Human instinctive thinking develops to deal with realities that are recurring from day-to-day and generation-to-generation for thousands of generations. Instinctive thinking develops when it can deal with a reality faster, better and more comfortably than analytic thinking (learned thinking) can.
One of the long-standing realities of the human experience is that resources run out - the good times never last - so our thinking is well adapted to that harsh reality. But modern technology has changed that reality, which means this is another place where instinctive thinking is not providing the best solutions to solving civilized problems.
The bright side of this instinct is when it tells us to be cautious about our spending and to prepare for rainy days. The dark side is when it interferes with growing the resource pie, as I describe below.
Neolithic Village mankind lives in a world of limited resources. The limits come quickly and they are harsh: food to gather gets all gathered, a season changes, mysterious calamity such as fire, flood or plague strikes. Less mysteriously, neighbors strike to steal or get revenge.
Consequently, human thinking expects limits. This means the concept of “growing the resource pie” through increasing productivity that goes on over decades is alien. In Neolithic Village you may discover a new pie, but to actually create one, a big one, is something for the heavenly afterlife, not real-world reality. Agriculture changes this a bit, with hard work you can clear a field, farm it, and store the excess, but you can only make one new field on a particular plot of land - the pie still has harsh limits.
The game changer is Industrial Age technology. Increasing productivity increases the resource pie (as I will call it in this essay). The hope for a bigger and better pie was expressed indirectly as early as the late 1700's by William Godwin, the Marquis de Condorcet, Jean-Jacques Rousseau (and scoffed at in the next generation by Thomas Malthus ). In their time these men were talking about possibilities, and all through the 1800's more and more pieces of that pie-growing possibility showed up - railroads and mechanized textiles being two icons of the period. This was the time in which the “Protestant Work Ethic” started to match real world possibilities.
In the 1920's the first big real world game changer came into existence - mass production. It effectively developed first in the US and was then exploited around the world. Its icon was Henry Ford and his Model T automobile. (Interestingly, in Ford’s promotion style, he prominently played the fairness card. He famously paid his assembly line workers above average wage and stated that Model T buyers, “Could have any color they wanted, as long as it was black.”)
This miracle of mass production was marveled at by writers and thinkers of the first half of the 20th century. Indeed, it was a miracle that the size of the pie could change! A lot was written about what this change would mean to human living. (As an ironic example of the power of adaptation in human thinking, in the early 21st century we take this miracle completely for granted.)
But instinct-thinking is not based on human experiences from the 20th and 21st centuries. Instinct-thinking hasn’t caught up with modern times, and it is still certain of harsh limits. This instinct, that there must be limits, puts a lot of oomph into 21st century environmental movements, in particular movements such as resource conservation. Peak Oil and the Club of Rome report, “We must beware! In spite of how good things look now, things will run out!”
In sum, this growing of the resource pie that Industrial and Information Age technologies makes possible is alien to human instinct-thinking.
Now let's look at some ramifications of how this mix of instinctive thinking and the new and alien reality interact.
The main social tool for growing productivity in human communities has been entrepreneurship - the building of new organizations that make products and services in new and more efficient ways. Entrepreneurship produces exciting results, but in the process it steps on the toes of two powerful instinctive thinking patterns: the harsh limits instinct and the fairness instinct along with its tight buddy, prescriptive thinking - “There's one right way to do this.” As a result entrepreneurship makes a lot of people uncomfortable; only a small percentage of the overall population engage in it while many watch skeptically.
The instinctive thinking surrounding entrepreneurism is strong. In the 1800-1900's, the anti-pie-growing instinct flowered as the feeling that entrepreneurial-based growth wasn't fair. “The rich get richer, and the poor get poorer” is the slogan for this feeling. In one form this discontent shows up as periodic anti-change movements such as the Luddites who were violently opposed to mechanized looms replacing human weavers in 19th century England. But being pro-fairness has proved a much more enduring concept than anti-change. Socialist, Communist and Unionist movements have at their heart being more fair about how goods are distributed.
It should come as no surprise that average community thinking has been caught in the middle.
This is an issue that see-saws communities and the governments that run them. We have yet to find a happy medium.
