Your Daily Tao

Innovations, too, often need a kind of isolation to realise their potential. It’s not that isolation is conducive to having ideas in the first place: gene mutations are no more likely to happen in the Galapagos than anywhere else, and as many people have observed, bright ideas emerge from the swirling mix of other ideas, not from isolated minds. Jane Jacobs, the great observer of urban life, looked for innovation in cities, not on Pacific islands. But once a new idea has appeared, it needs the breathing space to mature and develop so that it is not absorbed and crushed by the conventional wisdom. This idea of allowing several ideas to develop in parallel runs counter to our instincts: we naturally tend to ask, ‘What is the best option?’, and concentrate on that. But given that life is so unpredictable, what seemed initially like an inferior option may turn out to be exactly what we need. It’s sensible in many areas of life to leave room for exploring parallel possibilities – if you want to make friends, join several social clubs, not just the one that appears most promising – but it is particularly true in the area of innovation, where a single good idea or new technology can be so valuable. In an uncertain world, we need more than just Plan A; and that means finding safe havens for Plans B, C, D and beyond.

One of the more meaningful messages I got out of this book. It is ok to try multiple things to solve one problem at the same time, especially given that we are terrible at selecting the most optimal approach until we have seen the results.

While most of us won’t have the luxury of pursing parallel solutions towards a problem, the market can. A startup would not have the luxury to be trying out multiple strategies at the same time. It would, most likely with its limited resources, stick to one and hope it works. Its competitors would be trying their own solutions as well. From the perspective of the economy and society, these startups are each one of the many parallel possibilities and it should lead to good overall outcomes for us. This is provided we do not select any “winner” of these possibilities by funding/subsidizing them to crush the others.

It also reminds me on how we should be comfortable with a little redundancy at work. When I was managing my team members, I wouldn’t mind a little slack and having some team members overlap their responsibilities once in a while. This helps us find the best approach to a specific problem. Of course, doing so, we should also be alert to festering any unhealthy competitive vibes within the team.

I find that most of us are so attuned to the idea of efficiency that sometimes, allowing for a little bit of redundancy might help us be more robust in our approach to problem solving.

This passage reminds me of how we all have a tendency to attribute successes to ourselves but failures due to others. Of course, that doesn’t apply to everyone.

Working hard does positively contribute to the probability of “success”, however we deem it. However, its not the only thing in the equation. Many other factors such as luck, environment and timing play a much bigger role. For those of us whom have the concept that hard work is the only reason for success, and that people whom failed simply didn’t “want it enough” or “work hard enough”, that makes it much harder for them to empathise with people whom have “failed”.

I’ve always felt like the concept of “deserving” a certain status or success to be inexplicable. Many athletes might have worked equally hard, but there can only be 1 winner in sports. In such cases, it seems strange when we laud the sole winner for all the hard work they’ve put in, especially when the other competitors have, most likely, put in the equals amount of work. After all, they are not competing for the being number 1 in “working hard”.

That’s not to say that we shouldn’t believe in the concept of “hard work”. It is dangerous and probably overtly nihilistic to think so. However, the idea that we deserve something just because of all the effort and time put in is equally dangerous. It traps us and creates a situation where we are bound to be let down. It also blinds us to the many other factors that might have led to success, and makes it harder for us to empathize with “losers” if we’ve actually “won”.

I very much rather believe in just doing things in a deterministic manner. Do A, B, C and hope it leads to D. If it dosen’t, then try again. Life is already hard enough without living with an entitlement to success.

 

For example, when in 1997 the Grameen Bank teamed up with Telenor, the Norwegian phone company, and gave out microloans to women to buy a mobile phone and rent it out to their villagers, these ‘telephone ladies’ made handsome profits – $750–$1,200 in a country whose annual average per capita income was around $300. However, over time, the businesses financed by microcredit become crowded and their earnings fall. To go back to the Grameen phone case, by 2005 there were so many telephone ladies that their income was estimated to be around only $70 per year, even though the national average income had gone up to over $450. This problem is known as the ‘fallacy of composition’ – the fact that some people can succeed with a particular business does not mean that everyone can succeed with it.

I might be a sour prick, but I’m always skeptical over the effectiveness of “successful case studies” as shown in these micro-loans programs. What works for 1 person, might not work once it begins to scale within a community. In other excerpts from his book, Ha-Joon Chang mentions that most microloans are also taken to fuel consumption, rather than for the purpose of entrepreneurship.

While these consumption might be usually things that help immensely, e.g. illness, weddings, fixing a leaky roof etc. I still can’t get around how direct cash transfers isn’t just a more elegant and more effective solution towards helping the poor.

