The MacLeod Model of organizational sociology posits that workplaces tend toward a state in which there are three levels:
- Losers, who recognize that low-level employment is a losing deal, and therefore commit the minimum effort not to get fired.
- Clueless, who work as hard as they can but fail to understand the organization’s true nature and needs, and are destined for middle management.
- Sociopaths, who capture the surplus value generated by the Losers and Clueless. Destined for upper management.
Venkatesh Rao has a brilliant analysis of these three tiers as they play out in the sit-com, The Office.
I’m going to propose the existence of a fourth subset: the Technocrat. Before doing that, it’s important to assess the forces that generate these tiers, and why I think the MacLeod classification isn’t adequate.
Effort and strategy
Losers are not “losers” in the sense of being unpopular or contemptible people. Here, “Loser” means “one who loses”. In fact, they’re often well-liked and good people. However, they’re aware that employment is a better deal for the other side than it is for them. What they want most is to be comfortable. They don’t want job insecurity or too much change. They’re not “losing”, so much as they’re selling risk, in their poorly-paid jobs. They prefer contests where the points don’t matter (e.g. the Party Planning Committee in The Office) and the comfort of a stable group that will protect them. At work, they generally aim for the Socially Accepted Middling Effort (SAME). They’re not lazy, but the largest influence on how hard they work is social approval. They don’t want to be perceived as slackers, nor as overachievers, so they manage their performance to the middle.
Clueless are the hardest workers. They work as hard as they can, out of a sense of loyalty and ethical obligation. There’s an adverse selection at play that favors the untalented, because people who are naturally talented and hard workers tend to threaten Sociopathic colleagues and will be sabotaged. The survivors tend to be the less capable. Michael Scott, again borrowing from The Office, is a clear example of this. While he’s incompetent, he clearly puts everything he has into his work, having no social life outside of it. If he were more intelligent, he’d either have been tapped for a better role, or he’d be perceived as a threat and be sabotaged by an ambitious Sociopath. However, the less effective and capable Clueless are clearly destined for terminal middle-management roles that Sociopaths don’t want, so this adversity doesn’t often befall them.
Sociopaths are strategic in their work ethic, but also flexible. As Venkat describes, they’ll fall to the outright bottom, effort-wise, if that frees up resources to impress someone who matters. They have no qualms about reducing their effort to zero in an environment where social attractiveness is more important. However, they’ll also contribute immense bursts of energy when a promotion is available. One core Sociopath skill is assessing whether it’s advantageous to work hard and, when not, to slack off and focus on social polish.
Common traits of the tiers
Of these three subsets, each pair of them has a unifying trait that is considered an asset by the corporate world. Losers and Sociopaths are strategic, Clueless and Sociopaths are dedicated, and Losers and Clueless are team-players. Each of these deserves assessment.
Team-playing (Losers and Clueless)
Companies prefer employees who will prioritize social approval from the team over personal ambitions or needs, and call such a person a team player. The alternative is the out-for-herself careerist who expects interesting work and upward mobility. The selling trait of team players is that they don’t have to be explicitly motivated “from above”. Wanting to do good by the people around them will motivate them organically “for free”, and they’ll ignore being underpaid, ignored, and given few opportunities to advance if the group’s approval is enough to indulge their esteem needs.
Losers are team-players because they want social approval. They want the comfort of being in rather than vying for up. They’re happy with the trophy of ascent into a meaningless in-crowd (in The Office, the Finer Things Club). Their goal is to be cool. Clueless, however, want to be “in charge”. What turns them into team players is the fact that they can be motivated with meaningless leadership accolades, or even undesirable tasks dressed up as positions of power (in The Office, Dwight). Clueless, in general, can’t recognize the difference between the genuine power sought by Sociopaths, social approval sought by Losers, and the ceremonial non-power that Sociopaths and other Clueless generate to keep them motivated.
