The Purpose of a System is What it Does

A problem exists. A system is introduced that claims to solve the problem. It will then either completely fail to address the issue, solve it partially, or solve it completely. The system will additionally have side effects. If a system does not adequately address the original issue, or if the resulting side effects are unreasonable, it can be altered or removed again. A system that remains in a given form loses the ability to claim that its purpose is to solve the original issue, based on it having been introduced in response to that issue. To continue to claim that the purpose of a system is to do something it fails to do, or to claim that its purpose is not in the (side) effects it does have, is not sane. The purpose of a system is what it does.

Bullfighting in Spain rests on inflicting pain to keep the animal moving; a bull driven past exhaustion stops charging, and fresh pain restarts it.¹ The genitals are a recurring target, jabbed and struck to force one more charge from an animal that has nothing left.²³

Take a German Unternehmergesellschaft (UG) run by a single person. To be allowed to legally exist and pay taxes, the founder has to get the founding documents notarized, then register with five separate institutions: Handelsregister, Transparenzregister, Berufsgenossenschaft, Gewerbeamt, and Finanzamt, none of which talk to each other. The Transparenzregister alone charges an annual fee to re-file who owns the company, a fact the notary and the Handelsregister already have on record, with a fine up to €150,000 if the founder doesn’t.

Then every year there’s an E-Bilanz to file. Every payment needs to be mapped to a specific identifying number for its payment category. And everything gets recorded twice, a debit side and a credit side, for double-entry bookkeeping. And let’s not forget to also compile the right kind of summary of all this to send to the Bundesanzeiger, up to €25,000 if you forget.

And when something goes wrong, good luck getting a response. I’ve written to the Finanzamt four times over two months waiting on a tax number. One reply: a phone call telling me to resubmit a form I’d already filed, lost somewhere during an internal transfer. The other three: silence. No ticket, no acknowledgment, nothing.

Here’s the actual absurdity: not paying your taxes correctly is treated as a serious crime. Fine, it should be. But stack a pile of uncoordinated, pointless bureaucracy in front of that, as the precondition for being allowed to comply at all, and the weight of “tax evasion is serious” transfers onto the bureaucracy itself. Miss a step because a contact form vanished into silence, and the founder is carrying exposure meant for people actually trying to cheat the state. This overhead has no inherent right to exist. It’s not the tax. It’s not the accountability. It’s just friction that wired itself into the punishment structure of something far more serious.

If the purpose were ensuring correct tax collection, the solution would be simple: the state wants to know what money moved, so it can tax it correctly. A bank account already has every transaction timestamped, unforgeable, already reported to regulators. Request read-only OAuth access and pull the ledger directly. Done. No notary, no chart-of-accounts busywork, no duplicate registries, no forms dying in silence.

None of this was designed. No one sat down and decided a founder should register with five agencies that don’t talk to each other. It grew that way, one office, one law, one form at a time, each added for its own reason, none of them coordinated with the others. It persists because the people who could actually redesign it, the lawmakers and regulators who’d have to sign off on merging these systems, never start a company themselves and never run into any of this firsthand. Large companies can just hire more accountants and such and move on; the cost of compliance is easy for them to absorb.

It hits small companies and startups the hardest, and none of it ever shows up in a budget as the cost that it is.

But we must not make the mistake of confusing the origin story of the current system with its purpose.

"In individuals insanity is rare, in groups, parties, nations, and ages, it is the norm."
— Friedrich W. Nietzsche

Companies do not exist. They are merely mental constructs. The group of people “employed” by them exists. The building they work in exists. The sign on the building exists, and the logo it shows was created using real human labour. But all the people within the building act out a shared fantasy of the company existing. Same goes for governments, countries, money.

"What defines the separation between man and animal better than the ability to invent corporate identities?"
— Dominik Roth

But they are one of the most important inventions. They are a critical component in humanity’s ability to operate effectively in groups, to coordinate highly complex interactions. The modern world would not be possible without them.

And also convenient, in the dissonance it allows. Companies are evil, everybody knows that, so it’s fine to treat them as such, except there’s no one on the other side, save maybe a service rep. No human being did the thing; a fiction did. Works best if the antagonism runs both ways.

"The purpose of a system is what it does."
— Stafford Beer, The Heart of Enterprise⁴