So how do you create a habitat that fosters risk taking and experimentation? The best ways involve encouraging experimentation and evaluation of the results. The key is to get concepts out in front of others as soon as possible, so that everyone receives rapid feedback on their ideas. The longer you work on an idea, the more attached to it you become. Therefore you need to be encouraged to show your work to others when it is still raw, and to get their comments, before your ideas are hard to release if they aren’t working. Unfortunately, in most work environments people are strongly encouraged to polish their work before it sees the light of day. The more time they spend polishing, the more wedded they get to the ideas, and the less likely they are to release them if they aren’t working.

I believe many of us always have this tendency to polish up our ideas, work on it and test it before sharing with others to avoid looking “stupid”. While we might do that to avoid embarrassment, what is optimal for us might not be optimal for the group. Putting new concepts and work out in their early stages allows for constructive criticism, and helps the team on a whole. Getting too attached to our work only increases the sunk cost and makes it harder to switch out of what we’ve done.

More importantly though, is that we create environments where feedback can be shared openly and constructively. Too many times in the workplace, insecurity gets into the picture and feedback doesn’t come from a constructive angle but from self preservation. It is thus on managers to construct workplace environments that fosters constructive communication and sharing of ideas.

I’ve had my fair share of negative workplace environments and I think all of us should always think twice before we casually dismiss or accidentally laugh at anyone’s idea, especially in front of others. You might have just created a disincentive for someone towards sharing their work and ideas.

The most remarkable thing about this ordoliberalization of Europe is how it replicates the same error often attributed to the Anglo-American economies: the insistence that all developing states follow their liberal instruction sheets to get rich, the so-called Washington Consensus approach to development that we shall discuss shortly. The basic objection made by late-developing states, such as the countries of East Asia, to the Washington Consensus/Anglo-American idea “liberalize and then growth follows” was twofold. First, this understanding mistakes the outcomes of growth, stable public finances, low inflation, cost competitiveness, and so on, for the causes of growth. Second, the liberal path to growth only makes sense if you are an early developer, since you have no competitors— pace the United Kingdom in the eighteenth century and the United States in the nineteenth century. Yet in the contemporary world, development is almost always state led. Germany was in many ways the first country to prove this very point during the catch-up with Britain. But then, like the United States and the United Kingdom, Germany forgot her uniqueness, in terms of both timing and context and in terms of how building the export-led ordo that made Germany rich was only possible precisely because other countries were not doing the same at the same time. Now Germany and the EC want everyone else in Europe to be more German: another fallacy of composition that cannot work. As Martin Wolf put it beautifully, “Is everybody supposed to run current account surpluses? If so, with whom—Martians? And if everybody does indeed try to run a savings surplus, what else can be the outcome but a permanent global depression?”  Germany was able to take the lead in Europe because German ideas have been at the heart of the EU and the euro since its inception. This is also why the Germans were able so successfully to turn the debate about the crisis their way—they were the only people who really believed what they were saying.

This was a longer and slightly more painful read for me back in the day, but I did enjoy reading it, especially as there was more talk about Greece’s economy and the austerity measures taken back then to reduce government expenditure and generate a current account surplus.

Related to the previous excerpt from Joe Studwell’s book, How Asia Works, this passage also reminds me of how western countries constantly tout liberalization of economies as the only path to growth. In that book, and from the real life examples of South Korea and China, the truth is much more nuanced and complicated than that.

Cause and effect are also often hard to determine. Was economic liberalization a result of economic growth, or was it a cause? I remember reading about both education levels and economic growth being correlated, but cause and effect is much harder to ascertain.

Back to the topic of austerity and surpluses, regardless of your stance on whether reducing a nation’s deficit is of importance, (Modern Monetary Theorists put less importance on this. I’ve got a upcoming post about it.), certainly forcing nations to cut down on their public spending during a time of crisis certainly puts a lot more stress and pressure on the average citizen of the country. It also becomes a moral decision, whether forcing austerity on a nation already in economic downturn can be fair on its citizens. Rationally, it also makes it harder to get to the path of recovery.

Daily Tao – Messy: The Power of Disorder to Transform Our Lives – 1

In 2014, some of the workers on London’s Underground system went on strike for two days. The strike closed 171 of the system’s 270 stations, leaving commuters scrambling to find alternative routes using buses, aboveground trains, or the stations that remained open. Many commuters in London use electronic fare cards that are valid on all forms of public transport, and after the strike, three economists examined data generated by those cards. The researchers were able to see that most people used a different route to get to work on the strike days, no doubt with some annoyance. But what was surprising is that when the strike was over, not everybody returned to their habitual commuting route. One in twenty of the commuters who had switched then stayed with the route that they had used during the strike; presumably, they had discovered that it was faster or cheaper or preferable in some other way to their old routine. We tend to think that commuters have their route to work honed to perfection; evidently not. A substantial minority promptly found an improvement to the journey they had been making for years. All they needed was an unexpected shock to force them to seek out something better.

