Wednesday, December 26, 2012

Pat solutions always trump complex root causes

From Reynolds’ Law by philo.

Reynold's Law:
The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them.
It is the classic confusion between correlation and cause. It is also a special form of the logical fallacy post hoc ergo propter hoc, confusing "They have homes and education because they are middle class" with "They are middle class because they have homes and education."

Good intentions are never a substitute for logical, empirical decision-making and often obscure the decision that actually needs to be made. Everyone who has had a career in management or strategic consulting knows just how prevalent it is for very well intentioned and very intelligent people to become confused about the difference between the problem and the solution. As a simplistic example, highways are a solution to a particular problem - usually the speed or cost of transporting goods and/or people. What we are really trying to solve is the cost or speed problem. Highways are just one among many possible solutions. But people will latch on to a conceptually easy solution without addressing the real problem. Building highways becomes an end in itself rather than a means to an end (cheaper, faster transportation).

Likewise with government policies and people. What so often happens is that we try, with the best of intentions, to increase the welfare of people rather than trying to create the circumstances which allow them to be more productive. We ought to be encouraging the attributes that allow people to be productive (self-discipline, self-awareness, focus, future orientation, empathy, risk moderated decision-making, work ethic, saving, etc.) rather than encouraging the consumption that is made possible by that productivity.

Reynold's Law suggests that for a variety of reasons, governments tend to become blindly wedded to enabling consumption without focusing on production. Regrettably, and as repeatedly demonstrated, if everyone consumes and no one produces, in short order there is nothing to consume.

Why the aversion to defining the real problems (and their root causes)? Perhaps Colonel Jessup in A Few Good Men has the answer - "You can't handle the truth!" The truth is that for most major issues, the problems are hard to define, measure and quantify; there are multiple roots to the problem; the nature of the root causes makes them unamenable to effective action; and, not to be discounted, the actual root causes betray some of our cherished assumptions.

The sociological research strongly supports the historically common sense observation that certain attributes (self-control, self-discipline, focus, effort, commitment, tolerance, etc.), easily identified as middle-class virtues, on average lead to very positive outcomes in terms of productivity. In other words, middle class virtues lead to prosperity.

We have several decades of academia and pundits who have attempted to make the case that deviations from the well trodden path of middle-class virtues are not incompatible with prosperity. And at a theoretical level that is true. There are some individuals who can indulge in serial liaisons, alcohol and drug abuse, criminal actions, etc. and still be productive. That ignores that those individuals are rare. On average, people who do these things and forgo the attributes of the middle-class, usually end up with terrible life outcomes and low productivity. What is theoretically feasible is not practically achievable. In pursuit of theoretical ideals, the pundits condemn too many to terrible outcomes.

In our schools, which is more common? That we teach everyone that the sky is the limit, anyone can do anything, that there are no norms that cannot be successfully breached? Or do we teach that customary virtues such as diligence, hard work, saving, honesty, focus, responsibility, etc. are the reliable pathways to success?

Of course both messages are conveyed but I would wager that the latter message (the only one that can be counted on to deliver) is the poor cousin.

No comments:

Post a Comment