Hierarchies are based on obedience to superiors and the enforcement of commands

“Hierarchies are fundamentally based on obedience to superiors and the enforcement of commands. This structure creates two systemic disadvantages. Those in command have leverage over those below because they can deprive them of their pay or position. This leverage can serve the self-interest of those in power rather than the interests of the organization. Coercion is the core of hierarchy, and those with power face the temptation of using their leverage to optimize their own private gain at the expense of those below. All hierarchies have mechanisms to limit optimization of private gain at the expense of the organization, but this mechanism contains a built-in in tension that cannot be resolved: those tasked with rooting out the optimization of self-interest are themselves tempted to optimize their private gain. Hierarchies by necessity limit feedback flowing up to the leadership. The few at the top do not have enough time or expertise to analyze all the feedback. The job of each link in the chain of command is to summarize feedback from below before passing it up the chain. But given that the self-interest of each person in the hierarchy is only served by pleasing their immediate superiors, the default setting is to report only what pleases one’s superiors. Those who demand honesty will face the same dilemma when they report to their superiors: will an honest report hurt their own interests.

This accretion of self-interest and fear of disapproval builds as it moves up the pyramid of command. This process can lead to tragic absurdities being taken as truth. In one famous example in Mao-era China, underlings had rice planted in thick abundance along a particular stretch of roadway, so that when Chairman Mao was driven along this roadway, he would see evidence of a spectacular rice harvest.

In reality, China was in the terrible grip of a famine resulting from disastrous state policies. But since everyone feared the consequences of telling Mao his policies were starving millions of Chinese people to death, the highway was planted to mask the dangerous reality. This narrowing of feedback has other systemic consequences. Even the most honest reports reflect the biases of those summarizing feedback. As a result, when the feedback finally reaches the top leadership, it may be inaccurate in ways that are difficult to detect. Put another way, dissent has been edited out or perfumed. All leaders have their own biases and experiential limits, and these have the potential to lead to disastrous decisions.“

A Radically Beneficial World: Automation, Technology and Creating Jobs for All: The Future Belongs to Work That Is Meaningful, pp. 75-76, Charles Hugh Smith