What is a Rational Institution?

In preparation for Arnold Kling’s seminar on Institutional Irrationality, I submitted a short reflection on this question. While I am confident that my thoughts on institutional norms, structures, and feedback mechanisms will continue to evolve as I attend over the next few months, I post my initial answer to this question below.

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A rational institution orients individuals toward productive ends and facilitates the cooperation necessary to achieve those ends. Under this definition, an institution need not necessarily inhabit a particular physical space or be formally codified as an organization. Rational institutions may even lack explicit rules or procedures, so long as they succeed in integrating people in productive associations with others.

Under this definition, “rational” may seem like a misnomer as many institutions that fit this definition do not primarily rely on an articulated rationale to justify their existence. Yuval Levin points to families, churches, and markets as examples of such institutions, which operate by “channel[ing] the implicit knowledge of many individuals and generations and that have passed some test of time and contain in their very forms more wisdom than any person could possess” (emphasis added).¹

Because the wisdom embedded in institutional practices is hard to fully fathom or articulate, their procedures may often appear arbitrary or unnecessary. This poses a temptation to dismiss established practices without fully appreciating their contribution.

Another challenge to building and preserving rational institutions is arguably more fundamental. In order to successfully structure our collaboration toward productive achievement, institutions must constrain our choices and behavior. They provide clear guidance to the question “given my role here, how should I act?”, and in doing so discourage many paths to action we might otherwise like to take.² This basic function of institutions does not comport well with a culture that tends to view personal expression as an unassailable prerogative.³

Understanding how to fix our institutions begins with cultivating a deeper understanding and appreciation for them than we have now. It begins with recognizing that we are fundamentally limited in what we can know and accomplish without durable structures to mediate our interactions with each other. In short it requires humility, grounded in respect for what has gone before.

1. The Great Debate: Edmund Burke, Thomas Paine, and the Birth of Right and Left by Yuval Levin

2. A Time to Build by Yuval Levin

3. See for example Joe Pompeo’s article in Vanity Fair