Puzzles and Mysteries.

I was educated to solve puzzles.

That with enough expertise, evidence and tools, Economics was a puzzle to be solved if I tried hard enough.

It took me a while to work out that the problem was that somebody was fixing the rules. It was relatively easy to solve the problems that were set, but the problems that were set had only a passing resemblance to what was happening in the world.

But economics did it’s job. It gave me a degree, and a degree gave me a job.

Fast forward several decades, through behavioral economics, neuroscience, psychology and lots of different experiences to the present, and economics still largely defines the world through the lens of its own limitations. A hugely powerful tool, but limited to relatively short term specificity.

Over time, I became more and more interested in those problems that were mysteries more than puzzles. “Wicked problems” that morph and react to whatever action we take. The stuff of myth and quantum mechanics.

The more I got interested and involved with those interested in mysteries, from clinical psychology to storytelling to ancient wisdom, the more I recognised a real challenge.

The two schools of thought speak different languages, and each seems to want to deal with the world on its own terms.

People who like puzzles don’t like mysteries. They prefer precise language, and measurement. It is the language of business, and large organisations. Metrics, comparison, performance.

Progress is based on calculation, on looking for the missing pieces, Once the puzzle is solved, it stays solved.

Because mysteries can’t be solved, they are therefore extremely inconvenient and because they refuse to fit planning models we avoid them and push them into the background.

People who like mysteries have little time for puzzles. They can be solved, and therefore lack interest. They offer little scope for wonder. Mysteries revel in imprecision, in variation and unpredicatability.

Progress with mysteries relies on insight – seeing behind the mist that veils the mystery.

Finding common ground is often difficult, with each side believing they are right, and preferring their own language and company.

Yet most of the challenges we face contain both elements. I have seen many examples of those who live in the world of puzzles get real insight from working with those who deal in mysteries, and yet struggle to action their insights back in the world of puzzles because the languages are so different.

It makes Insight difficult to scale.

Progress is dependent on integrating puzzles and mysteries.

The situation we find ourselves in is a good example. Viruses are a mystery. We know they exist, and broadly how they work but not in what form they will appear, when or where.

We are capable of preparing for them, but tend not to because we cannot plan for them. We cannot make them fit a model with any precision. Expenditure lack a near term return.

Once they occur however, with precision, they become a puzzle and we are really good at them. The science kicks in, we can plan, measure and set targets, albeit at the expense of lives lost and ruined that perhaps need not have been.

The Centre for Disease Control poses an interesting quesion around events like these.

What will it be, when it occurs, that you will wish you had had in place?

CDC

Maybe, more personal protection equipment than our immediate forecasts required. Perhaps production facilities closer to home so we could react faster. More agile administrations who could make things happen where they needed to happen without the burden of a complex approval process. A better balance between “just in time” efficiency and “just in case” effectiveness.

Over time, in many fields, we have sidelined mysteries. We eliminate six sigma events in order to create efficient processes, whilst knowing it is a six sigma event – a Black Swan – that will catch us out, maybe terminally, at some point.

The 2 cent “O” ring on the Space Shuttle Challenger, The Dotcom crash, triggered by sudden realisation of unsustainable multiples. 9/11 because we expected conventional terrorist responses to events in the Middle East. The list goes on.

The essential but non specific truths of ancient wisdoms.

The lack of specific evidence when Rachel Carson published “Silent Spring”.

If we are only prepared to take mysteries seriously when they become puzzles, we pay a high price.

What will it be, when it occurs, that you will wish you had in place?

It’s a great question. One we all should ask ourselves.

One that relies as much on respecting the power of what we cannot calculate specifically, but feel to be true generally. Mysteries.

So what is it that, in the middle of this experience of Coronavirus, that you wish you had in place beforehand?

  • Reserves as a business, or savings as an individual?
  • Less debt?
  • A stronger local community?
  • Shorter, known supply chains, from shops to suppliers with relationships you could rely on?
  • Knowing what you do matters when the chips are down?
  • Effective alternatives you could call on to make an income whilst this goes through?
  • Less unnecessary overhead to be serviced?

It’s a good time to rethink risk.

Because we like data, we choose to express it in percentages. Nassim Nicholas Taleb offers a simple comparison of how we misuse risk as probability.

When a group of 100 people going to the Casino once, the majority will survive, and a small number will go broke. If 1 person goes to the Casino a hundred times, he will certainly go broke.

Nassim Nicholas Taleb, “Skin in the Game”

If we all play the lottery, one or maybe two of us will win big, whilst millions of us lose. If we continue to play the lottery, most of will lose significantly whilst hoping against reality.

The way we are working, relying on data and short term returns keeps us going to the Casino. As individuals, we are allowing ourselves to be aggregated into that single gambler, when we would be far better off spreading the risk amongst us.

It does not need a collective decision.