Most of us tend to get into our routine, keeping to the same habits or course of action to deal with issues over time. Our mind forms this particular pattern, and we think that this is the best way to do things. Even as things change, it might take too much effort to constantly find new things to do. Like in this book, sometimes some form of disorder can benefit us. By throwing us off routine, we get to try things out in a different way that we might not have conceived of, which allows us to discover new and possibly better ways to do things.

Good note to always keep open minded to new things!

Daily Tao – The Ten Types of Human – 1

We just cannot meaningfully extend the process beyond a certain point. Because for all our thousands of Facebook friends or Twitter followers, the effective limit of our social circle is 150 – what has come to be known as Dunbar’s Number (he is unaware of the precise origins of the term, but is quite content to adopt it). What can we deduce from all this? Thinking of others comes at a price. It has a cognitive cost. And that affects how we view and treat other people. Once we start worrying, caring, or just plain thinking of other people outside our family and familiar circles, we begin to load up our system. As Dunbar’s team conclude, this cognitive load ‘acts as a brake on our social ambitions’. It’s good to know this. It does not have to be viewed as a mordantly negative thing. It just is. It’s not that we don’t care. It’s just that in an important but critical sense we just cannot keep caring indefinitely. As Samantha Power poignantly puts it in her account of the historic failure to engage with genocide, we just can’t ‘wrap our minds around it’. We should stop beating ourselves up about this. Because there is a risk: our inability to care for the many, to act on a massive scale, can preclude us from engaging on a more modest but essentially achievable level – a human level. When we reach out to other human beings, we expose ourselves to pain.

A passage that I found interesting. In general, cognitive load affects our ability to control ourselves, to make decisions that benefit the long term over short-term gains, to be disciplined. This seems to be the general behavior that I have read in these books. Dias speaks about it from a social perspective though, where at some point if we give up on caring about the “many” whom are suffering die to the cognitive load, it might also affect our day-to-day dealings with those close to us.

It also reflects on why humans in general respond much more strongly to narratives than statistics about suffering. Studies have shown that humans are more more likely to donate with an emotional appeal than a logical approach. The suffering of 1 person is real and many of us are able to empathize. However, scale that problem ten-fold, hundred-fold and the scope of the problem seems too huge, such that many of us can’t process it and give up.

It also reminds me about how we should always focus on getting our own shit together, before we can worry about others. As this points out, worrying about others increases the cognitive load and probably affects your own ability to take care of yourself. Get oneself right, before worrying about and helping others.

Daily Tao – The Death of Expertise: The Campaign Against Established Knowledge and Why it Matters – 1

As a University College of London (UCL) study found, people don’t actually read the articles they encounter during a search on the Internet. Instead, they glance at the top line or the first few sentences and then move on. Internet users, the researchers noted, “are not reading online in the traditional sense; indeed, there are signs that new forms of ‘reading’ are emerging as users ‘power browse’ horizontally through titles, contents pages and abstracts going for quick wins. It almost seems that they go online to avoid reading in the traditional sense.” This is actually the opposite of reading, aimed not so much at learning but at winning arguments or confirming a preexisting belief. Children and younger people are especially vulnerable to this tendency. The UCL study suggested that this is because they “have unsophisticated mental maps of what the internet is, often failing to appreciate that it is a collection of networked resources from different providers,” and so they spend little time actually “evaluating information, either for relevance, accuracy or authority.” These youngsters “do not find library-sponsored resources intuitive and therefore prefer to use Google or Yahoo! instead,” because these services “offer a familiar, if simplistic solution, for their study needs.” Teachers and other experts are not immune from the same temptations. “Power browsing and viewing,” according to the study, “appear to be the norm for all. The popularity of abstracts among older researchers rather gives the game away.” “Society,” the UCL study’s authors conclude, “is dumbing down.”

One of the most concerning things to me, which is also a little ironic as I am sharing small fragments of what a book means in the form of passages. Each of us are capable of confirmation bias, and the internet as well as the increasing impatience that it has inculcated in many of us has led to many of us constantly searching the internet to support our beliefs. This is a concerning trend and it entrenches people’s viewpoints, hence increasing divisiveness and causing us to be more parochial in our mindsets.

To deal with it, I think many of us should actively seek to disconfirm our current viewpoints. While that may cause us to be tentative at times, this usually leads to more nuanced and better conclusions. Personally, I try to follow arguments from various perspectives, and try to understand the emotional aspects that may lead to me having a specific viewpoint. The desire to disconfirm my opinion also affects my book choices, as I try to read books that deal with various political or economic ideologies, to get a better rounded perspective on things.

