Accountability means having our ideas and actions evaluated by others, with those evaluations having consequences. The paradox of accountability is that everybody needs it but nobody wants it.
Everybody needs accountability in order to stay on track. Without effective accountability, individuals and organizations become weak and corrupt.
Nobody wants accountability, because it limits our autonomy. Whether our intentions are good or not, our autonomy is constrained by those who hold us accountable.
Because nobody wants accountability, we try to counteract mechanisms that are designed to create accountability. A CEO is supposed to be accountable to shareholders via the board, but the CEO tries to get around this by “stacking the board.”
Some remarks:
1. With any organization, you can study its accountability mechanisms. Who set them up? What concerns were they trying to address? How well do the mechanisms work? What are their weaknesses?
2. One can interpret institutional history as an evolutionary struggle to establish and evade accountability mechanisms. Organizations respond to corruption by trying to adopt more robust accountability mechanisms. Individuals try to increase their autonomy by finding ways around those mechanisms.
3. The 2008 financial crisis exposed a weak link in the accountability system in an unexpected place: the credit reporting organizations, like Moody’s and Standard and Poor’s. The buyers of mortgage securities were looking for AAA ratings for regulatory purpose only, not because they truly wanted to be certain that the securities were highest quality. The regulators treated the AAA-rated securities very leniently in terms of bank capital requirements, thinking that the credit reporting organizations were more accountable than was actually the case.
4. It seems to me that our society is collapsing because accountability mechanisms are falling apart.
Professors don’t give students bad grades, and students wish to abolish grading entirely. When they graduate, they long to work in the non-profit sector, where for the most part you are accountable for intentions and not results.
The professors themselves are not accountable for doing rigorous work. They just have to worship the diversity religion.
We are losing the small-business sector, which is most accountable to customers. We are replacing it with large corporations that are accountable to government for bailouts and to the social justice mob for approval.
Excellent note. I recall a similar conversation with a colleague months ago.
I think potentially one major foundational flaw of ideas of libertarianism being an attractive (vs relatively niche) political system relates ultimately to avoidance of accountability concepts. Politicians can ‘buy’ voters and supporters by promising to take accountability for various things away from them. In a short hand version, one of libertarianisms’ sales pitch is about self responsibility, which is closely related to concepts of accountability.
Because – as you point out – many people are naturally averse to accountability, the sales pitch of political (or other social philosophies….) that include an ability to remove accountability mechanisms away from the individual is an attractive sales pitch (at the extreme being the ability for the individual to externalise any blame for all downside outcomes onto others or society as a whole rather than facing into a self-accountability that it was their own flaws, mistakes, errors that caused the downside outcome).
Of course, it is an even more attractive sales pitch if you offer someone to externalise their downsides while allowing them to internalising upside….. but that is probably a whole another thread!
Very well said. It also seems like politicians don’t seem particularly accountable to voters anymore. If anything it seems like voters adjust their own views to match what their preferred politicians are doing (or to oppose what the other side is doing) rather holding the politicians accountable.
I think a lot of this comes down to group identity. It’s hard to hold members of your own group accountable because that’s not a stable equilibrium. Eg if Joe Biden, say, assaulted a woman, it wouldn’t make sense for Democrats to hold him accountable by voting for Donald Trump. Holding Biden accountable would just make Democrats worse off.
Once people form tribes, there won’t be much accountability because we won’t hold our own members accountable, and criticism from outsiders will just be ignored (or worse, used as evidence that outsiders are trying to harm us).
I’d like to see some evidence for your last paragraph. By and large, the government attempted to bail out small businesses and offer only something like your loan strategy to large corporations. In my inbox, small businesses seem to have been no less likely to send out emails in favor of Black Lives Matter than large ones. Amazon is more accountable to its customers than the individual sellers on Amazon are.
In my specific area, healthcare, this case makes more sense. But seeing how different it is as a field from other parts of the economy, that tends to make me doubt this is an accurate descriptor of the economy as a whole.
I found this post to be thought provoking. I’m not sure I agree with remark 2, or maybe it is put too succinctly. I don’t see why organizations would respond to corruption by adopting more robust accountability mechanisms. Many organizations are inherently weak against corruption.
