Daniel Klein and Michael Munger are right to worry about tyranny. But reforming the system that oligarchic tyrants control is a fool's errand.
If you track public affairs you know that multiple polls, taken with great deliberation over the past decades, show a shocking decline in the confidence and trust Americans have in their institutions. This applies across the board—government institutions, commercial institutions, educational institutions, religious institutions, and non-profits. Hardly any institution has been spared this collapse in trust.
This steady decline in institutional trust has also happened over the course of what has generally been a period of economic expansion, rising prosperity, advances in most material measures of health and well-being, and peace at home. So, we have been feeling funkier and funkier about institutional health in mostly good times. Political scientist and social critic Yuval Levin tells us that our age “feels peculiar in part because good news seems not to translate into confidence or hopefulness.”
The soundness of institutions in society is the lynchpin of prosperity, well-being, and happiness (as defined by Aristotle and Jefferson). I think restoring our faith in our institutions is the great American project of our time. It enables any other project we might undertake.
First, well-functioning and well-supported institutions underpin almost every measure of well-being in a society—for individuals and the whole. Health and life expectancy, welfare, prosperity, happiness, order, freedom, safety, and so on. Institutions ranging from the family up to the national government and everything in between are responsible for putting into the place and enforcing the terms and conditions of life, the services and the products, and the experiences of a lived life that make well-being possible.
Second, institutions are the key not only to well-being, but to national power and competitiveness. Economic historian Niall Ferguson notes that the viability and veracity of institutions provides a far better answer to the divergent fortunes of different parts of the world over the past few hundred years than other reasons such as gene pools, climate, topography, or natural resources.
Third, they are a social glue that holds a society together—especially a multicultural society. Social critics ranging from Ethan Zuckerman on the left to Yuval Levin on the right, base their views on an argument that is more cultural in nature than traditional economic concerns. They worry about the rise in political and cultural frustration.
Success and Failure
The good news is that just as trust in institutions can decline, it can also be rebuilt. The high standing of the American military in the public’s mind, rebuilt since the Vietnam era, is a case in point. Institutions regain trust when they show competence, character, and act in the proper context. In other words, they deliver what they promise, they have integrity and can be trusted, and they root themselves and their role in the context of a self-governing democratic republic.
This first quality is the most obvious measure of success and engenders some trust. The other two are more subtle and have a more pernicious effect on trust.
How to judge the success of the US government? After $22 trillion and 60 years has the federal government’s war on poverty been successful? Much of the data suggests not—the poverty rate has hardly changed. 50 years and over $1 trillion later, there are calls to end the war on drugs, due to its lack of demonstrable success.
The part of government that fights actual, not metaphorical, wars—the US military—is the most highly regarded institution in America and has been for some time now. But it has had its own struggles with wars—and indeterminate results from them. Now, war is a complicated venture to say the least. It is not just military operations—as Clausewitz reminded us, war is the continuation of politics by other means, so it has been possible for the US military to demonstrate tremendous military competence even within the political setting of an uncertain outcome.
Judging success in government is difficult, as I learned when I was a senior government official in a large agency. We tended to measure inputs—our budget, the number of programs we oversaw, the number of our staff. We tended not to measure outcomes. Still, some outcomes are measurable. It has been 20 years since Congress (11% trust rating) passed a budget in what is called on The Hill “regular order.” So, sometimes political institutions are simply not doing their job and it is very plain to see.
Failures in Character
Competence, even where it sags, is not a major challenge though compared to character. As Warren Buffett reminded us, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
What wounds reputations more deeply is not issues of competence, but rather questions around integrity, corruption, hypocrisy, and the perception of self-dealing. Politicians in particular are prone to self-dealing, or “rent-seeking” as economists called it. It is a kind of soft-corruption—a particularly insidious sort—that allows institutional leaders to hold forth on seemingly lofty goals in the public or shareholder interest, but from which the leader or the institution are among the biggest beneficiaries.
Self-dealing, but openly and not under the guise of moral preening, can be fairly expected in the commercial world. There the larger character challenge that has caused a generational plummet in American confidence in big business is mostly just plain cheating. We are spoiled for choice with corporate scandals—seemingly weekly. Enron, Arthur Anderson, Tyco, Worldcom, Wells Fargo, Bernie Madoff, Volkswagen, Theranos, WeWork, McKinsey, Purdue pharmaceuticals, Wirecard… where does one stop?
Issues of character have of course touched also organized religion—spurring the dramatic drop in public confidence of churches.
Medicine and science have certainly not been immune to the character virus, especially the many parts of the medical community who have contributed to the opioid crisis. And the fumbles and politicization of COVID policies (has anybody yet seen an official cost-benefit analysis of the lockdown policy?) has caused further erosion in trust. The venerable medical journal Lancet even found itself caught up in scandal last year over falsified medical studies published in its pages.
