world. The wars, genocides, and economic and social disruptions that are destroying tens of thousands of lives each week are the products of an "us" versus "them," "if you’re not with us, you’re against us" zeal on behalf of institutions. Such a collective mindset can be as fatal to human society as the socially isolated disposition can be destructive of the life of the individual.

How are we to reap the benefits of social organizations without, in the process, entangling our lives in those well-orchestrated insanities we have labeled "modern civilization"? Can we enjoy the economic advantages of divisions of labor, and social connectedness derived from cooperating with others through organizational systems that do not, at the same time, threaten our destruction? Stated another way, what are the forces that convert life-serving organizations into wasteful and ruinous institutions?

For the most sensible of reasons, we are pragmatic beings who judge the propriety of our actions by the practical consequences they generate. Even those who espouse abstract philosophic principles in their decision-making do so out of a consideration of more far-reaching or longer-term beneficial implications of their behavior. Any successful strategy — however we define the desired end — depends upon our being able to identify the factors influencing the events before us. If we wish to accomplish "x," and we correctly figure out that doing "a," "b," and "c" produce "x," we will regard this as a practical course of action.

Having discovered methods or systems that produce desired results, we wish to repeat them; to make them permanent ways of dealing with an uncertain world. But as events continue to remind us — and as the study of chaos confirms — our world is highly uncertain, and subject to unpredictable processes. Life, itself, is inconstant, as we find ourselves having to be responsive to continuing changes in our environment. Resiliency and spontaneity are essential to the health of any system.

But a state of permanent flexibility is uncomfortable for most of us. Constant awareness and eternal vigilance take great commitments of energy, and so most of us content ourselves with relying upon the repetition of past successes. We tell ourselves that what served us well yesterday will continue to promote our interests today. At the same time, those who operate the organizations we have created acquire a vested interest in the perpetuation of their systems. They discover, in our preferences for lethargy, our willingness to preserve and protect their structured forms and practices.

It is through such thinking that organizations that began as cooperative mechanisms, as means for the accomplishment of shared individual ends, become ends in themselves, or institutions. An institution is an organization that has become its own reason for being, transcending the interests of those who comprise the organization. Instead of fostering cooperation, it resorts to coercion; instead of being responsive to changes within its environment, it forces changes upon that environment; instead of being controlled by its members, it insists on controlling its constituency. It ceases to be an agency, in other words, and becomes the principal.

It is only through our adopting institutionally-defined identities and mindsets that more informal organizations are transformed into self-serving systems. When we begin to believe that our well-being is tied to the fostering of institutional interests, our lives become subservient to so-called "greater purposes." Just how demeaning such patterns of thinking are to individuals was recently demonstrated in a news story of a man I know who has long been involved in state and national Republican party politics. In discussing his retirement from a major position in the GOP, he declared: "I’ve agreed with the party 90-plus percent of the time, but I’ll have the freedom to have my own opinions now."

There is a correlation between organizational size and the processes of institutionalization. Because they have developed a "bigger is better" definition of success and efficacy, individuals invest more of their energies and resources in such collective purposes. But as a system increases its size, there is a tendency for it to lose its capacities to adapt to the inconstancies of life. The history of business consolidations and mergers is replete with examples of firms losing market shares and earnings following their increase in size. There are studies that have shown firms with smaller investments enjoying a higher rate of return than the more heavily-invested ones. Contrary to many presumed advantages arising from "economies of scale," larger firms are subject to such inner pressures as inertia, ossification, communications failures, conflicts, and other conservative influences that render them less capable of making adequate marketplace responses.

Organizational size, in other words, may be detrimental to the flexibility one must have in a spontaneous and inconstant free market system. Large, institutionally structured firms are often unable to adapt to competitive challenges posed by more aggressive competitors and, for this reason, call upon the state to regulate trade practices. I explored this subject in my book, In Restraint of Trade: The Business Campaign Against Competition, 1918—1938.

