How Economic Thinking Can Benefit Consumers, Managers, and Entrepreneurs (Part 4)
Barry L. Linetsky
The impossible task we each have in assessing the effectiveness of our thinking and action is that we cannot observe the results of actions not taken. We can only imagine an alternative reality both pre- and post-action, that is within the limited scope of our brain power, cognitive effort, knowledge, experience, wisdom, etc.
As such, all important complex decisions with broad social impacts and implications face what Duke University political science professor Michael C. Munger playfully but in earnest identifies as the Unicorn Problem.
Unicorns exists, posits Munger. They are “fabulous horse-like creatures with a large spiraling horn in their forehead.” They may also have other magical and unusual defining traits and characteristics. Don’t believe him? Close your eyes and envision a unicorn. The chances are that “the picture in your mind corresponds fairly closely to the picture in my mind.”
While we may not have seen an actual unicorn and experienced their efficacious nature, good deeds, positive outcomes, and fresh strawberry aroma, we can nonetheless imagine everything about them.
It turns out that unicorns are like the plans we devise together and share with each other to achieve desired future outcomes. As we talk with each other about our shared desires and develop plans to make them real, we each envision our own unique version of a unicorn and their shared characteristics – a perhaps slight downgrade from a perfect outcome – humans being imperfect after all.
While we are allegedly discussing and planning the work that we will participate in together to achieve an agreed-upon outcome, what we usually don’t know up front is whether the plans we are talking about are actually the same plans and the outcomes we imagine are actually the same outcomes. The specifics of unicorns imagined in our heads are not that detailed, although we can pontificate about them as much as we want to.
To make matters worse, sometimes we or others with whom we are planning agree to fields of play for our unicorns for which there is no intention of following through. But let’s put this aside and assume the best of intentions.
While we are never able to envision the future state in all of its intended glorious detail, instead sticking to the big picture, we can each convince ourselves that our own unicorn will indeed be magical and capable of bringing forth our intended outcome. We know our own unicorns – we can see them – and we know their capabilities and their will to not let us down.
Being an economist, Munger quotes observations from two great 20th century economists of the “Austrian school,” Ludwig von Mises and 1974 Nobel Prize winner F.A. Hayek with respect to the realm of political aspirations that point to a human psychological disposition towards conceit, aggrandizement and self-deception, in explaining why people tend to avoid recognizing and addressing the Unicorn Problem. First Mises then Hayek:
Only a few have the strength to accept that knowledge that these [social] reforms are impracticable and to draw all the inferences from it. Most men endure the sacrifice of the intellect more easily than the sacrifice of their daydreams. They cannot bear that their utopias should run aground on the unalterable necessities of human existence. What they yearn for is another reality different from the one given in this world…. They wish to be free of a universe whose order they do not approve.L.v. Mises, Epistemological Problems of Economics
[T]he curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. (Hayek, The Fatal Conceit.)F.A. Hayek, The Fatal Conceit
© 2019, Barry L. Linetsky. All Rights Reserved.
Barry Linetsky is a Partner with The Strategic Planning Group in Toronto, Canada, where he and his colleagues have been helping executives and owners align their business purpose with customer values since 1994. Barry is the author of the acclaimed book The Business of Walt Disney and the Nine Principles of His Success (Theme Park Press), and an Honorary Disney History Institute Historian. Barry is also a writer, photographer, researcher, and business strategy enabler. Read his blog and learn more at barrylinetsky.com.