Lost enfranchisement is the big direct cost of this difference in thinking. Many members of the community expect commercial and entrepreneurial types to cheat at every opportunity. The more widespread this attitude gets, the more the entrepreneurs respond with, “OK… We can do that.” This isn’t really what either side wants, but it then leads to the community enacting laws. If the disenfranchisement continues, the commercial and entrepreneurial types, being aggressive, innovative, and ambitious work at subverting those laws with loopholes and corruption. When the community notices this and gets outraged the vicious circle of blame and deceit continues. The cure is enfranchisement and tolerance. The community needs to understand that experimenting entrepreneurs will be doing things differently than before - tolerance - and they need to teach the entrepreneurs that they are part of the community and they are expected to act responsibly – enfranchisement. Then the community needs to remain vigilant.
An example, of the problems this vicious cycle causes, can be seen by comparing the Russian community's view of capitalists with the American community's view. (“Russia” in this section means the former USSR regions.) Russians have had an overtly dim view of capitalists since before the Russian Revolution in 1918. That revolution carefully prescribed commerce by making most of it a government activity. But the Workers’ Paradise didn't work out well. By the 1970’s stores in Russia were famous for their long lines, skimpily stocked shelves, and surly clerks. In the 1980’s the Russians started noticing the problems enough to do something about them. But the reforms they tried failed, and in 1989 the Soviet Union collapsed in bankruptcy. The USSR split into 15 independent nations, which are now called the former Soviet Republics. The Russian Republic moved away from Communism and began to embrace capitalism.
Operating modern businesses and governments is very much a civilized activity. It takes a lot of learning, and the learning needs to be the right kind. Few Russians have had a suitable education, so their transition into capitalism and free market economy has been clumsy - they haven’t been doing it right. A prime example of their clumsiness showed up when the state assets were sold off immediately following the collapse. Instead of going to the highest bidders they were sold to the people with the most influence in the dissolving USSR. This twist was a legacy of the Russian community expecting capitalists to take cheap shots, as in, unfairly exploiting workers, customers and outside investors, and this legacy continues to this day in Russia—they expected it, and it happened.
The ongoing result of this skeptical attitude is that the Russian economy has found it difficult to grow and diversify. These days Russia is as much an oil state as Saudi Arabia. This 29 Jun 13 Economist article, “Schumpeter: Spooked by Shale: the shale-gas revolution unnerves Russian state capitalism”, talks about this dependence. Russia’s condition as an oil dependant community doesn’t have to be this way. There are a lot of well-educated and resourceful people in Russia, and it's a land filled with many kinds of natural resources. But the community still links disruptive entrepreneurship - the kind that builds brand new industries that grow huge and change how we live - with cheap-shot capitalism. The Russians have a hard time telling the difference. It’s blind-spot-thinking for them. Because they can’t tell the difference, they can’t teach the difference to either their children or their entrepreneurs. The result is that fighting cheap-shot capitalism is Russia’s equivalent to the US War on Drugs, only it has been going on much longer. This was one goal of the Russian Revolution in 1918: Communism was to be the glorious replacement for abusive capitalism. As pointed out above one modern sad result is that Russians are still living to this day with an undiversified, underdeveloped economy. Another scary result is supporting Putin’s ruthless leadership style in which he distracts from these deep down-home economic problems by conducting military adventures in the old USSR territories. These adventures appeal to redneck Russians who aspire to bring back the “good old days” - it’s a warm, fuzzy instinctive kind of feeling.
Contrast Russia’s development with that of the city of Los Angeles. When California became a state in 1848, Los Angeles was one of a series of outposts along the road that lead from Mexico City to San Francisco. It was a mission home, way station, trading post and little more. The population was about 650 in 1820. Then in 1876 the railroad came, oil was discovered in 1892, and by 1923 Los Angeles was a booming oil producer. And then comes the difference between how the people of LA used their oil blessing and how the people of Russia used theirs. Los Angeles used oil-based prosperity as a springboard to develop a widely diversified economy that ranged from shipping to high tech manufacturing to finance and entertainment. As a result the area boomed in both wealth and population. It is now the second largest city in the US with close to four million people. Oil production is still going on, but it is dwarfed by dozens of other activities that the people of Los Angeles have developed into prosperous industries. This is what happened in LA, and hasn’t happened in Russia.
