Thursday, May 22, 2014

A Cynical Argument for the Liberal Arts, Part Eleven

See also parts: [Zero] [One] [Two] [Three] [Four] [Five] [Six] [Seven] [Eight] [Nine] [Ten]

The line of thought so far is that:

1. Cynicism is powerful and can be beneficial or detrimental to the individual, to society, and employers,
2. Cynicism is better learned or cultivated at liberal arts colleges than professional programs, and in particular there is a better chance that through diluted exposure, graduates are more likely to be responsible critics and users of the philosophy.
3. That this is not obvious to employers, despite what they say on surveys, and
4. That the employability deficit can be overcome by liberal arts colleges themselves.

We start by showing that organizations breed Cynicism. Because I have cast classical Cynicism as a solvent for epistemology, allow me to describe organizations accordingly. The Darwinian understanding of the production and memory of novelty is fundamentally about information and its relationship to the world, which is an ideal tool for us here. In biology, informational signals are transmitted through time by genetic and epi-genetic states that get translated into phenotypes (the bodies of plants and animals and their behavior), which then compete with each other for survival and reproduction. The result is a competitive truth-finding exercise that randomly explores the natural world (including the ecology itself) for relative advantages. Evolution only proceeds non-randomly where these truths are discoverable. For example, it may be in the long-term interests of bacteria to figure out how to travel to other planets, but this ability may not lie within the discoverable landscape of genetic traits.

Modern organizations are similar to biological entities. They encode information into processes, procedures, paperwork, job definitions, and so on, which I'll refer to as an ontology. The ontology loosely represents the way the organization "understands" the world. Of course, it's not really intelligent the way people are--it's more like a machine, which is the metaphor I began with. The machine has a certain amount of randomness in its behavior, but it will probably have well-defined ways of perceiving the world and encoding those perceptions into the bureaucratic language of its ontology. For example, a team of accountants that produce an audit report create an official understanding of the organization's monetary value, cash flow, and so on. This information can be transmuted into reality too, for example a company with solid financial statements can get a loan to build a new factory. There's nothing in the ontology that requires morality (Google's "don't be evil" aside), which lies within individuals, the not organization per se.

Just like in biological ecologies, most organizations compete for limited resources. This is truth-finding when advantages are discoverable, which implies that they can be perceived by the organization. Those with limited ability to understand the world will be at a disadvantage. You can watch this play out in real time at a basketball game. Motivations are clearly understood through the rules of the game, and the ways of knowing success are deliberately clear--the basket even has a net hanging from it so that it's obvious when points are scored (compare this to rating figure skating). This creates a competition between the two teams for truth-finding, which in this case means finding more effective ways of playing the game (better strategy, tactics, training, players, etc.). This would not be the case if points were scored entirely at random. From this point of view, the fans turn out to see the evolution of team ontologies. These unfolding histories are the subject of counterfactual conjectures ("what the coach should have done was..."), which the fans are unlikely to think of as metaphysics, but it fits the mold.

Cynicism is the life and death to organizations. If its conception of reality is sufficiently undermined, say by an enemy general using deception, an organization may make bad decisions. It can also easily fool itself. I wrote a series of articles about this for the Institute for Ethics & Emerging Technologies, which you can find here, here, and here, and I'll pass over this point, called "wireheading" in computer science literature.

But Cynical attacks on the reality of others is so effective that it can be a means of keeping an organization alive too. This morning a colleague walked in, and in our conversation volunteered the following story. I have no way to verify it, but it illustrates the point.
"Joe" gets a degree from an online college, and is delighted when an school-arranged internship turns into a real job upon graduation. He is happy at the job, but is fired after six months and a day for unspecified reasons. A new graduate is hired in his place. He discovers that the CEO of the company is also on the board of the college he graduated from, and hypothesizes that  the company is used to inflate gainful employment percentages for the college.
In this tale, the college is debasing what "gainful employment" means to the department of education. The next story should also be treated as apocryphal. It illustrates how tangled these signals get, and how Cynicism naturally emerges. The story was told to me by a historian friend who said it originated with someone in the State Department.
As the story goes, the leadership of the cold war USSR needed good information about the size of their economy. But they couldn't trust their underlings because Cynicism was a survival trait: tell the boss what he wants to hear. Instead of accepting the bloated over-optimistic estimates of their own people, they relied on the CIA to tell them the truth. On the other side of the world, the CIA had indeed calculated what they thought the size of the USSR's economy was, but the number was so small that they thought no one in Washington would believe them. So they artificially doubled the number. Therefore the Kremlin used an estimate of their own economy that was about twice as big as it should have been.
These stories, true or not, illustrate the kinds games that are played within and between organizations. When they have happy endings, sometimes we call them "disruptive technologies" or "competitive advantage." On the other hand, sometimes we call them Enron and Bernie Madoff and mortgaged-backed securities.

Bureaucrats are usually thought of as boring, but nothing could be further from the truth. They handle, with their copy-fluid-stained fingers, the neurology of the organization. The reality by which it lives and dies is contained in those forms and procedures for acting on forms, and the relationship between the content and actual reality is constantly being subverted. People (gasp) lie on paperwork to get what they want. A sufficient break with reality leaves the organization in a state like psychosis. Or like the dodo bird--choose your metaphor.

For a vivid development of a psychotic break with reality, read Michael Lewis's The Big Short, where he describes how the ratings agencies were 'gamed' to bless crummy investments with the official stamp of worth. These ratings are almost literally "coins of the realm," since they limit the behavior of institutional investors. A quote from page 98 of Lewis's book:
The big Wall Street firms [...] had the same goal as any manufacturing business: to pay as little as possible for raw material (home loans) and charge as much as possible for their end product (mortgage bonds). The price of the end produce was driven by the ratings assigned to it by the models used by Moody's and S&P. The inner workings of these models were, officially, a secret: Moody's and S&P claimed they were impossible to game. But everyone on Wall Street knew that the people who ran the models were ripe for exploitation.
This is epistemological warfare, and you want the most capable Cynics on your side.

Update: The image below is taken from the SEC's 2008 report "Summary Report of Issues Identified in the 
Commission Staff’s Examinations of Select Credit Rating Agencies", and has been reformatted around this single bullet point.
Next: Part Twelve

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