Arnold Kling, Complexity Economist

Here is Arnold:

In universities, I would argue that the growth in administrators is symptomatic, not an independent cause. The problem is what is known in the software business as scope creep or feature bloat. The more you add features to software, the more complex it becomes, and the harder it becomes to manage. Organizations are the same way.

It is fitting that Arnold has a background in economics and information systems, and that he thinks this way. I have the same sort of background, and am on the same wavelength. Lets put some meat on the bones of why this type of thing would happen.

Here is what I think is one reason: complexity catastrophe. Complexity catastrophe causes inertia because it:

  1. Reduces the incentive to make difficult choices.
  2. Nearly eliminates the ability to quickly change course.

Remember the second law of thermodynamics. The universe tends toward maximum entropy. Bloat, or creep is the organizational manifestation of this phenomenon. Whereas organisms will die, organizations without active management will stagnate, become bloated and inefficient, and (from the perspective of a product) continue adding features that sound good in an echo chamber, because there is too much gridlock everywhere else to get consumer feedback to product design. From an S-curve analysis perspective, this problem is endemic at the top of the S curve, when a market participant is dominant (or in econospeak, maximally monopolistically competitive).

Here is the problem: universities won’t fail. The threat of failure is the single best way to insure against institutional sclerosis. Eliminate this threat, and at best you put in self-enforced rules that approximate it…which are necessarily never good enough.

Here is a second reason for institutional sclerosis: knock-on effects (or path dependency).

Say you want to offer a program that grants a degree in Chemical Engineering. You would need to offer various levels of math, chemistry, biology, physics, environmental science, law, materials science. I’m sure I’m forgetting some, but take a look at the list…chemistry? That means you need a chemistry lab, and staff to maintain it. That means you need more HR administrators. And what if someone gets hurt? You’re going to need a team of safety experts to maintain the integrity of the lab. You can see where this is headed…

…and that is just one part of a very large program.

I don’t actually have clever anecdotes to this situation in universities. I also don’t think that Arnold’s prescription is either workable or desirable.

One thought on “Arnold Kling, Complexity Economist

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s