Computers vs. the Peter Principle

The Peter Principle vies with Parkinson’s Law as one of the two most fundamental laws of bureaucracy. Parkinson’s Law was first articulated in public in 1955:

“Work expands so as to fill the time available for its completion.”

C. Northcote Parkinson was a professional historian with the famous dry wit that was once common to the British upper class. He turned an article in The Economist into a book, Parkinson’s Law, in 1957. He later offered a corollary: “Expenditure rises to meet income.”

The Peter Principle was first made public in Jan. 1967, in an article in Esquire. This principle announces:

“In a hierarchy, every employee tends to rise to his level of incompetence.”

Professor Peter was a specialist in the area of hierarchical incompetence. He was a professor of education.

Here is his thesis. People get promoted in a hierarchy for as long as they display competence on the job. At some point, however, everyone hits his ceiling of competence. But neither he nor his employer recognizes that this is his top. So, he is given one additional promotion. At that point, he has risen to his level of incompetence. He will cease receiving any further promotions.

It is a plausible theory, but it has a conceptual flaw. I wrote to Prof. Peter on January 24, 1967, in an attempt to help him make his theory more rigorous. I began my letter with praise — an old Dale Carnegie technique.

Apparently, your perspective is a basic part of the minds of the American ethos, however vague the conception is in the minds of the citizenry. They have sensed the truth of your hypothesis, and their basic agreement with you is expressed in that strange American phenomenon which I like to call infracaninophilia: affection for the underdog. Most Americans cheer for the underdog, knowing full well that the man on top is basically incompetent and inferior. “We’re number two,” a major car rental firm announces, thus demonstrating to the public that the opposition’s product is inferior. . . .

However, your theory needs a certain modification. You are assuming, for one thing, the impossibility of hierarchical regression. This is undoubtedly the case in today’s world — tenure being what it is in so many walks of life. However, an administrator invariably has the option of upgrading a particular incompetent within the hierarchy. This is especially true in the civil service jobs. In this case, the superior recommends the incompetent to a higher office within the system, but one which has little direct contact with the first. You shove the incompetents upstairs and out of your hair. Conversely, you fail to recommend the best men for promotion; this keeps them within your own branch of the bureaucracy. In other words, given the Peter Hypothesis, the level of incompetence is in inverse proportion to the bureaucrat’s official record, plus or minus 3.7%. Thus, the worst possible men get to the top fastest.

Dr. Peter wrote back on February 7, asking for clarification.

Is infracaninophilia (love of the underdog) the same as hypercaninophobia (fear of the top dog)? Your concept of hierarchical regression indicates that you have a firm grasp of the fundamentals of hierarcheology. I trust that the book will deal more completely with this under lateral promotions, being kicked upstairs, and pseudo promotions (our language in the book is not always that crude).

If I replied, I did not save a carbon copy of my letter. Unquestionably, Dr. Peter did understand my observations. On page 68 of The Peter Principle (William Morrow, 1969), he refers to hypercaninophobia (top dog fear) and the Hypercaninophobia Complex (fear that the underdog may become top dog). He also includes a section, “Hierarchical Regression” (pp. 152—55), and another, “Hierarchical Regression Stopped!” (pp. 164—65).

I wish I could take full credit for “infracaninophilia,” but the term was first coined by my friend Hans Kraepelin. However, my concept of “hierarchical regression” is original.

Strangely enough, after Dr. Peter’s book was published, Dr. Parkinson wrote a scathing and not-funny review of it — as I recall, in the Sunday magazine of The Los Angeles Times. I suspect that he saw Dr. Peter as infringing on his turf.

In the section on hierarchical regression, Dr. Peter wrote:

One [school] administrator told me: “I wish I could pass all the dull pupils and fail the bright ones: that would raise standards and grades would improve. This hoarding of dull students lowers the standard by reducing the average achievement in my school.”

Peter recognized, as did the administrator, that this extreme policy would not be tolerated by the public.

So, to avoid the accumulation of incompetents, administrators have evolved the plan of promoting everyone, the incompetent as well as the competent. They find psychological justification for this policy by saying that it spares students the painful experience of failure.

The problem is this: every day, you and I must deal with the results of this comprehensive policy. So must every employer. Students who stay in high school for four years probably graduate. But they cannot all read.