Of the three traits I will analyze (team-playing, dedication, and being strategic) the most important one for a subordinate position is team-playing. Even if a person is highly competent, if she’s not well-liked by her team, she won’t be effective in a low-level position, because no one will help her. Subordinate positions never involve enough autonomy for a person to have a real achievement on her own. As Venkat Rao correctly assesses it, Sociopaths in subordinate roles have a short lifespan, limited by their willingness to run a team-player charade. It’s up-or-out for them. Ryan, in The Office, does this brilliantly. He uses his relationship with air-headed Loser Kelly to hide his true nature and underplay his threatening intelligence– seeming like an incompetent Loser– but once he finds common ground (his MBA degree) with CFO David Wallace, he takes the chance to jump and, on success, dumps her immediately.
Dedication (Clueless and Sociopaths)
For Losers, most of life is outside of work. Losers will put in their 40 hours, but if you ask one to work a weekend or do undesirable tasks that are way outside of her job description, you’ll get resistance. For the Loser, it’s “just a job”, and not something that has the right to dominate a person’s entire life. Losers aren’t lazy or apathetic, but they’re rationally disengaged. A loser recognizes that she can get an equivalent job at another company, so it’s group cohesion only that keeps them in place.
Clueless and Sociopaths, on the other hand, can work 90 hours per week without complaint. They’ll do their best to meet unreasonable requests from above, but their motivations are very different. Clueless are driven by a misguided sense of corporate loyalty, both above and below them. The Clueless middle-manager (or over-performing team member) is willing to please her boss, on whom she depends for her connection to the company (to which she feels a debt of gratitude). She’s also willing to pick up the slack of the Losers on her team, out of a sense of personal and possibly parental loyalty to them.
Sociopaths are dedicated for a different reason. Like anyone else, a Sociopath would prefer not to work long hours or do unpleasant tasks, but their pain tolerance is extremely high, because the corporate game is fun to them. For a Sociopath, a 90-hour work week is like spending that much time playing a video game. It’s not how most adults would choose to spend their lives, but it’s not taxing, boring or painful either. If the rewards are there, the Sociopath will drop everything and put in the hours.
For a middle manager, dedication is the most important trait. Middle managers frequently find themselves in two jobs that are often at odds. On one hand, they have to clean up the messes left by rationally disengaged Loser subordinates. On the other hand, they must please the hard-driving Sociopaths above them. This generates not only a lot of work, but an incoherent, heterogeneous mess of it. Frequently, they end up working on “whatever’s left” and putting in a lot more energy than the tiers below and above them. The Loser subordinates don’t work as hard as they do. The Sociopath executives have enough power to control the division of labor and definition of “performance”, so they don’t have to work hard. Middle-managers get stuck in the middle, and it takes dedication to survive it.
Strategy (Losers and Sociopaths)
Losers and Sociopaths might seem to be polar opposites, but they also share an important trait: they’re strategic. They’re realistic in their assessment of what efforts will be fruitful and, unlike the Clueless with their unconditional work ethic, they allocate their time and energies only toward work that seems to be worth a damn. In this, they tend also to be able to relate amicably, because their strategies rarely conflict. They want different things. Losers want to minimize discomfort and to be “cool” as defined by the in-crowd where they are. Sociopaths want to maximize personal reward and rise into the in-crowd that actually has power.
Strategic workers tend not to waste time. Losers work efficiently but tend to do as little as they need to retain social acceptability. Contrary to stereotype, they don’t do “the minimum not to get fired”. They modulate their efforts to the middle, not wanting a slacker reputation, but not wanting a “busy bee” reputation that will overload them with undesirable work. Sociopaths (and Technocrats, to be discussed later) work on the stuff that benefits their careers, and ignore whatever doesn’t.
