Feed on

This is a theme that we will come back to from time to time. Let’s think for a minute about what Daniel Kahneman says about making good investment decisions:

  • “You should talk to people who disagree with you and you should talk to people who are not in the same emotional situation you are,” (via Marginal Revolution today)

That of course is general good advice and not just for making investment decisions. But notice, as I am sure you do, people do not want to engage with people who disagree with them, and even when they do, it is not typically done on “truth seeking” terms. For instance, the entire university system is supposed to be predicated as getting people together who disagree with one another (“celebrate diversity!”) but of course it is Potemkin Diversity. We are all in the same place. There isn’t much actual diversity of thought. And then when people are together, it’s a food-fight and not a search for truth and common understanding. My view is that universities are polarizing and on balance are destructive for community and discourse across America. I DO allow for the possibility that I am wrong.

The upshot? If we are to have people engage, seriously, with people who disagree with them, they must be “forced.” Here I am, a totalitarian libertarian! As parents we force our children to deal with their siblings and us, and there tends to be SOME learning from it. What things are out there that “force” you to engage with and learn from people that disagree with you? How about free-market competition? Seriously. The entire point of competition, freely, is that you cannot violate people’s property – and so it is required to be peaceful, yet what you do is go nuts trying to persuade customers that your idea, your product, your book, your show, etc. is better. That fierce competition forces every competitor on a daily basis to engage with ideas that are inconvenient and that they disagree with. Every day. And this is true whether or not the actual competition is out there. For example, if you run a monopoly pie-baking business, you are constantly on the alert for different bakery products that may take all of your customers from you, or a health craze that may take all of your customers from you – and so you also tend to anticipate the inconvenient and disagreeable ideas and arguments that are out there and then do something about it.

Name another institution that “forces” us to engage with difficult ideas and does so peacefully?


2 Responses to “Economics, Peace and Progress”

  1. Scott says:

    “That fierce competition forces every competitor on a daily basis to engage with ideas that are inconvenient and that they disagree with. Every day.”

    A really great point. Competition forces us to leave our ‘comfort zone.’ It forces us to dig deep and truly improve, constantly maneuvering around new threats and meeting new challenges.

  2. Roger says:

    There are at least three and a half clear institutions which foster constructive competition toward positive sum outcomes.

    Markets, of course. Producers compete to solve consumer needs.

    Science. Scientists compete according to the institutional rules to be the first to publish relevant facts or explanations or to tear down others’ work with the wider goal of gaining knowledge of the natural world.

    Sports. Players and teams compete within a narrow zero sum dimension for the broader benefit of entertainment or enjoyment (of players or fans). The ideas here are more like strategies or techniques or responses of course.

    The fourth area is messier than the others and marginal. That is the constructive competition of politics.

    Each area has complex institutional solution sets which have emerged and evolved over the history of society. They are in effect problem solving systems within their respective domains.

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