Top-down approaches attempt to achieve efficiency in focussed goals despite differing individual goals. Bottom-up approaches attempt to empower individuals and small group decisions despite inefficiency in achieving focussed goals. Both approaches have their merits and because they are not mutually exclusive they can exist simultaneously at multiple levels within a system. Even so, to achieve democracy, the system as a whole must be bottom-up.
Most systems and organizations use a mix of top-down and bottom-up approaches. For example, your workplace probably has an owner, CEO or government minister at its head, i.e., a top-down decision making structure. If your workplace is healthy, you respond to the needs of your customers or constituents, i.e., a bottom-up feedback process.
Even with the above examples of top-down or bottom-up approaches there are many variations in system dynamics. Are customer needs inferred from the experiences of the front-line employees or dictated by a visionary CEO? Do managers hand down commands to their subordinates or do they coordinate goals and expertise from their employees?
The effectiveness of these approaches depends on your values and goals. If you value efficiency, profit and goal-based achievements then top-down systems are practical. However, if you value overall individual agency and empowerment then bottom-up systems are constructive.
If you want to create a society that caters to the needs of individuals is to give them control. That is, bottom-up systems are the key to democracy. This is the theory behind parliaments, free markets and socialism (individuals collectively owning companies).
We can observe system failures when we attempt to use the wrong kind of system to achieve our goals. For instance, when a CEO attempts to use democratic consensus to make decisions about decisions employees have no stake in, like the company logo. Or when government departments dictate Key Performance Indicators (KPIs) to increase efficiencies and ignore the unique circumstances of many of their constituents.
This is the fundamental sin of centrally planned economies. The complex needs of a nation individuals cannot be catered for by the limited capacity and experience of a government. The best a top-down system can hope to achieve is optimisation of a few key variables.
Systems rarely fall so neatly into purely top-down or bottom-up though. The concept of free markets posits a system controlled from the bottom-up by consumers. Unfortunately, in some market systems, the most powerful consumers are top-down corporations. This means that top-down entities control the bottom-up system. Thus, these free markets are top-down systems from the perspective of individual people.
So, if we value a fundamentally bottom-up approach for our society how do we design systems that cannot be perverted by top-down control over time? Good question! I don’t have any concrete answers yet. Nonetheless, I believe a key tool must be recognising the ways in which the bottom-up decision making power in our societies is being eroded.