Some things of enormous cultural importance take place under our noses, unseen. Practices change the way we live and work, yet we pay no attention.

When was the last time you paid close attention to the keys on a cash register at a fast food restaurant? The keys are no longer exclusively numerical. They are mostly graphic. On the keys, there are tiny images of the items in the menu. The clerk taps keys, one by one, as you place your order.

The cash register computes the bill. Then you hand the clerk some money. The clerk now enters the total of the money that you handed over. For this entry, there are numeric keys. The machine subtracts your bill from the total money paid. The clerk hands you some paper money change, and coins roll down the chute.

Entry-level clerks can no longer compute change.

No one teaches them what my boss taught me at age 14. When someone handed me $5 to pay for a 93-cent single by Elvis, I counted back “94, 95” (pennies), “$1” (a nickel), and then doled out “$2, $3, $4, $5.” Easy. It could be learned in one lesson.

No longer.


Chinese is an ideographic language. It uses representations of pictures for words and ideas instead of a phonics-based alphabet. This made sense politically for a huge nation that was divided into many provinces, whose spoken dialects were so different as to be unintelligible to outsiders. The written language, being ideographic, was consistent throughout the nation. The emperor’s bureaucrats could communicate with each other by sending letters. The emperor ran the postal service, had spies monitoring letters, and could find anyone in the country by means of the postal network and regional censuses. Students had to learn the written language in order to enter the bureaucracy.

In contrast, the ancient Near East and classical civilization used alphabetical scripts. If you learned the language and the sounds of the letters of the regional alphabet, you could communicate through writing.

The look-say method of reading, introduced in the 1920s by Columbia Teachers College, was the educators’ way of breaking the power of the alphabet. This method trained children to recognize whole words. This was a step toward Chinese/Asian education, where memorization of thousands of symbols is vital for literacy because of the absence of an alphabet. The educators’ trinity of Dick, Jane, and Spot were supposed to redeem youthful Americans from the tyranny of phonics. The trinity’s task was to turn readers into memorizers, thinkers into repeaters. Ultimately, it was designed to turn entrepreneurs into bureaucrats. It would re-make pupils into the image of a tenured professor of education.

The result was a steady decline of literacy that continues to our day.

I was an early victim of that experiment. In first grade and second grade, I was subjected to Dick, Jane, and Spot. But in third grade, I had an elderly teacher of the old school who taught us phonics. That was when I learned to read well.

I can recall only one incident in kindergarten. The teacher came by and showed us two papers to color, one of Dick and one of Jane. She asked: “Which one would you like to color?” My answer, even today, I regard as one of the foundational turning points in my academic career: “Neither.”

She told me I had to do one or the other. Not suffering from gender disorientation, I chose Dick. I picked up a red crayon and scribbled as fast as I could across Dick’s image. Color inside the lines? Not me. I handed the completed assignment back to her before she had finished handing out more than a couple of papers to the next kids at my table. I like to think that I handed it back immediately, but I’m not sure I did.

I decided that day that coloring inside the lines was at most a useful academic ploy, never a matter of principle. The educational system never came close to getting me again.

John Taylor Gatto, the maverick who won “Teacher of the Year” in New York City three times and once for the whole state, has described this methodological transition in his crucial book — free and on-line — The Underground History of American Education. In 1991, Gatto quit the public schools in disgust, admitted publicly that he had wasted his tax-salaried career, and has worked ever since to bring back education through home schooling. Here is his version of the story of look-say methodology.

“In 1930, the Dick and Jane Pre-Primer taught 68 sign words in 39 pages of story text, with an illustration per page, a total of 565 words — and a Teacher’s Guidebook of 87 pages. In 1951, the same book was expanded to 172 pages with 184 illustrations, a total of 2,603 words — and a Guidebook of 182 pages to teach a sight vocabulary of only 58 words!” Without admitting any disorder, the publisher was protecting itself from this system, and the general public, without quite knowing why, was beginning to look at its schools with unease.

By 1951, entire public school systems were bailing out on phonics and jumping on the sight-reading bandwagon. Out of the growing number of reading derelicts poised to begin tearing the schools apart which tormented them, a giant remedial reading industry was spawned, a new industry completely in the hands of the very universities who had with one hand written the new basal readers, and with the other taught a generation of new teachers about the wonders of the whole-word method.

