The Long Game: Civilization & Work - Designing for Sinners, not Saints

Episode Date: May 8, 2026

Today's episode is entitled Designing for Sinners, Not Saints.Most initiatives fail not because the people involved are incompetent, and not because their intentions are bad. They fail because of a particular kind of naïveté — one that is easy to miss precisely because it sounds like wisdom.It's the assumption of shared vision. The belief that if we simply get the right people in the room, align around a common goal, and communicate clearly enough, the system will move in the direction we intend.It won't. Not reliably. Not in a world of asymmetric power.When people occupy different positions in a hierarchy — with different incentives, different risks, and different definitions of what winning looks like — the assumption that we are all pulling toward the same outcome is not optimism. It is a design flaw. And like most design flaws, it doesn't announce itself. It hides inside the language of collaboration, until the initiative collapses and everyone wonders why.The answer, almost always, is that the design was built for saints. And saints, it turns out, are in short supply.Good institutional design doesn't assume virtue. It accounts for human nature as it actually presents itself — self-interested, status-conscious, risk-averse, and politically aware — and builds structures that make cooperation the rational choice even for people who weren't planning to cooperate.

Welcome to Episode 6 of The Long Game. I'm Gregory Sparzo. Today's episode is entitled, Designing for Sinners, Not Saints. Most initiatives fail not because the people involved are incompetent, or not because their intentions are bad. They fail because of a particular kind of naivete, one that is easy to miss precisely because it sounds like wisdom. It's the assumption of shared vision. The belief that if we simply get the right people in the room, align with a common goal, and communicate clearly enough, the system will move in the direction we intend.

It won't. Not reliably, and not in a world of asymmetric power. when people occupy different positions in a hierarchy with different incentives, different risks, and different definitions of what winning looks like, the assumption that we will all be pulling towards the same outcome is not optimism. It's a design flaw. And like most design flaws, it doesn't announce itself. It hides inside the language of collaboration until that initiative collapses and everyone wonders why. The answer, almost always, is that the design was built for saints, and saints, it turns out, are in short supply. Good institutional design does not assume

virtue. It accounts for human nature as it actually presents itself, self-interested, status conscious, risk averse, and politically aware, and builds structures that make cooperation the rational choice even for people who weren't planning on to cooperate that's what today's episode is about it's an important idea i think you'll find worth your time let's get into it you know um when a structural engineer sits down to build like a suspension bridge they do not just calculate how much weight that bridge can hold on a sunny 70 degree day right no that would be completely negligent yeah like actual professional malpractice they don't just picture perfectly behaved drivers spacing their cars out evenly. They design for hurricane force winds.

They build for the absolute worst case scenario, you know, where bumper to bumper semi trucks are just idling on the sender span during a blinding blizzard while the metal contracts in subzero temperatures. Right. They actively anticipate maximum stress. They design for extreme foreseeable friction because it's a fundamental principle of physical engineering. You have to anticipate the sheer force of gravity, the shifting of tectonic plates, material fatigue. The entire discipline is built on acknowledging physical reality rather than just, you know, hoping for ideal conditions. Yeah, right. But then when you look at the social engineering that governs our daily lives, like the systems inside our corporate workplaces or sprawling health care networks or massive

government institutions, we seem to do the exact opposite. We really do. We literally build for a sunny day. So welcome to a brand new deep dive. We have a deeply fascinating mission for you today. Yes, we do. We are going to uncover why beautifully designed systems constantly fail and how assuming the absolute worst about human nature might actually be, well, the most optimistic and practical way to build a better world. It's a highly counterintuitive premise, I mean, but it's an incredibly powerful structural lens for looking at the world. Holy. Today's source material actually comes from Gregory Sparzo. We're synthesizing two deeply connected documents he authored. There's an essay and an extended conversation script, and they both share this

really provocative title, The Economics of Sin. Okay, let's unpack this. Sparzo basically argues that when we see elegant institutional systems collapse, whether it's like a corporate scandal or a massive regulatory failure, we have this reflex to just blame a few bad apples. Right. We always do. Say, oh, the culture turned toxic or the leadership lost its way. Right. Sparzo's telling us to stop looking at the people. Yeah.

