A university degree once distinguished its holder precisely because few people had one. As degrees spread, employers began demanding them as a baseline, and today many jobs that historically required a high-school education demand a bachelor’s degree, not because the work grew more complex, but because the signal became an entry fee. Everyone pays more; nobody stands out. That sentence describes far more of modern life than credentials.
Replying to email quickly once demonstrated diligence. Then prompt replies became the norm, the advantage evaporated, and what remains is an expectation of perpetual availability. Consultants encounter a version of the same trap: clients rarely read a 300-slide deck, and a concise 30-slide report would usually communicate the recommendations better, but the extra 270 slides signal effort and thoroughness. Psychologists call the instinct behind it the effort heuristic. Even prizefighting has its costume: athletes dehydrate themselves by as much as ten kilograms to make a weight class below their natural size, a practice doctors condemn and many fighters privately hate, yet no one can quit alone without gifting an opponent a size advantage.
The pattern behind all of these is old and well mapped. Michael Spence won a Nobel for showing that a signal can be perfectly rational for each individual and pure waste for the group. Garrett Hardin’s tragedy of the commons is the textbook cousin: each herder benefits from grazing one more animal, so every herder does, and the pasture dies. Individually sensible, collectively expensive. The life cycle is always the same. A practice starts by conferring a real advantage; the advantage is competed away as everyone adopts it; the costs become permanent.
Why does nobody simply stop? Three forces keep these equilibria in place. The first is the first-mover penalty: whoever stops first suffers first and alone. The consultancy that slims its decks does not become worse at analysis, but it becomes different—and different demands an explanation. The second is inertia: practices that have endured for decades acquire a presumption of legitimacy, and some of that presumption is earned, since most new ideas are bad. The third is conformity: visible non-participation unnerves people even when it is harmless. The complaint about the plain-spoken colleague is never, “Communicates too clearly.”
The encouraging part is that these equilibria are not permanent. They end, and history shows how.
Sometimes innovation obsoletes them. Employers are currently dropping degree requirements in favor of skills assessments, portfolios, and work samples, not because they became altruistic, but because better predictors of performance emerged. When a superior alternative changes the incentive structure, an old equilibrium unravels surprisingly fast, and the first mover to kill a hated practice captures real goodwill.
Sometimes coordination does it. People who cannot stop individually can stop together. Volkswagen famously configured its servers to stop routing email to employees’ phones outside working hours. Many firms now enforce hard stops on after-hours messages, a private fix for a private arms race. And sometimes private governance moves where regulators stall: after a fighter died during a weight cut in 2015, the promotion ONE Championship banned dehydration cutting and introduced hydration testing, a reform state athletic commissions in boxing have still not matched.
And sometimes status does it, which is the strangest exit of all. The first-mover penalty is not distributed evenly. Warren Buffett writes his shareholder letters in plain, folksy English while much of finance drowns in jargon, and nobody concludes that he must not understand derivatives. Economists call this countersignaling: when your position is beyond question, refusing to signal becomes the loudest signal of all. The people at the top can abandon a pointless practice at little cost, and when they do, they give everyone below them permission to follow. Casual Fridays did not spread from the interns upward. If you are waiting for one of these equilibria to die, watch the most secure person in the room.
Notice what none of these exits requires: mass moral improvement. These systems rarely disappear because people become more rational or more generous. They disappear because incentives change. The moment participation stops conferring an advantage, or non-participation stops carrying a penalty, the structure collapses faster than anyone inside it expected.
So here is a better question to ask of any practice than, “Why does this exist?”: If everyone could stop doing this tomorrow without consequences, would they? If the answer is yes, you are probably not looking at an efficient institution. You are looking at an equilibrium people maintain simply because everyone else maintains it.
Apply the question with care; G.K. Chesterton’s rule about fences still holds, and some practices that look pointless are quietly load-bearing. But apply it. Many practices we now consider absurd were once perfectly normal, and many we currently accept will one day receive the same treatment. Progress rarely comes from convincing people to be better. It comes from changing incentives until the sensible thing and the individually rational thing become the same thing.