In his book, The Breakdown of Nations, Leopold Kohr has provided further insight into the dysfunctional role played by organizational size. Observing that "[w]henever something is wrong, something is too big," Kohr develops what he calls "the size theory of social misery," noting that "[t]he instability of the too large . . . is a destructive" influence. There is an allometric principle, governing biological systems, that informs us of the optimal size members of various species can achieve and still remain functional. I have long believed that the marketplace, unrestrained by political forces, would keep the size of business organizations within limits posed by the inner capacities of such firms to remain resilient to competitive challenges.

Having become their own reasons for being, institutions — whose size gives them a concentrated economic advantage — call upon the state for legislation to help promote and preserve their special interests. Such political intervention — which becomes identified with the maintenance of the status quo — is incompatible with the creative and productive demands of a vibrant society. Such efforts inject rigidity into the social system, a consequence of which is to weaken the instrumentalities and processes that produce the values upon which a society depends. In such ways, as some historians have observed, institutions threaten the health — even the survival — of the civilizations from which they emerged.

To those who are prepared to see events free of the red, white, and blue lenses with which their eyes have been fitted, the stifling and debilitating nature of our institutionally-directed society should be evident. If we are to live free, rational, and responsible lives, we need to become aware of the interests being advanced by any form of collective behavior. The Roman politician, Cicero, popularized the question "cui bono?" (i.e., "who benefited?") in confronting the origins of political assassinations or other political undertakings. It is now "politically incorrect" to ask such questions, and those who so inquire are often labeled "paranoid" or advocates of "conspiracy theories."

But as a friend of mine commented, "I am not interested in conspiracy theories; I am interested in the facts of conspiracies!" From such a perspective, one begins to unravel legislative programs that have, as their underlying purposes, the transfer of property from some to others (e.g., subsidies, government loan guarantees, eminent domain, government contracts) or the restraint of human action that might be disadvantageous to established interests (e.g., legally mandated trade and product standards, licensing, tariffs). Those who seek to insulate themselves from the vicissitudes of a creative and energized society will preach the virtues of uniformity and standardization. As we have learned from the institutional enforcement of "political correctness," even the content of thought and speech must be regularized, with deviants hunted down as "hate criminals." Wars and other expressions of "foreign policy" can also be seen as the exercise of state violence to promote institutional purposes at the expense of those with nonconforming interests.

If these institutional rackets are to continue, however, it is essential that their individual and social destructiveness not become known to the rest of society. To this end, the state will insist upon maintaining its secrets — in the name of "national security" or "executive privilege" — all the while insisting upon a greater intrusion into the details of your life. The distortion of language will also occur, as the state — with the help of its media scribblers and babblers — will try to convince us that dropping bombs on people is an act of "liberation," that expanding a police-state fosters "freedom," and that those who fight back when their neighbors are tortured and killed are "terrorists."

But the Internet, and other alternative sources of information, make it increasingly difficult for the state to maintain its desired monopoly over the contents of the minds of its citizenry. Whether the state will be able to continue playing out its charade of "what’s good for General Motors is good for America," may prove to be a moot point. If the historians are correct in their assessments of the collapse of previous civilizations, the continued structuring and ossification of life for the purpose of preserving institutional interests may likewise seal the fate of the American civilization.

Perhaps before our civilization completes its entropic fall, the information revolution may awaken our neighbors to the destructive consequences of allowing their lives to be structured for the benefit of institutions that have shown, by their lack of resiliency, to be no longer capable of producing the values upon which society depends. Even the most credulous among us may discover how they have allowed their lives — and the lives of their children — to be exploited and consumed on behalf of purposes that nowise comport with their own.

At the ending of Orwell’s Animal Farm, the barnyard bourgeoisie look through the windows of the main house to witness their swinish rulers living it up at their expense.

One can hope that even the most fervent flag-waving zealot may be as capable of such an epiphany as their ovine counterparts.

Butler Shaffer [send him e-mail] teaches at the Southwestern University School of Law.

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