Authority and character vs. process and markets

Working in a non-profit setting with a union and a tenure system, you learn certain things about character and its importance, largely because the motivating "sticks" of authority, process, and market forces are all removed from the equation.  There are processes to deal with poor performance, but they are slow and weak, market forces (if they motivate people at all) mostly only motivate them to build themselves up for jobs elsewhere, and arbitrary authority is somewhere between non-existent and plausibly deniable.  Without those sticks, only a sense of duty will push people to do more than the most minimal. (Some readers might think they know which situation or situations I'm referring to, but I might be referring to other situations as well, and I might even have a different take on the particulars than you realize.) There are good things that come with that academic freedom, of course, not the least of which is the safety to take risks, but there

A commonplace observation is that process or market incentives do not suffer from those defects, and to a large extent that is true.  However, it only goes so far.  In a process-oriented institution, the person who's willing to rules-lawyer things can always find a way to get away with the minimum.  You can make the process stricter, but at best that just defines the minimum upward.  It might get more out of people than you were getting before, but in a dynamic setting, the high minimum of one year is neither high nor low but rather irrelevant in another year, because needs have changed.  So then you're back to "Where does it say that I have to..."

The threat to fire is only effective to the extent that it is a feasible decision, and the transaction costs of replacing a person are real.  Some of it can be chalked up to bureaucracy and regulation and litigation risks and all that, but even in the least-regulated "at will" environments the cost of bringing a new person up to speed is real.  The nature of the labor market will determine how easy it is to get someone who requires only minimal time to become productive.

Of course, people can rationally decide to bear a high transaction cost and endure a period of lost productivity because they don't want "the minimum", but that is only rational if you think on a long enough timeline where the message you're sending reaps long-term rewards.  Ultimately, it's rational at one discount rate but not rational at another discount rate.

But real people are not computers.  They can make good decisions, but they can also choose to  incur costs that were ill-advised in hindsight, or luck out and make better decisions than they had any foreseeable odds of making with the available resources.  And that's OK, because we're human.  Process can only take you so far before choking on its own transaction costs, markets can only tell you "Well, it depends on your risk tolerance", and not-strictly-rational "because I said so" decisions carry potential costs (via morale).  Culture and character matter, and when they fail, and when processes and markets fail, "because I said so" is necessary.

We try to avoid that conclusion in the modern world.  To a large extent that's a good thing:  Process in many settings is known as "the rule of law" and it's a very, very good thing.  A reasonable amount of legal process avoids bloodshed, as history shows up.  Too much gums up the gears, creating a space for people to do the minimum. And Arrow's Theorem, Sen's Theorem, and related insights show us that political process isn't much better.

Markets are very good things, as the failures of command economies teach us.  But Coase's Theorem only applies when you have zero transaction costs, complete information, and well-defined property rights.  To the extent that those assumptions fail, room is carved out for people to do the minimum and get away with it. Holmstrom's Theorem bears that out. And with arbitrary exercise of authority comes the opportunity to suck up to the boss and get on the right side.

So we're back to the fact that character and culture matter.

We try to deny that, and as I said it's largely for good reason.  We try to seek the "win-win" solutions.  We try to insist that we're doing things for purely rational reasons, not just because we want to.  But in the end, character and culture matter.

Sein und Zeitgeist

In Chapter 10, Lee Jussim gets to the question of why inaccuracies and bias in human perception get more attention than accuracy.  On page 153 he addresses an aspect of the issue that I think is most salient to my concerns as an educator: If we believe that a person is unskilled, under-qualified, under-accomplished, or whatever because our perceptions are inaccurate, then "all" that we need to do is change our perceptions.  That isn't always easy to accomplish as a seamless thing, it often requires conscious effort, but, in the end, bringing yourself to say "You know, he/she is actually pretty talented; I'll hire them/admit them to college/etc." is still easier than saying "Uh-oh, this person is way under-prepared, we have work to do to fix that."  Any research that tells us that problems can be fixed by thinking differently is going to attract more support from the intellectual class than research that tells us that we'll have to do a lot more work on problems that stubbornly defy easy solutions.

On page 158, Jussim also notes that social psychology is more fun if you find bias and inaccuracy.  If people generally perceive things pretty accurately then what is there to say?  What need is there for a consultant?  People will figure things out and, um, yeah.  But if bias and misperception are everywhere then there's something to work on.  This is akin to issues of publication bias in other areas of science.  Perhaps bias research is biased in favor of bias research?

If the concerns in the first paragraph are largely social and political, and the concerns in the second paragraph are technical and pecuniary, then I think there's also a third contributor to the intellectual zeitgeist: Negative results from Western intellectuals in the 20th century.  From them, we learned that measurements of distance and time are not absolute, but rather depend on how you are moving relative to someone else.  (Einstein)  We learned that mathematics is incomplete, and contains statements that cannot be proved by pure logic.  (Godel)  We learned that matter is not composed of solid particles with fixed positions and motions, but rather is "fuzzy" and smeared out, with uncertain positions and velocities. (Schrodinger, Heisenberg) Then Turing taught us that computers, the defining technology of the modern era, would have limits to what they could compute.  Subsequently, Arrow taught us that it is impossible to even construct reasonable and egalitarian procedures for picking a winner in an election!*  All of this set the stage for post-modernism and numerous other ideas from French intellectuals, and ultimately led to classmates in the 1990's telling me that scientific truth is just, like, a social construction, man.**

Mind you, I would happily argue that relativity, quantum mechanics, formal logic, computer science, and election theory should not be taken as death knells for ideas of objective knowledge and accurate perception.  I would be happy to argue that all of these ideas are misinterpreted.  However, if we are discussing how these topics are viewed by the educated classes rather than how they ought to be viewed then I think it's clear that the zeitgeist is favorable to the notion that humans can't really, like, know anything.  And, having just graded a stack of final exams, I am also favorable to the notions that most humans are unable to, like, know anything!  :)

*What Arrow's Theorem really says is a bit more subtle than that, but let's leave that aside for now.  Some other time I'll argue that the Gibbard-Satterthwaite Theorem can be interpreted as a theorem about conflicts of interest.
**However, the "science wars" of the 1990's, in which some humanities scholars went way too far in their critiques of science, became irrelevant after the 2000 election.  The academic community found a new common cultural enemy, and recently I read an article (can't find the link now) in which one combatant on the left wing of the "science wars" now finds himself on the side of objective scientific fact when facing right-wingers who argue that global warming is just, like, your opinion, man.