The power of no

In their excellent book, From Poverty to Prosperity, Arnold Kling and Nick Shulz wrote:

To control intrapreneuring [development of new ideas within a company], corporations set up bureaucratic filters through which new ideas must pass.  The bureaucracy is designed to kill most new ideas, because most new ideas offer poor return on investment.  Corporate decisions are made by committees.  In a typical committee, no individual has the power to say “yes” to a new project.  On the other hand, almost every member of a committee has the power to veto a new project.

Observers of organizational behavior have noted that in committees one is more likely to be regarded as intelligent and a good team player by one’s peers by arguing against a new idea than by arguing in favor of it.  Middle managers who fight for new ideas are regarded as troublemakers, even if they succeed in convincing corporations to undertake the projects they propose.

A corporate middle manager who fits Pinchot’s description of an intrapreneur is likely to be driven to leave a large organization to start a new enterprise as an entrepreneur.

It seems like we’re setting up those filters in general society as well.  Too many people are gaining the power to say no.

Do you want to build an office building in an old shopping district?  I saw this one.  A preservation group formed to prevent it.  In their view, the facade of the new building didn’t line up with the old architecture, even though on the very next block there was new development in the past 20 years that integrated just fine.  That group never attempted to acquire an ownership stake in any of the property, but was successful in chasing away the developers and seeing to it that the property they didn’t own remained unchanged.

I saw another case where a decrepit old building had once served as a school long ago. A new owner wanted to purchase the property, tear down the building and build something new. Groups without an ownership interest in the property, the planning commission and historical society, told the owner he must restore the building.  He bailed on the project.

These are just a couple tiny examples.

If you watch, you will see many such projects in your neighborhoods, towns, states and at the Federal government.  Look at all the folks who want to stop the Keystone XL pipeline.   Even in my neighborhood recently, the Homeowners Association and homeowners got into a heated dispute over the placement of a new fence.

All the while, unemployment continues to languish.



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