Why did the Soviet Union collapse?
Ok, that’s a stupid question - too complex, hundreds of reasons, highly contested historically.
What we can say is that the inefficiencies of central planning in allocating resources to ordinary people played a significant part.
It’s easy to conjure up images of queues around the block for milk and dairy products, mad rushes for the one store that had cooking pots and pans in stock. It wasn’t a pretty picture.
Looking back, I think it’s easy to see this as a direct result of too much structure.
Having bureaucrats sitting in an office deciding exactly what production quota of frying pans to produce in a given region turned out to be a pitiful way to allocate resources.
I think the answer is simple. No government structure could ever match the data contained in the signalling power of prices.
The amazing thing about this is that without any formal structure, the preferences of millions upon millions around the globe come together to organize production through the incentive power of pricing alone.
How much do you ‘value’ that thing? How much is it really ‘worth’ to you? We express that through how we spend our hard-earned cash. No office of actuaries can hold a candle to the complexity of information contained in that unstructured system. Hence no queues for frying pans in modern-day Lithuania.
The question is, where else does an overbearing abundance of structure hinder rather than help?
I would say in far, far too much of our lives.
How much true innovation do companies stifle through management rigidity?
How many children in the school system end up falling into miserable careers, with few life chances because of a narrow-minded view of what is ‘academic’?
How much do we actually compromise our own personal lives through an overly inflexible focus on specific goals?
The point is not ‘let’s throw away all constraints’ and hope for the best. Some structure is good, indeed utterly vital and necessary. But too much is quickly poisonous.
We don’t want Lord of the Flies - total anarchy, warlords stalking the streets, junior employees running amok in large companies. But once you cross the basic threshold to avoid disaster, less structure may actually be more.
Perhaps “structure is most powerful right before the point it no longer exists”.
Less is more, none is a disaster.
This isn’t my idea or graph, I stole it from Sean McClure.
Worth thinking about as applied to how we go about business organization, not to mention our daily lives, perhaps.