Prosperity and the Universal Law of Increasing Complexity: Capability and Possibility

 View Online and Translate

“Every new form of cooperation expands what becomes possible.”

Organization

The fruit harvest was one of the highlights of my childhood on the kibbutz. From June through October, the orchards came alive. At the peak of the season, nearly one hundred people harvested just under 1,000 tons of apples, peaches, plums, grapes, cherries, and other fruits. Kibbutz members, volunteers from around the world, high school groups, and seasonal workers filled the orchards from sunrise until four o'clock in the afternoon. During the busiest weeks of the season, every kibbutz member was also expected to contribute two additional hours of harvesting twice a week, either before or after their regular workday. We called it "giyus" (recruitment), the kibbutz term for work performed outside one's regular job. Beyond its agricultural importance, the harvest was a celebration. The orchards, kibbutz grounds, and swimming pool were full of people, movement, and excitement.

Some twenty years later, and a couple of years after returning to the kibbutz from my military service, I became responsible for managing that same harvest. The orchards looked remarkably familiar. Apples remained the principal crop, annual production had modestly increased to about 1,200 tons, and the harvest season was essentially unchanged. However, the atmosphere had become more professional; volunteers had disappeared, and the harvest now relied on about thirty paid workers during the busiest weeks of the season.

My objective was straightforward: improve the harvest. To that end, I continuously sought better technologies and better ways to organize the work. Although we kept looking for technologies that could improve the harvest, most opportunities lay elsewhere. I focused on the people, carefully selecting and training harvesters, paying them substantially higher wages, redesigning the daily workflow, and reorganizing supporting logistics. Skilled harvesters were no longer treated as interchangeable labor but as valuable resources whose productivity depended on how effectively the entire operation was organized.

The results exceeded my expectations. Fruit quality improved immediately as harvesting became more professional and consistent. The harvesters' daily income increased dramatically, often more than doubling. The management and logistics team was reduced by roughly three-quarters. The cost of harvesting each kilogram of fruit declined substantially. Perhaps most importantly, the harvest became predictable. We could estimate with far greater confidence both the quantity and quality of fruit to be harvested each day. At the peak of the season, a team of only five to seven highly trained harvesters routinely accomplished what had once required around thirty workers and, during my childhood, nearly one hundred.

The changes extended well beyond the harvest itself. The workday now ended around two o'clock in the afternoon instead of four, and the mandatory "giyus" disappeared because it was no longer needed. In its place, an occasional Saturday-morning tradition remained, in which anyone who wished could volunteer to harvest. What had once been an essential source of labor became a social gathering with good food, good company, and a celebration of the harvest.

Only years later did I fully appreciate what had happened. What impressed me most was not any individual improvement but the fact that they occurred simultaneously. Efficiency increased, costs declined, quality improved, workers earned more, and planning became more reliable. Remarkably, people worked fewer hours while accomplishing more. Nothing about the land, the trees, or the climate had changed, and even many of the people who had worked in the orchards twenty years earlier, including my father, were still there. Yet almost every important outcome had changed.

For some time, I genuinely believed I had found a way for farmers to substantially improve their livelihoods. If reorganizing the same orchards could transform so many outcomes at once, perhaps organization was one of the missing explanations for why some farmers remain poor and for how those who already prosper can prosper even more.

Capability

The more I explored that possibility, the more I encountered the same pattern in places far removed from agriculture. A better organization did far more than improve efficiency; it expanded what people could accomplish collectively.

One of the clearest confirmations came from an entirely different world. Henry Ford did not invent the automobile, the internal combustion engine, or even the factory. In 1913, he reorganized automobile production around the moving assembly line. The innovation transformed the relationship between individual workers and the production process. Instead of each worker performing many tasks, production became a coordinated sequence of specialized activities. The results were extraordinary: productivity increased almost ninefold, production costs declined dramatically, quality became more consistent, and automobiles that had once been available only to the wealthy gradually became affordable to ordinary families. At the same time, Ford roughly doubled the minimum daily wage for his workers and later reduced both working hours and the length of the workweek. Years later, reading about Ford, I was struck by how familiar the underlying logic had become. Although the scale was vastly different, the principle was remarkably similar to what we had discovered in our own orchards. Better organization did not simply improve one activity; it transformed the performance of the entire system.

