Nepotism is the biggest problem facing any economy

[artillery77]

Out here, nepotism is either offensive or defensive. Hacks will bring in their cronies merely to take over functions and then get others to do the work. Opposing them are defensive groups that will try and contain the offensive groups. These can be just as bad as they'll soak up all the jobs and not really give people a chance for fear it will open up their department to something that cannot be controlled.

I can't speak to China....when I was last there was a decade ago and was 41 flavors of corruption to deal with, but here in Silicon Valley it's definitely a byproduct of making all employees disposable. The employees in turn have formed their own ways to make themselves in-disposable, good of the company be damned. It feeds into the destroy the enemy by eliminating them as opposed to we have to find a way of making all teammates productive.

I went back home to South Dakota in a rural area where some hotshot was going to move a large medicine production plant they have to NorCal. I simply laughed straightaway and said that was a mistake. I advised them to make sure the plant remaining still had capacity to operate on all the products, then let them try it and they will need twice the people and incur twice the costs as to how you operate here. Three years later that's exactly how it played out and they were back to normal.

Corruption is the invisible bleed of entire economies. We have plenty here in the United States. If we resolved a fraction of it, we'd be richer than rich. Nepotism (defined as family members - cronyism includes friends) is only bad on the face if someone isn't qualified. Where it gets nasty is that it inherently limits diversity of knowledge. For example, a medical startup out here begged me to come join them and save them as they were having trouble making the leap from expense everything to function manufacturing distribution and sales. Unfortunately, I got there too late, the Founder/CEO, who knows nothing of backoffice functions, signed a tremendously expensive deal with a former finance bigwig of Visa charging $550 an hour....who in turn sacked the entire backoffice and put her Visa cronies in....except none of these mofos has a clue about manufacturing....however, because they all share the same things they do know, it becomes incredibly difficult to even explain to them what the right answers are.

Great product, but the company is now foundering. Instead of going IPO, they're going to have to sell out to someone. On the clinical end where the CEO and his staff were very skilled, a lot of that labor is going to be sold much more cheaply simply because someone got sold on a dream at a fancy cocktail party. That's an expensive free drink.

You could code it as cronyism or stupidity....but that product will make it and will save lives....it's just going to benefit the company that is appropriately staffed better. In China, with one party ruling increasingly more....there are fewer and fewer opportunities for someone else to come in and profit on these things. Anytime you have this, you get stuck with more and more unresolved problems until things start to collapse. That's the difference.

[BigCityDreamer]

Originally Posted by Rocko20

No, that would be laziness. If one believes their economy is corrupted then they have a duty to get off their butt and change it.

I agree with you.

The biggest problem facing a nation’s economy are unproductive people who want something for nothing.

[Avondalist]

Originally Posted by Phil P

People can point to examples of gross negligence from nepotism, but at the core, people like to work with those they have built relationships with: that trancends nations, corporate culture, technology etc...

It's not always economically destructive, it only looks that way if you count the instances where it went wrong without counting all the instances where it went right, where people were on a similar page or driven by similar goals and things went better than if everyone was a stranger working with a stranger.

In most workplaces, you don't really have to be some genius or subject matter expert, you really just have to comminicate and treat people right. That's why people like building relationships, they are looking for signals that you will can do that, moreso than that you really are the smartest in the field or the cheapest laborer.

I'd like to believe connections are the lubricant of society and mostly just smooth things over. However I don't want to fall into the trap of normalizing what I see around me, which is often rotten from a merit standpoint. We can do better and accepting the status quo is defeatist.

We have examples of more and less meritocratic industries. Technology, at least for technical roles, is pretty meritocratic. The talent pool includes the whole world, there are somewhat objective hiring criteria that are related to the work, people bounce around jobs to cross-pollinate knowledge. These policies have all been chosen to optimize productivity, and what is the result? A very inventive and productive industry.

I work in technology. I've only gotten two jobs through a connection, and have gotten five by applying as an outsider. Being easy to work with is a low bar and does not require a personal relationship with coworkers. I work with strangers, as it were, all the time. I've never met most of the people I work with in person since I'm remote. We're all very productive.

I'm less familiar with industries where connections matter more. What's the canonical example of an "industry" where it's not what you know but who you know? It starts with a G and is centered in DC. How productive and efficient are they?

About the last paragraph... there are millions of normal jobs where competent people are passed over for promotion and growth all the time. You don't need to require great expertise for merit to matter. Merit matters at all levels.

Edit: final thought. How much of nepotism is based upon affinity and true connection? I think it's mainly I scratch your back, you scratch mine. That's just as transactional as working with strangers, except the incentives are not aligned with productivity.