The vested interests in organizational stupidity

Supposedly we Americans live in a “knowledge economy,” in which the source of wealth is neither financial capital, physical plants or natural resources, but the knowledge, expertise and intelligence of individual human beings.   We have a whole industry called “information technology.”

But although employers require ever-higher levels of academic credentials, this is not reflected in the work itself.   College graduates wind up doing work that high school graduates once did, and high school graduates do work that school dropouts once did.

In the early 20th century, businesses adopted a practice called Taylorism—resolving factory work into the simplest, most basic, mindless human motions.  Now we have McDonaldization—resolving service work into the following of simple checklists.

Mats Alvesson and Andre Spicer, in their 2016 book, THE STUPIDITY PARADOX: The Power and Pitfalls of Functional Stupidity at Work, attribute this to the tendency of organizations to suppress critical thinking because of their need for obedience to orders and smooth internal functioning.

What they write is true as far as it goes, but organizational stupidity is more than a simple mistake in setting priorities.   Organizational stupidity is maintained by powerful vested interests.

Knowledge Is Power

Knowledge is power.  If I am a supervisor and my subordinate is more knowledgeable and competent than I am, that diminishes my power.   What college graduate, fresh out of business school, wants to be contradicted by some grouchy old skilled craftsman, who has less schooling but may know more than he does?

Harry Braverman, in Labor and Monopoly Power and David Noble, in America by Design and Forces of Production, described the de-skilling of the American work force and the development of technologies devoted to increasing command and control by management rather than increasing productivity as such.

The more knowledgeable and skilled a worker is, the more power the worker has in relation to the employer, both as an individual and as a member of a labor union.   So knowledge and skills aren’t necessarily wanted except where they are indispensable.

A friend of mine who went back to school in mid-life to get an advanced degree in his specialty discovered that employers did not want his new skills.  What they wanted, he said, was “a jack of all trades who would work cheap.”   Employers see more benefit in having replaceable workers than in having  productive workers.

The Iron Law of Oligarchy

 Sociologist Robert Michels’ Iron Law of Oligarchy is the thesis that any organization, no matter what its original purposes, will be taken over by an elite who are primarily devoted to increasing their power within the organization.   He was thinking of labor unions and left-wing political parties, but the same applies to corporations and government bureaucracies.

Anybody who has ever worked for a large organization knows that the way to get ahead is to please the person above you in the hierarchy.

Often this coincides with the mission of the organization.  Sometimes it doesn’t.   Sometimes, as in the case of Wall Street bankers who sold securities based on subprime mortgages, they knew it left the organization in jeopardy.  But they were able to get out and keep their bonuses, so they didn’t care.

General Colin Powell in his autobiography said he was able to rise in the military by “giving the king his shilling”—that is, doing whatever his immediate superior thought was important, and still managing to find time to do his real job.   Eventually, in his speech to the United Nations on weapons of mass destruction in Iraq, he gave the king one shilling too many.

The Iron Law of Oligarchy is not an example of individual stupidity.   Rather it shows how members of an organization, each acting intelligently in their own self-interest, can make the organization fail in terms of its mission.

The Arrogance of Power (and wealth)

Wealth and power foster stupidity because it shields decision-makers from the consequences of their actions.   Decision-makers try to spend their way out of their mistakes rather than take thought.  A good example is the F-35 stealth fighter.

I member reporter Ron Suskind’s quote of an anonymous member of the George W. Bush administration, who sneered at “the reality-based community” and boasted that “we are an empire now” with the power to create their own reality.

Small businesses or agencies, in which everybody knows everybody else by name and they all have contact with customers or clients, can’t get far from reality.   But a large enough organization, with a sufficiently large budget, can go a long while before reality catches up with it.

Reality Asserts Itself

The philosopher Bertrand Russell once wrote that democracies would always defeat totalitarian systems in the long run, because totalitarian dictators could shield themselves from reality and democratic leaders could not.

In the USA and other Western countries, the reality check is supposedly provided by  (1) democracy, (2) the free market and (3) science.   Statesmen who fail to serve the public are voted out of office.  Businesses who fail to serve the public go bankrupt.  Scientists who fail to support their theories with evidence are sufficient.

In theory, this is a never-ending process.  There is no last election, no final transaction and probably no last scientific theory.

But in fact, if one political party or two political parties dominate the political process, if one corporation or a few corporations dominate a market, if a few self-interested groups control funding for scientific research, the people at the top of these organizations can hold off reality for a long, long time.

The only answer that I can see is perpetual struggle.   So long as there are vested interests in stupidity and ignorance, they must be resisted by those with an interest in intelligence and knowledge.


You don’t have to be stupid to work here but it helps by André Spicer for Aeon.

Why smart people buy into stupid ideas: The Stupidity Paradox by Mats Alvesson and André Spicer.  An edited excerpt from their book,

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One Response to “The vested interests in organizational stupidity”

  1. Craig Says:

    The incentives at the top of corporations are high to ensure that the system of inequality is perpetuated. At-will employment makes it easy to purge anyone out that tries to change things.


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