Friday, July 1, 2022

'Why' and How to Find it (1)

"Possibly, Adam Smith would not ever expected, that the seed of plants he sowed, would grow into a creeper which, on one branch, produced sweet fruits, but on the other branch, and on many branches, bore bitter fruits," Laluna opened the talk after greeting with Basmalah and Salaam. "Is it he the one to blame?" she went on, "Of course not. In the history of Modern Economics, in every single century, the battle of opposing points of view, focusing on the 'Big Three' : Adam Smith, representing laissez faire, Karl Marx reflecting the radical socialist model, and John Maynard Keynes symbolizing big government and the welfare state.
In the twenty-first century, Adam Smith's 'invisible hand' model has gained the upper hand, and capitalism has ultimately won the battle of ideas over socialism and interventionism. But even in the era of globalization and privatization, Keynesian and Marxist ideas continue to play a significant role in economic policy in the public and private sectors.
In his work, 'The Theory of Moral Sentiments,' Adam Smith wrote,
'... We often see the vices and follies of the powerful, much less despised than the poverty and weakness of the innocent. For us, to further our great ambition, to enjoy the respect and admiration of mankind, two different roads are presented to us, each leading to the desired goal: (1) the acquisition of wealth and greatness, and (2) the study of wisdom and the practice of virtue. Two different characters are presented for us to try to achieve: (1) proud ambition and ostentatious greed, and (2) humble modesty and fairness of conduct. Two different pictures are held out to us as models on which we can try to shape our own character and behaviour: (1) one is gaudy and glittering in its colouring, (2) the other is more correct and more exquisitely beautiful in its outline; (1) one forces itself on the notice of every wandering eye, (2) the other doesn’t attract much attention from anyone but the most studious and careful observer. (1) The admirers and worshippers of wealth and greatness are the great mob of mankind (and how odd it seems that most of them aren’t in this camp because they hope to get anything out of it). (2) The real and steady admirers of wisdom and virtue are mostly wise and virtuous themselves; they’re a select group, but not a large one, I’m afraid. ...'
And so? The following joke, hopefully can help us to understand what Adam Smith meant, 
It was said, in the Wonderland, a presidential aide said, 'Mr. President, I was wondering, sir, if it might be possible for my son to work somewhere in the Presidential Palace.'
'Of course,' answered the president. 'What does he do?'
The aide threw up his hands and said, 'Nothing, except hang out with his friends.'
'Excellent,' noted the president. 'We won't even have to train him!'
And that night, along with Songbird, I came to the meeting I've promised you before. We were little bit late, it was the time when the philosopher, stood up then talked. He said, 'The historian, like any other scientist, is an animal who incessantly asks the question ‘Why?’ The great thinker is the man who asks the question ‘Why?’ about new things or in new contexts. Men were ‘not governed uniquely by their fantasies, their behaviour followed certain laws or principles, derived from ‘the nature of things.' So, let us begin by asking what the historian in practice does, when he is confronted by the necessity of assigning causes to events. 
The study of history is a study of causes. The first characteristic of the historian’s approach to the problem of cause is that he will commonly assign several causes to the same event. The historian deals in a multiplicity of causes, a random jumble of economic, political, ideological, and personal causes, of long-term and short-term causes. This brings us at once, to the second characteristic of the historian’s approach. The true historian, confronted with this list of causes, of his own compiling, would feel a professional compulsion to reduce it to order, to establish some hierarchy of causes which would fix their relation to one another, perhaps to decide which cause, or which category of causes, should be regarded ‘in the last resort’ or ‘in the final analysis’ (favourite phrases of historians) as the ultimate cause, the cause of all causes. This is his interpretation of his theme; the historian is known by the causes which he invokes.
Henri Poincare, noted that science was advancing simultaneously ‘towards variety and complexity’ and ‘towards unity and simplicity,' and that this dual and apparently contradictory process, necessary condition of knowledge. This is no less true of history. The historian, by expanding and deepening his research, constantly accumulates moreand more answers to thequestion, ‘Why?’

The point is, we make assumptions. We make assumptions about the world around us based on sometimes incomplete or false information. This is important because our behavior is affected by our assumptions or our perceived truths. We make decisions based on what we think we know. We make decisions based on a perception of the world that may not, in fact, be completely accurate. Not only bad decisions are made on false assumptions. Sometimes when things go right, we think we know why, but do we really? That the result went the way you wanted does not mean you can repeat it over and over. You have to be careful what you think you know. Asumptions, even when based on sound research, can lead us astray.
 
There are those who decide to manipulate the door to fit to achieve the desired result and there are those who start from somewhere very different. There are only two ways to influence human behavior: you can manipulate it or you can inspire it. From business to politics, manipulations run rampant in all forms of sales and marketing. Typical manipulations include: dropping the price; running a promotion; using fear, peer pressure or aspirational messages; and promising innovation to influence behavior—be it a purchase, a vote or support. When companies or organizations do not have a clear sense of why their customers are their customers, they tend to rely on a disproportionate number of manipulations to get what they need.
Assuming that one's mother says, 'If your friends put their head in the oven, would you do that too?' Sadly, if the President of the Wonderland did that, added with spices by his cheerleaders a.k.a his paid Buzzer and influencers, it might actually start a trend. And for good reason, manipulations work.

Over the course of time, Manipulations cost more and more. The gains are only short-term. Beyond the business world, manipulations are the norm in politics today as well. Just as manipulations can drive a sale but not create loyalty, so too can they help a candidate get elected, but they don't create a foundation for leadership. Leadership requires people to stick with you through thick and thin. Leadership is the ability to rally people not for a single event, but for years. In business, leadership means that customers will continue to support your company even when you slip up. If manipulation is the only strategy, what happens the next time a purchase decision is required? What happens after the election is won? No matter how visionary or how brilliant, a great idea or a great product isn't worth much if no one buys it. Manipulations are a perfectly valid strategy for driving a transaction, or for any behavior that is only required once or on rare occasions. And, like any promotion, the manipulation will work if the incentive feels high enough to mitigate the risk.
In any circumstances, in which a person or organization wants more than a single transaction, however, if there is a hope for a loyal, lasting relationship, manipulations do not help. Does a politician want your vote, for example, or does he or she want a lifetime of support and loyalty from you? (Judging by how elections are run these days, it seems all they want is to win elections. Ads discrediting opponents, a focus on single issues, and an uncomfortable reliance on fear or aspirational desires are all indicators. Those tactics win elections, but they do not seed loyalties among the voters.)
Manipulations work, but they cost money. Lots of money. When the money is not as available to fund those tactics, not having a loyal following, really hurts. Knowing you have a loyal customer and employee base not only reduces costs, it provides massive peace of mind. Like loyal friends, you know your customers and employees will be there for you when you need them most. It is the feeling of 'we're in this together,' shared between customer and company, voter and candidate, boss and employee, that defines great leaders.
In contrast, relying on manipulations creates massive stress for buyer and seller alike. For the buyer, it has become increasingly difficult to know which product, service, brand or company is best. Manipulations will make our organizations and systems, getting weaker and weaker.'"
[Part 2]