And start looking at the hidden physics of the organizational design itself. Yeah. Sparzo suggests there is a behavioral pattern so consistent across human history that it basically operates like a law of organizational physics. Oh, wow. Yeah. And the pattern goes like this. Someone brilliant and well-intentioned designs an elegant system, and its internal logic is completely sound. Like, the incentives look carefully constructed on a whiteboard. Right. On paper, it's flawless. Exactly. If the ideal people were placed inside this system, it would operate flawlessly. But then, as he puts it, the sinners show up. And the sinners always show up. I mean, eventually, within a generation or sometimes just a single decade, that brilliant whiteboard system is completely captured. Yeah, it gets gamed into producing outcomes that would absolutely horrify the original designers.

And Sparzo calls this fatal recurring design error the saint assumption. Right. The saint assumption. It's this deeply flattering, yet ultimately fatal belief that the people operating inside a system will naturally pursue its stated purpose. It just assumes that individuals will willingly subordinate their own self-interest, their career ambitions, and, you know, their tribal loyalties simply to follow the spirit of the rules without ever trying to game the metric. Which is crazy. It really is. It's treating social design as if gravity just doesn't exist. To put this in perspective, just imagine building a massive 10-lane interstate highway. You lay down the perfect asphalt, but you decide not to install any speed limits.

Right. No lane markings and absolutely no guardrails along the cliff edges. Sounds terrifying. Right. And why? Because you assume every single driver on that road has taken driver's head, genuinely wants everyone to be safe, and will simply regulate their own speed and spacing at all times. Right. Which never happens.

Never. You aren't designing for reality. You are designing for saints. And what happens when the first driver realizes they're late for a meeting And there is no penalty for going 100 miles an hour. What's fascinating here is that when these guardrail-less systems inevitably crash, like when that first driver speeds and forces everyone else to swerve, changing the entire culture of the highway, we almost never fix the structure. Right. We just blame the driver. Exactly. We don't paint the lane markings. We don't build the concrete barriers. We just go hunting for better saints.

Yeah. We fire the CEO. We recall the politician. We write a stern memo about corporate values. And then we just put a brand new person into the exact same flawed structure, fully expecting a different result. It's wild. Sparzo emphasizes that this isn't like a string of bad luck. It is a fundamental failure to design for human behavioral reality. Well, if this theory about the sane assumption really holds true, we shouldn't just be talking about hypothetical highways. We should be able to track this invisible physics operating throughout actual history. And we can.

Yeah. Sparzo's text provides incredibly detailed autopsies of three distinct historical institutions that succumbed to this exact structural rot. The historical evidence really demonstrates how universal this dynamic is. The first autopsy he does focuses on Russell Ackoff's interactive planning. OK. So Ackoff was a highly influential systems thinker at the Wharton School. And over the course of 50 years, he developed this rigorous, heavily researched methodology for redesigning sluggish corporations and institutions. OK, so what was the process? Well, the core mechanism was basically to bring all the key stakeholders into a room, surface their shared goals and collaboratively design an idealized future state for the whole organization.

Wait, that sounds like every corporate offsite I've ever heard of. Like bring everyone together, get alignment and optimize the whole instead of the parts. Right, exactly. And the theory was elegant, but it contained a massive saint assumption. Oh, I see where this is going. Yeah. Ackoff assumed that these departmental leaders, if they were provided with good facilitation and a logical framework, would just engage honestly. He basically assumed they would voluntarily sacrifice their own budgets or departmental influence for the greater good of the entire company.

Which, I mean, anyone who has worked in corporate America knows is a stretch. Exactly. When real power, actual headcount, and millions of dollars were on the line, that idealized behavior just evaporated. The stakeholders simply absorbed the methodology and used it for what Sparzo brilliantly terms sophisticated institutional theater. Wow. Sophisticated institutional theater. So they learned the buzzwords to sound cooperative, produced the collaborative slide decks, and then walked right back to their offices and used all their localized knowledge to fiercely protect their own turf. Yeah, they completely weaponized the collaborative process. That's incredible. Ackoff operated under the belief that skilled process facilitation could somehow neutralize entrenched power. But power does not dissolve just because a good process is introduced to the room. It adapts. Exactly. It adapts to the new terrain. The self-interested actors figured out how to use the language of interactive planning to just obscure their hoarding of resources.

Well, when you see that failure in a single corporate boardroom, it really raises the stakes for what happens when you apply the exact same design flaw to an entire economy. Oh, absolutely. Sparzo scales this up by analyzing the New Deal regulatory agencies created in the 1930s. I mean, these were sweeping federal bodies launched to protect the public from financial ruin and industrial exploitation. Right. And they were initially staffed by true believers, like people who possessed a genuine burning desire to serve the public interest. They had a massive political mandate and soaring public support. Yet Sparzo notes the speed at which these agencies were structurally compromised.

