Institutional Conversion

In 1170, Henry II of England made his friend and chancellor Thomas Becket the Archbishop of Canterbury. A loyal companion at the head of the Church would bend it to the Crown's will.

Becket did the opposite. He defended the Church against the king with a ferocity he had never shown in royal service, until an exasperated Henry is said to have cried ‘Who will rid me of this turbulent priest?’ Becket was assassinated by four knights at his own altar.

Such cases of betrayal are not unique. In 1953 Dwight Eisenhower nominated Earl Warren to the Supreme Court. He was a Republican governor, chosen partly to settle a political debt. Warren went on to author Brown v. Board of Education’ and led the most liberal Court of the century. Eisenhower is reported to have called the appointment ‘the biggest damn-fool mistake I ever made.’

In 1979, Jimmy Carter faced double‑digit inflation. He chose Paul Volcker to chair the Fed, trusting his reputation as a pragmatic central banker. But Volcker promptly made price stability his north star and sent interest rates into the high teens through novel money supply control mechanisms.. Carter lost the 1980 election.

The pattern is recurring. To reach a great office, most candidates spend years signalling loyalty to an appointor and gaining their trust, including by telling them what they want to hear. The break with the past, once appointed, is a form of betrayal (one that can also be felt by voters after electing a politician.)

Three explanations: In the first, the appointee is freed from sycophancy and returns to their true self. In the second, the appointee gains access to inside information and to a broader perspective that justify a change of stance. In the third, the weight of the new institutional function converts them.

The last explanation deserves further exploration. In ‘The Presentation of Self in Everyday Life’ (1959), Erving Goffman observed that individuals perform the roles handed to them until the performance sets into character: wear a mask long enough and it becomes the face.

Whoever takes a great office inherits an institution with a noble history to cherish, illustrious predecessors to honor, strict conventions to observe, and a mission to accomplish. A form of institutional conversion is bound to take place, with the seductive notion of personal legacy taking hold.

Could the same drama be now playing in Washington? Kevin Warsh was placed at the Fed after two years of White House pressure for lower rates. Yet, on the back of this week’s FOMC, the market speculates that his first move will be restrictive. Has the seat already begun to absorb the man?

The temptation is to believe that with enough vetting, loyalty checks, and ideological screening, one can safely appoint a friendly, reliable officer. The reality, however, is that the higher the office, the more it rewrites the loyalties of the person who enters it – not only to the patron, but also to their earlier self.

One does not get to choose the person and what the new function will make of them.