Great Founder Theory

by | September 5, 2018

This is an excerpt from the draft of my book.

A theory of history

Our beliefs concerning large scale patterns of the present world carry predictions for the future and explanations of the past. Yet, when we think about society as a greater whole and the humans in it, it seems all too natural to consider these kinds of models separately.

We change explanations of social phenomena to fit time periods, without principled reasons for doing so, for why some factors come to dominate. This divide is an artifact of our lived experience and limited knowledge, not of reality itself.

Whether we like it or not, attempting to evaluate reality on the scale of society is to implicitly claim of an overall theory of history.

Through previous essays we’ve explored the functioning of institutions, the transmission of knowledge, and the landscape of power. These phenomena substantially overlap and interact.

In this essay I will illuminate this overlap and try to make the common driving factor of their dynamics explicit in what I call Great Founder Theory.”

On institutions

What is an institution? This term conjures associations with organizations such as governments, courts, corporations, and universities. For our purposes, an institution is a zone of close coordination maintained by automated systems.

There is a spectrum of automation, however, and it is more useful to call something an institution the more automated it becomes. The most automated of institutions can be understood as bureaucracies.

We can understand the world as a landscape of functional and non-functional institutions. Functional institutions are the exception. Creating functional institutions requires a founder who knows how to coordinate people to achieve the institution’s purpose, and who uses this knowledge to build new institutions or dismantle and rebuild existing ones.

Non-functional institutions, which inadequately imitate functional institutions, are the norm rather than the exception. They attempt to copy the relevant social technology from one or several functional institutions. Such non-functional institutions can still easily generate the external and internal story of being goal oriented and functional.

The internal story helps them achieve modest effects locally, but these are side effects of socializing. Its members might individually pursue actions towards the organization’s goal, perhaps even believing they are pursuing them effectively; however, the social interface rewards appearance rather than reality, hence close cooperation towards the organization’s goals cannot materialize.

One sign and symptom of this simple optimization for appearance is that everyone in the organization is trying to perform the same kind of task, the one that is most socially rewarded, rather than them being specialized according to their function.

The body of the institution becomes a social club gathered under pretense. We shouldn’t disparage the value of socializing itself. Anomie, the rift between individual and community, has only grown since the sociologist Emile Durkheim introduced the concept in his diagnosis of 19th century society. Perhaps given our predicament it is wise to try and build community by any means available, so our society should tolerate some false pretense for socializing.

However, whatever the talent or intentions of individuals within such a non-functional institution, the main body of the institution, the communal fabric of socializing and even material incentive, stands in the way of fully realizing the institution’s nominal function.

Ultimately, vital functions must be realized. To name only a few, imagine militaries that cannot win wars, churches that cannot maintain communities, governments that cannot guarantee security, universities that cannot maintain intellectual life, courts that don’t uphold the rule of law, and industries that fail to advance technology.

To fail at all of these functions would amount to a failed society.

Limits to knowledge and effects of imitation

A society can make do with having some functional institutions and some dysfunctional institutions. You could argue that the Roman Empire for century after century succeeded in building armies that could win wars, but failed to maintain the intellectual life inherited from the Hellenic era, for example.

Even then, such a society pays a high and often invisible opportunity cost. They might believe their institutions functional, because they have simply never seen the functions carried out well. There are no outliers that can be used to disprove the thesis that the status quo is the best that can be done.

The invisibility of dysfunction may follow from a lack of viable comparisons. Comparisons between often competing societies are difficult, because of clashing politics and social narratives. Comparisons across time are difficult, because of confounding factors we cannot control for. Comparisons against theoretical ideals are limited by the quality of theory.

We might only be able to clearly compare functional and non-functional institutions when functional institutions still exist in a domain of society. This illustrates what a crucial difference even one functional institution can make.

A functional institution is only an instance of a class. There is more than one technological company, for example, though there might be only one truly innovative company per industry.

If an organization is clearly better, it is possible to imitate it. In a famous Caltech commencement address, Feynman explained the folly of simple-minded imitation. However, as long as the functional example is around you can keep returning to it, each step narrowing down. You are only stuck building wooden airplanes or wearing turtlenecks if the original is no longer around. Success through reverse engineering is much easier than blind trial and error.

This kind of imitation can bring you to a better and better approximation of a given set of social technology. However, since the social technology behind functional institutions wasn’t discovered through blind tinkering, it is ultimately grounded in an existing lineage of knowledge.

