The pioneers of cybernetics borrowed the concept of entropy from thermodynamics, the tendency of systems to become less organized over time.They regarded structure and information as ways of halting or reversing entropy, and information is sometimes defined as negative entropy (negentropy).
In the past few days, I have seen a few examples of what appears to be entropy at a higher level – over time, rules becoming less effective or even counterproductive.
We keep hearing stories about large corporations paying practically no tax. As we heard on BBC Radio 4 recently, (File on Four: Taxing Questions), new tax rules are created with the participation of interested parties, including large corporations (HSBC, Vodafone) and accountancy firms (KPMG). Having advised on the creation of loopholes, the accountants then make huge amounts of money selling knowledge of these loopholes to their clients. Sadly, even this valuable knowledge degrades over time, and new tax laws must be created with new and more obscure loopholes.
Within a sceptical article about the so-called Robin Hood tax (Algorithm and Blues) @TimHarford mentined Myron’s Law – the theory that taxes collect diminishing amounts of revenue over time, as people work out legal ways to avoid paying.
Meanwhile, @CyberSal has tweeted a couple of links to articles about Payment by Results. Since Deming, systems thinkers have understood that targets and incentives often don’t (and perhaps cannot) achieve the intended results. Instead, they stimulate various forms of devious behaviour, known as gaming the system.
I think the interesting point here is not just that these mechanisms don’t work, but they get worse over time. To start with, people may make a genuine attempt to do things properly, and some professionals may be reluctant to game the system, but they gradually get worn down. Those that don’t quit altogether become stressed, depressed and cynical. For example, if teachers don’t teach to the test, and if the head teachers don’t bully them into playing the game, then the school will slip down the league tables and become non-viable. But this degradation takes time, which is why I think it makes sense to think of this as another form of entropy.
How then might this entropy be halted or reversed?