Furthest Right

Regulatory Capture

Lately we see lots of talk out there about why things invert themselves, for example why democracy seems to be doing the exact opposite of what people want. The simple answer is that process and procedure take precedence over goals, and this means-over-ends thinking causes the organization to defend its past acts instead of making future choices.

If you join a job or organization, it quickly becomes easier to “go through the motions” than care about the end product in reality of your actions. Just do what others tell you; if you follow the herd behavior, you have low risk of being fired, and to others it looks like you are advancing the organization.

One form of this that we see a great deal in modern managerial-administrative societies is regulatory capture or inversion of regulators:

Regulatory capture is an economic theory that says regulatory agencies may come to be dominated by the industries or interests they are charged with regulating. The result is that an agency, charged with acting in the public interest, instead acts in ways that benefit incumbent firms in the industry it is supposed to be regulating.

Regulatory capture happens this way: the regulator needs knowledge of the industry, so it hires people from the industry, and they convince it to shape its activities around the proceduress and process used in the industry, at which point the regulators essentially become a final step in the checklist for any industry action.

At that point, the regulator depends on industry and starts making deals to preserve its little world. As long as it oversees the process that industry follows, the regulator appears to be successful from a distance, so all jobs and salaries are safe, which is all its workers really want unless they are fanatics.

Like political correctness, this has the effect of legalizing what industry does with an additional cost and paperwork layer imposed, which causes it to rubber-stamp many violations, and ignoring everything but what industry already focuses on. The organization becomes myopic and repetitive as a result.

We can see a contemporary example of regulatory capture leading to inversion:

How does it happen? How does an organisation end up doing the opposite of what it was established to do?

If you mistreat your dog or cat or horse or rabbit, you can expect an investigation by the RSPCA. If the case is serious enough, it could lead to prosecution. If you abuse animals on an industrial scale, you might face not investigation and prosecution, but active support and a public relations campaign to help you sell your products.

The RSPCA has now ceased taking animal abusers to court directly, but the last report of its private prosecutions, for the year 2019, documents its pursuit of people whose pets have been left in filthy, squalid conditions, their wounds or illnesses untreated, without sufficient access to food, water or clean bedding. In other words, it pursues exactly the abuses that have been reported from its own Assured farms, but on a much smaller scale.

What is the means-over-ends thinking here? It is easier to beat up on someone without money and win, therefore creating the appearance of being an effective organization. Since this is lower-risk and higher-reward, the organization becomes dedicated to it, which allows it to ignore other abuses and take money to look the other way instead.

Perhaps these accusations are true, or perhaps not. However, we have seen enough similar cases to believe it plausible. Organizations die when they forget their goals and focus on going through the motions; similarly, civilizations perish when they forget that their purpose is to nurture a culture not wrap it in rules and procedures.

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