How do we build more exceptional institutions?

Tuesday, August 31st, 2021

In a world where functional institutions are now the exception, Samo Burja asks, how do we build more exceptional institutions?

A key component of institutional health is personnel — people who understand the social system. Every institution has an official “org chart” and set of protocols, but beneath the org chart lies a deposit of “intellectual dark matter” vital to the institution’s function: private social networks, unwritten plans, roles with more or less power than officially stated, and more. This institutional memory resides in the heads of people who know how to use it.

Such people are essential to the maintenance of existing systems. A healthy organization needs leaders who understand not only what is being done but also why it is being done, which allows them to see which areas are succeeding or failing. Departments may be succeeding according to internal metrics but failing to advance the general mission of the organization. It often takes unusual skill to tell these apart. Without enough such people to repair internal drift and respond to changes in the external environment, an organization will become corrupt and obsolete.

Once an institution has enough people who understand the social system, the second key component is effective meritocracy. Merit must be defined in accordance with the logic of the specific institution. Skilled people must end up in the right roles or their talents will achieve very little. Healthy institutions don’t need to achieve the philosophical ideal of perfection. Rather, they need to get enough good people into responsible positions and put highly capable people into the most demanding roles. In most domains, relationships, soft skills, and effective combinations of skills — such as Scott Adams’s concept of talent stacks — tend to be more relevant to success than marginal differences in pure skill. Moreover, an effective meritocracy does not ignore the problem of trust and coordination between its meritocrats. Trustworthiness, loyalty, and other people skills are as important qualities as narrow skill in a domain. The competent people in an organization have to get along, one way or another, or nothing will get done.

This is especially true in politics. President John F. Kennedy was highly capable as a politician, but his success also depended on his looks, charisma, and family resources. He appointed his brother, Robert Kennedy, to be attorney general. An ideal meritocracy would condemn this as nepotism, but it would hardly make sense for JFK to have combed the earth looking for the objectively “best” candidate when he had a loyal, capable brother who was a graduate of Harvard and conversant with his aims. The degree of trust and loyalty between them outweighed any considerations for a marginally more competent lawyer when it came to the question of coordinating on government policy. Historically, dynasties like this were unremarkable, as it was widely recognized that family members would be motivated to work together.

Counterintuitively, this type of meritocracy can sometimes coexist with a rigid class system. For example, Britain in the 1700s was a highly stratified society, with hereditary nobility at the top of the social pyramid. Nevertheless, many of the most powerful people came from the middle class and gentry. Government ministers like Robert Walpole, generals like Robert Clive, and industrialists like Boulton and Watt faced few barriers as they rose to greatness and contributed to the dominance of the British Empire, while less competent nobility retained social privileges without real power. Weaker class barriers could have increased the pool of potential leaders even further, but so long as the pool is large enough, a society can thrive.

Training and education are essential to institutional continuity. A new generation of skilled people must be intentionally cultivated. Autodidacts may sometimes rise on their own, but never in sufficient numbers to make education obsolete. There are no societies of autodidacts; society must instruct its future leaders. Education is indispensable, but credentialism can be a far greater barrier to professional success than a rigid class system and was historically not the dominant system.

The Roman Republic’s cursus honorum put young elites in a variety of military and civil positions to get hands-on experience with the mechanics of power. The Ivy League of the early 1900s taught a broad classical curriculum to young American elites that prepared them for effective leadership, not for a specific profession or area of expertise. Individual companies, professions, subcultures, and other institutions must also pass down their individual traditions of knowledge or see them decay.

Effective institutions must also solve the succession problem. As time passes and skilled people retire or die, an institution must find ways to preserve the knowledge and structures that allow it to function. Existing institutions must solve the succession problem and hand control to people of sufficient ambition and skill. As new power centers arise, elites must find a way to incorporate them into the system. A more recent example is the effort to integrate tech companies into the ruling elite.


  1. Bomag says:

    The shrieking I hear is that these older, successful ways are going to be vastly improved by promoting women and the diverse who have vast, untapped ability to launch us high, high! into the sky.

    I’m wondering if the old ways had a fundamental flaw that brought us to our growing kakistocracy; or was the system hacked by evil people?

  2. Harry Jones says:

    It’s all the problem of succession. You can’t make a good institution with bad people, and good people can figure out the details themselves — except for succession. No one has ever cracked that nut.

    Every elite regresses to the mean in a few generations. Some descend further. The Hapsburgs went from a master race to pathetic inbred circus freaks in a few centuries.

    There’s no avoiding an elite. Elites just happen. An entrenched elite is stagnation incarnate. What’s needed is a new elite every few decades. Establishment gotta fall down and go boom.

  3. Senexada says:

    Honesty is required.

  4. Albion says:

    Jerry Pournelle’s well-known ‘Iron Law’ helps explain the difficulties.

    Every organisation and every bureaucracy becomes dedicated not to doing the job first intended, but to preserving itself. This is because the administrators behind the original ideal will gradually take control and in so doing, maintain that control by deliberately only selecting ‘the right people’ who will support and preserve the power.

    How you break that is a problem, though natural decay and growing entropy will help the decline along and allow new institutions to be found on the ruins of the old.

  5. VXXC says:

    Bomag: “I’m wondering if the old ways had a fundamental flaw that brought us to our growing kakistocracy”


    ”or was the system hacked by evil people?”

    YES, and they’re not Christian.

  6. Dan Kurt says:

    RE: “An ideal meritocracy would condemn this as nepotism, but it would hardly make sense for JFK to have combed the earth looking for the objectively ‘best’ candidate when he had a loyal, capable brother who was a graduate of Harvard and conversant with his aims.“

    JFK would have lived longer had he found and appointed someone other than his brother who stirred up a hornet’s nest by pursuing the Mafia.