No institution is immune to these forms of corruption and dishonesty, although some handle it better than others. When the US Navy had a series of ethical scandals surface several years ago, I co-chaired a bi-partisan commission to take an independent look at the causes of this and the possible solutions. The Navy not only thoroughly investigated, and ruthlessly punished wrongdoing, but very quickly enacted our commission’s and other recommendations to inculcate a renewed culture of ethics and integrity in the service—where every sailor could “see” it day in and day out.
Off the Path
For an institution to be truly trustworthy, it also must operate in a context for which it has legitimacy, authority, and some facet of what we call “the consent of the governed” in the political realm. Institutions that stray outside their remit, as our British friends might call it, or deviate from their purpose, feel “off” to constituents. And they lose confidence and trust as a result.
This is a kind of smaller view of context for institutions. Doing that for which you are authorized, legitimate, governed, structured, staffed, and expert. Here, some of the discontent with many institutions we’ve discussed stems from operating outside of their organic context. In particular, trust erodes or discontent grows when institutions use the authority and resources given to them by their volunteers, customers, constituents, or shareholders as a platform to enter the political arena.
Politics has come to dominate almost every aspect of American life—sports, education, corporations, journalism, churches, and civic associations. Today’s scorched-earth politics can ruin much of what it touches, and not gain the purported goals besides. Every non-political institution that has been perceived to have been “politicized” has rapidly shed trust and confidence.
The very low standing of journalism and large corporations in the polls, and to some extent the steep decline in the confidence of higher education, can be traced to this. If, in the minds of many, an institution seems to, for instance, abandon reporting for advocacy, abandon free inquiry and education for monocultural activism, or eschew product excellence for corporate moral posturing, trust withers.
For higher education, which has had the largest drop in confidence of any institution over the past few years, the danger of changing context in the purpose of a university is particularly damaging. When the President of Harvard took office a few years ago, he acknowledged the issues of free speech, due process, and ideological conformity at campuses. He noted that the public was not only questioning affordability and accessibility, but “whether or not colleges and universities are worthy of public support, or are even good for the nation.”
If one pulls the lens way back, it is important to recognize that the larger context of any American institution is to exist in a unique setting of a free society making an attempt at self-governance. And a society that is predominately civic, commercial and private in nature, not predominately governmental in nature. Under the rule of law. These are not tired tropes or a certain kind of political philosophy. There have been, for as long as the country has been around, liberal, conservative, progressive, whiggish, and other variations on the American experiment—but always in the context of self-governance—in the most self-governing nation I have observed or studied.
That requires, as our founders warned us, a free and virtuous citizenry, and by extension virtuous and free citizen leaders. I was pleased to see a recent op-ed by six former US education secretaries from both parties about the need for American History and civics education to achieve exactly this.
How can leaders and leadership “fix this?”—if fixing in fact means regenerating widespread renewed trust and confidence in important American institutions.
First, very early in career development at schools, colleges, and elsewhere we need to train executives in leadership, strategy, and ethics. In almost every walk of life, we tend to promote executives based on their previous mastery of various tasks—mostly of a technical and tactical nature.
But, when those same executives are in institutional leadership positions, their leadership challenges are almost entirely strategic, interpersonal, and ethical. That requires a different set of skills and executive competencies, a different mindset, a different lens through which to judge things and make decisions. It demands not just competence, but character—not just smarts, but wisdom. We do not train our leaders in these high arts until they are already in the thick of it, if then. Sometimes it is too little too late.
This has greatly contributed to the rather narrow, parochial, and somewhat blinkered view that many institutional leaders have of how to be successful in their little slice of life. As I learned on the ethics commission for the US Navy, unless you teach ethics and strategic leadership early in an executive’s career, it is not fully inculcated into the life of an institution and the development of the executive throughout. Only recently have many (not all by any means) MBA programs started to teach ethics and strategic leadership electives, let alone as required courses. Despite what is happening in the business world.
We need leaders to not just run institutions well, but to run good institutions. And they must understand that they have a further responsibility to the larger societal project of trust. All individual institutions are co-dependent in this regard—together they make “the system” trustworthy.
When the US military, particularly the Army, was rebuilding after Vietnam, it not only developed a new doctrine of how to fight, but an accompanying doctrine of leadership, strategic, and ethical training that gave great responsibility and the initiative of action to leaders at all levels. The revolution in military affairs caused by this—and one from which I benefitted from as a cavalry lieutenant in tank combat in Operation Desert Storm—was driven not by technology or equipment, but by leadership development tied to strategy and institutional direction.
