The Marginal Myth

I’ve been reading quite a bit recently about how the world works and what one must do in order to succeed. It’s become a source of minor frustration that much of this advice (though likely effective) comes from those whom I would not wish to emulate.

Put simply, the modern world rewards effort, but also ruthlessness. As the saying goes, “Nice guys finish last”.

People are catching on to the fact that the world is not a meritocracy—your circumstances make a huge difference both to what opportunities you receive, and your ability to act on them—but what I’m calling the Marginal Myth seems to be either unrecognised, or actively ignored (as with many other uncomfortable truths).

The Marginal Myth comes from the common practise of examining the “margins” of a situation in order to streamline (e.g. being able to produce goods faster and/or more cheaply).

“But wait!” you say, “That’s not a myth; it works!” And you’d be right. It’s more insidious and subtle than that: the myth is that this approach is always worth taking.

To cite another saying: “When all you have is a hammer, everything looks like a thumb nail”. So, when times are tough, people get bogged down in trying to work out where they can “economise”; governments speak of “belt-tightening”; a lot of emphasis is placed on “the bottom line”. We trim and squeeze the margins further and further, our blinkered focus not seeing the other drawbacks that don’t directly affect the magic number.

Using the example of a soda-making factory: profit margins are being squeezed by their competitors, so they have to economise. Various tweaks are made to the bottling process, after which they find to their delight that they can save a few cents a bottle. A seemingly trivial amount, but given the volume they produce it has a significant effect. Hands are shaken, new instructions given to workers on the floor, and the bigwigs head out for a celebratory round of golf. But…

  • Maybe there isn’t time to properly clean the machines between batches, leading to build-up of syrupy residue which attracts insects, leading to contamination of the product.
  • Maybe the cheaper supplier of ingredients is farming them unsustainably, creating environmental problems due to deforestation or use of pesticides.
  • Maybe making the plastic bottles slightly thinner leads to increased leaks, causing wasted and unsold product, and frustrating retailers.
  • Maybe no-one’s properly checking the bottles before they get boxed up anymore. Occasionally, one has the wrong label, or the label upside-down, or just skewed/misprinted. No disaster, but customers start having subconscious thought of declining quality and are more likely to try a different brand if it catches their eye.

And so on. Okay, I’m presenting worst-case scenarios here, but the thing about “belt-tightening” is that it almost invariably happens again. Whether because other economic pressures arise, or because some board-member who doesn’t know the factory’s address, let alone having ever visited, gets excited at the improvement and thinks if they do a bit more he can add a couple of feet to his yacht.

Easy changes are made, and everyone’s okay with that. All seems well. Further changes are made. People on the ground are under more pressure than before, but once they get used to it, everything will settle down again, right? When the next change happens, they suddenly realise things didn’t settle down again. Now they aren’t getting a pay rise for this year. Still, not a problem, right*? Next time, more drastic cuts are required. People may accept reduced hours/pay because the alternative is redundancy. Either way, there are (on average) less staff on the factory floor. Compromises get made. Mistakes creep in.

We’re viewing this as a quantitative adjustment—changes made cause numbers to be different—but at some, not necessarily predictable, point in the process, a qualitative shift can happen. The proverbial straw that broke the camel’s back. And it’s all driven by competition: the incredible, ephemeral “market” that makes companies and governments march to its drum**. It’s a commons dilemma where too many are placing no value on the long-term good.

There’s a story about a village that decided to hold a great celebration. Everyone in town was asked to contribute a bottle of wine into the vast barrel placed in the square, and that night there would be revels aplenty. But the blacksmith thought to himself, “I don’t want to pay for a bottle of wine, but if I add a bottle of water, there’s so much wine, no-one will notice”, so he did. Many others had similar thoughts, so that evening, when the mayor—with great ceremony—poured the first flagon, only water came out. All went home, chastened, the celebration cancelled.

Maybe we need to hold our glasses up to the light.


* People are less likely to complain at missing out on a bonus (pay rise) than suffering a penalty (pay cut), not realising that it’s effectively a pay cut given the likely increase in the cost of living (due to inflation and suchlike).

** There’s a lot of other issues I have with being driven by “the market”, but that will have to wait for later posts.

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