I mean, within just two decades, the boundaries between the regulated industries and the regulators themselves began to dissolve. Only two decades. Yeah. And let's look at the actual mechanics of how this happens, because it isn't usually through, like, cartoonish bribery. It happens through social proximity and informational dependency. OK, what does that look like? Well, the regulators need highly technical data to do their jobs, and only people who have that data work for the industry. Right. So you have regulators attending the same specialized conferences as the industry executives. Yes.

They're debating the same highly technical models. They basically start sharing a social circle. And over time, this psychological shift occurs. The regulators begin to view the industry executives not as targets of oversight, but as peers. Right. This tribal loyalty just forms naturally. And by the third decade, the revolving door had become standard operating procedure. A regulator would write the rules and then leave public service to become a highly paid consultant for the very companies they used to police. Just helping them navigate those exact same rules. Exactly. The system had no structural defense against this. It relied entirely on the same assumption that regulators would indefinitely ignore their own post-government career prospects. So the structural gravity just pulled them right back into the industry. Yeah, it did. Which leads directly to the third historical example.

And this one shows how this same gravity can capture an entire profession. Let's look at the American Medical Association. The AMA, right. Founded in 1847. And the AMA's original purpose was undeniably noble. The medical marketplace in the mid-19th century was super dangerous. Like, anyone could just call themselves a doctor. Right. Snake oil salesman, basically.

Exactly. The founders wanted to implement rigorous quality controls, eliminate fraudulent practitioners, and elevate public health standards. And in its early decades, it actually functioned as a genuine instrument of public health. I mean, it pushed for hygiene standards and scientifically backed treatment. But as the AMA accumulated influence, the internal physics shifted. By the mid-20th century, Sparzo argues, the institution had basically morphed into one of the most effective and powerful professional cartels in American history. Yes. And they achieved this through the structural levers they had acquired. Like they gained control over medical school accreditation, which on paper, that ensures quality.

But in practice, it allowed them to artificially choke the supply of new physicians. Right. And fewer doctors means less competition, which means higher fees. Exactly. Yeah. They also heavily influenced the billing code system, structuring it in ways that maximized incomes for specialists. They leverage their lobbying power to protect the financial arrangements of existing doctors, often at a measurable cost to broader public health care access. It's a huge shift from their original goal. I have to push back here, though, because when you look at the trajectory of the AMA or those New Deal agencies, does this mean the founders were just cynics?

Oh, I see what you mean. Like, were the early leaders of the AMA sitting in a room in 1847 plotting this multi-generational long con to secure billing monopolies? Oh, no. It is crucial to understand that they were not cynics. They were absolutely well-intentioned reformers. But institutions follow a logic that outlives their founders. As the decades pass, the people operating inside the institution will naturally pursue their advantage within whatever structure is available. If the structure allows a group to artificially limit competition and raise their own incomes with no countervailing force, they will eventually do it. That makes sense. The original public purpose gets hollowed out, and it's replaced by institutional self-preservation. It is a story about flawed architecture, you know, not a story about villains.

To really grasp why that architecture rots from the inside out, we have to look closely at the hard data of human behavior. Because if we aren't saints, what exactly are we? Well, here Sparzo integrates Daniel Kahneman's decades of Nobel-winning research in behavioral economics. Kahneman basically proved empirically that humans are not perfectly rational, mission-focused calculating machines. Far from it. Right. We possess deep evolutionary cognitive biases. we are reliably loss-averse, meaning the pain of losing a dollar or, say, losing our departmental budget feels significantly more intense than the joy of gaining one. And we're also present biased.

We wildly favor short-term, immediate gains over long-term stability. Like, if you offer someone a small bonus this quarter versus a safer company five years from now, human nature grabs the bonus. Every time. And we're inherently tribal, prioritizing the protection of our immediate team over the abstract concept of the organization. And of course, we are systematically overconfident in our own objectivity. So what does this all mean? Well, it means that building a system on the same assumption isn't just slightly naive. It is actively destructive.

Right. If we are naturally loss-averse and tribal, and you put us in a system that assumes we will be completely selfless and objective, you are practically forcing us to game the metrics just to survive. You really are. The bad system actively rewards hoarding information and punishing transparency. The self-interested actor who quietly builds their own fiefdom will just always outperform the virtuous actor who openly shares resources for the good of the mission. Which raises an important question.