Second, and related to this, we need to promote diversity in careers, not the development of a singular expertise or experience only in one segment or industry. Too many politicians, business leaders, and even teachers have been at one thing for too long. It denies society the benefit of leaders with range, rather than simply depth, with hard-won perspective earned in other walks of life.
In his recent book detailing the unraveling of the once great General Electric, career GE employee and former CEO Jeffrey Immelt said with regret “I wish I had experienced more different things to be better prepared for the world I saw.” Unfortunately, when you look at the career tracks of so many institutional leaders these days, they have been locked in on one setting for most or all of their careers. Diversity in experience among leaders also helps with the challenge of getting institutional leaders to, as a cohort, understand and appreciate the interconnectedness of institutions.
Leading the Little Platoons
Third, we need to much more intentionally train leaders so that they understand the context of leading an institution in a self-governing free society. I referred to this above as the “ultimate context” for an American institution. Let me frame it in leadership terms: the great question of political order and leadership for most of history was “who shall rule us?” The American answer to this was “we will rule ourselves.” A radical departure from most answers to the question over time and one that caused us to shift focus on the question to “if we are going to rule ourselves, who shall lead us?” That started a “what kind of leader do we want?” conversation that is still ongoing.
Niall Ferguson reminds us that political scientists often talk about two general patterns of human organization. The “limited access pattern” which operates with a centralized government, not many independent institutions outside of its influence or control, an uncertain consent of the governed, and often organized along personal or dynastic lines. There are many of these systems in the world today, including among the other great powers.
In contrast, our American experiment is with an “open access pattern” of human organization, whose chief feature is a diverse and vibrant civil society composed of many independent organizations, a decentralized government, and bound together by impersonal and non-dynastic forces like the rule of law and principles of equality and fairness.
One doesn’t need to be a leadership scholar to see that these different approaches to human organization demand very different kinds of leaders. One needs mostly automatons waiting to be directed by a higher order. The other system demands independent leaders who not only run their own show, but as stakeholders in the whole affair cooperate with each other to make the larger ecosystem work—and they do so without central direction.
Noted social scientist Mancur Olson showed us in his research that nations fail and societies get “stuck” when their institutional leaders transfer to a higher collective authority the responsibilities for decisions previously made by families, communities, localities, civic organizations, religions, independent schools and so on. Olson’s findings showed that subsidiarity tends to fuel dynamicism and innovation in a society.
This demands a renewed commitment to citizenry and citizen leadership that was once—at least in Alexis de Tocqueville’s eyes—the singular and unique hallmark of the American system—and one that gave it a competitive advantage above other systems. A yearning by American leaders to own their own responsibilities within a self-governing system of co-dependent institutions rather passing it off to a higher authority.
Finally, we need to reinvent the service mentality that has been a universal hallmark of good leadership throughout history. It is sometimes hard to see that orientation of service and sacrifice, of advancing the institution and not one’s self, in today’s leaders. Yuval Levin writes:
we find that many holders of elected office now spend much of their time participating in the cultural theater of our politics—often complaining dramatically about the corruption of the very institutions in which they hold positions—more than playing the role the system assigns them. We find many journalists leveraging the reputations of the institutions they work for to build their personal brands, outside of those institutions’ structures of editing and verification, and to accumulate followers for themselves on social media. We find professors and scientists and ministers and CEOs and artists and athletes all using the legitimacy built up within professional institutions to raise their own profiles in a broader public arena, and often in ways intended to signal cultural-political affiliations more than institutional ones.
In his recent book on the revolutionary war, Rick Atkinson noted of George Washington, “great responsibility enlarges him: he rightly embodies the sacrifice of personal interests to a greater good, as well as other republican virtues—probity, dignity, moral stamina, incorruptibility—traits that should remain true north for every citizen today, traits we should demand in our leaders, at all levels.”
Just so. When was the last time you referred to an institutional leader of today in those terms? Getting better institutional leaders in government, business, education, and non-profits is a project of the highest order. We need to renew our education in civics and ethics at every level and without the apologies for its unique cultural wellsprings that have muted its teaching over the past 40 years.
We need to hold institutional leaders accountable not only for their narrow measurements of success, but also for the metrics of trust in their institutions that have fallen so far and so fast over the past generation. Term limits for office holders, and boards and oversight bodies that are forced to consider not simply today’s diversity trends, but also the leadership characteristics above would help start this project of renewal. There is not a policy solution to this, rather rebuilding trust in American institutions through the selfless and virtuous leadership needed in a self-governing republic is an aspiration stakeholders need to demand of the institutions in which they have influence.
Maybe that is something we should shoot for and I think we might surprise ourselves by how our trust meters respond to this enduring measurement of a leader in the public interest.