Three Abstract Pervasive Problems in Human Society

Some of the biggest problems in the world are actually subtle and meta, but they're pervasive: the Proxy, the Agent and the Institution. And it's not that they are inherently bad -- it is that they are often accompanied by bad. Which itself is part of the problem, because the good is closely related to the bad, but we want the baby and not the bathwater. Furthermore, comparing each of these three problems, we see that they are similar, but still distinct from one another. And lastly, they are pervasive in human society. Billions of people are tripped up by them, seemingly multiple times a day every day, for much of their lives. And as a society, as a civilization, it's an old problem that has been recurring for thousands if not millions of years. They are such old and pervasive problems you might naturally think they are difficult or perhaps unsolvable problems, but the funny thing is that they are not. You just have to know how to recognize them and solve them, or avoid them. And the ability to do this, or the application of solutions or mitigations for them are just not evenly distributed. So part of the challenge is to understand that these phenomena exist, and to learn how to recognize or avoid them, but also to make sure everyone (or at least, enough of the right people) know how to do these things. Like the saying goes: any history we don't learn will be doomed to repeat.

The Proxy Problem

Many things we seek, buy, build or engage in are not the thing we truly want but merely a proxy for it; there are many examples in education: people seeking expensive "elite" degrees when what they (should) really want is education, or seeking education when what they (should) really want is happiness/health/wealth/etc; people seeking a college degree in order to get a "good" job when what they're really trying to do is find a way to emit a signal that they are of higher/right quality for the given job, and to more likely pass through filters. Did you take drugs truly because you wanted to take drugs, or because you wanted to be happy, and ideally as fast as possible? What if you could achieve the latter without doing the former? The trick here is to identify what the individual or society truly wants as the end result, and think of a way to achieve it in a way that is cheaper, faster, cleaner, safer, more efficient, more fair or otherwise better than the default way being compared. Some needs are complex and layered -- a graph or tree of desires, options, effects, constraints, rules, etc., and so when doing analysis you may not want to climb back to the "root" of the needs tree, because there are desires and effects and details and byproducts farther down the branch that would be a net-win. But it's important to understand the true goal, otherwise there is a chance that much waste will occur, many opportunities lost or overlooked, and excess complexity created and coddled instead of an alternative which would have been much simpler, more transparent, honest or direct. Do you want to work at Goldman Sachs or do you want a job? Do you want a job or do you want wealth? Do you want wealth or do you just want security and trinkets and the freedom to be yourself? Can you achieve these latter things in some other way? Can we reorganize government or society so these needs can be met in some other way that is more direct, honest, efficient, compassionate, fair or productive? Thinking about the proxy problem and analyzing any situation with respect to it often turns into an exercise in what is sometimes called "The Five Whys" technique. Because when some initial statement is made and assessed we immediately ask, "Why is that?" and then when that question is answered we follow with another, "Why?" about that, and then another answer, another question, and so on, until we (in theory, ideally) arrive at the root of the tree, the ultimate source of the problem and the goal or collection of goals or risk mitigations we were truly trying to address. We arrive at the thing we want -- not what is merely a proxy for it.

The Agency Problem

Whenever there is a separation between a person or entity that wants something, and the person or entity that carries out that plan or fulfills that desire (such as an actor and their agent), then the second party, the Agent, is often not perfectly incented to act in a way that is truly in the best interest of their client, but rather in the agent's own self-interest, which may actually be opposed to the client. An example would be a business owner that wants a certain product created quickly and well and an external skilled contractor (or even an internal salaried employee) who wants to maximize his own profits by maximizing billable hours by maximizing the amount of makework or rework or dependency. There are two general ways to mitigate or eliminate the agency problem. One obvious way to is to have no agent. Both the client and the agent are one, the same person or organization: there is no middle-man or hired gun, nothing outsourced or delegated. A second way is to keep the client/agent separation but structure the relationship so there's an explicit contract that aligns rewards between the agent and his client so that they either both win or both lose, and they win or lose together in proportion. The classic example of this method of solving the agency problem is in business where multiple partners who found a business are each given shares of the ownership of it: since they each have equity in it, they each have incentive to make the pie (revenue, profits, acquisition price, etc.) as big as possible, because as the pie gets bigger then each slice gets bigger, so everybody wins. But if the pie stays small, or nothing (size zero), nobody gets anything. In practice, even in business the relationships are often more complex than this, both over time, and with respect to individual goals, and because each equity partner gets a different percentage, or one parted with mostly cash and another with time, and some stakeholders are employees or contractors or vendors. So in reality it's hard to get everyone's interests perfectly aligned and fairly proportioned, but part of the art of business (and of any human relationship, really) is coming up with whatever "best attempt" arrangement you can to create so-called win-win situations. Make the best of everything you can and move along to the next thing. (Because there will always be a next thing, a new situation, another relationship or opportunity or potential relationship, generally, right up to the moment when you die.)

The Institution Problem

Any institution created to address a problem becomes addicted to its own existence and the support it receives, and the security of a predictable paycheck & life routine, and thus tends to not want to truly fix or eliminate the problem, merely to temporarily mitigate or ameliorate it, but for only so long as the institution itself continues to exist, and is given power, wealth and control. For example, if you're a member of the US Congress, you're going to tend to not want to look for ways to eliminate the need for Congress, or shrink it, or replace it with something more efficient or responsive to the will of the people -- if you can give the appearance of doing these latter things, while still keeping your job and keeping the institution of Congress going, fine, but you're not truly incented to do the latter if it means the former goes away. Institutions, once created, further tend to seek more wealth, power and control, with no natural upper bound unless pushed back against by other external forces (such as a finite budget, or lack of political will, or competition from other potential receivers of funding.) Institutions tend to accumulate more complexity and more rules, and more process and paperwork, the larger they are and the longer they operate. Institutions, as they get larger and older, tend to seemingly invert the apparent purpose of their existence from being in a primarily submissive role of serving others (in exchange for money, or whatever) to instead being in a primarily dominant role having others (customers, citizens) serve the institution's needs and desires, as much as possible, while giving back in exchange as little as they can get away with while continuing to keep themselves in existence, and keep the game going.

The Proxy-Agency-Institution Deluxe Combo Effect

There are cases where all three of the above effects are in play, adding up to cause worse results and more distorted motivations and ecosystem impacts than if any single one of the effects existed alone.

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