  7. Wang Wei Lin says:

    “A key component of institutional health is personnel.”

    I quit reading after the first sentence. When experts state self-evident principles as some special insight they reveal themselves to be part of the problem.

    Seems the civilized world is slipping into tribalism.

  8. Bomag says:

    “Seems the civilized world is slipping into tribalism.”

    Is that a bad thing?

    The modern age is marked by tribal people punking non-tribal people.

  9. VXXC says:

    Bomag is right; we need to get tribal.

  10. Wang Wei Lin says:

    VXXC, Tribalism is ok with me as long as my tribe can sustain itself. Western Civilization tribes will win, but likely in regions instead of nations.

  11. Gavin Longmuir says:

    How do we build more exceptional institutions?

    Maybe that is the wrong question. Elon Musk was interviewed recently with respect to Spacex. One of his comments about designing rockets was that the first question on any system or component has to be — Do we really need this?

    More exceptional institutions might be nice, but that would require more exceptional people … angels instead of humans. The practical answer may be fewer institutions, more narrowly focused. Hopefully doing less, but doing it much better.

  12. VXXC says:

    If we want to build decent institutions again, we must select for Virtu, that is courage over intelligence in any position of leadership or management, or responsibility beyond your own work or research.

    Selecting the Intelligent aka Meritocracy has given us clever test-takers who, being apple polishers and often enough cheaters, fail at every test not on paper.

    The break being exactly college deferments from the Draft, aka conscription. This was not only predictable but predicted; “Decisions will be made by cowards and the fighting done by fools” was predicted for allowing college deferments from conscription. There are many kinds of fights and situations in life that require courage moral and physical beyond mere war.

    This is what infects our society and all the professional managerial class top to bottom: Church, State, Business, every level.

    Nor should it surprise us that shirkers often enough are frauds, that is incompetent as well.

  13. Harry Jones says:

    Every institution is a tribe unto itself. You may as well start by designing them for the purpose of organizing your tribe, whatever you perceive your tribe to be. VXXC, that is your “we.” All practical iconoclasm is tribal.

    Does your tribe have what it takes to become the elite? You have to take your chance and see…

    First, prove you have what it takes to get on top. Then prove you have what it takes to stay on top long enough for history to notice. Hang time. These are two distinct skill sets. These two combined are empirical Virtu. Any other definition of merit is just cheerleading and trash talk.

    No elite stays on top forever. Some groups don’t stay on top for long, and many never even get there…

  14. vxxc says:

    “Every institution is a tribe unto itself.”

    I think you missed something here, a lot of things actually.

    Nice link. The same word repeated over and over.
    It just never works out that way.
    Perhaps the correct word is selection?

    Here is what happened…

    A pleasant village took in a group of desperate refugees. Their children grew up in the village, which was overshadowed by a cave surrounded by skulls.

    Against all warnings of ‘Don’t go there’ the children threw stones and shouted insults into the cave…Until one day…yesterday…the cave came alive with eyes.

    Their taunts dying in their throats the brats turned round. The pleasant villagers faces had turned to stone. The cave is all around them now.

    The end, again.

    Epilogue: The Villagers get their village back.
    They never wanted anything else, anyway.

  15. vxxc says:

    qaryat mumtieat aistaweabat majmueatan min allaajiiyn alyayisina.
    nasha ‘atfalihim fi alqaryat alati taghaa ealayha kahf muhat bialjamajim.

    raghm kuli tahdhirat “la tadhhab hunaka” ‘alqaa al’atfal bialhijarat wasarakhuu fi alkahf …
    aistahza’at bihim alsukhriat wahum yamutun fi hanajirihim aistadar alnaqaniq.

    tahawalat wujuh alqarawiiyn almubhijat ‘iilaa hujaru. alkahf fi kuli makan hawlahum alan.
    alnihayat maratan ‘ukhraa.

    khatimatu: alqarawiuwn yastaeidun qaryatahum.
    lam yarghabuu abdan fi ‘ayi shay’ akhar , ealaa ‘ayi hali.

  16. Harry Jones says:

    That inspires another link:

    Some groups just want to be left alone. If you are your own heap of one, it’s easy to be at the top of it.

    That only works so long as you keep the population from growing. The village way of life doesn’t scale. Nor does it survive collision with the larger world. The Amish only survive because the United States protects them. We sort of keep them like pets.

    But it’s a nice fantasy.

    And let’s not talk about small town politics.

  17. VXXC says:

    The seven samurai work fine at scale. So does the village. All politics are local. DC and Globalist politics are very local, you know. Just oligarchical swine and their feral retainers instead of warriors don’t scale.

    Amish as pets? The Amish would be left alone almost anywhere, really. They live down the road from me in fact, and no one has any quarrel with them at all, great workers in fact and never any trouble. Also their basic humanity and quiet dignity serve as a role model that others would have been wise to emulate, but it was beyond others Iron Age ‘humanity’ not to taunt and throw stones.

    As far as keeping pet, and for that matter the USA keeping pets, yes, we’ve noticed some pets are far more trouble and expense, and grief, and insults, and taunts, and stones then they are worth. Almost an itinerant race of feral ankle biters we unwisely tried to help. As it happens it didn’t work out, as it happens it never worked out, perhaps never will.

    But none care if it works out anymore, the village just wishes to be rid of troublemakers.

    Should point out the samurai are all from the villages. Bit of an oversight, that…

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