---
title: "The Proxy Problem"
url: https://popup2026.com/eOiiu9
kind: html
created_via: web-html
created_at: 2026-06-24T09:16:10.935932+00:00
---
The Proxy Problem 
 
 
 
 The Proxy Problem

 When profit becomes the only thing a company measures, it quietly takes the seat meant for the goal itself.

 Last spring, I sat across from an executive at a pharmaceutical company. He was walking me through his firm's drug pipeline when, at a certain point, he lowered his voice. "Honestly," he said, "the drugs that make us the most money aren't the ones that cure people. They're the ones that keep people from getting better—but also from dying." He laughed, as if it were a joke. I couldn't laugh. Inside that sentence was the most refined malfunction of our era's capitalism.

 A corporation is a machine built to maximize something. The trouble is that the something is almost never the real goal—it's a proxy for it. We can't measure health, so we count medical spending instead. We can't measure education, so we count test scores. We can't measure value, so we count quarterly profit. And the moment a thing is measured, the proxy quietly slips into the seat meant for its master. As the British economist Charles Goodhart warned long ago, when a measure becomes a target, it ceases to be a good measure.

 Consider what happens when profit becomes a company's only proxy. Profit points to "what people are willing to pay for." But what do people pay for most desperately, most repeatedly? Not problems that have been solved, but suffering that is managed without ever being resolved. A cured patient pays once and leaves; a dependent patient pays for life. A rational firm chasing profit alone will, almost naturally, drift toward manufacturing the latter rather than the former. Narcotics are simply the most naked terminus of this logic. Addiction is the perfect business model—because demand reproduces itself.

 This isn't to say the entire pharmaceutical industry is a drug cartel. Countless researchers stay up through the night genuinely trying to save lives. But that goodwill is in constant friction with the system's incentives. The American opioid crisis was not the work of villains hatching a conspiracy. The legitimate goal of pain management was translated into the proxy of "prescription volume," which was then linked to revenue and bonuses—a chain of perfectly rational decisions at each step, adding up to hundreds of thousands of deaths. No one was evil, and yet the outcome was. That is the terror of a bad proxy.

 So what's the alternative? "Don't pursue profit" is a hollow sermon. A company that starves dies, and a dead company helps no one. The point is not to abandon profit but to return it to its proper place—as a consequence, not a purpose. A good company asks, before "how do we make money," a different question: "if we vanished, what would disappear from the world?" Solve a real problem and money follows like the shadow of the solution. Aim directly at the money, and the solution dissolves while the shadow swells.

 The healthiest organizations I know all shared one habit: they relentlessly put their real goal into words. They spoke not of "market share" but of the specific hardship a patient would suffer in their absence; they asked not about "user engagement time" but about whether users' lives had actually improved. They used proxies, but never for a moment forgot that a proxy was all they were. This small discipline—refusing to confuse the proxy with the thing itself—is finally what separates the company that makes drugs from the company that makes medicine.

 As I parted from that executive, there was a question I never managed to ask. What is your company's real goal? To make people well, or to make people keep paying? Most organizations can't answer this. They've never once put the question to themselves. But not asking does not mean there is no answer. The answer is disclosed every quarter—quietly, and precisely—in what they choose to maximize.