# How bad systems grow Many of the activities that define a bad system are variations of wise [investment](money-investing.md) concepts. Most of these can create tremendous growth over time: - Make advantageous [agreements](people-contracts.md) by [influencing](influence.md) people to sacrifice key aspects of their [power](power-types.md) in exchange for power the system may not need as much (e.g., giving publicity for money). - Get a significant discount from another group selling something, then sell it for a smaller discount to someone else. If possible, keep the [agreements](people-contracts.md) quiet and away from [public criticism](stories-storytellers.md). - Instead of outright selling something, rent it out. - Collect royalties on what *other* people [create](creations.md). - Absorb risk by charging flat prices for things with a varying cost structure (e.g., it costs $40-110 to ship something, so charge $100 to do it). - Re-invest *everything* to prevent making any taxable organizational [profit](money-accounting.md). Further, as a system grows larger, it can take advantage of favorable situations *much* faster and more effectively than smaller groups: - Use [tax shelters](money-accounting.md) to move the money into a tax-free arrangement, often with added publicity (e.g., owned not-for-profit organizations). - Hire people from foreign regions where the work may be more affordable or advantageous to costs. Very frequently, a bad system has the means to continue growing through questionably [ethical](morality.md) approaches: - Issuing [loans](money-2_debt.md) to people who don't have the financial position (or [investing savvy](money-investing.md)) to pay them back, then taking the collateral for themselves once they miss a few payments. - Falsely [advertising](marketing.md) in a way that's difficult to [prove](people-rules.md) is insincere. - Charge rent and royalties at [unfairly](morality-justice.md) high rates, often permitting the parent organization to profit under a [contract](people-contracts.md) while the subsidiary organizations or individuals will get nearly nothing by comparison. - Disregarding any [ethical considerations](morality.md) and taking advantage of the lettering of vaguely worded or poorly considered [laws](people-rules.md) to perform activities that are *not* in the spirit of its design. - Underpaying the people in the group, often by implying the roles are tremendous [career-starting](jobs-1_why.md) opportunities or that the person can "grow with the company". - [Distorting the truth](image-distortion.md) about a product in a way that either hides the harm it may cause or [advertises](marketing.md) a feature the product in no way can remedy. This can include coining the [term](language.md) for a new disease (e.g., halitosis) or bribing/deterring [scientists](science.md) to prevent research. As they defeat progressively more competitors and gain more [power](power.md), a large system can operate at *enormous* scale, meaning they can act more efficiently than their competitors: - Add a tiny fee to many, many small transactions (e.g., $2 isn't much, but becomes $2,000,000 across 100,000 people). - Collect a small commission on many, many small transactions (e.g., 1% for 40,000 people spending $5 each is $2,000). - Saving 15 seconds on a procedure to sabotage quality doesn't mean much, but can save 15,000,000 seconds across a million tasks. Small adaptations can convert into a diminished relationship between quality and price. Bad systems can only subsist and grow on [goods and services](results.md) treated as a commodity. If the objects are observed as new or special, skimming [quality](values-quality.md) is a *dramatic* problem. However, once an object becomes part of everyone's [habitual](habits.md) background, they have no reason to pay attention to quality. As much as people will condemn a bad system, they'll still use the [products](creations.md) until they find a suitable alternative. APPLICATION: Don't publicly shame a large system with hearsay or lies. Stay as close to [the truth](reality.md) as you possibly can (and make sure you know other people to advance [the cause](values.md) if they shut you down) or they'll repudiate you faster than you can respond. Typically, the leader of a [large group](groups-large.md) is *not* aware they're inspiring a gigantic force of individuals that [portray](image.md) that leadership as an antagonist. Often, they have a sincere and misguided [belief](trust.md) that they're establishing a new level of [order](unknown.md), but either fail to incorporate [how humanity works](humanity-universals.md) (especially their [range of personalities](personality.md)) or [overstep their boundaries](people-boundaries.md). They'll often perform their tasks in secret, and it will often [backfire](stories-storytellers.md) later. ## Merging A large group's expansion typically comes through taking over and absorbing other smaller groups, with a few tactics: - [Selling](marketing.md) people on the [inspirational idea](purpose.md) itself, often with certain [religious](religion.md) implications. This can be a legitimately sincere desire if the person is receiving [company stock](money-investing.md) as compensation without any [strange arrangements](image-distortion.md) involved. - Using [charm](influence.md) to convince smaller groups that their [security](safety.md) is far better than their [freedom](people-boundaries.md), often with a [contract](people-contracts.md) that provides *much* more benefit to the larger group. - Using [fear](mind-feelings-fear.md) to coerce them to give up, often through threats of the unknown, which can be accomplished effectively with anything that represents legitimate [risk](safety.md) to the smaller group (e.g., a pre-existing [story](stories.md) of their previous conquests, [legal](legal-safety.md) environment changing). If a large business has been expanding their operations for a long time, they'll often create subsidiary organizations that do *nothing* but seek smaller groups to absorb ("roll-ups"): 1. Buy out numerous small organizations in many regions and combine them together. 