Once that tradition is lost, you are making photocopies of photocopies. Each subsequent copy loses information. A crucial difference between organisms and organizations is that organizations do not undergo natural selection. Since the fidelity of transmitting intricate social technologies is so low, complex adaptations cannot arise.

There is no corporate equivalent to DNA. The positive copying errors do not propagate and overwhelm the negative copying errors as they would in millions of years of evolution in wasps or elephants. This means that institutions only arise through the process of imitation and invention carried out by human minds.

A single new functional institution that visibly and strongly outperforms others in its reference class offers an educational example that can be followed by many. Imitation of practice is much easier and faster than transfer of knowledge, especially when the tradition of knowledge is still alive to be imitated.

Some functional institutions shoulder the burden of their civilizational function entirely on their own. There was only one organization that went to the Moon: NASA under von Braun.

Whether because of the scale of the task they handled and consequently their solitary nature, or because other institutions learn from their crucial example, functional institutions are often irreplaceable. When a functional institution dies, the living lineage of knowledge disappears, succeeded only with ever fainter echoes.

Such institutions, when they arise, provide far more value to society than they can possibly capture for themselves or their founders.

A civilization is an ecosystem of institutions

In “Institutional Failure as Surprise,” we explored how institutions rely on each other for handling many necessities. Examples include infrastructure, enforcement of contracts, security, intellectual culture, design… too many to name.

No institution is self-sufficient. Rather it is a part of an ecosystem, receiving and giving support in complex arrangements. Due to interdependency and the extreme differences in functionality among institutions, functional institutions subsidize all others.

The functional institutions solve and handle hard tasks not just for themselves but many other organizations and communities. Since they can outsource to functional institutions, let alone imitate their example, even mere social groups become quite productive.

The reason is that there are multipliers external to the social group, provided by functional institutions elsewhere, that make the nonfunctional institutions’ modest linear efforts worthwhile.

In a civilization with several functional institutions, everything seems to work very well. The ubiquitous perception of functionality is then reflected in the culture and produces a very palpable mood of optimism. Nothing seems beyond the civilization’s grasp.

People impact the world through institutions they build

The term institution is not synonymous with the concept of empire, though they can overlap in some cases.

An empire is a region of coordination around a central power, where the central power is the cause of the region of coordination. An institution can be the entirety of a given person’s empire, but such an empire can also include multiple institutions. Naturally functional institutions can extend the reach of personal empires.

I argue in “Competition for Power” that people’s impact on the world follows a Pareto-like distribution, with the most impactful people having a far greater impact than the rest.

The creation of functional institutions is the means by which people are hugely impactful. People who build institutions are far more impactful than people who don’t, and among those, people who build functional institutions are by far the most impactful.

The height of personal power amassed by creators of functional institutions can certainly dwarf that held by those merely inheriting them. But power is a means, not an end. The big picture impact of such impressive personal empires doesn’t lie in the power to right particular wrongs or achieve particular aims, but rather in how such empires lay the foundation for building further institutions.

A functional institution can outright solve a problem for a civilization. It might, for example, complete the construction of infrastructure so important it changes the course of economic development for centuries to come, such as ancient China’s grand canal or a hypothetical space elevator.

A functional institution can subsidize the working of many other ventures through providing services other institutions and communities can rely on. One might consider Hammurabi or Muhammad’s systems of law as examples.

Those who build these functional institutions mold society. Among the founders of functional institutions, those who build the most functional institutions are much more impactful than the rest.

I will call those who found the most functional institutions that contribute to the bedrock of their civilizations Great FoundersVia the creation of institutions, Great Founders become the shaping force of society.


To examine a society, then, we should first look for functioning institutions. A simple way to do this is to identify businesses, religions, governments, and so forth that are radically outperforming their competitors. We then seek out the founders of these institutions.

By looking at the distribution of founders across various domains, we can make predictions about the future of specific fields and industries. Even further, by investigating the plans and intentions of Great Founders, and evaluating how likely they are to succeed, we can make specific predictions about what the future holds.

The actions and capabilities of Great Founders determine the future social and material landscape of civilization, and thus the future of the world. Societies with many Great Founders will innovate and flourish, while societies with few will stagnate and deteriorate.

For a more complete description of this theory see my manuscript.