For upper-management roles, being strategic is the most important trait. A non-strategic manager or executive will put a lot of effort into pursuits of low or even negative value. That can be acceptable for a middle manager. The Sociopaths above will set priorities, and direct him, while the social-approval mechanisms of the strategically-aware Losers will keep the team from going completely off the rails. Teams can protect themselves, in the short term, from off-the-rails Clueless management. A non-strategic executive is dangerous, if not untenable. Losers, in fact, tend to be better picks for executive roles than Clueless. This explains why, after Peter outs himself as a disengaged Loser to “The Bobs” in Office Space– while office conformity demands that subordinates fake Clueless earnestness around authority– they describe him as “a straight shooter with upper management written all over him”. He’s strategic. He understands that his current job is not worth doing.
Other possibilities…
All three of these traits are attributes that corporations view as assets: being a team-player, dedication, and being strategic. I’ve painted a picture in which each of the three MacLeod tiers has exactly two of the three. Losers are strategic team players, but not dedicated. Clueless are dedicated team-players, but not strategic. Sociopaths are dedicated and strategic, but not team players. This brings us to the question: why should an employee have exactly two of these seemingly orthogonal capabilities? What happens to people with zero, one, or three?
Deficient categories (0/3 and 1/3 traits)
If someone’s neither dedicated nor strategic, it doesn’t matter much whether that person’s a team player or not. A team player sacrifices personal ambitions for the health of the team, but people who are neither dedicated nor strategic have nothing credible to sacrifice. These fall into the bottom of the Loser category: Lumpenlosers.
Dedicated, non-strategic, non-team-players are Loose Cannons (see: Andy in The Office). They’re driven by ego, but have no insight into whether what they’re doing serves any purpose (personal or organizational) at all. They tend to eagerly throw themselves into battles with no idea where they will lead. Either they are fired, or they become Lumpenlosers as well, being tolerated for the amusement they provide.
Finally, to be strategic but neither a team-player nor dedicated is almost a contradiction in terms. A strategic person will recognize that one or the other is necessary in order to retain employment in the long term. So, the only time this constellation occurs is when a person has little interest in staying with a company. They usually quit or get fired.
Unicorns? (3/3 traits)
Are there people out there who are strategic, dedicated, and team players? I would also argue that this arrangement is contradictory, at least in a subordinate role. A strategic person will either aim for minimal discomfort and pain, or for maximal benefit. The first category will avoid conflict and disharmony (team player) but not work long hours, especially not to an extent that hurts the group (by making others look bad in comparison). On the other hand, the yield-maximizer will work very hard (dedication) but not for the benefit of a social group coalesced around someone else’s purpose. People who are strategic and dedicated will demand important roles and interesting work, which means they’re not likely to be perceived as team players.
This is not to say, however, that it’s impossible or even rare for a person to be strategic, dedicated, and a good person. What I do mean to imply is that strategic and dedicated people don’t accept subordination. Although they will work for altruistic purposes or the good of “the team”, they do it on their terms. In fact, I would argue that among the most important players in the modern economy, a fair number of them fit this exact description. Like MacLeod Sociopaths, they’re dedicated and strategic. However, the term “Sociopath” doesn’t apply, because they aren’t bad people, and they’re not willing to rise by being unethical. They want to win, but fairly. This requires revisiting the Sociopath category.
Are MacLeod Sociopaths really sociopaths?
I would argue that the Sociopath category should be split into two subsets: Technocrats, and the true Psychopaths.
It’s important to address the term sociopath. It’s no longer used in psychiatry, having been replaced by psychopath. A psychopath is a person without a conscience, and that’s about as close as modern psychiatry gets to calling someone “a bad person”. Most psychopaths are, as typically defined, bad people. Their lack of empathy and concern for others leads then toward reckless and harmful behavior. Whether this is mental illness or sane moral depravity is almost a religious question, but either way, psychopaths aren’t desirable in an organization, but many are very successful climbers of institutional ladders. The lower classes of psychopaths end up as common criminals, but the smartest and most socially adept psychopaths develop strategies for externalizing costs and taking credit for others’ accomplishments. They are disproportionately common in the upper ranks of corporations.
