My dad used to tell me that the way to understand a situation is to follow the money and follow the power. This works well but doesn’t always explain people’s behaviors.
You can broaden this into systems analysis by asking “Who is incentivized/disincentivized to behave how?” Money and power are a subset of all kinds of incentives. The story we want to tell ourselves (or want others to believe about us) is an incentive – as I wrote before, people die for ideas. The desire to either fit in or stand out is an incentive. Vengeance and fear work as incentives. The common thread of most atrocities in the 20th century was a powerful conviction that God did not see the perpetrators or hold them to account. Interpersonal and social cohesion operates with incentives and disincentives, too.
Fundamental: If you want to change a system you must adjust the incentives. Half the challenge is that the people with power to change a system benefit from the current incentive structure!
Consider a complex system like healthcare in the US. It’s incredibly difficult to change because at least four major participants in the system have learned how to optimize it for their own interests. (Sadly, patients are not one of these four.) I’m surprised that a high-leverage proposal from years ago – offer individuals the same tax break on insurance we grant corporations – is systematically rejected, but I shouldn’t be.
Consider legislative bodies. Even the highest character individuals with noble ambitions are usually overwhelmed by the incentive structure of the political system. Disincentives against greed and corruption have weakened in my lifetime. Lies are first tolerated, then celebrated. This is a deep echo from the decline of the Roman republic, and Greek and Babylonian history before that.
You can probably think of other examples with larger and smaller scopes. Education and school administration. Regulatory oversight. Industries dominated by a small number of players. Religious denominations. Voluntary associations.
We trend towards perverse incentives. Left unchecked and unchallenged, we create the conditions for Caesars. “The fault, dear Brutus, is not in the stars but in ourselves…”