What is the actual human toll of ignoring this structural reality? Because the cost isn't just measured in lost profits or bureaucratic inefficiency. No, the cost is deeply personal. Sparso describes the result as a slow violence against conscience. Oh, that's heavy for you. It is, because when an institution leans entirely on the same assumption, it is effectively outsourcing its structural integrity to the raw willpower of its individual employees. It creates an impossible bind, like picture a middle manager at a hospital or a regional sales director. The institutional structure applies immense pressure on them to hit unrealistic quarterly targets.

But the official company values demand they act with perfect ethical purity. Right. They are forced to choose daily between their own conscience and their job security. You place a person in a system riddled with perverse incentives, overload them with competing demands, and effectively tell them to act like a saint to keep the whole fragile architecture from collapsing. That's just exhausting. It causes profound moral injury over time. The employees eventually burn out. They succumb to deep cynicism. They stop believing the glossy official story the institution tells about itself. And they basically just quietly disengage to protect their own sanity. It is incredibly bleak when you realize how much burnout is just a symptom of terrible organizational design. But the deep dive turns a hopeful corner here. Yes, thankfully. Once we fully accept the behavioral reality of human nature, our biases, our fatigue, our self-preservation, we don't have to throw our hands up in despair. We can actually start designing for the sinners who will inevitably walk through the door.

Exactly. And Sparzo calls this alternative framework power-aware design. Okay. It is the direct antithesis of the saint assumption. Power-aware design does not rely on moral pressure, corporate value statements, or asking people nicely to do the right thing. It works exclusively through terrain change. Meaning? It acknowledges from day one that power is the fundamental medium in which all institutions operate. It assumes right out of the gate that people will try to extract value for themselves.

So instead of begging them not to, it makes extraction structurally exhausting and expensive. Exactly. It forces radical transparency so that any attempts to game the system is immediately visible to peers or competitors. And it ensures that exit is easy. Right. Meaning if a system becomes corrupt, the customers, the talent or the capital can just easily leave. And that threat of exit imposes real immediate economic consequences. Crucially, power where design relies on consequences rather than increased supervision. Because supervisors are human beings too, right? Right. They're subject to the exact same cognitive biases, tribal loyalties and capture dynamics as the people they're supposed to be watching. You cannot solve a structural problem by simply layering on a new class of virtuous overseers. Yeah.

To understand how this works in practice, we can examine some historical triumphs of power aware design. Yeah. The sources outline brilliant historical examples where we actually successfully designed for sinners. Look at the American Constitution's separation of powers. The framers did not harbor any delusions that future politicians would be benevolent philosopher king. Definitely not. They assumed that power inherently corrupts. So they built a mechanical system where, as James Madison famously articulated,

ambition must be made to counteract ambition. They took the self-interest of the executive, legislative, and judicial branches and pitted them against each other to prevent any one group from achieving monopoly control. Another masterful example is double-entry bookkeeping developed by Renaissance merchants. Oh, yeah. These merchants didn't just hire clerks, cross their fingers, and assume they would be perfectly honest and immune to mathematical error. They assumed human frailty and fraud were absolute inevitabilities. Right. They expected it.

So they created a structural constraint, forcing every single financial transaction to be recorded twice as both a debit and a credit on opposite sides of the ledger. Which doesn't stop someone from wanting to steal, but it makes hiding the discrepancy mathematically complex and exhausting. Exactly. And think about scientific peer review. It operates on the core assumption that individual scientists will naturally have blind spots, personal biases, and a deep self-interest in seeing their own theories proven right. Of course they will. The system doesn't ask the scientist to try harder to be objective. It relies on structured, adversarial, multi-angle criticism from other competing scientists to catch the errors that an individual might miss or try to gloss over.

The friction generates the truth. Here's where it gets really interesting. Designing for sinners isn't a cynical worldview at all. It is actually the most optimistic position available to us. It really is. Because it proves that we have the capability to build systems that consistently serve human flourishing completely, regardless of the moral purity of the people operating inside them. You don't have to wait around for a hero to save the day if the system itself is doing the heavy lifting. If we connect this to the bigger picture, Sporzo is pointing out a fundamental reality here.

Power accumulates. It concentrates and converts itself into privilege as reliably as a powerful magnetic field slowly aligns all the iron filings in a room over time. This isn't a moral judgment about the people involved. It's simply the structural reality of organizations. Yeah, water flows downhill. Exactly. A truly humane institution accepts this magnetic pull. It protects against abuse not by demanding moral purity, but by actively dispersing power, forcing information into the light and creating structural space for repair when the inevitable human failures occur.

