The Efficacy of Efficiency

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Cui bono - for whose benefit?

The greatest trick pulled on the public is the framing of any debate on policies to be around the concept of efficiency. Those who beat their chests and loudly exclaim the virtues of the mythical free market, the same ‘free’ market that could only be implemented at gun point in Chile and in Argentina[1], repeatedly dribble about ‘efficiency’. After all in this magical land of unrestricted capitalism (the white tiled torture rooms of Santiago, the helicopter rides and disappearances out of Buenos Aires) there is the persistent belief that non-governmental entities, driven by private interests to generate profits, are somehow more efficient, and therefore more effective, than the alternative. Any discussion then degenerates into both sides lobbing rhetorical hand grenades and cherry picked examples without ever stopping to consider just what exactly ‘efficiency’ means, and in what context.

Are we talking about efficiency as in the ratio of energy expended for work produced in other words how much bang you can get for your taxpayers bucks? In which case we have to stop and ask why there are more homeless people than unoccupied houses[2], given that it is far cheaper in the long term to simply provide housing than continually recur emergency medical expenses, legal costs of having police move them for loitering, court fees if they are arrested, any crimes they may commit in order to survive. Is it more ‘efficient’ to deliberately turn a productive member of society into an unproductive one, denying them further access to any means of retaking their place in society (jobs, bank accounts, access to IDs are all dependent on having a legal address) ensuring that the public must pay a greater cost? Is it more ‘efficient’ to pay 20 million dollars to have people pee in cups to largely detect THC, since harder substances have a much shorter half-life in the body, to ‘save’ 1 million dollars in potential welfare fraud[3]? If ‘efficiency’ is the be all and end all we have to ask why the two public services that generate the most return on investment – public schooling and mental health (1 dollar in either is equivalent to a return of 4-5 dollars[4]) are the most underfunded and the services that create the lowest return: the military, of which Americans are still paying off an estimated 3 trillion for Iraq[5], with layby instalments of 60 billion a year in Afghanistan[6], and tax cuts for the wealthy which increase the deficit by 1.5 trillion[7] get the most funding and backing? Is it more ‘efficient’ to pay 30,000-60,000 dollars a year to lock someone in a cage[8] (of which they are disproportionately black and are tried without jury or due legal process[9]) than to invest a fraction of that into their education and training to make them productive citizens? The question we really need to be asking isn’t ‘is it more efficient’ it is ‘more efficient for whom?’

Before we can begin to talk about efficiency we need to talk about the system in which it operates – efficiency is only relative to what yardsticks we are measuring it with. For example the fact that we use the QWERTY keyboard layout isn’t because it was the most efficient or even the most effective keyboard layout, in terms of hand strain and the required motion of movement to hit common letters it is incredibly inefficient. The DVORAK keyboard layout was vastly superior, however that was its flaw – it was so efficient it caused early typewriters to jam from the sheer speed in which operators could input keys, therefore the less effective QWERTY layout was actually the more efficient marketable choice given the technological constraints of the time[10]. Efficiency is relative to the purpose of the system it operates in.

So we have to ask ourselves what is the purpose of this mythical free market? It is to produce a profit. That is the fundamental imperative of the system, that is its design and that is its reason for existing. Everything else is window dressing. Facebook doesn’t exist to connect people, give everyone warm fuzzies, and be a place to share your travel photos. It exists to produce a profit. That it happens to provide all these other wonderful things is merely there to help facilitate its primary goal - get enough people using it so advertisers can fork over money in exchange for likes, clicks, eyeballs and shares. Therefore every single rational decision made within this system, e.g. the most ‘efficient’ decision, is toward that bottom line. Why is this important, because in order to understand what exactly ‘efficiency’ means and why seemingly insane inefficient decisions are continually pushed for by lobbyists, politicians, and business leaders, we have to understand that efficiency means different things depending on the system in which it operates.

Two key ideas highlight the logical insanity of ‘efficiency’ and are highlighted in Goodhart’s Law and Campbell’s Law. Goodhart’s Law, stemming from economics states that “any observed statistical regularity will collapse once pressure is put on it for control purposes”[11]. What this means is any metric you use to evaluate the effectiveness of a particular policy becomes ineffective because the agents operating within a system quickly adapt and begin to game whatever metric is chosen. Campbell’s Law coming from sociology is quite similar in stating that “the more any quantitative social indicator is used for social decision making, the more subject it will be to corruption practices and the more apt it will be to distort and corrupt the social processes it is intended to monitor”[12]. What this means is that the more pressure there is on a particular yardstick to measure something – say for instance using national test scores for the purposes of government funding (No Child Left Behind) – the more likely it is for that yardstick to be corrupted. In other words if we were to use standardised test scores to determine which schools get more or less funding, then logically, the most successful schools under this system are not the schools which actually teach and educate, but rather the ones that can groom their students to produce the highest test scores[13] (facilitated by teaching to the test, teachers outright handing out the answers, administrators falsifying test scores, suspending low performing students[14]).

