Beyond Mythology

Compression Thinking - Beyond MythologyMarch 9, 2011

My own path toward Compression Thinking began almost 50 years ago, asking dumb questions in Economics 101. Economists seemed to build complex models on overly simplistic assumptions, for instance that all of us are motivated by self-interest – but I knew plenty of people that weren’t. Economists assumed perfect competition. However, most businesses that I knew tried to be too unique to have head-on competitors.

Profs usually parried such questions with a standard model builder response: the assumptions were necessary to create formal models, and if a model was predictive, it had value. Their quantification was impressive, and many models did roughly predict. But that success did not answer a key question: When do assumptions no longer hold so that a model stops working?  Without monitoring validity of assumptions, we risk quantifying mythology, assuming that the future will be like an imagined past.

Today, economists are more diverse. Some recognize that we are not always self-interested, nor rational by self-interest logic if we are.  A few like Herman Daly propose economics with different rules that recognize ecological limits. But much of the time, all of us, not just economists, bend our perception of reality to our unconscious assumptions.

About 30 years ago, lean thinking began to ooze into the West. One of its precepts is to go see the physical reality of a work situation on the scene. Don’t make assumptions and jump to conclusions, not even with data. Western business leaders were slow to realize that Japanese success at the time depended more on thinking differently than any financial or investment advantages. Some could not understand this when seeing it with their own eyes, blinded by unconscious assumptions – their mind sets.

Today this situation applies on a much broader scale. A finite world is being compressed – resources depleting, environmental limits, demonstrators rioting – interrelated changes coming too fast for people to adjust. Economics has long assumed unending expansion, ignoring limits and their effects. We argue over ways to cure economic slowness by restarting rapid growth, but we don’t question whether economic growth is desirable, or possible – or obsolete mythology.

If we have physically grown to the edge of our Petri dish and can’t expand further, then what? Fear; panic; utter social chaos? Wars to grab resources for survival?

By comparison, Compression Thinking should seem pretty cheerful, but what is it? It has a combination of attributes. The first is striving to ascertain facts and use scientific reasoning. Go to the source if possible; check sources for validity when you can’t. Second, try to see causal connections between phenomena that may not seem connected on first viewing. Third, work through problems to find root causes if you can. And finally, go for high quality outcomes using a minimum of resources.

Learning to address our limitations with Compression Thinking is difficult. But reexamining unconscious assumptions for whiffs of obsolete mythology is even harder.

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