Systems Get Gamed

How I explain social decay, particularly in academia

Lorenzo Warby writes,

The claim that we have a uniform human nature is false, and nothing good can be built from it.

Matt Lutz writes,

Is relativism the only problem with the humanities? No way. Is it the foundational problem with the humanities? Maybe, although I wouldn’t bet on it. Is it a major, central problem with the philosophical underpinnings of the humanities? Absolutely it is! And it has been since the 90s. Boghossian is entitled to his “I told you so.”

I agree with Warby and Lutz that academic intellectuals have gone bad. But I do not blame bad philosophy per se. Blank slate-ism and relativism are symptoms, not causes.

My framework is that people work within systems. Systems decay as people learn to game those systems.

I think that one could extend this into a general theory of institutional decay. Every business, religion, political system, or set of social norms is subject to being gamed. People will figure out how to use the rules and practices of the institution to gain personal advantage, at the expense of the overall health of the institution. If the institution manages to adapt and renew itself so that its incentives deter the worst sorts of gaming, it will survive. Otherwise, it will rot.

I noticed this early in my career as a would-be macroeconomist. A lot of interesting questions and hypotheses in macroeconomics were closed off in the 1980s. This was not because macroeconomics was “solved.” It was because Stanley Fischer had figured out the game of placing his Ph.D students in academic positions. If you were in graduate school at MIT (which I was) and you were one of Fischer’s students (which I was not), you got a good academic placement. Otherwise, no. In my case, I ended up working at the Fed, and even that position I obtained primarily because of my connections from having been a research assistant there.

Gaming compensation systems

When I worked at Freddie Mac, I noticed that senior management was constantly tinkering with bonus and compensation systems. That turns out to be a necessary strategy, whether the executives were conscious of it or not.

Compensation systems are always going to be gamed. Management is trying to get the maximum effort in return for the least pay. Workers are trying to get the most pay for the least effort.

In this context, keeping any compensation system in place for many years is like continually playing “rock” in the game of “rock, paper scissors.” You are going to lose once the other person figures out your system.

Consumer-driven markets are less subject to gaming than is central planning. Consider a nail factory (I am not the first economist to use this example). In a market economy, the factory will produce the nails that yield the most value to consumers. In a centrally planned economy, the managers will produce nails based on the criteria set by the planners. If the planners judge the factory managers based on the quantity of nails, they will produce a lot of tiny nails. If the planners judge the factory managers based on the weight of nails produced, they will produce one gigantic nail.

The Academic Game

Warby and Lutz see that the academic game is not working well. Warby blames it on a philosophy of blank slate-ism. Lutz blames it on relativism.

Stepping back, I see the problem in terms of the system. I think that the game that at one time worked to elevate brilliant scholars has been thoroughly gamed by midwits. The result is a system that places a premium on conformity.

The academic fads that survive are those that any midwit can participate in. The sort of intellectually gifted, independent-minded scholar that could attain a prestigious professorship at a university in 1950 would be weeded out by the current system by the time such an individual could finish a postgraduate degree and apply for a faculty position, if not sooner.

I do not think that the system will be fixed by somehow seeding academia with a better philosophical framework. I am afraid that you have to blow it up and start over.

substacks referenced above: @

On the Boghossian Report

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The uniformity delusion in Chinese thought and Western progressivism