2. Fire all the back-office staff that the larger organization can do better (e.g., [accounting](money-accounting.md), [management](mgmt-1_why.md)). 3. The collective organization is now capable of operating as one unit across many regions, with many added [logistics](logistics.md) benefits. Often, a bad system will give incredibly generous incentives to the [smaller groups' leaders](groups-small.md) for them to step down from their leadership role ("golden parachutes"). In a merger or acquisition, a significantly larger group will merge and absorb the smaller group's [culture](people-culture.md) and names, but the smaller group will only exist as a name after that point. The original [spirit](values.md) of the group will be gone unless the larger group treats that smaller group as its own autonomous unit. At some point, it'll make tremendous [marketing](marketing.md) sense to present a component of the organization with a separate [public image](image.md). Often, they can have such effective [marketers](stories-storytellers.md) that the public won't even *realize* it's the same organization! APPLICATION: Government elections are corrupt proportionally to the amount of work it takes to even run a campaign. Therefore, corruption in government scales with population. In the political domain of a [free society](politics-systems.md), it takes many resources to win an election, proportionally to the size of the electorate. For that reason, every politician *requires* [funding](economics.md) from a large system, which distorts the interests of the public at large. Government bureaus work similarly to business units in merging, but without the [economic motivation](economics.md) and with a motivation for [control](power.md), and typically through a top-down consolidation of departments through a government order instead of any agreement. ## Monopoly At some point, without a [large conflict](people-conflicts-war.md) to keep a bad system beholden to [results](results.md), it becomes unstoppable by any competitors. Their sheer size in an [industry](jobs-specialization.md) will make them impossible to defeat through any conventional means. In other words, success for a [large group](groups-large.md) eventually becomes monopolization, at least toward a [niche](jobs-specialization.md). It's worth noting that monopolies are *relatively* successful. It means there was a void that someone was waiting to [seize](socialrisk.md), and especially when there's a commodity which nobody cares where it came from (a product of [technological innovation](technology.md)). APPLICATION: Monopolies are inevitable as long as people desire [power](power.md). Antitrust [laws](people-rules.md) only work when they're too simple to abuse and enforced by governments, which is *another* potentially bad system that checks the first bad system. Typically, [technology's](technology.md) complexity makes regulating vertical control absolutely impossible. And, because of [how we understand reality](mind-bias.md), we can't easily regulate ideas (e.g., [misinformation](stories-storytellers.md), "fake news"). When large systems [have control](politics-monopolies.md) of vast portions of entire [specializations](jobs-specialization.md), they can dictate what people must [choose](people-decisions.md) to build by redefining the [consequences](results.md) to reward/punish activities in line with the group's interests. It's [our nature](humanity-universals.md) to dislike competition, so it's an inevitability. Gaining [power](power.md) usually takes far more effort than maintaining it. Instead of fighting *many* [competitors](people-conflicts.md) while focusing on much more powerful people, the fight is against other competitors in *other* groups and a few lower-ranking competitors who may become a future threat if not swiftly [dealt with](morality-evil.md). APPLICATION: The only reason people use [Verizon, Google, Facebook, Ford, and Coca-Cola](politics-monopolies.md) right now is because they're [familiar](habits.md) with it or don't see much to [choose](people-decisions.md) instead. However, assuming they didn't exist, their present [quality](values-quality.md) probably isn't enough to start a new trend if people hadn't been familiar with it in the first place. Thus, once someone has command of a large system in a comparatively small domain, they'll often focus all their efforts on stifling [competition](people-conflicts.md). They'll usually become complacent and forget the organization's [purposes](purpose.md) they were originally trying to advance. Each type of monopoly creates limits on members' [decision-making](people-decisions.md): 1. Horizontal control monopolies can make their services absolutely necessary or "too big to fail" if they control an entire phase of a [technology's](technology.md) method. 2. Vertical control monopolies control every stage of the process of a [creation](creations.md). This permits them to make things more affordably or higher quality, and is much harder to [measure](math.md). 3. Government monopolies are also called "dictatorships". While every government technically has a regional monopoly on killing people, they abuse their [power](power.md) when they don't permit people to freely move out from under the influence of their government. 