This is one of my favorite ideas, I keep seeing it play out around me. I think its very important to talk about it. It is named after British economist Charles Goodhart, who put it in an esoteric way:
Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.
Later this idea was put in a form that I like the most,
When a measure becomes a target, it ceases to be a good measure
To understand this let's take some examples of the two key words - measure and target. Targets are usually some intangible goal that we have. We might want students to target knowledge, competency, intelligence, etc.
Measures are used to indirectly quantify these traits, for example we use marks, awards, breadth of vocabulary, degrees held, etc as concrete correlates of these abstract features we care about.
Now that we have an idea about what these two terms mean, consider what it means for a measure to become a target. Consider the education system where teachers teach from an "exam point of view". Where parents pay lots of money to enroll their kids in special coaching centres that focus on teaching kids how to earn marks, how to improve their accuracy, they discuss previous question papers, dissect the exam and find patterns to exploit.
If you notice, here the measure - marks, have now become the target. Lots of people seem to have shifted their target away from understanding the material, aquiring real skills in that subject, etc towards the more practical target of scoring high marks/good rank in exams. As a consequence of this happening at scale, throughout the system marks ceases to be a good measure of understanding which it was supposed to be a measure of. The measure stops being a "measure of that target" and now becomes a measure of how well you can game the system.
When people realize that others judge you based on the measure (say marks) and they watch people who are worse than them in maths score better than them by focusing on known exploits of the exam rather than studying the actual subject. It turns into a prisoner's dilemma where even those who wanted to study the subject are forced to dedicate more and more time to learning the exploits that the exam has.
Nowadays everyone needs to have at least an undergraduate degree to get a job nowadays, people go to college just to stay afloat in a society where they use degrees to judge you. People try to enroll in clubs and get awards for the sake of building their resume.
Let us move onto some other examples of this law in action to see just how pervasive this problem is. It's a rut that we humans keep falling into. One important consequence of realizing this law is to work on updating measures regularly making it harder to exploit.
For example not reusing questions from previous years, patching any loopholes that coaching centres find, adding essay type questions, increasing time, etc are all some ideas. The paper setters need to be on their toes if they want the marks on that exam to remain a good measure.
Marks are just a measure of how good you are at writing exams
Beauty and Health
Beauty, specifically physical attractiveness, evolved to be a measure of health, well it was a bunch of stuff - fertility, status, access to resources, etc all of which was predictors of how likely you were to help raise the kids and pass on quality genes.
Over time beauty became a target, we saw women wearing makeup, wearing high heels, fashion and style, plastic surgery, etc. This means beauty stopped being a good measure of these underlying targets and became a metric for how good you are at applying makeup, rich enough to afford the surgery or salon.
Happiness and Survivability
Now that religions are dying, as culture loosens its shackles I see more people embracing hedonism, biological shackles remain. As a species we are trying to pleasure ourselves in intricate ways. Capitalism is aimed at making this process of packaging and distributing short-term pleasure efficiently.
Happiness was also a measure; it was one of the tools nature used to teach us what behaviours were conducive to survival. Pain was the other side of this coin. Now we all seem to agree that this measure is our target. We aim for a happy life, we aim to prevent suffering and ensure more people are happy.
I think it is worth looking back at the original target; our obsession with happiness might be to our detriment. We ignore the damage we do to our environment; the real risk of extinction looms near.
Ideally, I think we should realize that happiness has stopped being a good measure of survivability, like beauty it has become a goal in of itself. We should be aware of this and take extra effort to aim to become a multi-planet species, fund fundamental science research to better understand reality - plan for the Sun's stellar evolution, when earth is uninhabitable within about a billion years and even plan to survive the eventual heat death of the universe.