Elizabeth Leyne and Yvette Nonte write,

For the IC [Intelligence Community] customer dataset, there was a stark dichotomy between the highest-level customers at the Cabinet level, who offered glowing praise for the IC, and customers a few echelons below, who gave the IC mixed to poor reviews.

Pointer from Larry Catá Backer.

Pleasing superiors while producing low-grade work is something that can happen in any organization. But in the private sector, this behavior will be weeded out, either by smart top executives or by the Darwinian competition of the market.

Philip K. Howard writes,

Unlike rigid rules, an open framework of goals and principles leaves room for context-based judgment. This is how law aligns with prevailing norms of what is fair and reasonable. Such a system can be responsive and practical because, as was he case with Australian nursing homes, the people involved are able to use their authority to take responsibility and get things done.

In business, there was a movement in the 1990s to give front-line workers empowerment rather than a constraining set of rules. The idea was to throw out the procedures manual and instead give the worker a goal of pleasing the customer, subject to a few constraints.

I once suggested this sort of approach for regulation. I called it principles-based regulation. Instead of auditing banks against a specific set of rules, audit them against a set of principles for safety and soundness.

Howard is suggesting something like principles-based management of government policy. But there one has to be careful. Part of the idea of throwing out the procedures manual and instead giving someone discretion in how they achieve management’s objective is that the employee takes on accountability for results. Autonomy and accountability go together. That approach would be antithetical to how government works now. In general, no one has accountability. And government workers do not have much autonomy, either.

As far as I know, the term was coined by Handle.

Incumbentocracy is a big topic, but in general, I’d say if you look at the set of names in the top echelon of a lot of different areas, the longevity and stability of those sets has tended to increase a lot.

Think of Harvard. Think of the NYT. Prestige hierarchies appear to be stable and self-perpetuating. But I wonder if we are in for some instability in the next twenty years.

Markets are less stable. These days, it seems difficult for a firm to remain on top for more than a few decades.

I enjoyed this interview. Marc says,

Substack isn’t a new form of communication; in fact it’s the original form of Internet communication — the written essay, the IETF Request for Comments, the newsgroup posting, the group email, the blog post. But until now you could never get paid for writing online, and now all of a sudden you can. I think it’s hard to imagine how transformational this is going to be.

Substack is causing enormous amounts of new quality writing to come into existence that would never have existed otherwise — raising the level of idea formation and discourse in a world that badly needs it. So much of legacy media, due to the technological limitations of distribution technologies like newspapers and television, makes you stupid. Substack is the profit engine for the stuff that makes you smart.

We may hope.

Later, he says,

My partner Alex Rampell says that competition between an incumbent and a software-driven startup is “a race, where the startup is trying to get distribution before the incumbent gets innovation”. The incumbent starts with a giant advantage, which is the existing customer base, the existing brand. But the software startup also starts with a giant advantage, which is a culture built to create software from the start, with no need to adapt an older culture designed to bend metal, shuffle paper, or answer phones.

As time passes, I am increasingly skeptical that most incumbents can adapt. The culture shift is just too hard. Great software people tend to not want to work at an incumbent where the culture is not optimized to them, where they are not in charge.

I was surprised that Amazon was able to develop a logistics system before Wal-Mart could figure out the web. But Marc’s point is that as software becomes more important, the incumbent firms lose their advantage.

Marc is bullish on crypto, which he says provides

distributed consensus — the ability for many untrusted participants in a network to establish consistency and trust. This is something the Internet has never had, but now it does, and I think it will take 30 years to work through all of the things we can do as a result. Money is the easiest application of this idea, but think more broadly — we can now, in theory, build Internet native contracts, loans, insurance, title to real world assets, unique digital goods (known as non-fungible tokens or NFTs), online corporate structures (such as digital autonomous organizations or DAOs), and on and on.

Maybe. But I wonder: in the process of moving from existing trust mechanisms to “distributed consensus,” how many Chesterton fences have to be torn down, and how well will that go? When bad guys do their thing, what will the “distributed consensus” do about it? Of course, “it will take 30 years to work through all the things” may make allowances for such problems.