Campbell’s Law

Social measures of performance distort the performance of the thing you’re measuring.

Psychologist Donald Campbell wrote in 1976:

Achievement tests may well be valuable indicators of general school achievement under conditions as normal teaching and good general competence. But when test scores become the goal of the teaching process, they both lose their value as indicators of educational status and distort the educational process in undesirable ways.

Don’t miss the double disaster here: it’s not just the test scores that lose relevance; the teaching also gets worse when test scores are valued because the curriculum becomes optimized for testing rather than learning.

The strangest example of this is when Fannie Mae and Freddie Mac were caught systematically under-reporting their earnings, purposefully stalling business and pushing potential earnings into future quarters in order to make earnings appear less volatile. Incentives are wild creatures.

Words:  Morgan Housel
Original Source: Collaborative Fund