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The model of rational choice is faulty

Virtually all of the assumptions built into it about human beings and the world are false:

  • It assumes that people are self-interested. Well, yes and no.
  • It assumes that there is a common scale of value on which everything can be compared. There isn’t.
  • It assumes that we can attach meaningful probabilities to outcomes. Sometimes we can, but life is not a roulette wheel or a series of coin flips, in which probabilities are well defined.

If we are to move toward societies of greater opportunity and justice, we need a more expansive notion of what it means to be rational than we will ever get from economics.

via Barry Schwartz.

Good governance went out of the window when a reductive view of human nature took hold

Simon Caulkin [website, @nikluac]  in The Guardian:

The irony is that we know what makes companies prosper in the long term. They manage themselves as whole systems, look after their people, use targets and incentives with extreme caution, keep pay differentials narrow (we really are in this together) and treat profits as the score rather than the game. And it’s a given that in the long term companies can’t thrive unless they have society’s interests at heart along with their own.

So why do so many boards and managers, supported by politicians, systematically do the opposite – run companies as top-down dictatorships, pursue growth by merger, destroy teamwork with runaway incentives, attack employment rights and conditions, outsource customer service, treat their stakeholders as resources to be exploited, and refuse wider responsibilities to society?

The answer is that management in the 1980s was subject to an ideological hijack by Chicago economics that put at the heart of governance a reductive “economic man” view of human nature needing to be bribed or whipped to do their exclusive job of maximising shareholder returns. Embedded in the codes, these assumptions now have the status of unchallenged truths.

Best way to quit a job

Managers who claim to know the future are more often dangerous fools than great visionaries

As complex systems go, the interaction between the ball in flight and the moving fieldsman is still relatively simple. In principle, most of the knowledge needed to compute trajectories and devise an optimal strategy is available: we just don’t have the instruments or the time for analysis and computation. More often, the relevant information is not even potentially knowable. The skill of the sports player is not the result of superior knowledge of the future, but of an ability to employ and execute good strategies for making decisions in a complex and changing world. The same qualities are characteristic of the successful executive. Managers who know the future are more often dangerous fools than great visionaries.

(…) Good predictions may be available in structured, well-ordered, situations – but, even then, forecasts are properly conditional or probabilistic. There are few certainties about the future: but one is that hedgehogs who make confident statements on the basis of some universal theory will be as persistently misleading counselors in the future as in the past. And that the foxes (…) who scramble everywhere for scraps of information will provide better, if more nuanced, advice.

via John Kay.

Un libro no sirve sólo para leer

Mucho se equivocan (…) quienes afirman que una tableta electrónica borrará el libro de papel de las necesidades humanas. Porque un libro no sirve sólo para leer.

Sirve también para que su peso tranquilice las manos lectoras, para subrayar y ajar sus páginas con el uso, para regalar el ejemplar leído a personas a las que quieres. Para ver amarillear sus páginas con los años sobre los viejos subrayados que hiciste cuando eras distinto a quien ahora eres. Para decorar -no hay cuadro ni objeto comparable en belleza- una habitación o una casa. Para amueblar una vida.

Bien dicho, Arturo.

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Business buzzwords generator at the WSJ

Our modest contribution to horizontally push the envelope for thought leaders: Business Buzzwords Generator

Stop stressing about stress

Vintage Kellaway:

The most stressful thing about stress is its lack of clarity. It is a scary umbrella term for all sorts of things, some of which aren’t scary at all. When I say I’m stressed I usually mean one of three things:

  1. that I’m too busy, for which the answer is to do less.
  2. Or that I’m too tired, for which the answer is to go to bed.
  3. Or that I’m anxious, for which the answer is to deal directly with the thing that I’m worrying about.

To wipe out stress in one easy step by banning the word, and thus forcing people to identify more precisely what it is that ails them.

 

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