> All societies are dysfunctional, great and small, because human beings are dysfunctional.

I don't agree with the 'because' part of this. It misses my point about why organizations are dysfunctional. Even if the organization was made up of perfectly rational, perfectly functional individuals, it would still be dysfunctional. The people running large corporations, are individually, very rational, and very functional. They are among the most capable humans at achieving their goals. Any explanation of organizational dysfunction has to also explain that data.

The dysfunction (which means actions not aligned with the shareholders) comes from the fact that 1. preferences cannot always be aggregated coherently and 2. that the people operating the corporation do not necessarily have incentives aligned with the shareholders. The first is a mathematical impossibility which cannot be fixed, and the second is a failure of mechanism design. That's the "open problem" I mentioned.