The schools which refuse to change to this system are the ‘inefficient’ ones that soon lose funding and are eliminated by the ones that do adapt. This change in the logic of the system to use a metric to measure ‘efficiency’ forces all agents within the system to adapt or die and rewards the agents that are most successful at gaming it, rather than the ones who perform their intended role. To not teach to the test, facilitate cheating, and falsify scores would be irrational and insane under the logic of the system and so decisions that are contrary to the intended goals of the school become rationalised as the only ‘just’ thing to do. Otherwise your competitors, who will logically act in their own self-interest, will get more and more funding, snowballing their inherent advantage and further crippling your ability to function until you are eventually dubbed ‘inefficient’ and attacked by conservatives for being a waste of taxpayer dollars who will claim that school choice and the ‘free market’ will fix it. The same free market that has dominated New Orleans with charter schools that focus exclusively on test scores to assert their superiority over public schools – relying on suspending low performing students to manipulate their data (students who aren’t enrolled in any school aren’t included in any reports or studies) and excluding the most disadvantaged from entry[15]. What this drive toward efficiency produces are schools that care more about their continued existence than they do about the students who attend them because that is what the system demands. Only madmen and saints knowingly work against their own interests, and humanity happens to be short on both.

If we were to follow this logic toward its conclusion then if I have the financial means to afford a prestigious education at a private institution (which is exempt from the same policies used to distort public schools) for myself or for my children, I have every incentive to ensure such policies continue. After all under the logic of game theory I am able to cripple my competitors and future competitors by gutting their ability to be educated – those who cannot afford private schooling are now funnelled either into increasingly underfunded schools with unmanageable class sizes, teacher shortages, cuts to extra-curricular and enrichment courses[16], or put into schools whose sole function is to teach exclusively to the test by rote memorisation, killing any intellectual curiosity and turning the attainment of knowledge into a mind numbing chore.

I can even adopt a holier than thou attitude of smug veneration by saying to myself and to others that I ‘earned’ my success through hard work and determination, not by effectively eliminating the vast majority of my competition. I can wax lyrical and vigorously masturbate over how successful I am because under the guise of ‘efficiency’ I can slowly erode and dismantle the institutions that facilitate social mobility by transforming any public debate on policies to being toward what the best bang for your taxpayers bucks and these standardised metrics. The middle class, who pay the heaviest tax burden being just rich enough to afford private services, and too poor to afford accountants and overseas tax havens, have their anger redirected at the ‘wasteful’ and ‘inefficient’ government, and become co-opted into conservative politics. They become so concerned with keeping their comfortable place in the system that they don’t see how those above them have rigged it to their exclusive benefit.
The most successful individuals are simply the ones most capable of exploiting the system, or the ones least affected by its destructive policies. There is a reason why when we look at our political leaders and CEOs, those avatars of success and ‘efficiency’, they disproportionately come from private schools, and their children all attend private schools[17]. The role of public education has shifted in the past four decades from incubators of future citizens, institutions of knowledge and learning, academies of democracy that teach civic values[18] - toward glorified training centres for jobs, under the guise of ‘efficiency’. The explosion of standardised testing and its use as a yardstick for policies coupled with increasing budget cuts has distorted the system of public schools to the point of collapse. The system is incredibly efficient, just not for us. We’re just there to pay for its costs.

We have already with the exponential growth of fake news, the increasing inability for people to be able to ascertain fact from fiction, the disassociation and outright denial of history, the fear mongering and grotesque carnival of vulgarity that has replaced journalism. We have paid for this increased efficiency in moving jobs to countries where we can pay workers cents to the dollar[19], where we can hire paramilitaries to murder union organisers rather than pay for cost of living adjustments[20], where we can imprison people on trumped up charges to then work for seventeen cents an hour in prison[21] (“Neither slavery nor involuntary servitude, except as a punishment for a crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.”).

