Home On the Agenda In What Ways Have Our Institutions Grown Less Rational?

In What Ways Have Our Institutions Grown Less Rational?

October 7, 2014

Our institutions—business, politics, health care, criminal justice, and education—are failing to deliver what they’ve promised, argues Dan Yankelovich.

We are not accustomed to judging our institutions by how faithfully they adhere to their own mandates. I am shocked by the conclusions I reach when I do take this perspective.

Consider our hugely successful institution of big business. Since the 1970s, the doctrine known as shareholder value has dominated our business culture. This is the doctrine that the investors who own the company’s stock come first and take priority; all other stakeholders take a back seat.

This means that a casual day trader with no stake in the company other than some shares he bought yesterday and may sell tomorrow is given precedence over all of the company’s employees, however committed and effective they may be. The company’s obligations to the larger community are likewise shoved to the side in favor of shareholders. The long-term interests of the company are subordinated to the trading manipulations of hedge fund managers who don’t give a damn about the company and want only to add to their unimaginably huge, undeserved profits.

It is hard to conceive of a more irrational, shortsighted and frankly stupid doctrine for a nation that prides itself on maintaining a democracy-friendly form of capitalism.

In the domain of politics, our cult of the self has engendered a form of polarization where voters grow ever more doctrinaire and opinionated—a symptom of the willfulness I identified in a previous blog post. Our leaders are even worse—a situation that guarantees paralysis at a time when urgent problems cry out for action.

This form of nuttiness is almost un-American in its lack of pragmatic practicality.

We also have an irrational health care system where physicians take ever more time away from patient care because of onerous paper work demands imposed by our weird insurance system.

In our health care system, the very concept of insurance has been badly distorted. The purpose of insurance is to protect individuals against random catastrophe. Yet our health care insurance system is not designed and funded primarily for protection against catastrophe; it is instead a perverse form of prepaid medical service that undermines the basic principles of a free market economy. It is as if we had established a prepaid “food insurance” system where a huge bureaucracy bills people for the food they buy and consume. No one knows the real price of what they are buying or the justification for their bills, but yet everyone is expected to be price conscious.

This form of nuttiness is almost un-American in its lack of pragmatic practicality.

Our criminal justice system almost seems designed for destructive purposes. In its efforts to “protect society,” it targets young black males and mentally ill people—the population groups who start out with fewest resources for coping with our complex, class-ridden society. It then punishes them in ways that further reduce their life chances, increasing the threat they pose both to themselves and to the larger society.

Rationally, if large numbers of our most vulnerable citizens are to be imprisoned, our jails and prisons should be the largest and busiest source of job training, rehabilitation and vocational education in the country, instead of a century-long rehabilitation failure.

Our K-12 school system suffers from yet another form of irrationality traceable to individualism-run-amuck. It is public knowledge that many other countries do a far better job of educating their children than we do. We spend billions of dollars annually on conducting research on how to improve our schools. But there is little coordination or integration of all this research: each researcher carries out his or her own narrowly focused projects. The result is a vast flood of confusing information that rarely offers insights into how to scale the results to reform the overall K-12 system.

And the closer one gets to our system of higher education the more irrational and dysfunctional it looks. At our most prestigious colleges and universities, senior faculty is in business for itself. Faculty members are free to pursue their own interests and to choose their own research projects irrespective of what others are doing and of national need. This is especially true in the social sciences.

The mismatch between scholars busily writing articles for peer review journals and the needs of the student body is huge. The result is that the social sciences largely neglect both student needs and our nation’s most urgent problems.