Don Quixote's Fried Eggs: Purpose Of A System Is What It Does
“And he who has shown the greatest longing for him has been the great Emperor of China, who wrote me a letter in Chinese a month ago and sent it by a special courier. He asked me, or to be truthful, he begged me to send him Don Quixote, for he intended to found a college where the Spanish tongue would be taught, and it was his wish that the book to be read should be the History of Don Quixote.” - Miguel de Cervantes’s Dedication of Volume II .
Key points:
Miguel de Cervantes' "Don Quixote" introduces the concept of "the purpose of a system is what it does" (POSIWID) centuries before Stafford Beer, both through its story and its cultural impact, illustrating how outcomes often differ from stated intentions.
Real-world policies frequently contradict their rhetoric, as seen in various domains:
Housing: San Francisco's "progressive" policies have limited new construction and kept rents high, contrasting with more effective approaches in “progressive” Austin and “centrist democrat” Houston.
Unemployment benefits: Benefits vary widely across states, often misaligning with political stereotypes and cost of living differences (e.g., Texas offering more generous unemployment benefits than California).
Family policies: Many countries have reduced family support post-Great Recession, contradicting goals of increasing birth rates and supporting families.
Contradictions in advocacy, such as Elon Musk, show how personal interests can shape policy positions contrary to stated goals.
Fun Fact: Cervantes' centuries old joke about teaching Spanish and Don Quixote in China has become reality, with the Cervantes Institute now operating centers in Beijing and Shanghai.
In Miguel de Cervantes' "Don Quixote," the phrase "you will see when the eggs are fried" appears, often translated as "the proof of the pudding is in the eating." This phrase encapsulates a concept familiar to managers and system analysts: Stafford Beer's "the purpose of a system is what it does (POSIWID)." Beer remarked, "No point in claiming that the purpose of a system is to do what it constantly fails to do." Ironically, the popularity of Don Quixote's adventures testifies to this principle, though in a way that might leave Cervantes spinning in his grave.
Cervantes aimed to satirize and diminish the popularity of chivalric romances during his time, with the "fried eggs" meant to point out how silly Quixote's ideals are. However, the novel has historically had the opposite effect, with romantic writers admiring Don Quixote's noble ideals in an increasingly cynical world. By embodying outdated virtues and trying to meet those ideals, Don Quixote becomes as heroic as the legends he aspires to emulate, if not more so.
The "fried eggs"/POSIWID concept extends beyond "Don Quixote." Often, people implement and protect systems and policies that contradict their stated goals and beliefs.
Affordable Housing
San Francisco, a city with a reputation for compassionate politics, is fighting hard to help people experiencing homelessness. They are fighting so hard that SF has agreed to build only 16 homes this year. The Board of Supervisors (including Bernie Sanders-endorsed Dean Preston) has been intent on helping people experiencing poverty by reducing the housing supply and keeping rents high for the last 20+ years.
They recently passed an ordinance limiting density in several historic neighborhoods on the Northern Waterfront, effectively reversing Mayor London Breed's efforts to build denser housing and attempt to slow down rent growth. The measure, introduced by multimillionaire landlord and progressive Aaron Peskin, imposes density controls for most (well, what's left of) development in the city. Meanwhile, Mayor Kirk Watson and the progressive city council in Austin, Texas, passed reforms to make building more housing easier. Austin is now seeing rents drop because of the increased supply.
A lot of SF’s left NIMBY supporters claim that government-only social housing is the way forward. They cite Vienna, where, according to San Francisco lore, the government builds lots of super-affordable public housing while the private market is not involved. However, in 2018, one-third of the 13,000 new apartments built in Vienna yearly were funded by the government and commissioned by housing associations. This means about 8,700 apartments are built annually by the private sector in a city with 1.8 million people.
Houston, the most YIMBY mega-city in the United States, implemented a successful Housing First program called The Way Home because of its extra supply and because it is getting its housing nonprofits under control. This year, the Houston City Council unanimously approved support for 17 new affordable (multifamily and multiunit) housing proposals—far more than the 16 in San Francisco, not including all the market rate units coming online. Instead of restricting supply and letting those nonprofits run rampant, as Preston and Peskin preferred, Houston achieved better results by doing the opposite.
Corporate Greed, Developers, and Landlords
What about those greedy developers and landlords? This is where antitrust laws come into play. Monopolies and cartels have always worked by restricting the supply of goods and jobs to the point where the consumer is forced to pay higher prices, and skilled labor is forced to accept lower wages.
In 2022, ProPublica revealed that RealPage, a landlord software firm, encouraged big landlords to raise rents by sharing private data on nearby competitors' prices. RealPage also discouraged bargaining with renters and even recommended (essentially mandating) accepting lower occupancy rates and driving down supply to increase rents and profits. Software companies typically don't have this level of control, but de facto cartels do.
Looking across the pond, research in England supports the point that zoning exacerbates monopolies and housing cartels. Findings indicate that the sluggish build-out rate in England results from local and regional developer consolidation and NIMBYism, which makes it easy for developers to consolidate (some might say the developers and NIMBYs are working together in some places). An intricate and uncertain planning system supercharges this consolidation (by forcing smaller developers to submit to the larger ones), with the top 10 firms now responsible for nearly half of all new construction in England.
However, focusing on rent control and making housing nearly impossible to build (instead of, you know, passing and enforcing antitrust laws designed for these situations) suggests that progressive landlords like Preston, Peskin, and others might be more landlords than progressive.