Daily Tao – Nudge: Improving Decisions About Health, Wealth, and Happiness – 1

The false assumption is that almost all people, almost all of the time, make choices that are in their best interest or at the very least are better than the choices that would be made by someone else. We claim that this assumption is false—indeed, obviously false. In fact, we do not think that anyone believes it on reflection. Suppose that a chess novice were to play against an experienced player. Predictably, the novice would lose precisely because he made inferior choices—choices that could easily be improved by some helpful hints. In many areas, ordinary consumers are novices, interacting in a world inhabited by experienced professionals trying to sell them things.

This is one of the interesting premises in Richard Thaler’s book that opens up many moral questions of whether we should be taking active action in manipulating people to make decisions that are perceived to be good for them. Nudge, in general, is about the design of choices and how seemingly miniscule factors can have a significant effect on the choices of people. For instance, we could try to dissuade people from taking sugary food products by putting them in supermarket shelves that hard to see or reach. In many instances, such a seemingly small choice can lead to significant results without the consumers being aware of it.

The passage above relates more towards our life experiences. For many of us, we only buy perhaps a house once or twice in our lifetimes. Other things, like weddings or vehicles are also things that we tend to only make a purchase a handful of times in our lives. Essentially, we are novices, trying to read the salesmen who are trying to extract every dollar out from us, and are extremely experienced in doing so. This then serves as a justification for a “nudge policy”, where the government takes an active role in trying to protect the consumers. That also explains why government regulation can be helpful, and new sources like internet reviews/ratings and forums have helped give most of us “novice” consumers some more information.

Of course the question that goes is how much is too much? What are the areas of our lives that we are comfortable with letting the government decide? From where I live in Singapore, I feel that there are many aspects of our polices that “guides” us towards certain paths and choices. This is exemplified by the public housing scheme. I feel like many local couples center their future plans around a house purchase (BTO), a scheme that lets people get a completely new flat and maximizes their asset value. This is due to the extremely attractive incentives and schemes to “nudge” people into taking up public housing. And while one can’t argue with the results (80% of locals live in public housing), it also reduces the attractiveness of alternate paths. Some might even say it is stifling and overly paternalistic.

Interestingly, Thaler proposes a form of “libertarian paternalism” towards the end of his book. It is a concept where government can try to influence our decisions through the framing of choices, but that the people also have the freedom to ultimately choose what they want. As things tend to be with such ideology, the devil is always in the details. How one might feel comfortable living in such a government would always depend on the specific policies.

Daily Tao -Reality Is Broken: Why Games Make Us Better and How They Can Change the World 1

he wondered, then why did real life so infrequently resemble a game? Csíkszentmihályi argued that the failure of schools, offices, factories, and other everyday environments to provide flow was a serious moral issue, one of the most urgent problems facing humanity. Why should we needlessly spend the majority of our lives in boredom and anxiety, when games point to a clear and better alternative? “If we continue to ignore what makes us happy,” he wrote, “we shall actively help perpetuate the dehumanizing forces which are gaining momentum day by day.” The solution seemed obvious to Csíkszentmihályi: create more happiness by structuring real work like game work. Games teach us how to create opportunities for freely chosen, challenging work that keeps us at the limits of our abilities, and those lessons can be transferred to real life. Our most pressing problems—depression, helplessness, social alienation, and the sense that nothing we do truly matters—could be effectively addressed by integrating more gameful work into our everyday lives. It wouldn’t be easy, he admitted. But if we failed to at least try to create more flow, we risked losing entire generations to depression and despair

Flow is best achieved when we engages tasks with a sense of autonomy, where tasks are challenging enough but not too difficult such that it induces stress and anxiety. Nevertheless, most of the tasks that we engage in our school and work life seldom lead to any form of satisfaction in itself. That might be one of the challenges of life itself, as unlike games, life does not proportionally reward hard work with rewards. In a game, positive feedback is highly observable and you can complete milestones, tasks and achieve points unlike in real life.

In this book, Mcgoinal asserts that what we need to do is to insert more aspects of games into our real life environments. Workplace can create environments where employees have more autonomy, where feedback for their effort is apparent and where milestones and achievements can be better appreciated. The fact that some people choose to engage in gaming speaks to a “hunger” for something more. In games, people can feel their actions matter, like they have “saved the world”, like their actions mean something in the world. We should always try to drive and create that element for “meaning and value” into our work place.

As individuals, we can also insert gamification elements into our own life. We could also choose to engage in some hands-on work where results can be observed. For ourselves, we have to also learn to create situations and challenges which induces our own “flow”.