Knowing Me, Knowing You

People underestimate the consequences of this election.

The motivation for Closest Point of Approach is to help people understand bureaucracy so that they can predict its behavior. We live in a world with compliance stacked upon governance. The Wild West this is not.

If we want to know how bureaucracy works, we need to understand the people who populate it.

The Harvard economist Roland Fryer wrote an editorial in the Wall Street Journal last week in which he talked about the concept of identity, opening with a startling quote from Nobel Laureate George Akerlof and his colleague, Rachel Kranton.

“Identity may be the most important economic decision people make.”

Under this characterization, identity is a choice. It is an economic decision. It is the constitutional election that drives all our other preferences. This direction we take for ourselves does not occur in a vacuum. We live in a social context and others help to shape this decision. In a sense, we choose continuously. We evolve.

We say that we are straight or gay, gun owners or pacifists, brown or white. We identify with a category. We shoe ourselves into a box with a label.

Fryer tells us that there are three types of identity: personal (who am I?), social (how do I want others to see me?), and collective (who are we?).

These are economic decisions because our identity, as the fundamental, bedrock description of our selves, dictates the principles for our conduct. We behave to fit our identity. A midlevel investment banker dresses in a certain way, drives a certain car, lives in a certain neighborhood, vacations in certain places. You can pick them out of a crowd in midtown, as they stand in line at some salad takeaway joint with their buddies, all clad in Patagonia vests, making plans to carouse unproductively at The Spaniard in the West Village on Saturday night, looking to meet their future first wife.

The old school economic models that assumed monolithic rational robots were motivated more by mathematical tractability than by an intent to represent real-world actors accurately. There is real diversity in the way people approach the world. This is intuitively true.

Akerlof and Kranton take it one step further, arguing that people have complicated preferences. Where the robot of theory would prefer a high-paying job to a low-paying job without question, the identity-driven person may be as or more interested in seeking employment that is more consistent with her sense of self, even if it meant taking a lower monetary wage. There are people who would rather teach high school math than work in a quantitative hedge fund because they find being an educator more consistent with their identity than being a capitalist overperson. We can think of this identity fit as a form of non-pecuniary compensation.

Fryer and his colleagues Steve Cicala and Jorg Spenkuch studied how individuals developed an initial sense of identity. They found that people decided based on their perceived comparative advantage and on their social context. An individual will pursue the identity path for which he has some talent and which yields the greatest return on investment to him in terms of self-fulfillment and status or social recognition. He gives the example in the Oped of women and STEM. Women may not enter the field if they do not see it as consistent with social expectations. They may have talent but think that society sees women engineers as unusual, a view that would impose a kind of tax on them. The returns on their talent would need to exceed significantly the penalty for violating what they internalize as the social norm for people in their shoebox. The less they subscribe to this old-fashioned assumption, the more likely they are to enter the field.

This is consistent with Rene Girard’s Mimetic Theory.

“Mimetic theory has two main parts - the desire itself, and the resulting scapegoating. Girard's idea proposes that all desire is merely an imitation of another's desire, and the desire only occurs because others have deemed said object as worthwhile. This means that a desirable object is only desired because of societal ideas, and is not based on personal preference like most believe. The mimetic desire is triangular, based on the subject, model, and object. The subject mimics the model, and both desire the object. Subject and model thus form a rivalry which eventually leads to the scapegoat mechanism.

“The scapegoat mechanism has one requirement for it to be effective in restoring the peace; all participants in the removal of the scapegoat must genuinely believe that he is guilty. It is also essential that the scapegoat cannot strike back afterwards, so it is common for him to be killed. Once he is gone, peace will quickly be restored, further confirming his "guilt". However, the scapegoat is chosen arbitrarily. The resulting peace is borne from violence, and this form of violence controlling violence has existed since the beginning of civilizations.”

We are who we model.

It is also of a piece with the way Seth Godin talks about culture: “People like us do things like this.”

All of this leads us to the question: who are the people in the bureaucracy? Because if we can nail that assessment correctly, then we’re more than halfway to predicting their behavior.

Let’s posit a theory.

There are two kinds of people in a bureaucracy: doers and influencers.

Doers occupy a role in the organization. They develop an expertise in a specific function and they spend entire careers executing that role. We discussed in a prior post, Hierarchy, the hierarchy of needs for the bureaucrat. Listed in order from the foundation layer to the aspirational one, these are control, status/rank, credit, power, and acclaim. The doers are focused on control, status, and (potentially) credit. They are willing to give up the perquisites of power for stability and purpose. They are risk averse. They do not want to be embarrassed. They model themselves more closely on the inhabitants of the Weberian ideal.

Influencers are more focused on the upper levels of bureaucratic fulfillment: credit, power, and acclaim. They want the credit for things that go well; they avoid the blame when things go awry. They seek impact in the form of large staffs and power. There are those who obsess over acclaim, the “widespread perception of virtue and excellence” from outside the self, ideally from those they model.

The doers are vital, important people. They make things happen. They keep the wheels on the bus. Ironically, the doers may be the biggest victims of bureaucracy. If you think it’s bad on the outside, you may underestimate wildly the amount of internal compliance foisted upon them. Yet, they persevere in their safe jobs with their safe pensions and their generous benefits packages. The traffic in DC is heaviest at 3 pm, one presumes.

For our purposes, understanding policy requires us to get inside the minds of the influencers. These people are paid a decent wage while they’re in the seat, but if they get it right, they line themselves up for a big payday on their transition into the private sector. This is what is known pejoratively as the revolving door to industry. The influencers who make the biggest impact are often risk takers, hedged with a back-pocket scapegoat they can sacrifice should things turn pear-shaped. You don’t get to Hollywood by being timid. You need to stand out and be noticed.

Players on the outside don’t understand the mindset of the influencer. The influencer engages in empire-building as art form. For some, there can be a pathological indifference to consequences. It’s about power. It’s really about seeking the approval of the beautiful people, the bien pensants. To acquire this acclaim, one must signal virtue. Plaudits will not seek out the influencer; the influencer must stalk its prize as a lion preys upon an antelope on the Serengeti.

Ultimately, to predict the behavior of the influencers we need to know who they look to as models and what these models want.

The predicate assumption of Project 2025 and Schedule F and Loper is that the influencers model themselves after the icons of the political left. In this view, they see themselves as well-educated, benevolent dictators full of sympathy for the downtrodden. They would intervene to alleviate the pain of the underclass. They are activists who are not content to create the conditions for prosperity and sit back. That is to say, they are lopsided in their political dispositions and, by extension, their loyalties. They will not abet the implementation of policies with which they disagree. The notion of a professional civil service that acts apolitically is quaint and archaic.

Correctly or not, Schedule F targets this influencer class; it leaves the doers in place. The pace of change could be swift in terms of deregulation (and the imposition of different types of regulation) with costs and benefits accruing at a large scale, spanning many disparate groups, foreign and domestic. I do not believe that people outside the beltway understand the breadth of this potential change. The influencers may find themselves scapegoated in the name of progress, ironically. It just won’t be the kind of progress they envision.

The consequences of the election in November are paramount not just for the American federal bureaucracy, but for the global economy.