What Happens When Complexity Unravels? By Charles Hugh Smith

The benefits of complexity often don’t outweigh the costs, especially when the complexity unwinds. From Charles Hugh Smith at oftwominds.com:

Those glancing at the appearances will be assured all is well and it will all sort itself out. Those who look behind the screen will move away as fast as they can.

When finances tighten, there are two choices: cut expenses or increase revenues. Monopolies, cartels and governments can increase revenues by increasing taxes or the price of goods and services because users / customers / taxpayers have no alternative. The rest of us have to cut expenses.

Making lasting cuts in expenses generally requires reducing sources of expense, and within institutions and enterprises, complexity is one systemic source of expense. But reducing complexity is difficult, so it’s rarely pursued unless the only remaining choice is bankruptcy / collapse.

The problem is there are many constituencies defending complexity and none favoring slash-and-burn reductions of complexity. As a result, complexity is defended and the core functions of the institution are sacrificed instead.

I’ve posted the charts below reflecting the extraordinary expansion of administrators in higher education and healthcare in the context of the Ratchet Effect and bureaucratic bloat.

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