So analyzing constitutional architecture and Renaissance merchants is deeply fascinating, but we promised you a practical playbook. How does this apply to you right now, navigating your own professional life? Right, getting down to the practical. Even if you aren't drafting a new national constitution, Sparso offers highly specific, immediate levers you can pull. First, you have to actively hunt for the same assumption in your own environment. Yes. You are looking for areas of concentrated discretion that lack any structural counterweights. Look at the workflow around you. Is there a vice president of sales who is allowed to unilaterally sign off on the metrics that determine their own bonus?

Oh, that's a big one. Right. Or is there a department head who can authorize massive vendor contracts with only a rubber stamp oversight committee? Anytime you hear a colleague say, oh, we just have to trust them not to abuse this process. You have located a massive saint assumption. Exactly. The second lever is what Sparso calls humane hiring. We have to swallow our pride and accept that our interview processes and candidate selection methods are incredibly noisy and flawed. They really are.

We are statistically terrible at reliably identifying saints at the front door. So instead of spending endless resources hunting for the perfect, flawless candidate who will never make a mistake, spend that energy building work systems that are robust enough to handle the inevitable mishires. Right. Design a workflow where ordinary, flawed people can succeed without needing to be heroes. Third, identify your local design livers. You do not need to control the entire executive board to make a structural difference.

If you manage a small team, look at your daily operations. Okay, give us an example. Separate the power of budget approval from the power of vendor selection. Add an independent second pair of eyes to any critical quality control process. Create simple, automated, transparent dashboards so that everyone on the team has access to the exact same information. Which destroys the incentive to hoard data. Exactly. And fourth, fiercely protect truth-telling.

You must create safe pockets within your organization where your team can explicitly discuss structural design flaws without any fear of retaliation. Right, because if the employees who point out the perverse incentives are quietly marginalized or punished as not being team players, the structure will never correct itself. But stepping back, this raises a fairly urgent question for you, the listener. What if you are the one holding the levers of power right now? Like what if you are the startup founder, the CEO or the managing director? Well, Sparso has a very pointed piece of advice for leaders currently in power. You must treat your own virtue as temporary good fortune. Yeah.

You might be acting with the absolute utmost integrity today. You might have the purest intentions, but you need to look at the authority you hold and ask yourself, how could someone totally unlike me, someone selfish, tribal, and short-sighted abuse this exact power I hold five years from now and what structural mechanism exists to stop them? So you have to build the brakes today while you still care enough to do it. You basically build the guardrails for the successor you hope you never have. Exactly that.

It requires a profound foundational shift in how we analyze failure. After a project collapses or a scandal hits, the immediate reflexive question in most organizations is, who failed? Right. We go hunting for the bad apple. Sparzo argues our very first question must become, what in our organizational structure made this failure likely? Or kept it invisible for so long. Because if we just fire the person and replace the entire team tomorrow, but we keep the exact same flawed structure intact, and we inevitably get the exact same bad outcomes a year later, then we know for a fact it's a design problem. Right.

The system is working exactly as it was built to work. That is the core paradigm shift. True institutional optimism doesn't come from demanding that everyone be heroic and self-sacrificing. sacrificing. It comes from doing the hard architectural work of designing systems where doing the right collaborative thing is simply the path of least resistance, where humane ethical behavior is the easiest, most rational choice a flawed human being can make. It is a completely new lens to view the world through. And as we wrap up this deep dive into Sparzo's work, we want to leave you with a final provocative thought to mull over on your own.

Something that takes this framework and applies it to the very edge of our modern technological world. Right. If historical institutions from the Wharton Boardroom to the New Deal agencies to the AMA all eventually drift toward self-interest and structural capture, what does this mean for the complex AI and algorithmic systems we are currently integrating into every facet of our lives? It is perhaps the most critical structural question of our era. Are we currently baking the same assumption into the foundation of artificial intelligence? Are we blinding ourselves by trusting that today's prompt engineers, AI ethicists, and tech executives will forever act virtuously, perpetually prioritizing human flourishing over the immense profit and power these models generate? Or do we need to start inventing the structural equivalent of double-entry bookkeeping for algorithmic black boxes right now before the sinners inevitably show up to exploit them? We really do. Because if there is one thing we have learned today, it is that hoping for the best is not

an engineering strategy. Just like the engineer building that suspension bridge, we have to stop designing our most critical systems for a sunny day with perfect drivers. We need to build the guardrails for the blizzard. Absolutely. Thank you for joining us on this deep exploration of the economics of sin. We hope this gives you a powerful new structural lens for viewing the hidden physics of your own organization. Thanks for listening. We will catch you on the next deep dive.