That’s true… for the banking sector. However, the author was talking about the software projects in general. In my experience (and the author’s experience appears to agree with mine) the sort of organizational irrationality peculiar to software isn’t especially overrepresented in any particular sector. It’s present in all sectors, from banking to video games. There’s a deep intuition suggesting that adding more workers to the project will make progress occur more quickly. (Bad) middle managers play to that intuition and add workers even when the addition of more workers actually slows down the progress of the project.
I haven’t seen any evidence of extensive governmental intervention in, say, XBox Games, but management practices at EA appear to fit this stereotype to a tee.
And Microsoft’s behavior on device drivers, as explained in the second ‘Halloween document’: close the process on driver development so you can assert more control over them so you can improve their quality… but instead it gets to the point where major electronics corporations have to wing it on making device drivers because the process is so closed. And then everything breaks harder than before.
That’s true… for the banking sector. However, the author was talking about the software projects in general.
Missed the point completely I’m afraid.
ETA: because clearly Moldbug is talking about government interference in the banking system disrupting the free market in general, i.e. including the software industry.
Yes, there are many other ways in which (according to Moldbug et al) government interference causes business irrationality. After all, Moldbug’s favourite thinker Thomas Carlyle popularised the term “red tape” as a metaphor for bureaucratic procedure.
However, the excerpt that I quoted deals exclusively with the idea that government intervention (usually disguised through the concept of loan guarantees, but overt in times of recession) in the banking system causes business irrationality, because if the banking system isn’t subject to the discipline of profit then this lack of profit-discipline contaminates the private sector via the loans that the banking system provides.
I was disappointed that user:quanticle was upvoted for responding, “That’s true...for the banking sector”—this suggests that he didn’t make a reasonable attempt to understand the excerpt, because although readers are welcome to disagree with it in an intelligent and thoughtful way, clearly his interpretation is simply an error of comprehension.
That’s true… for the banking sector. However, the author was talking about the software projects in general.
The banking sector interacts with all of private industry, therefore government interference in the banking sector (arguably) causes Dilbertization in software engineering and elsewhere. The articles that I linked to explain this idea in more detail.
I prefer this explanation to the idea that “eventually is a long time”, because it seems to me that a free market should punish wanton incompetence efficiently enough such that Dilbertization doesn’t become a commonplace state of affairs. There is ample opportunity for profit to be made in eliminating incompetent management before the point at which a company implodes; widespread Dilbertization (in which, as the writer of your article described, patently inept managers preside over multiple failed projects) implies to me that what is really happening is that the profit motive in eliminating this incompetence just isn’t that strong – in which case Moldbug’s explanation fits the facts better.
Other forms of government intervention (e.g. “red tape”) also cause Dilbertization, but influence through the maturity mismatched banking system is particularly insidious. Government loans are disguised as “deposit insurance”, propping up an unstable fractional reserve system that wouldn’t exist in a free market context, and when the system inevitably crashes private industry can be openly Sovietised on the basis that the (allegedly) free market has failed – a “piss on my boots and tell me its raining” scenario.
That’s true… for the banking sector. However, the author was talking about the software projects in general. In my experience (and the author’s experience appears to agree with mine) the sort of organizational irrationality peculiar to software isn’t especially overrepresented in any particular sector. It’s present in all sectors, from banking to video games. There’s a deep intuition suggesting that adding more workers to the project will make progress occur more quickly. (Bad) middle managers play to that intuition and add workers even when the addition of more workers actually slows down the progress of the project.
I haven’t seen any evidence of extensive governmental intervention in, say, XBox Games, but management practices at EA appear to fit this stereotype to a tee.
And Microsoft’s behavior on device drivers, as explained in the second ‘Halloween document’: close the process on driver development so you can assert more control over them so you can improve their quality… but instead it gets to the point where major electronics corporations have to wing it on making device drivers because the process is so closed. And then everything breaks harder than before.
Missed the point completely I’m afraid.
ETA: because clearly Moldbug is talking about government interference in the banking system disrupting the free market in general, i.e. including the software industry.
He could be talking about that, but he attributes all lasting business irrationality to government interference. There are plenty of other sources.
Yes, there are many other ways in which (according to Moldbug et al) government interference causes business irrationality. After all, Moldbug’s favourite thinker Thomas Carlyle popularised the term “red tape” as a metaphor for bureaucratic procedure.
However, the excerpt that I quoted deals exclusively with the idea that government intervention (usually disguised through the concept of loan guarantees, but overt in times of recession) in the banking system causes business irrationality, because if the banking system isn’t subject to the discipline of profit then this lack of profit-discipline contaminates the private sector via the loans that the banking system provides.
I was disappointed that user:quanticle was upvoted for responding, “That’s true...for the banking sector”—this suggests that he didn’t make a reasonable attempt to understand the excerpt, because although readers are welcome to disagree with it in an intelligent and thoughtful way, clearly his interpretation is simply an error of comprehension.
The banking sector interacts with all of private industry, therefore government interference in the banking sector (arguably) causes Dilbertization in software engineering and elsewhere. The articles that I linked to explain this idea in more detail.
I prefer this explanation to the idea that “eventually is a long time”, because it seems to me that a free market should punish wanton incompetence efficiently enough such that Dilbertization doesn’t become a commonplace state of affairs. There is ample opportunity for profit to be made in eliminating incompetent management before the point at which a company implodes; widespread Dilbertization (in which, as the writer of your article described, patently inept managers preside over multiple failed projects) implies to me that what is really happening is that the profit motive in eliminating this incompetence just isn’t that strong – in which case Moldbug’s explanation fits the facts better.
Other forms of government intervention (e.g. “red tape”) also cause Dilbertization, but influence through the maturity mismatched banking system is particularly insidious. Government loans are disguised as “deposit insurance”, propping up an unstable fractional reserve system that wouldn’t exist in a free market context, and when the system inevitably crashes private industry can be openly Sovietised on the basis that the (allegedly) free market has failed – a “piss on my boots and tell me its raining” scenario.