Sociopath is a pop0-psychology synonym for “psychopath”, most likely persisting because the popular ear conflates the latter with “psycho” or “psychotic”, which psychopaths are clearly not. It is not even clear that psychopaths are mentally ill. I would argue that, in a prehistoric evolutionary context, their lack of emotional attachment to others made them individually successful (high rates of reproduction, at least for men) at the expense of group harmony and stability. In modern society, they are the cancer cells– individually fit at the expense of the large, complex body of civilization. This is different from typical mental illness (especially psychosis) which is undisputedly pathological, making the individual less fit.
Psychopaths are egotistical and usually unethical. Above all, they desire social status. Money and power are only interesting to them so far as they confer an elevated position over others. This characterization, one hopes, does not apply to everyone who is strategic and dedicated within an organization. I find it clear that it does not. There are good people who are strategic and dedicated. So I add a fourth category: the Technocrat. So I discard MacLeod’s Sociopath category, and split it into the Technocrat and the true Psychopath.
In this usage, Technocrat pertains more to the abstract principle of technology– the use of knowledge in pursuit of mutual benefit– than to any concrete device. Technocrats are dedicated and strategic and, like Psychopaths, they want to win. What differentiates them is that they don’t want to make others lose. Technocrats have a positive-sum mentality and a desire to make improvements that benefit everyone. True psychopaths despise what they perceive as human weakness and want to dominate people. Technocrats are competing against “the world” in the effort to make it better than it has ever been.
Because Technocrats like to improve things, they extend this mentality to their work and themselves. They want to be more skilled, and more autonomous, so they can achieve more. They’re dedicated, because it requires work to find “win-win” opportunities. They’re strategic, because what they do tends to require creativity. In general, they’re not team players. Losers are team players because they fear social disapproval, and Clueless if they perceive their role as leadership (even if it’s objectively not). Psychopaths view the team as something to exploit (for personal gain) and to dominate (for enjoyment). Technocrats want to improve the team, often in spite of itself. This makes them good leaders, but they turn out to be shitty subordinates. That, in fact, is the Technocrat’s downfall. Of the four classes, they are the absolute worst in subordinate positions. Psychopaths hate subordination as well, but they’re better at failing silently for long enough to move up.
The MacLeod model correlates psychological traits with organizational position, and the Technocrat is difficult to pin down. Other categories are much easier. Losers cannot typically rise into management because they aren’t dedicated. Clueless should not become executives because they aren’t strategic. (It happens, but they usually get fired at some point.) Psychopaths can rise without limit, but their lack of a team-player ethos means they’re fired if they can’t find a route. There isn’t a clear position in the traditional managerial hierarchy for the Technocrat. Organizations would probably prefer to have Technocrats over Psychopaths in upper management, if they were rational entities. They’re not, and for a variety of reasons, when Technocrats and Psychopaths battle, the Psychopaths usually win.
Technocrats don’t have a well-defined home in the white-collar corporation. They despise the pointless busywork of subordinate positions, so they don’t do well in the Loser circuit. They tend to be logical truth-seekers, so the Clueless world of middle-management is too full of self-deception for them. Finally, amid the zero-sum in-fighting of Psychopaths in the executive suite, they often lose. Why do they often lose? That I will address below.
Some Technocrats have found a way to become highly-paid individual contributors, such as in academia, research, and software engineering. Unfortunately, this isn’t a stable arrangement for most. Academia has taken a Clueless direction of late: graduate students and pre-tenured professors are grunts, and tenured professors are (semi-autonomous) middle managers chasing rainbows. I consider most of them non-strategic because they lack interest in the practicality of their work, a behavioral pattern that has reduced their social status over time. Software engineering, on the other hand, is mostly a (better-paid) Loser’s world, because most of the work that professional developers get is line-of-business dreck that isn’t intellectually challenging, and not worth the dedication that a genuinely important or interesting project would deserve.
