Compare https://www.gwern.net/Backstop
Basically, war (or the threat of war) is what keeps militaries honest.
Competition and the threat of bankruptcy keeps companies on their toes.
Evolution keeps brains honest.
But those forces are rather blunt, so the day to day optimization has to proceed by other means.
For example, just for humans a big, big driver of instability in the last few millennia has been other human brains.
Also keep in mind that (in-)stability and harshness of environment are too almost independent dimensions; if you see instability as something like the variance of outcomes.
Eg if some new opportunities open up, everything is strictly better (so the environment is less harsh), but variance might shoot up dramatically, perhaps because only the clever and resourceful can make use of the new opportunity.
Evolution only suffers brains to exists, if their advantage outweighs their costs. (Though keep in mind that the example I gave is a bit broader than just brains: any way for an organism to learn would fit the bill. That doesn't necessarily need to be a full sized brain, if fewer nerve cells do the trick, too.)
Similarly, smart and resourceful leaders for your company are only useful if their advantage outweighs their costs.
In any case, read the linked Gwern article for a deeper discussion. I'm just rehashing the main point here, Gwern has more to say.
It really does not.
> Competition and the threat of bankruptcy keeps companies on their toes.
Only some companies and some of the time.
And from the article:
> One defense of free markets notes the inability of non-market mechanisms to solve planning & optimization problems.
s/notes/falsely claims/
etc.
> It really does not.
I meant 'honest' in the sense of suffering if they bullshit themselves too hard. Not 'honest' in the sense of dealing with third-parties honestly.
Could you expand on your point?
>> Competition and the threat of bankruptcy keeps companies on their toes.
> Only some companies and some of the time.
Maybe. And that suggests that one goal of public policy should be to subject more companies more of the time to these pressures. Eg by abolishing tariffs, lowering barriers of foreign companies entering local markets or buying subsidiaries; allowing WalMart to become a bank, and banks to sell coffee etc.
>> One defense of free markets notes the inability of non-market mechanisms to solve planning & optimization problems.
> s/notes/falsely claims/
Not sure what you are complaining about here? If you read the rest of the introduction, it's rather clear from context that the author agrees with you here. (You don't even need to read the whole article for that insight.)
They measured over 4,000 pilots on 140 different dimensions. The hope was that they could design to the average pilot. What a Lieutenant named Gilbert Daniels found was that even if you only looked at the 10 most important dimensions, not a single actual pilot was within 15% of them all. Even just a handful of dimensions would fit almost no-one.
The consequence of this was that everything became adjustable.