Only years later did I realize that the improvements we achieved in the harvest were possible because the harvest was just one organized activity within a much larger organized system. The orchards were one specialized branch within the kibbutz, alongside education, healthcare, food services, transportation, workshops, culture, governance, industry, and other branches. Each developed its own expertise while contributing to the functioning of the community as a whole. Looking back, I began to see the kibbutz as another example of the same principle: better organization did not merely improve individual activities; it made entirely new forms of cooperation possible.

The same principle extends far beyond factories and cooperative communities. Modern hospitals depend on hundreds of specialists who coordinate their expertise for each patient. Universities integrate researchers from many disciplines into institutions capable of generating knowledge no individual could produce alone. Global supply chains connect millions of people, each contributing a relatively small part to processes of extraordinary scale and sophistication. Human progress, therefore, appears to depend not only on knowledge, technology, or effort, but also on our remarkable ability to organize specialized capabilities into coherent systems.

Looking back, it became increasingly difficult to ignore the conclusion emerging before me. Organization did not merely improve existing activities; it made entirely new forms of human cooperation possible. It expanded collective capability and enabled human communities to accomplish what no isolated individual could achieve on their own.

At the time, I was interested only in improving the performance of our orchards and the livelihoods of my community. Only years later did I begin to wonder whether the same principle might also explain much broader differences among organizations, farming systems, and eventually societies.

Structure

Only years later did another question begin to emerge. If better organization could so dramatically improve what people accomplished together, why were some organizations capable of accomplishing things that others simply could not, even when both appeared to be well organized?

Gradually, another realization emerged: reorganizing the harvest had transformed its performance without changing the people themselves, only how their work was organized. Until then, I had focused almost entirely on improving individual activities, paying far less attention to the larger systems within which those activities took place. That realization led me to look beyond agriculture and ask whether history itself revealed the same pattern.

The more I looked into history, the clearer the pattern became. Every major expansion in human cooperation seemed to coincide with the emergence of a new organizational structure. Families made possible a stable environment in which children could be raised and knowledge passed from one generation to the next; tribes expanded cooperation far beyond the family through shared identity and common purpose; villages created the conditions for permanent agriculture and the first meaningful division of labor among households; and cities integrated many villages through trade, governance, infrastructure, and increasingly specialized economic activities. Each new organizational structure expanded the scale and complexity of cooperation by complementing rather than replacing the organizational structures that had come before. Families, therefore, remain the foundation upon which every society is built. Throughout this long history, human organizations continued to evolve while human biology remained essentially unchanged. What expanded was not the individual, but what people became able to accomplish together through organization.

The same pattern continued into the modern economy. Another organizational breakthrough emerged with the limited liability company. For the first time, an organizational form combined investment, specialization, professional management, continuity, and shared ownership in ways that enabled cooperation far beyond the lifespan, resources, and personal relationships of any individual participant. Millions of people who would never meet could nevertheless contribute to the same enterprise, each performing only a small part of a much larger whole. Once again, the breakthrough lay not in changing people, but in changing the organizational structure within which they cooperated.

This realization also changed the way I viewed my own experience. The improvements we achieved in the harvest were no longer simply an example of better organization; they had become an example of what a particular organizational structure enabled. In this case, the harvest was one organized activity within the orchard, and the orchard was one specialized branch within the kibbutz community. Gradually, the implication became clear. Just as different vehicles are designed for different purposes, different organizational structures have evolved to solve different coordination challenges. Families created stable environments for raising children and transmitting knowledge; tribes strengthened collective identity and trust; kibbutzim demonstrated how an entire community could integrate economic, educational, cultural, and social life into a single coordinated framework; and the limited liability company enabled large-scale economic cooperation across continents and generations. The question was therefore not which organizational structure was better, but what forms of cooperation each organizational structure enabled.

Looking back on those experiences, I began to understand why they had been so important. Better organization clearly mattered, but it now seemed that organizational structure determined what forms of cooperation became possible in the first place. The persistent differences I had observed between farming systems, organizations, and societies no longer appeared to be explained by effort, technology, or organization alone. Increasingly, they seemed to reflect the organizational structures within which people cooperated. For a time, I believed I was finally approaching the explanation I had been searching for.

Contradiction

For a time, I genuinely believed I was approaching a satisfactory explanation: organization explained why people accomplished more together, while organizational structures explained why some forms of cooperation became possible in the first place. History appeared to confirm this pattern: the broader the forms of cooperation an organizational structure enabled, the greater the collective capability it appeared able to support. For the first time, the persistent differences I had observed between farming systems, organizations, and societies appeared to fit within one coherent explanation.