The typical career of a Technocrat looks similar to one of a Psychopath: job hopping, up-or-out gambits, and the obvious prioritization of a personal strategy over “team player” social acceptability. The difference is the purpose toward which she aims. The Technocrat wants to become really great at something and do something good for the world. The Psychopath wants to climb old-style, increasingly anachronistic, industrial hierarchies and dominate (or, at least, exploit) others. Both are after power, but they define it differently. Technocrats seek the power to help people; Psychopaths want power over people.
One might suspect that Technocrats should succeed as entrepreneurs, and this is probably the Technocrat’s best bet. Rather than attempting to find a decent role in an existing, dysfunctional organization that it will be impossible for her to fix, she should create a new one. Then, she has no conflict between her strategic and dedicated nature and being a “team player”, because she has built and defined the team.
What I would say, however, is that the venture-capital-funded startup ecosystem (VC-istan) is not a Technocrat’s paradise, despite its pretensions to that effect. The actual ethical behavior of the leadership at most of these VC darling startups is old-style managerial Psychopathy. Why is it this way? To answer that, one needs to understand what VC-istan actually is: one of the first postmodern corporations. VCs are supposed to be in competition with one another, but they collude. They decide, as a group, who’s hot and who’s not, and what valuations will look like in each season, and they get together and co-fund startups. There is no market economy. Rather, funding decisions are made by a command economy driven by social consensus among an in-crowd (partners at influential VC firms) and those who wish to join them.
One might think that VC-funded startup founders are Technocrats. Not likely. These so-called CEOs are actually mid-level Product Managers within the postmodern corporation of VC-istan. Some are ascendant Psychopaths seeking a transition to a more senior (“entrepreneur-in-residence”, VC associate, corporate executive) role and others are Clueless “true believers” who fail to recognize that, due to their investors’ unilateral control not only over their current projects but over their long-term reputations, they’re nothing but eager middle managers.
So where are the Technocrats, then? Over time, they tend to fail out of hierarchical organizations, being ill-equipped to fight against the Psychopaths who tend to defeat them. As VC-istan increasingly devolves into a postmodern corporation (rather than a real market, with– imagine this!– actual competition among investors) they will be increasingly out-of-home there, as well. I don’t know where they’ll go. My guess is that the rising generation of Technocrats will find a way to democratize business formation, with crowdfunding (e.g. Kickstarter) being an obvious first step in that direction, and presumably a lot more to come.
Why Psychopaths beat Technocrats
Why do the zero-sum, destructive Psychopaths defeat the positive-sum, creative Technocrats? To answer this, it’s important to understand credibility, which is an umbrella term for intangible assets that institutions create in order to rank people by perceived merit.
How do organizations decide how to compensate people, and whom to promote? When a person starts a new job, her salary is based on economic conditions and her negotiation skill much more than any objective definition of merit. Companies, begrudgingly, accept this. They recognize the tradeoff between operational efficiency and fairness in compensation, and will gladly adapt salaries to conditions. However, companies prefer to believe that they get the division of labor and recognition right. It’s important for them to maintain this fiction, because it allows them to believe that, although they know their compensation schedule to be unfair, they know exactly how unfair it is and can reduce the injustice (not out of ethical principle, but because it’s a morale risk) over time. If Bob and Mark are both Level IV software engineers making $100,000 and $120,000 per year, respectively, Bob can receive better annual raises until they’re at parity.
This is what professional ladders and job titles are for. The firm wants to believe (or, at least, wants the Clueless to believe, that often being enough) that, while small injustices are tolerated in specific individual compensation, that salary ranges shall be set according to job descriptions, which will be assigned according to pure merit. Someone who is “platonically” at Level IV might get a higher salary based on prior compensation, negotiation skill, and market conditions, but he should never get a Level-V title… until he earns it. Titles, as the organization perceives them, must correspond to personal merit and work performance, not external conditions.
