Shirky Principle: Why Problems Are Never Fully Solved

Institutions try to preserve the problem to which they are the solution. Extended, this means any entity is incentivized to prolong the problem it is solving. As everyone remembers from high school biology, a good parasite does not kill its host. It knows that it must never destroy its rival, despite being in biological warfare, since it would die otherwise. This natural phenomenon mimics the Shirky principle as it works in business and management. Organizations, like parasites, must not destroy the very problems they were designed to solve, else they will find themselves without purpose.

Its why light bulbs go out. Longer-lasting bulbs were invented hundreds of years ago. But manufacturers quickly found that if they sold lights that lasted a lifetime, they would soon have no customers. So they made them worse. A group of the largest lightbulb manufacturers got together to lower the life expectancy of all bulbs from 2,500 to 1,000 hours. Yes, they deliberately engineered products to fail so you would have to buy more of them. Police officers need crime. Personal trainers need you to stay fat enough to keep attending their sessions. It’s bad business to make yourself redundant.

In 2017, a French lawsuit was brought against Epson, HP, Canon, and Brother. The printer companies designed their printers to display false signals that told their companies the products were nearing expiration. But this evil scheme isn’t always present in tech. Apple doesn’t design iPhones to “expire” prematurely. Older models simply struggle to keep pace with newer software and applications. From one angle, it might seem that Apple is losing out on business this way. After all, if your phone broke every year you would have to buy one more often. But this oversimplifies economics. If Apple produced shoddy and easily broken phones, they would have a reputation for mediocrity. Which is the opposite of what is currently true for Apple. People buy Apple products because they are well-made.

The Shirky principle is a fine line. You cannot be profitable for long if you offer one-time purchases. But if you only sell sub-standard, low-quality, short-term products, you will be massively distrusted and destroy you customer base. Knowing about this principle is important both for creators and consumers. Don’t fall into the trap of inventing problems. Products and services are there to meet needs. If you create a need for yourself just because you want to buy something, you’re applying the Shirky principle on yourself.

Real-world examples of the Shirky principle:

• Public Safety Agencies: a police department receives increased funding and public support during a period of high crime. There is an institutional bias toward policies that emphasize crime reporting and enforcement. Not, of course, community initiatives that genuinely reduce crime in the long run. The agency’s resources depend on a persistent level of crime. This makes it challenging to implement reforms that actually lower crime rates.

• Regulatory Bodies: an environment agency monitors pollution levels. They enforce regulations for sustainability. A dramatic reduction in pollution results in calls for budget cuts or scaling back the agency’s role. This incentivizes it to continue enforcing standards that keep the problem visible. The agency’s power relies on the ongoing need for sustainability. So it won’t aim for policies that render its mission completed.

• Healthcare: hospitals and insurance companies benefit financially from a system that requires ongoing treatment. They need chronically sick patients to survive. Ironic. While innovations that improve health are beneficial, they, in turn, reduce revenue streams for institutions built around care. There is a big institutional bias against radical healthcare reforms that would dramatically reduce demand for the services.

• Media: news organizations thrive on reporting breaking crises, scandals, and conflicts. Continuous negative news drive viewership and engagement. Thus a financial incentive to focus on dramatic stories that reinforce persistent societal problems is present. The media’s role in shaping public perception is fueled by an underlying need of a steady flow of impactful stories. Even if that means amplifying or making up problems.

How you might use the Shirky principle as a mental model: (1) ask who wins — when making a choice, consider whether reforming the issue would reduce the provider’s funding, influence, or power, as this can indicate how well the problem will be addressed for you; (2) question the status quo — recognize that some institutions resist one-time solutions if they have a stake in maintaining the existing problem; (3) look for alternatives — seek out ideas or organizations that approach the problem from a sustainable, lasting perspective, comparing traditional institutions to non-profits and innovative startups that are more willing to disrupt the norm; (4) delete unintended consequences — measure performance by problem-solving and efficiency rather than maintaining a demand for your services, as this will bring long-term reputation which is much more valuable than short-term revenue.