I, too, would like to see evidence of the last paragraph, but I’m inclined to believe it. Even though the government has extended some loans to small business, there are much larger efforts to ensure survival of big business. And some of the big businesses got loans as well. I’m also willing to believe that wokeness is more prevalent among large businesses than small. If one tends to believe that the cost of politically organizing is higher for small business, then it makes some sense that large business is able to extract the most rents.
Concur completely. Shout it from the rooftops.
And let’s develop it further to cover political governance.
Accountability can be considered as direct (e.g, consumer choice) or intermediated (e.g., regulatory agencies). The latter is much more prone to public choice issues than the former and I would argue a big reason why accountability is crumbling in society generally. Anyone who has perused the catalog of absurdity that is the annual report of the Council of Inspectors General will have an idea of what I am getting at but there are countless other examples.
The USA Constitution is much celebrated for its scheme of separation of powers. But separation of powers diffuses accountability. Is the poor performance of USA federal programs the result of poor congressional design or poor execution? Or both? Where is the accountability?
The greater accountability within a parliamentary system comes from members of the legislature actually having to take responsibility for execution rather than simply taking grand standing pot shots in oversight hearings.
The Federal Council of the Swiss Confederation, for example, has seven members elected by the Federal Assembly each of whom has executive responsibility for a portfolio of programs. The title of President carries a one year term that rotates amongst the members. Unlike in a typical presidential system, the chief executive is not responsible for everything and thus accountable for nothing. And because Federal Council members are elected by a Federal Assembly proportionately representing the full breadth of the population, there is no cottage industry devoted to “blame the voters” as is typical in presidential systems. Parliamentary systems are empirically better managed and more efficient and rarely produce the sort of bewildering redundancy in government programs that is characteristic of the USA federal government. Government consumes a smaller share of GDP in the Swiss Confederation than in the USA.
And unlike the highly politicized USA Supreme Court whose decisions are random and arbitrary, the citizens of the Swiss Confederation enjoy the substantive rule of law. Quarterly referendums ensure that the citizens directly can hold their courts in check.
Perhaps most importantly, federalism is a real thing in the Swiss Confederation and the cantons have much more independence and responsibility than USA states, and because of this strong sense of subsidiarity, voters can hold members of local canton governments accountable. There is much less diffusion of accountability between local and national government.
“We are replacing it with large corporations that are accountable to government for bailouts and to the social justice mob for approval.”
This saddens me on a personal level, but I’m not sure practically how it will negatively effect the qualify of life for an average American. Drop in income? Inflation? Just an overall unease?
In spite of all the uproar this year, it’s surprising to me how upbeat the news seems to be. Obviously the media is happy to see Trump losing, but the sheer level of support I see for the BLM protests makes me think people in general are positive about the changes. I have family in Michigan, and although some people are very unhappy with the governor- I personally can’t blame them- I don’t think she’s doing poorly if you read the polls. Certainly the Republican party’s senate candidate looks to have a very uphill battle. This isn’t the only way of measuring discontent, but I’m not seeing it elsewhere either.
Preference falsification. Everyone insists the emperor’s clothes are simply the best. You can’t judge by appearances during an inquisition.
Every time Stalin ends a speech, people give a standing ovation for minutes, because you can’t afford to be the first person who stopped clapping.
We’ll find out in November how people really feel won’t we? Most fascinating election of my lifetime. Especially the Senate races where you don’t have to vote for Trump.
“We’ll find out in November …”
No we won’t, because BLM / Antifa / CHAZ / LootzNLulz parties aren’t on the ballot for the left. This time.
Instead, it’s Joe Biden, 77.5 year-old white guy, considered the ‘moderate’ choice who has been a national-level politician for nearly half a century. He is the representative of the Democratic party’s very-senior-citizen incumbent establishment and so not-quite-yet-100%-insane wing, which is about to disappear anyway via the biological method of baton-passing. The effect of that generational turnover – racing toward our skulls like a hurled-brick – is going to be lit. Like a Wendy’s.