This is credibility, which represents the company’s degree of trust in an individual. Compensation is what a person takes out of a company. Credibility is what the firm thinks the person puts into it. Job titles are a powerful form of credibility, being transferrable to some degree across companies. So-called “performance” reviews exist to calibrate private credibility based on a person’s work history, and may eventually result in public credibility changes through promotions (or demotions and terminations). Societies understand that resources (power, money, information) sometimes accrue to unworthy or even dangerous individuals, and that there is nothing to prevent “the bad rich” from acquiring mere commodities once this has happened, but the sacred intangible of trust is supposed to be above that. Credibility is the corporate analogue of trust, invented because interpersonal trust becomes sparse at scale. Large organizations recognize that genuine trust, built through direct interaction, is not enough to tie people together, so they need to invent a legible pseudo-trust in order for anything to get done. Credibility is a currency that corporations mint in order to make statements about how far a person can be trusted. You’re not supposed to be able to get credibility through trade. It should be a reward for the demonstration merit only.
Credibility isn’t just a vague, academic notion. It has actual effects. For example, a common way for a company to do a layoff is to select levels at which it is overstaffed, and terminate the highest-compensated at that level. The idea is that employees at each level are equal in productive value. It’s corporate consistency. Thus, the most marginal employees, who should be let go first, are the highest-paid at the targeted level. Let’s say that the Level IV salary range is $80,000 to $120,000 and the Level V range is $100,000 to $160,000. It’s dangerous to be a Level IV at $120,000– but very safe to be a Level V at the exact same salary.
Is this regime exploitable? Of course. Clueless might believe that there’s such a thing as a “platonic” Level IV, and that people will be accurate assessed and promoted to their level of ability. That’s not true. There is no “platonic” Level IV or Level V. There will be guidelines based on work experience and interview performance, and then myriad possible exceptions. A wise negotiator slotted for Level IV, if he knew the company’s HR infrastructure, would target his salary history and expectations toward $125,000, making him ineligible for a Level-IV position. Would the hiring manager say, “We can’t meet that”, and turn him away? Or would she bump him to Level V, not only justifying his salary, but improving his job security, leadership opportunities, and level of respect within the company? Unless he were very clearly ineligible for a Level-V position, the latter would happen. So he would, in effect, be using his negotiation skills to win credibility. In the real world, credibility is just as negotiable and tradable as “harder” currencies like money, power, and information. It’s not “supposed” to be that way, but it is.
Losers care about credibility, but only enough to retain employment. Once they have enough of it, they focus on side games in which those games’ local definitions of credibility and status don’t really matter, in that they have no effect on personnel decisions or compensation. Clueless believe deeply in credibility and go about earning it “the old-fashioned way”, which is to earn it through hard work. Psychopaths, on the other hand, are the quickest to actually realize what credibility is: a corporate fiction. In reality, it’s a commodity like any other. If they need someone to vouch for them, they find a way to buy it. Psychopaths bribe and extort their way into credibility. They take credit for others’ work, they lie, and they find ways to trade social assets (including titles and “job performance”) that aren’t “supposed” to be for sale.
How do Technocrats handle credibility? I’m not sure. Since the intended effect of corporate credibility is to create a global social status in large groups that would otherwise not have a clear rank ordering, thus generating a sort of “permanent record” that’s ripe for abuse by power, it seems naturally opposed to the Technocrat ethos. However, it’s also clear that corporations need to invent credibility, because interpersonal trust is too sparse at scale for large organizations to function, and credibility becomes a lubricant. To the extent that Technocrats accept credibility’s existence, they tend to treat it as an engineering problem. I think the Technocrat’s objective is to fix credibility: to redefine it so that it can’t be traded, bought, or won through extortion, and to make it an actual dimension of merit. Of course, this is a hard, if not impossible, problem. Psychopaths take a much easier route with more personal benefit: they find ways to exploit it.