Mute evidence that Scott Foresman [the publisher] wasn’t just laughing all the way to the bank, but was actively trying to protect its nest egg in Dick and Jane, was its canny multiplication of words intended to be learned. In 1930, the word look was repeated 8 times; in 1951, 110 times; in the earlier version oh repeats 12 times, in the later 138 times; in the first, see gets 27 repetitions, and in the second, 176.

The legendary children’s book author, Dr. Seuss, creator of a string of best-sellers using a controlled “scientific” vocabulary supplied by the publisher, demonstrated his own awareness of the mindlessness of all this in an interview he gave in 1981:

I did it for a textbook house and they sent me a word list. That was due to the Dewey revolt in the twenties, in which they threw out phonics reading and went to a word recognition as if you’re reading a Chinese pictograph instead of blending sounds or different letters. I think killing phonics was one of the greatest causes of illiteracy in the country.

Anyway they had it all worked out that a healthy child at the age of four can only learn so many words in a week. So there were two hundred and twenty-three words to use in this book. I read the list three times and I almost went out of my head. I said, “I’ll read it once more and if I can find two words that rhyme, that’ll be the title of my book.” I found “cat” and “hat” and said, the title of my book will be The Cat in the Hat.


Computerized cash registers make possible fast food restaurants. Bar codes make possible real-time re-ordering of inventory at Wal-Mart. Check-out lines move faster, so profits per sale fall. Things get cheaper.

You can order a plane ticket on Expedia or any of dozens other travel sites. Ticket prices keep getting lower, despite rising fuel costs. These sites spread information regarding the existence of low fares. But my wife hit a brick wall recently while trying to schedule a trip to California with frequent flyer miles. She wanted the cheapest flight. She had to make the reservation 21 days in advance. She asked the girl on the phone if the 21 days started today or tomorrow. “Tomorrow,” she was told. Wrong. So, she had to pay an extra $50 the next day.

Here is North’s law of the telephone tree. Violate it at your own risk.

“When you reach anyone by way of a computerized phone tree system — “Press 1, press 2, press 3″ — that person does not earn more than $8 an hour.”

With India coming on-line, the person may not make over $3 an hour.

Your ability to make a correct decision becomes dependent on someone whose career is hanging high up in a phone tree.

The Peter Principle is relentless. That person may already have reached his/her level of incompetence. So, when you ask a question, you must assume that this person is not sure of the answer. If it is a crucial question, assume that the person is wrong. If yours is a time-sensitive matter, and you are told that you have until tomorrow to finalize your arrangements, assume that you have until midnight today, your time.

Like the British Navy, a computerized system is designed by geniuses to be run by morons. Computerized systems have driven down the price of just about everything over the last generation. But, from time to time, a system cannot automatically solve your problem. A telephone representative must solve it.

At that point, you are at the mercy of a probable moron.

In any system, 20% of the people are highly competent — pre-promotion — 10% are fairly competent, 40% are competent, 10% are barely competent, and 20% are incompetent.

The odds are against you — 4 to 1 — that the person you have just reached through the phone tree is highly competent.

Make your plans accordingly.


The spread of computer technology is having its civilization-changing effects because it empowers barely functional people to perform adequately most of the time. Computerized systems restrict these employees’ ability to demonstrate their true level of incompetence.

Certifiable morons, derelicts, and the drug addicted are reduced to non-computerized work, which means low-level jobs or the unemployment line, unless they become rock stars.

Computers have been described as incredibly fast morons — digital idiot savants. This, they are. Software makes them appear to be smart. Software that enables the barely functional to perform tasks far above their personal level of incompetence is transforming the world.

This is not a new phenomenon. It is the history of capital: tools that enable us to expand our productivity. But computer technology has vastly expanded the power of tools by reducing the intelligence required to use them. Monkey tap, monkey do.

A college drop-out named Gates and a college drop-out named Dell became multibillionaires by enabling high school graduates who should have flunked out to perform well enough to meet consumer demand at an ever-lower price. As the tax-funded educational system declines, computer software improves.

This fact does not solve our problem at the far end of a high branch on some telephone tree.

July 17, 2004

Gary North [send him mail] is the author of Mises on Money. Visit For a free subscription to Gary North’s newsletter on gold, click here.

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