If we learn anything from this extended event, I hope it is that the idea that continual growth through efficiency, and using only money as a measure, is a complete, obvious fallacy and that we should actively come to terms with that.

It starts with each one of us. We can choose.

Try choosing simplifying and subtracting.

  • Notice and be grateful for what you have right now.
  • Remove a negative relationship from your life.
  • Cancel one subscription.
  • Stop playing the lottery.
  • Go on a Twitter Fast.
  • Drop a mindset that is holding you back.
  • Stop adding things you don’t really need (but want) and start removing what’s holding you back.

Cheap has a price

As a family, we used to play the board game risk. When things weren’t going to plan, one of the children would just fold the board up and throw all the pieces in the air. 

It feels a bit like that now.

“How did you go bankrupt? Gradually, then suddenly”

The sun also rises. Ernest Hemingway.

Gradually

Technology has enabled, over the last fifty years, our ability to disaggregate the elements that made the industrial revolution so commercially effective and reassemble them in an economically efficient way. 

First we outsourced production to low cost economies, then on the back of that, basic services then more advanced services, and finally much of our innovation efforts. 

We were able to reduce costs far more than prices, and create a small group of phenomenal winners, a large group of marginal winners in the developing economies that dramatically reduced poverty, and another large group of losers in the developed economies who saw incomes and living standards stagnate.

We are now looking to continue that progression using machine learning and artificial intelligence.

We have ended up, in aggregate as a world population slightly better off, but with huge perceived disparities and a sense of unfairness and along the way created a very small group who are unimaginably better off.

Suddenly

It is the wont of politicians at present to use metaphors or war when talking about how we deal with a virus that has no politics. It’s good to have someone to blame.

The reality is that much of the economic impact we will experience is a result of the blindness of those pursuing growth at the expense of  prosperity. 

Staying with ideas of war, no competent military leader would dream of extending supply chains in the way that we have with our manufacturing, service and creative assets. We have managed to extend both our material supply chains and our relationship chains at the same time, leaving us heavily exposed to multiple disruptions. 

We got really excited at the Brexit threat to lean production (remember that?) and now find ourselves self isolating in every respect.

I’m noticing lots of small things that add up to a big thing. I tried shopping online with a couple of supermarkets – the welcome screens were full of the benefits and ladels of wonderfulness I would receive, until I got to the ordering bit, which in a cursory manner said effectively “go away”. The same is true of many of other “highly efficient” systems, from banks to protective clothing to pharmacies. 

On the other hand, I live in a village and our local shops just roll with the punches. More expensive, yes but strong on relationships, flexibility and humour in adversity. 

I know the situation is exceptional, but that’s the point. That’s where risk lies. Viruses are not “black swans” – they have long been identified as major potential disruptors, only the timing and initial location was unknown.

We have knowingly created the conditions for the situation we find ourselves in, little by little, blinded by efficiency and growth.

And here we are.

Balancing

We will, of course, get through this, although the degree to which we will be battered in unknown. Lives will be lost. Jobs will be lost. We will end up a long way from where we started.

If there is one lesson we might learn before, like Monty Python’s Black Knight, we climb back on our growth obsessed, AI and ML empowered, mechanical charger, it is that AI doesn’t do this type of challenge.

It may be brilliant at puzzles, where our uncertainties lie in not knowing where the missing pieces are, but Covid-19 is a mystery, the morphs and mutates as we deal with it. 

It is a mystery, not a problem, and we should be mindful of it’s brother – climate change, which promises many of the same issues. 

And humans are brilliant at mysteries. We have been contemplating them since we emerged from the primordial soup.

Our pursuit of mysteries is at the core of who we are. 

Cheap has a price

This is a wake up call. It is going to be be messy and unpleasant, but we will survive it. 

If we want it to have a benefit, then let it be that in the end economies serve people, not the other way round. We can design them, and make choices.

We can create huge opportunities for humans to do what they do best. Imagine, dream, create, love. 

The rest, we can leave to machines. 

I’ll finish with one of my favourite stories from Nietzsche

There was once a wise spiritual master, who was the ruler of a small but prosperous domain, and who was known for his selfless devotion to his people.

As his people flourished and grew in number, the bounds of this small domain spread; and with it the need to trust implicitly the emissaries he sent to ensure the safety of its ever more distant parts.

It was not just that it was impossible for him personally to order all that needed to be dealt with: as he wisely saw, he needed to keep his distance from, and remain ignorant of, such concerns.

And so he nurtured and trained carefully his emissaries, in order that they could be trusted. Eventually, however, his cleverest and most ambitious vizier, the one he most trusted to do his work, began to see himself as the master, and used his position to advance his own wealth and influence. He saw his master’s temperance and forbearance as weakness, not wisdom, and on his missions on the master’s behalf, adopted his mantle as his own – the emissary became contemptuous of his master.

And so it came about that the master was usurped, the people were duped, the domain became a tyranny; and eventually it collapsed in ruins.

Stay safe all.