Techno-Optmists & YIMBYs vs YIMBYism
That being said, some self-proclaimed YIMBYs aren't the advocates they portray themselves as. For example, Elon Musk decries NIMBYs as the source of economic woe, yet pushed the "Hyperloop" to kill transit projects in California, promoted a fake $10,000 tiny house, and his "utopia town," which increasingly looks like a way to restrict his employees' control over their own homes like the company towns of old. Not to mention "Techno-Optimist" Marc Andreessen has a history of being a vocal YIMBY while (checks notes) simultaneously blocking housing projects.
Not Just Housing
I could continue discussing housing (especially considering how big of an issue it is and how much it affects everything else) in a future article (or a series of articles), but I want to get the point across: this isn't just about housing; it affects multiple other issues.
Unemployment Benefits
You might think there's a clear line between political ideologies regarding unemployment benefits. With progressives and liberals understanding that unemployment benefits are essential, companies worldwide have clarified that job security is no longer necessary. "We will fire you for any reason, regardless of how much profit you bring in." Meanwhile, more conservative groups view being unlucky as a fault.
Ruby Texas and Sapphire California have 26-week-long unemployment benefits, but the maximum benefit in Texas is $577 per week, compared to California's $450 per week. Housing and other living costs are much higher in California than in Texas. Even this doesn't cut cleanly: Massachusetts, a deep sapphire blue state, has a 26-week term with a maximum benefit of $1,033, while Florida, a newly ruby red state, has a horrid 10-week term with $275.
Regardless of ideology, many states have been cutting back on benefits post-COVID. For instance, Iowa reduced its maximum to 16 weeks for claims filed after July 3, 2022. Michigan increased the maximum number of weeks to 26 during the emergency, only to cut back to 20 weeks for new applicants in 2021. The average job search may take five to six months from application to hiring and even longer, depending on the industry. California and Florida have a documented history of delayed benefits, making it difficult to file for benefits in the first place.
Family Policy
By now, you can guess it is the same song and dance with family policy, especially pronatalism. In 1999, Labour Prime Minister Tony Blair and his Chancellor Gordon Brown increased social security for families with children, contributing to a 30-year high in UK fertility rates. However, after the Great Recession, the "family-friendly" Conservative-led government systematically dismantled many benefits for younger generations. This included implementing the Two Child Cap on benefits, dramatically increasing the cost of higher education, and maintaining zoning laws that limit housing construction.
A similar situation occurred in France but with a twist. The Socialist president at the time, François Hollande, and his senior advisor, Emmanuel Macron, championed austerity measures that undercut family support despite being, you know, socialists. Now president and rebranded as a centrist, Macron has lamented falling birth rates—which coincided with the new means testing and cuts to family policy in 2013—and proposed (less costly than increasing benefits) paid leave expansions instead of reversing earlier cuts. This trend of cutting family benefits after the Great Recession can be seen throughout famously generous Western Europe, including Germany and Denmark.
Interestingly, the regions and countries that have successfully supported families—ranging from towns like Nagi in Japan to countries like the Czech Republic—do not share a common ideology. Their success stems from a long-term commitment to creating a family-friendly environment, using various tools and policies tailored to their situations.
Pronatalists vs. Family Policy
Tesla "founder" Elon Musk has expressed concern over falling global fertility rates, warning about the "extinction of humanity." However, Musk has also championed practices and policies that have been shown to decrease fertility rates, such as increasing work hours, ending remote work, opposing better working conditions and job security, and mistreating pregnant employees.
Similarly, Malcolm and Simone Collins, dubbed an "elite couple" by The Telegraph, present another fascinating contradiction. They claim and promote themselves as pronatalists, but they viciously oppose social spending to help families despite the research and the real world showing otherwise. They make one notable exception: advocating for subsidies on IVF and surrogacy—treatments that directly benefited them personally. Their “selective” advocacy highlights how personal interests can shape public policy positions, even when contradicting broader stated goals.
The Governor of Barataria
As Don Quixote lies on his deathbed, seemingly freed from his chivalrous ideals, he believes he did no one any good. Sancho, the most grounded person in the story, tries to rekindle those ideals in Quixote, highlighting a profound irony: Quixote's earnest attempts at chivalry, though often misguided, were not in vain.
Throughout the story, Quixote's misadventures underscore something that seems at odds with the rest of the article: the genuine pursuit of noble ideals can inspire real change, even if the immediate results seem foolish or futile. When the Duke pranks Sancho by making him a governor, Quixote earnestly advises him on good governance—emphasizing honesty, compassion, and integrity. This guidance, rooted in Quixote's romanticized view of knighthood, helps Sancho become an unexpectedly practical and wise governor, to the point the Duke kept Sancho’s policies. The policies endure, not just because of Sancho’s practical wisdom but also because of Sancho's inspiration and ideals he absorbed from Quixote.
Stafford Beer's principle, "The purpose of a system is what it does (POSIWID)," is perfectly reflected in the duality of "Don Quixote." While Cervantes intended the novel to satirize chivalric romances, it ironically enshrined the ideals it sought to mock. This unexpected outcome exemplifies how systems often produce results far removed from their stated goals. Throughout the story, Don Quixote may have been a misguided knight-errant. Yet, his adventures inadvertently inspired the goodness he imagined, even if he remained unaware of his impact.
Systems and policies frequently contradict their stated intentions in the real world. Progressives, Conservatives, Centrists, and others, it doesn't matter what they call themselves or what their intentions are.
In the end, with all these moving parts, what counts is what a system does. And who knows? Maybe those well-meaning efforts we read about in books can make a difference in real-life systems (if properly tempered), even if we can't always see it coming.