603 Conservative blockage of learning and innovation.

 There are many blockages. A general one is that many people are not eager ‘to step out of the box’. Such a step may destroy reputation, endanger a job or position, hurt friendships, disable your position in networks.

 In networks, one can be imprisoned in a position by one’s ties.

 Another obstacle is the loss of economies of scale attached to established procedures , as mentioned in the previous item in his blog.

 This conservatism also arises among scientists. Lakatos proposed the theory of ‘research programmes’ that harbour a ‘hard core’ of basic assumptions that my not be broken. There is a ‘protective belt’ of subsidiary assumptions that can be modified to protect the core when it is threatened by falsification. In economics, the assumption of the maximisation of utility by rational actors is an example of a sacrosanct core assumption. If it is threatened by the facts, one picks a more sophisticated production- or utility function. If your work violates the core, you will have to institute a new journal with like-minded.

 In the economy there are economies of scale, but also diseconomies. Communication in an organisation increases with the number of direct contacts in the network, which increases quadratically with the number of people, which increasingly crowds out work. That is why hierarchy invented, to limit the explosion of communication.

 Something similar arises in systems in general. As the number of elements increases, such as organs in an organism, or people in a community, more institutions are needed to keep the elements in concert with the purpose of the system. I call this ‘institutional crowding’. To keep the human body in its ‘homeostasis’, we need blood, a heart and a system of arteries, a breathing system that brings oxygen in the blood stream, a system of neuronal paths to trigger muscles, emotions and cognition, hormones to regulate them, and white blood cells that constitute a system of immunity, sweat to lower heat, and tears to lubricate eyes. As systems expand, elements become more specialised, complicating hom

In social systems we need laws and regulations to keep people in line with the goals of the community, and to satisfy needs. These, in turn, need controls to prevent fraud and errors. In a democracy, it is hard not to satisfy needs and wishes, and institutional crowding results, the more when there is diversity of needs. People get spoiled by the regulations, and lose the ability to cope with problems.

 Institutional crowding is increased by the goal of equality, combined with the fact of diversity. The ideal of equality enforces equality of public service, but diversity of people calls for diversity of regulation. Some services have been delegated by the state to municipalities from the idea that those are ‘closer to the citizens’, and better able to offer tailor-made services, but this is raising a clamour of inequality that is unjust, Then regulations are increased to compensate for this inequality, further deepening the problem of institutional crowding. Institutional crowding immobilises the system, and to enable transformation it has to be pruned. But political competition makes this hard. It is easier to add benefits than to scrap them.

 Thus, democracy is grinding itself into the ground, and this causing a strengthening call for an autocratic regime, which will make matters worse.

 

 

A familiar phenomenon is that a couple of young entrepreneurs make an invention and set up a business to exploit it., with own capital or crowd funding. That is a good side of capitalism. Next. if it is a success and enjoys a breakthrough in the market, they seek capital to finance their expansion. Then they become dependent on the board of shareholders, who are often not themselves entrepreneurs, accept only incremental, not radical innovation, smother the entrepreneurial spirit of the founders, and enforce customary policies for shareholder value, that economise on labour, and reduce service to customers, in the drive for efficiency and profit, which reduce the social value of the company, and often the service on which sales depend. Shareholders thus often have a conservative effect..