The rewards for advances in worker productivity – 96.7% between 1948-71, which came with a 91.3% increase in wages, compared to a 73.7% increase between 1973-2016 and a paltry 12.3% increase[22] (most of which has gone to managers and CEOs). The efficiency of the system to generate increased private profits for some comes at the enormous expense of the many. We are expected to do more with less – it’s a ‘sharing economy’, a ‘gig economy’, your costs to access what were previously public services (healthcare, education, infrastructure) get more expensive while your wages stay low. You ‘voluntarily’ enter what is a dressed up form of debt peonage by going to universities to get a degree that has inflated in cost by 498%[23] in order to enter a job market where wages have largely stayed the same. It is more efficient after all to pay someone less to do more when you have a surplus population of the unemployed to call upon as reserves. If you don’t like it, there are twenty other people just as hungry for the scraps you can get from the table. After all you can’t hack it, you are the failure, it’s your fault for being stupid and under skilled - not the system which is designed to render you obsolete.

We have allowed the insane rhetoric of ‘efficiency’ to create the problems our societies have to pay for down the line. A surplus population created from deindustrialisation – moving jobs overseas to save costs while destroying the communities left in their wake. The destruction of unions and the co-opting of labour movements to prevent strikes and collective bargaining[24]. Cuts to education and healthcare which create a desperate and disenfranchised underclass, stuck in barely functioning schools teaching to the test[25], one accident away from bankruptcy[26]. The growth of service sector jobs that pay so little employees need food stamps to survive while giving tax cuts to their billionaire employers[27]. We have declining life expectancies in the richest countries on the planet[28], an explosion of poverty that rivals the ‘shithole countries’ we contemptuously look down upon[29], drug addiction and homelessness helping empower a militarised police who protect and serve the interests of the wealthy behind their gated communities. And we have a growing rage in the masses of people trampled and ground down by a system that has failed them. A system which considers them expendable in its pursuit of profit, as more beneficial incarcerated than walking free, as disenfranchised until it needs them to vote for its interests. We have a rising fury in the hearts of the people who have been so profoundly betrayed by liberal elites who take corporate money to look the other way while feigning progressive piety, by the hereditary aristocracy of conservatives who cunningly redirect their anger at the other while picking their pockets. We have now the ripening of the grapes of wrath, growing heavy, heavy for the vintage.

We can point to the vulgarities of Trump and his burlesque menagerie of Thatcherite goblins in the White House. We can blame Brexiters for being ignorant and stupid, racist white idiots voting against their interests. We can ridicule and laugh at the sheer insanity of Trump supporters and feel schadenfreude at their worsening conditions but they are all symptoms of a much greater sickness. They are the logical result of four decades of cuts to public services in the name of efficiency. They are the regurgitated, half masticated products, of a system that exists for no higher purpose but dollars and cents. Both Democrat and Republican are complicit in this, conservative and progressive for maintaining a status quo that benefits them and only them in a Hobbesian war of all against all, identity against identity.

It is said that it is easier to imagine the end of the world than it is to imagine the end of capitalism. To imagine a fundamentally different system to the one in which we have all been raised in but that is what will be required of us. We will be tasked with asking ourselves not what policy or course of action is ‘efficient’, but for whom it is efficient for. We will have to ask ourselves that if we harken to the call of Christendom as what defines ‘the west’, to remember the teachings of a brown Roman refugee who chased out the money lenders, urged we share what we have, and preached that we love our neighbour. That if we believe our nations to be democratic, founded on the pretty sounding ideals of Liberte, Egalite and Fraternite, then for the voices of the people to be heard. Not the voices of pre-selected corporate puppets, these silver spooned scions of political and financial dynasties, lying for the highest bidder, but the people they claim to represent. That if we are so arrogant to presume that our societies are the pinnacle of freedom and human rights while bombing unarmed women and children and torturing their sons and fathers, then to ensure that we work toward dismantling a system which ensures freedom for few only at the expense of the many.

Or we can look away, with eyes that have seen the past, and lie to ourselves that history doesn’t repeat itself. That surely it couldn’t happen here. That we were forged in the nuclear furnace of stars and cultivated by thousands of years of civilisation to sit in an air conditioned office fifty weeks a year so we could spend two weeks on a beach in Bali. That we have no greater purpose in life than to merely exist like a plant or a mineral, at mercy to forces we refuse to confront until it’s too late. Until the world is divided – not by rich and poor, liberal and conservative, Democrat and Republican – but between the few who have the right to live and the many who are deemed expendable.


