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This is a story of unrequited love, the story of a lopsided romance. It’s about a man who cherished an idea so deeply he could not see the truth, a man so enamored with the love story in his mind he could not perceive reality. It’s a tragedy from one perspective--as all love stories ultimately are--but it’s also a story of rebirth as illusion gives way to reality.
This is my story. And my erstwhile lover…well, you’ll meet her momentarily. She was both my muse and my demon, my inspiration and my condemnation. You see, every once in a while you meet someone so attractive, so alluring and radiant, so surprisingly blunt they consume your thoughts. They make sense of a chaotic world and make you feel good about yourself. They make your chest swell with pride before you even realize you’re doing it.
“It was all within my grasp, all within my control.”
I was twelve or thirteen when I fell in love with neoclassical economics. She was so elegant, so mature and wise. She was youthful but had an ancient soul. She explained the world to me and I believed it--every bit of it--and it clarified why the world was the way it was. She showed me the future, a land of promise and opportunity, just waiting for someone who really wanted to take it. It was all within my grasp, all within my control. I was limited only by desire. All my efforts would be rewarded.
When I was discouraged, thoughts of her comforted me. When I was successful I could hear her effusive praise. She was the smiling hand that patted my back, the sparkling eyes full of pride. She was the shoulder to assuage me, the hand that cradled my defeated head.
Eventually she let me down. Or rather I let myself down. I realized the world wasn’t what I thought it was when I was with her. Ultimately I realized she was never really what I had made her out to be. Yes, she was elegant and full of promise but the love was never real, the woman was a creation. I misinterpreted her and made her into something she was not. All evidence to the contrary I continued to believe she loved me back and that distorted my thinking.
And that’s how it is with love, you want to believe it so you do.
Walter’s passion
When Walter started a graphic illustration company he didn’t expect to become rich, famous or influential, he was simply doing what he’d seen his peers do and what people in America had always done. He was making a living. In his mind that meant opening a business—if you were fortunate you succeeded, if not you failed and had to start all over again.
To Walter, America had always been an agricultural society where people grew up understanding a simple formula: grow more than you consume, sell the surplus, reinvest in what worked, and pray for good weather. As the economy transitioned into an industrial machine the vagaries of weather patterns mattered less and less. Where previously, prosperity had been closely linked to factors outside of our control, the industrial revolution convinced us our success was completely within our own power to determine.
When Walter’s company failed to attract clients and bills continued to pile up it became apparent his business was a failure. If we believe the deterministic premise above we must conclude it was his own fault. Walter was not the victim of a draught or a late-season frost. He had failed in some fundamental business skill. He had improperly marketed his services, taken on too much debt, expanded too quickly or failed to provide value-added services.
“We see things in successful people, things we don’t see in ourselves.”
But failure was not the end of the road. Determined to succeed he collected himself, dusted himself off, relocated, regrouped and opened another business. He was presumably smarter this time--having learned from his own mistakes--and more business savvy. But his second company fared no better than his first.
There are certain things we see in successful people, attributes we don’t see in ourselves. We look for these missing pieces, these essential ingredients to triumph, and find them in passion, desire, and self-discipline. We tell ourselves, those who succeed are those who want it the most or who force themselves to put in long hours, endure hardship and turn back the approaching tide of failure by sheer force of will.
Everyone will tell you it’s that fire in the belly which gives successful people a divine claim on victory. You cannot justly withhold success from someone who wants it so badly it infects every fiber of their being. As romantic as this notion seems, as right as it feels to our soul, it’s just not true. It is neither passion nor skill alone which guarantees success.
The Library of Smith
From around 300-50 BCE the Library of Alexandria was the repository of all written knowledge and was alleged to have contained every published work of the time. Today the largest library in the world is the United States Library of Congress which holds almost 22 million books but still only claims to preserve a “representative sample” of all published material rather than every book ever published.
Large as these examples are they are infinitesimal compared to a theoretical library conceived by Daniel Dennett. The Library of Babel, as Dennett describes it, contains not books actually written but every book it is possible to write. It contains volumes of every combination of English words possible and therefore, by definition, contains every book ever written and every book which will be written in the future, as well as billions of volumes of nonsense.
Building on Daniel Dennett’s conceptual Library of Babel, Eric Beinhocker uses the Library of Smith (named after the original economist Adam Smith) to represent the landscape of all possible business plans including every conceivable business idea.
“The really great ideas tower above the landscape as mountains rising from flat plains.”
Imagine each business plan were evaluated, rated and plotted on a near-infinite grid using height to represent usefulness. Many business plans would be useless blather but the good ones, the ones society could benefit from, would rise from the landscape of mediocrity. The really great ones would tower above the landscape as mountains rising from flat plains.
On the landscape of the Library of Smith, the winners are those which create a more efficient use of the world’s resources. When this happens the world is better off because less of its resources need to be used to meet people’s needs or alternately the same amount of resources can be used and improve the world’s condition.
The highest peaks in this landscape are the ideas which revolutionize how things are done, that turn conventional wisdom on its head and make Herculean leaps in productivity. These ideas make their discoverers rich but also make society much better off by providing a way to use resources most economically.
Exploring, discovering and inventing
To discover where the highest peaks are on the landscape of the Library of Smith let’s imagine we send out explorers with a simple mandate, find the highest ground. These economic explorers are placed randomly on the grid and simply look around them choosing to step toward a square higher than the one they are on. When there is no higher ground they stay put.
This simplistic exploration would allow us to get to a high state of efficiency but there would remain places which would be out of reach. Peaks surrounded by a lower ridgeline for example. Areas of localized super-performance would trap explorers because once at the peak a step in any direction would be downward.