Yet one observation stubbornly refused to fit the emerging explanation.

The contradiction first emerged much closer to home. The harvest improvements we achieved were genuine and not isolated. Similar improvements occurred throughout the kibbutz as better technologies, improved management, greater specialization, and more efficient organization were gradually introduced across many branches of the community. Agriculture became more productive, industry expanded, and everyday activities became more efficient in countless ways. By almost any operational measure, the community improved. Yet over the same period, many kibbutzim entered prolonged economic and social decline. At first, I wondered whether this was merely a coincidence. But the same pattern emerged across much of the kibbutz movement over roughly the same period. The more examples I encountered, the less convincing coincidence became as an explanation. If the organizational structure had remained largely unchanged while technologies, management, and organization continued to improve, why had the community's long-term trajectory shifted from decades of prosperity to prolonged decline?

This contradiction, however, was not unique to the kibbutz. It appeared in very different organizational settings. Apple, for example, remained the same company, operating within essentially the same organizational structure throughout its history. Yet under different leadership teams it experienced periods of remarkable innovation, stagnation, decline, renewal, and unprecedented success. The Apple example suggested that belonging to the same organizational family - in this case, the limited liability company - defined what the organization was capable of becoming, but not what it actually became. Apple showed that the contradiction extended far beyond cooperative communities. Ichak Adizes independently documented the same pattern through his study of thousands of organizations. He observed that companies often follow recognizable developmental trajectories, summarized in his Corporate Life Cycle model, yet those trajectories are not predetermined. Some continually renew themselves, while others gradually decline despite operating within remarkably similar organizational structures.

The kibbutz, Apple, and the organizations studied by Adizes all pointed toward the same unanswered question. Organizational structures clearly differed in the forms of cooperation they enabled. They explained why a modern corporation could accomplish things that a village or a tribe never could. Yet they still could not explain why organizations built upon remarkably similar organizational structures could follow profoundly different trajectories through time, or why the trajectory of the very same organization could change so dramatically.

It led me to realize that I had been asking two different questions without distinguishing between them: what became possible, and what was ultimately realized. The first seemed to be explained by organizational structure, but not the second. Somewhere between possibility and realization, another essential part of the explanation was still missing - or at least, I couldn't see it yet.

Boundary

My investigation had led me to a conclusion that was both satisfying and unsettling. It was satisfying because organization and organizational structure explained far more than I had ever imagined. Together, they explained how human beings had progressively expanded what they were capable of accomplishing together, from families and villages to corporations and entire societies. Yet the conclusion was equally unsettling because it still failed to explain the one contradiction I could no longer ignore.

That contradiction had become impossible to dismiss: organization explained how people worked together; organizational structure explained what forms of cooperation became possible; together, they explained what human systems were capable of becoming. Yet neither explained why one organization managed to renew and rejuvenate itself while another gradually stagnated and deteriorated, or why one society repeatedly transformed its capabilities into lasting progress while another failed to realize possibilities that appeared equally within its reach. It led me to realize that I had been asking two different questions without distinguishing between them: what became possible within a given organizational structure, and what was ultimately realized. The first seemed to be explained by organizational structure, but not the second. Somewhere between possibility and realization, another essential part of the explanation was still missing - or at least, I couldn't see it yet.

Only then did another realization emerge. None of the explanations I had discovered were wrong, yet none was complete. Each explained an essential part of reality, yet each resembled only one piece of a much larger puzzle. Energy explained activity; optimization explained efficiency; organization explained capability; and organizational structure explained what cooperation made possible. Scientific progress did not require replacing one explanation with another, but recognizing where each ceased to provide a sufficient explanation.

If different organizational structures make different capabilities possible, the next stage of the investigation was to understand why, within the same organizational family, some organizations repeatedly realized those possibilities while others gradually drifted away from them. By this stage, I had become convinced that somewhere between possibility and realization lay another principle - one essential to understanding human prosperity.

For any matter, contact me at +972-54-2523425

Subscribe here, free!

"Mental and Economic Freedom Are Interconnected."

See you soon,

Nimrod

The author: Dr. Nimrod Israely is the CEO and Founder of Dream Valley and Biofeed companies and the Chairman and Co-founder of the IBMA conference. +972-54-2523425 (WhatsApp), or email nisraely@biofeed.co.il

P.S.

If you missed it, here is a link to last week's blog, “Prosperity and the Universal Law of Increasing Complexity (ULIC): Success Is Not Enough“.