Something may depend on who Biden picks as v.p. If it’s, say, Stacy Abrams, some of those nice white people may have second thoughts. On the other hand, the media will probably be full of stories about how moderate she is. (One of the more ridiculous media performances in my lifetime occurred when Ruth Bader Ginsburg was nominated to the Supreme Court and she was consistently described as “moderate”.)
And sadly, Joe Biden’s “moderate” official positions are as usual far left from less than a decade ago. Remember, according to Biden “transgender rights are the civil rights of our time.” I guess “conservative” judges agree.
But yeah normal old Joe is the media image say my wife’s senior citizen old left relatives believe in and will believe in November.
Even if people subjectively believe they have these preferences (which have essentially been programmed into them), that does not mean the preferences are rational or good. We are at the point where most of the population is incapable of rational reflection about their own direct interests.
“Professors don’t give students bad grades, and students wish to abolish grading entirely.”
The students should realize that employers are aware of this and will adjust for it. A 3.5+ college GPA is only beneficial on a resume if relatively few can obtain it. If most college graduates receive a 3.5+ GPA, there’s no benefit to any candidate who has that GPA.
In my interviews, I quiz candidates to see how well they are able to reason and what sort of understanding they may already have of the work they will be asked to do. People who struggle with that part of the interview do not receive an offer.
Right now we are all accountable to the neo-Jacobin mob out there. Did we sign up for that? Did I miss that article of the Constitution? “The thought-police power shall be vested in the mob.”
There’s a big difference between being accountable to impersonal market forces or on the basis of voluntary agreements on the one hand, and being involuntarily accountable to coercive power on the other. Slogan for the New Politics when we rebuild from the smoking rubble, “More accountable to markets, less accountable to mobs.”
It would be nice to be slightly less accountable to the mob right now. And for the people to whom we are accountable, also to be less accountable to that mob.
The tone is set from the very top…why should society be accountable when the government/Federal Reserve simply paper over every financial problem?
Speaking of the dysfunctional USA Federal Reserve is democratically unaccountable to either shareholders or the public at large. A comparison with the truly excellent Swiss National Bank of the Swiss Confederation is instructive.
Although both banks claim independent status, shares in the Swiss National Bank can actually be bought and sold on the market thereby creating accountability. Shares have been listed at the SIX Swiss Exchange since 1907. And unlike the USA Federal Reserve, the law establishing the Swiss National Bank specifies that it is intended to promote the welfare of the Swiss people, a nationalist provision to be sure but unsurprising in a substantive democracy.
In contrast, purchases of shares in USA Federal Reserve Banks are coerced and shares are not market trade-able. To be a member of the Federal Reserve system, by law commercial banks must own shares of stock in the 12 regional Federal Reserve banks. Owning Federal Reserve bank stock is not like owning common stock in a private company, however. Federal Reserve stocks can’t be traded. And they don’t give the member banks voting rights either.
The Swiss National Bank also is more accountable because it has a narrowly defined range of responsibilities. Although obliged by the Swiss Constitution and by statute to act in accordance with the interests of the country as a whole, its primary goal is to ensure price stability. Primary responsibility for banking regulation in the Swiss Confederation is vested in a single entity, the Swiss Financial Market Supervisory Authority.
In contrast, the USA Federal Reserve is responsible for everything and accountable for nothing, as would be expected in a country with a minimally democratic presidential system of government. Per Wikipedia, the USA Federal Reserve is tasked with:
“maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve’s dual mandate. Its duties have expanded over the years, and currently also include supervising and regulating banks, maintaining the stability of the financial system, and providing financial services to depository institutions, the U.S. government, and foreign official institutions.” So the Fed is basically responsible for everything and accountable for nothing.
And in contrast with the single Swiss bank regulatory authority, and as would be expected in the presidential system of no accountability but perpetual blame-shifting between executive and legislative branch, the USA has a botched abortion of a bank regulation system.