Indeed, these four categories can be framed in terms of psychological reactions to the divergence between true merit and corporate credibility:
- Clueless deny it and persist in the just world fallacy. Indeed, credibility’s root power is in its ability to motivate and impress the Clueless.
- Losers accept the crookedness of the corporate game and disengage, grabbing just enough credibility to avoid adversity.
- Psychopaths become crooked themselves, which is the fastest path to personal benefit, and ultimately win not only credibility for themselves but the capacity to modulate others’ credibility, which is corporate power.
- Technocrats attempt to fix the game, often altruistically through openness, transparency, and anti-hierarchical corporate structures. So far, they haven’t shown much success in deploying their vision at scale.
Between Psychopaths and Technocrats, who is more likely to climb the corporate ladder? Unfortunately, the advantage is with the former. Technocrats have to change people, while Psychopaths exploit them as they are.
Corporations, being pre-industrial in their ideology, have relied heavily on credibility and personal relationships for an obvious reason. There weren’t many hard problems for these institutions (rent-seekers that used technological innovation, but rarely created it) to solve, and there was no other way to evaluate people. Once the hard intellectual challenges have been overcome and it’s a risk-averse, stable organization, then how does it define the “best” who deserve leadership positions? How does one define “merit”? The Losers don’t attend that debate, because they don’t care. The Clueless say, “Hard work”. Technocrats argue for creativity and insight, still wanting to tackle hard problems that the now-stable and risk-averse organization believes it has outgrown. Psychopaths form an alliance with the Clueless, recognizing them as effective (in well-defined roles) but non-threatening. What’s built up, then, is a concept of “performance” that, to the Clueless, looks like a commodity earned only through hard work: a credibility. Clueless provide the muscle and blind support that enable credibility to be manufactured; Psychopaths define it. However, the Psychopaths are always careful to define performance with enough back-doors that they can win, regardless of whether they wish to work hard. At the top, this is especially easy. If you control the division of labor, you get to write your own performance review.
What Psychopaths recognize is that credibility can always be bought on a black market. There are always ways to get it, and often the illicit ones are more effective than the straightforward path. Technocrats understand this as well, but they often find it morally objectionable to start trading. It feels like cheating to them, and the worst varieties of credibility-trading (which generally amount to professional extortion) they refuse to use at all.
Can Technocrats win?
Psychopaths and Technocrats are destined for conflict. Psychopaths invent social credibilities to win the support of the Clueless and put themselves at the top of organizations. Technocrats see a crooked game and try to fix it, often with radical honesty. If the Technocrats succeed, they’ll undermine the work of the Psychopaths. This becomes a fight to the death. The character of an organization will be determined by which of these two categories wins. Ultimately, most organizations will be run by Psychopaths who superficially adopt the appearance of Technocrats. This becomes increasingly the case as corporations become risk-averse and self-protective. The positive-sum “win-win” outcomes that Technocrats seek exist, and they’re all over the place, but they never come without risk. Once the company decides that creative risks are intolerable, what’s left is zero-sum social-status-driven squabbling.
The MacLeod hierarchy applies best to the modern white-collar corporation, whose modern incarnation was developed in the 1920s. At the time, there were a decent number of Technocratic leaders, but over time, corruption set in. By the mid-1970s, it was clear that Psychopaths were going to take over, and the “greed is good” 1980s saw that through. Basic research was cut, academia turned into a pyramid scheme, and well-positioned corporate executives made millions. Psychopaths gutted and looted corporations, leaving husks– large, powerful institutions whose beneficial purposes had been discarded, leaving mere patterns of externalized costs and value-capture by the Psychopaths. Where’d the excluded Technocrats go? Well, all over the place, but the most well-known cohort moved to Silicon Valley– before it was cool.