[1] Naomi Klein, The Shock Doctrine, “Part II The Southern Cone”, 2007 Knopf Canada.

[2] http://www.thejournal.ie/empty-houses-homelessness-3265373-Mar2017/

[3] https://www.forbes.com/sites/judystone/2015/02/17/the-sham-of-drug-testing-walker-scott-and-political-pandering/#7cea505259be

[4] http://www.mhinnovation.net/blog/2016/may/3/what-do-we-get-back-investing-mental-health?mode=default%27A%3D0
https://www.epi.org/publication/bp348-public-investments-outside-core-infrastructure/

[5] Joseph Stiglitz, The Three Trillion Dollar War, 2008 W. W Norton. Note: Stiglitz’s estimate is seen as conservative with debt costs mounting the ‘true cost’ to upwards of 6 trillion in the decades to come.
https://www.reuters.com/article/us-iraq-war-anniversary/iraq-war-costs-u-s-more-than-2-trillion-study-idUSBRE92D0PG20130314
https://www.thebalance.com/cost-of-iraq-war-timeline-economic-impact-3306301

[6] http://money.cnn.com/2017/08/21/news/economy/war-costs-afghanistan/index.html

[7] https://www.usatoday.com/story/news/politics/2017/12/20/deficit-could-hit-1-trillion-2018-and-thats-before-full-impact-tax-cuts/969347001/
https://www.cnbc.com/2017/11/08/house-tax-reform-plan-would-raise-deficit-by-1-point-7-trillion-cbo.html

[8] https://www.cbsnews.com/news/the-cost-of-a-nation-of-incarceration/

[9] https://www.truthdig.com/articles/legalizing-tyranny/

[10] http://infohost.nmt.edu/~shipman/ergo/parkinson.html

[11] http://cyberlibris.typepad.com/blog/files/Goodharts_Law.pdf

[12] https://dianeravitch.net/2012/05/25/what-is-campbells-law/

[13] Diane Ravitch, The Death and Life of the Great American School System: How Testing and Choice are Undermining Education, 2010.

[14] https://www.nytimes.com/2015/08/23/opinion/sunday/the-myth-of-the-new-orleans-school-makeover.html?mtrref=www.google.co.nz&gwh=C97C80EACF52CAEEF9DD5E71815FBF95&gwt=pay&assetType=opinion

[15] https://www.nytimes.com/2015/08/23/opinion/sunday/the-myth-of-the-new-orleans-school-makeover.html?mtrref=www.google.co.nz&gwh=C97C80EACF52CAEEF9DD5E71815FBF95&gwt=pay&assetType=opinion

[16] https://www.cbpp.org/research/state-budget-and-tax/a-punishing-decade-for-school-funding

[17] https://www.theatlantic.com/education/archive/2016/08/a-public-school-paradox/495227/

[18] https://files.eric.ed.gov/fulltext/ED503799.pdf

[19] http://www.thanhniennews.com/society/vietnams-minimum-wage-to-increase-1418-per-month-in-2015-29590.html
http://www.bbc.com/news/10344233

[20] https://www.telesurtv.net/english/news/Colombia-Coca-Cola-Accused-of-Funding-Terrorist-Paramilitaries-20160901-0005.html

[21]  https://www.truthdig.com/articles/the-prison-state-of-america/

[22] https://www.epi.org/productivity-pay-gap/

[23] https://inflationdata.com/inflation/inflation_articles/Education_Inflation.asp
https://www.forbes.com/sites/steveodland/2012/03/24/college-costs-are-soaring/#c1a7eef1f862
 

[24] https://www.epi.org/publication/union-decline-lowers-wages-of-nonunion-workers-the-overlooked-reason-why-wages-are-stuck-and-inequality-is-growing/

[25] https://www.washingtonpost.com/local/education/trumps-first-full-education-budget-deep-cuts-to-public-school-programs-in-pursuit-of-school-choice/2017/05/17/2a25a2cc-3a41-11e7-8854-21f359183e8c_story.html?utm_term=.82bb46408ac6

[26] https://www.cnbc.com/id/100840148

[27] http://www.businessinsider.com/amazon-employees-on-food-stamps-in-ohio-2018-1

[28] https://www.economist.com/news/united-states/21733980-thats-not-really-meant-happen-developed-countries-life-expectancy-america-has

[29] https://www.theguardian.com/society/2017/dec/15/america-extreme-poverty-un-special-rapporteur