To give our hypothetical society a better chance of reaching the highest, most economically efficient peaks, we need to prevent explorers from getting caught on intermediate ridgelines. Let’s modify our explorers' mandate. They will continue searching for the highest ground immediately around them, but every so often they will leap in a random direction.
“We want these explorers to succeed but we know many of them will fail, some miserably.”
Wherever these leaping explorers land they start looking again for higher ground. Models have shown this technique to be more effective in producing positive results but it also produces some catastrophic failures. Explorers leap into deep pits or from a relatively high position to a lower one. Still, the overall outcome is positive with more explorers finding previously unreachable peaks.
As a society we want these explorers to succeed because we all benefit from their discoveries. Unfortunately we cannot guarantee their success. In fact we know some of them will fail. And that’s the crux of the capitalistic dichotomy; it creates an economy which is wildly successful in the aggregate, but which requires a small number of people suffer miserably.
Predicting success
No one really knows which businesses are going to succeed. I mean that. No one. I have a friend who keeps the books for a flower shop which has been on the brink of failure for years. Several years ago, when she first started working there, my friend told me, “I’m going to start looking for another job. This place is going to be out of business in a month.”
The shop was in debt, had no inventory controls and had over-purchased underperforming supplies: baskets nobody wanted, miles of ribbon in off colors. The shopkeeper was constantly taking money out of the till for personal expenses and putting off paying business bills and rent. They were doing little to no advertising and provided no customer service. It was only a matter of time. Months perhaps, if not weeks.
But somehow the shop would survive crisis after crisis. It has for years. Whenever I see this friend, who still works for the same florist, she still tells me the store is about to close. Nothing has fundamentally changed about how the store is run over the years, they just seem to get an influx of orders when it’s crucial for their survival.
“No one can predict business success with confidence. No one.”
Now this is just one shop but I could tell you many more similar stories. Other stores that did everything wrong but somehow survived and I could tell you about plenty of stores which were well capitalized with a solid business plan but still didn’t make it. No one can predict business success confidently. Evidence of this is everywhere.
If success could be determined in advance venture capitalists would get the same return as U.S. Treasury bonds. There would be no stock market because everyone would dump the losers and buy the winners. Every investor has access to the same information, but some think company X will succeed, others think it will fail.
But if it’s not effort and passion and knowledge that determine success, why does it look that way? Why does the economy seem to reflect neoclassical theory? Because some people must suffer.
Choosing our glasses
It’s okay to think about suffering if we can assign it to personal failings; the person who doesn’t wear their seat belt, the one who eats raw chicken, the idiots who jump off tall buildings and try to deploy a parachute before hitting the ground. These people make choices which directly cause their own suffering and they get what they have coming. The glasses through which we view the world influence the policies we enact, the causes we support and the way we treat others.
So it makes a huge difference in our attitude whether we think business success is self-determined or random. If we believe success is as random as an explorer arbitrarily jumping onto a high peak we have compassion on the failed businessman. But if success is a product of our own behavior, the losers only get what they deserve. All events are interpreted by the lens through which it is observed.
It’s the same with love. It not only rejuvenates us and makes the world seem much more interesting, but it actually causes us to reshape our perception of events to conform to our beliefs. It literally blinds us to the truth by making it impossible for our brains to see our lover’s actions for what they are. It alters the shape of the lens through which we see the world.
“When attraction strikes, it resonates to our core.”
Who knows what forms our concept of the ideal theory or the ideal woman, what combination of youthful experiences makes us prefer fair skin over a deep tan or hesitant, stilted conversation over polished banter. But whatever shapes our preference for theories or mates must reside deep within us because when attraction strikes it resonates to our core.
Not some superficial attraction but one that works its way to the center of our heart. Subtly at first, invisible to the senses, but then we suddenly we realize we’re in love, that we have been for months and are just now becoming aware of it. Even when we know it’s not real, that the attraction was false and one-sided, the feelings are impossible to ignore. It’s a disease you can survive but never fully recover from. A sickness which only needs a hint of encouragement to return with full force.
We rarely think about these glasses of perception, they develop over time and the things we see through them just seem natural and right. But we can choose to see things differently. We can change our prescription if we want to, if we see a need to.
If at first you don’t succeed
After Walter failed three times you might think he’d get the hint, he wasn’t cut out to be in the animation business. But he started again and this time got a toe hold producing short cartoon features. Before long Walter Disney’s company was making money and becoming well known in the industry. Today The Walt Disney Company is a global empire and while Walter passed away in 1966, no one can dispute he was an extraordinary success.
And that’s the allure of neoclassical theory, the siren song that tells us we were right to believe in hard work and devotion as the determinants of success. I only have to hear her name to feel my body react. My heart races, my mood brightens, I become expectant--though for what I’m never quite sure.
“In order to see the world clearly I must forever fail.”
She says something innocuous to me and I turn it into a love song. I interpret everyday courtesy as a lover’s deference. It’s said perception defines reality but this is only partially true. Our perception does not define other people’s reality, but it does define our own.
I want it to be real, to feel my attraction reciprocated, to fulfill the romantic fantasies of loving looks and implied flirtations. To see the world so simply again, so wonderfully and purely explained. And I know I will never be free. We can reinterpret events so easily, see a compliment as a slight and vice versa depending on how we think the other person feels about us. And amazingly we can revise and reinterpret these memories well into the future as new information impresses itself upon us.
All it takes is a hint of success for me to believe in self-determination again, to think I was right to love her all along. Any crack of sunlight will cause me to believe in love again and I know that would be a mistake. In order to see the world clearly I must forever fail.
Recommended reading:
Michele Boldrin--Against Intellectual Monopoly
Steven Johnson--Where Good Ideas Come From
Kevin Kelly--What Technology Wants
Eric Beinhocker--The Origin of Wealth
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