4. Idea monopolies control a facet of society that doesn't [create](creations.md), but is a forum for [ideas](values.md). This one is far more abstract, but is the most severe monopoly because [ideas](values.md) begin *all* [creations](creations.md). It's difficult to spot, but watch out when [university educators](education.md) are run by intellectuals instead of [trade masters](jobs-specialization.md) or social media is run by censoring committees. While a monopoly may not be corrupt in its inception, the most apparent indicator of corruption comes through the organization quietly decreasing the [value](values-quality.md) of their [created](creations.md) goods and services: - Raising fees beyond natural [economic](economics.md) [trends](trends.md) like inflation, but without adding [quality](values-quality.md) to the offering. - Decreasing the [quality](values-quality.md) of the organization's offerings, but without lowering their costs. - Devoting more effort toward [advertising](image.md) to draw in people than to improving overall [quality](values-quality.md). - Advancing a [conflict](people-conflicts-war.md) or [fear](mind-feelings-fear.md) of that conflict, then [justifying](logic.md) a substandard situation with it (often by raising the price inappropriately). - Under-producing the available product to create [scarcity](economics.md), then supplying plenty of the product later once the demand for it goes up. - Giving varying regional prices for the same goods and services in relationship to *much* smaller competitors in that area ("price fixing"). - Prevent over-producing, since it'll [flood the market](economics.md) and drive down demand in relation to supply, and find ways to maintain it with everyone else in that domain. APPLICATION: Research *every* company you buy things from. You'll often find that the company is simply [one of the many faces](politics-monopolies.md) of a gigantic bad system. To stifle new [trends](trends.md) that may unseat their [power](power.md), most monopolies try to shut down anyone taking the [necessary risks](socialrisk.md) to build a [competitive](economics.md) alternative that gives the public more [choices](people-decisions.md) ("anti-competitive practices"): - Lowering prices beyond the lowest-possible cost of the item (i.e., taking a severe financial loss) to make it completely impossible for smaller [competitors](economics.md) to have a reasonably comparable price. - Giving an "open forum" for discussion, but preventing dissenters from saying what they want. - Observing any new [trends](trends.md), then buying out all the [ideas](mind-creativity.md) or their [creators](purpose.md) as they arise. - Publicly shaming anyone [building](creations.md) a [technology](technology.md) (or the technology itself) that could render their most profitable endeavors obsolete. - [Attacking](people-conflicts-war.md) any [intellectual property](legal-ip.md) that vaguely resembles the group's [symbols](symbols.md) or techniques (e.g., patent trolls). - Driving down the monetary value of a competitor's organization via [smear campaign](stories-storytellers.md) or [sabotage](people-conflicts-war.md), then buying them out when they're *just* about to go out of business. - Stalling and delaying reliable delivery of products to inhibit the [image](image.md) of a competitor. - Blacklist anyone who performs business with a competitor, as well as forbidding business with anyone *else* who does business with that competitor. - Buy out all key things the competitor may need (e.g., real estate, [logistics](logistics.md), factories). - Continuing to create situations that generate problems the system was originally designed to solve. One of the most significant features of a persistent monopoly is when people *outside* the group entirely (e.g., producers, consumers) have very little [power](power.md) compared to various middle individuals and groups with [obscured purposes](image-distortion.md). Free societies come with unique problems, and [political parties](politics-conservativeliberal.md) can do an election-based version of the same thing: - [Influence](influence.md) people to hate the opposition party with a [portrayed event](stories-storytellers.md) approximately 1-3 months before election day. This can include a [manufactured crisis](image-distortion.md). - Have an electoral system that only has limited [regulation](people-rules.md) of the voting, then add in votes from another source. This can work if the vote is declared as [justice](morality-justice.md) only *without* the regulation. - Disqualify votes through rules that are difficult to [define](language.md), but serve to benefit one political party more than the other. - Maintain [power](power.md) with new legal directives after the public has voted the leader out, but before that leader must change roles with the next one. With a government-funded institution (e.g., [public education](education.md)), the source of that organization's [power](power.md) and lack of competition gives them *much* more means to control, and it demonstrates itself through more [bureaucracy](bureaucracy.md) and [micromanagement](mgmt-1_why.md) than would otherwise exist. APPLICATION: Most [large systems](groups-large.md) are at least partly bad systems. Before destroying them, carefully consider what will replace it. Often, a bad system's leadership will ally with other large groups to suppress shared threats: - Giving [power](power.md) to other groups' leaders to [influence](influence.md) them to steer clear of conflicting [purposes](purpose.md). - Creating proxy organizations or appointing people who [appear](image.md) unrelated. Those people can then "verify" and "authorize" that group. They'll also sometimes discredit their source group's rivals with those organizations, who can often act without the [rules](people-rules.md) or formalized leadership of their host group. - Conspiring with other [large groups](groups-large.md) to create [government rules](people-rules.md) that prevent other [smaller groups](groups-small.md) from [fairly](morality-justice.md) competing ("crony capitalism"). - Conspiring with other [large groups](groups-large.md) to prevent [smaller groups](groups-small.md) from establishing themselves in a domain ("cartels"). - Creating [rules](people-rules.md) that prevent people from competing with other organizations in the same domain for a certain amount of time after leaving that organization ("non-compete agreements"). - Using publicized [awards shows](stories-storytellers.md) to demonstrate "insider" [influence](influence.md) to signal affiliated groups. - Delaying [law enforcement](people-rules.md) which may harm them for as long as possible, with the expectation that their opponents will run out of [hope](understanding-certainty.md) and no longer want to keep sacrificing resources for the conflict. - Using protesters to "take action" through the [appearance](image-distortion.md) of being forced to act.