Wikipedia lays out the USA banking regulatory farrago nicely:
“A bank’s primary federal regulator could be the Federal Deposit Insurance Corporation, the Federal Reserve Board, or the Office of the Comptroller of the Currency. Within the Federal Reserve System are 12 districts centered around 12 regional Federal Reserve Banks, each of which carries out the Federal Reserve Board’s regulatory responsibilities in its respective district. Credit unions are subject to most bank regulations and are supervised by the National Credit Union Administration. The Financial Institutions Regulatory and Interest Rate Control Act of 1978 established the Federal Financial Institutions Examination Council (FFIEC) with uniform principles, standards, and report forms for the other agencies.
State regulation of state-chartered banks and certain non-bank affiliates of federally chartered banks applies in addition to federal regulation. State-chartered banks are subject to the regulation of the state regulatory agency of the state in which they were chartered. For example, a California state bank that is not a member of the Federal Reserve System would be regulated by both the California Department of Financial Institutions and the FDIC. Likewise, a Nevada state bank that is a member of the Federal Reserve System would be jointly regulated by the Nevada Division of Financial Institutions and the Federal Reserve.”
The Swiss Confederation’s track record speaks for itself. Not only does the Swiss government consume a lesser share of GDP than the USA, its central bank contributes much more to financing the government on a per capita basis. The USA Federal Reserve System paid $54.9 billion out of its annual net income to the U.S. Treasury in 2019. For the same year, the Swiss National Bank posted an annual profit of 48.9 billion Swiss francs ($50.27 billion) and said it would double its payout to Switzerland’s regional and central governments to 4 billion francs. The USA has about 320 million people, the Swiss Confederation less than 9 million.
Tooby an Cosmides :
Cognitive Adaptations for n-person Exchange: The Evolutionary Roots of Organizational Behavior
https://www.cep.ucsb.edu/papers/npersonexchange.pdf
This is the evolution of rational economic behavior. Markets seeking more profits push ever increasing labor specialization, greatly complicating accountability. Now, most individuals have learned to act marginally. Things keep speeding up. People change jobs quickly, or just work a gig. Accountability, like redundancy, feels like a cost that can be lowered after things go well for a while.
Meanwhile, all of the elements of accountability that we grew up with are melting away. Real reputations are inefficient, often contentious and easy to game. Online reputation strategies are a joke. Brands are just words that can be bought and sold.
This is just evolved capitalism.
“Accountability means having our ideas and actions evaluated by others, with those evaluations having consequences”
But, an important question: how do we know that the evaluators got it right in terms of the evaluation and that they are acting in good faith? This just raises another paradox and potentially blows a hole in the whole virtue of accountability.
Example:
1) he followed police policy regarding tasers and threats from tasers
2) he followed the DA’s own conclusion that tasers could represent deadly force
3) but yet, he is being held preliminary accountable for murder and his life is ruined for at least the next 2+ years while the matter is adjudicated and potentially for life if found guilty.
More here:
https://www.google.com/amp/s/www.fox5atlanta.com/news/fulton-county-da-charges-officers-involved-in-deadly-shooting-of-rayshard-brooks.amp
“Bow down before the one you serve, you’re doing to get what you deserve”
https://youtu.be/ao-Sahfy7Hg
SNB shares are 60% owned by the Cantons or the Cantonal Banks which have exclusive voting rights. The 40% privately held receive a dividend, but it is limited to 6% of par value which is 250 SFr. Shares currently trade at 4950 SFr, or about $5200.
It holds about $94 billion in US equities alone, plus there are foreign equities and bonds in much larger amounts. US equities alone are equivalent to $940,000 per share. It can print money, so it can never go broke. Think of it as a giant closed end mutual fund selling at more than a 99% discount to market value of holdings.
How did all this happen? Huge foreign inflows into Switzerland. SNB buys foreign currency to hold down value of SFr by printing SFr. What to do with the foreign currency? Why, invest it in equities. It’s an amazing story. Nobody pays it any attention because the number of SNB shares is so small that it is of no use to institutions.
But it is far and away the most solid value on the planet.
One of the major mechanisms to hold companies accountable is the potential, if not threat, of a hostile takeover. It seems to me that a good way to preserve this possibility would be to require advance approval by shareholder vote of any “takeover defense mechanism” such as golden parachutes or poison pills.