Silicon Valley is not a Technocrat haven any more. If nothing else, one need only look at house prices in the Bay Area. In cases of extreme geographic scarcity (e.g. San Francisco, Manhattan) house prices might be explicable by supply and demand in a fair, because supply responds slowly to economic circumstances while the demand curve moves quickly. However, when extreme housing prices persist over the long term, and over a large and mostly suburban area where there is no natural geographic scarcity, this suggests market manipulation and NIMBYism. That’s the surest sign ever that Psychopaths are winning. I am not saying this to rag on California. (I live in Manhattan; we have expensive real estate and Psychopaths, too.) In fact, had California’s real estate problem reversed itself, I’d argue that it was a transient market phenomenon and not Psychopathic victory. However, even when the economy softened, Bay Area real estate remained pricey. That’s a primary indicator that the Psychopaths have started to win. Psychopaths love when real estate is expensive, because they can use physical position to display dominance. Technocrats, on the other hand, love New Places, because New Places are positive-sum– you can build cool things on inexpensive, unused territory and improve it. The Technocrats poured into California when it was a geographic New Place and land was cheap. Now the New Places are elsewhere. It’s not clear what the next Technocratic New Place is, or even if “Place” still needs to be a geographic location, but it’s no longer Northern California.
If I had to guess, though, I’d bet that within the next 10 years, VC-istan will fall under the weight of its own organizational Psychopathy. I don’t have enough personal experience to opine on whether VCs themselves are Psychopathic, but the VC darlings thatI’ve known well have been run by some horrible people. Mark Pincus has been most overt about his psychopathy, but his behavior is far from atypical among the sorts of people who win in this bubble-world. Once, I had to leave a junior-executive position (for which I had left Google) at a brand-name, VC-funded startup at 3.5 months because I refused to sign an affidavit that not only contained perjury, but probably would have Pincus’d ten on my colleagues who had joined early and had “too much” equity. The Psychopathic management of that company spent months afterward attempting to destroy my reputation. How I overcame that adversity deserves its own essay, for another time…
Psychopaths defeat Technocrats in an organization where the work is intellectually easy, creatively non-demanding, and social status ends up trumping ability. That describes most organizations, because most companies are too risk-averse to do anything hard or important. Needless to say, Psychopaths love economic bubbles– exploitable, chaotic optimism without substance– and the 2010-13 “social media” affair clearly qualifies. However, this bubble’s very different from the last one. In the 1997-2000 bubble, startups were overvalued by the market. Wall Street provided the fools. In this one, market valuations appear reasonable. Investors aren’t going to fall for that one again. This bubble is in the unduly high value assessed, by young talent, to subordinate positions in these startups. (I wrote this, last summer, to contribute to its inevitable “pop”.) The fools aren’t coming form Wall Street, but fresh out of school. Most employees of these VC-funded “tech startups” believe they’re 6 months away from investor contact, real job titles, and the chance to be a founder in the next startup. They’re wrong. Long before they can collect the career assets they’ve been promised, this bubble will have popped and washed back to sea, leaving them with useless work experience and, thanks to the high cost-of-living in the startup hubs, no savings. The 1990s dot-com bubble wrecked a few careers and spilled a lot of rich peoples’ money. The 2010s bubble will spill a little bit of rich peoples’ money and wreck a lot of careers– mostly, those of young technologists trying to establish themselves. I would argue that this makes it worse.
What I hope to see during 2013, and the coming years, is a Flight to Substance. I want the best people– investors, entrepreneurs, engineers– to realize that they’ve been hoodwinked by VC-istan’s shallow reinvention of the corporate system as something different and “cooler”, and to demand a return to Real Technology. I want to see better ideas, better companies, and better cultures. I want to see funding for research and development, so that people can do intellectually interesting work without being thrown into the secondary labor market that academia has become. I want to see a world in which people actually care about solving hard problems and delivering real value. When this happens, the Technocrats can win again.
