Knowledge And Decisions

The systemic approach implies coping incrementally with tragic dilemmas rather than proceeding categorically with moral imperatives. This applies both to categorical defenses of the status quo and to categorical revolutionary opposition to it, and to positions in between. It was the great conservative thinker Edmund Burke who refused to categorically defend the status quo, saying, “A state without the means of some change is without the means of its conservation,”⁹ and “he that supports every administration subverts all government.”¹⁰ In the British struggle with the American colonies, Burke warned his fellow members of Parliament against categorically raising the question of sovereignty “with too much logic and too little sense.”¹¹ Unlike Hobbes and Locke before him, Burke did not defend existing institutions with categorical deduction. He said: “I do not enter into these metaphysical distinctions; I hate the very sound of them.”¹² On the other end of the political scale, even such revolutionaries as Marx and Engels were unsparing in their criticism of other revolutionaries who categorically opposed capitalism without regard to time, conditions, or the inherent constraints of technology. From a Marxian systemic perspective, socialism became preferable to capitalism only after capitalism had created the economic prerequisites for socialism and after capitalism had exhausted its own potentialities as a system.¹³ Even European colonialism was approached in this way, as “historically justified” during a particular era,¹⁴ much to the embarrassment of later Marxists who tended to treat this as an ethnocentric aberration¹⁵ rather than inherent in the systemic Marxian approach.

Once institutions are seen as implicit transmitters of knowledge in the explicit form of incentives — whether financial or emotional incentives — the question can then be faced as to how accurate and effective the particular transmission is. To what extent do the desires, caprices, or exigencies of the institution itself cause the incentives presented to the recipients to differ from the desires of the individual sender — that is, the public or the consumer? How quickly, accurately, and effectively does feedback reach the decision makers, whether they want it or not?

If individual incentives are not enough to overcome stubbornness, systemic constraints will. For example, if an individual businessman should happen to be uninterested in money, his suppliers, creditors, and employees are, and it is only as long as he can earn enough money to pay them that he can survive as a businessman. Conversely, those businessmen who most closely supply what consumers want — whether by foresight or sheer luck — will be systemically enabled to expand their share of the total output of the product.

Insulation from feedback takes many forms. Perhaps the most effective insulation is simply force. The pain felt by helpless victims may be information available to the user of force — whether it be a criminal or a government — but such information is not effective feedback as far as behavior is concerned. Totalitarian regimes may in fact have more information about their citizens than do governments constitutionally limited in their use of secret police surveillance methods. The Nazis were informed as to the sufferings of inmates in their concentration camps, but this information was not feedback in any effective sense. On the other hand, the mere suffering of embarrassment may be sufficient to modify the behavior of those decision makers causing the embarrassment, when they are dependent on the dollars, the votes, or the personal goodwill of those offended. Panic-stricken censorship, apologies, and/or denials of responsibility by decision makers are evidences of effective feedback mechanisms. Both the transmission of feedback and insulation from it have costs. The effectiveness of social processes in communicating knowledge to decision-making points depends in part on these costs — absolutely and relative to one another. A bureaucracy which can envelope its processes in intricate and unintelligible regulations and bury its performance under mountains of tangential statistics has achieved the security of insulation from feedback. Knowledge costs — whether inherent or contrived — are institutional insulations.