In sum, the skeptical Russian attitude towards capitalism is Russian goat sacrificing.
The big secondary cost here is that many community members develop a blind spot. They don't see that pie growing is a delicate process and far, far from inevitable. As a result many communities have experienced a “Golden Age” or a “Boom Age” in which they grew, prospered, the community became mighty, and its members legendarily prosperous… and then lost it. From mighty, the community first becomes “average” and “comfortable” and eventually withers into obscurity and poverty. Ancient Mesopotamia, Ancient Egypt, Ancient Rome, Renaissance Italy, Ottoman Empire, Chinese empires… this cycle is the rule rather than the exception. The oddest part of this decline is that many community members don't see a problem as this is happening- some speak up, of course, but many say, “Huh?” I experienced this first hand as I grew up in Ohio in the 1960's - so I call it “The Midwest Disease”, but it has happened many times and places all over the world.
A current example of this issue comes from this 22 Aug 14 WSJ editorial, “Why Silicon Valley Will Continue to Rule the Tech Economy”, by Michael S. Malone who explains why Silicon Valley is going to stay on top. In the article Malone argues that success breeds success, the valley is on a Long Wave, its demographics are great, and it has wonderful infrastructure. But he also notes some problems and threats. From the article, “Yet there are growing murmurs—underscored by plateauing new-jobs numbers and housing prices, street protests in San Francisco over the new ‘plutocrats,’ the lack of exciting new products and a decline of early-stage new investments—that Silicon Valley has finally peaked and begun the downhill slide to irrelevance.”
When the decline comes, the result will be that disruptive entrepreneurship is discouraged. The community will establish prescriptive regulations on how business can be conducted and how people can relate to each other. This will be done in the name of fairness. In response to all this prescription, those who want to try their new and exciting ideas either simply give up, or they vote with their feet and move to places that are more tolerant of their “crazy thinking”. In the 1490’s Columbus, an Italian, took his crazy idea to the Spanish royalty who were feeling the thrill of optimism because they were on the winning side of the war to kick the Moors out of Spain. In the case of the Midwest in the 1960's, many moved to California, and that was a large part of what pushed Silicon Valley into becoming an icon of American innovation and enterprise in the 1980's.
The good news is: the decline is not inevitable. New York City narrowly dodged the Midwest Disease of the 1960's and stayed a vibrant city to this day. Sadly, how they dodged it has not been an easy lesson to learn or teach.
Increasing community tolerance is at the center of solving the problem of how to keep a community growing in prosperity. This is so because it is needed to foster entrepreneurship. Increasing community tolerance is the most important trait for allowing entrepreneurship to thrive and grow the pie. I'm not talking about the politically correct definition here: “Don't do or say things which may offend others.” I'm talking about the vigorous “live and let live” version of first-half 20th century American cities: “You do your thing. I'll do my thing. And I won't be thin-skinned about what you say or do.” The result was a culture that did a lot of population growing, and a lot of pie growing (growing the resource pie), but left a lot to be desired if you were looking for “fair” in the prescriptive sense - as in “We are setting up rules and regulations for how people can do things. We are defining what fair means in this community. And we are going to be fair.” This getting fair part follows… when the Midwest Disease takes hold.
Tolerance in this usage means being tolerant of changing how things are done as well as tolerant of what things are said. Example: not playing the “I've lived in this dwelling for twenty years now. How dare you expect me to move!” card when someone wants to build a new road, factory, or other building that will improve how the whole community lives.
Immigrants are by nature tolerant people. They have to put up with countless changes as they move from their old community to a strange new one to take advantage of new opportunities. For two centuries this immigrant-fueled tolerance has been the “American edge”, creating the foundation for America's legendary prosperity. We need to remember that, analyze it to understand it better, and teach it to all our community members. This is a place where learned thinking is vitally important to continuing our progress. Harking back to the Russian example I brought up earlier, the immigrant experience has been one of the big differences between the American Experience and the Russian Experience as the Industrial Age flourished. In the 1800’s both nations had a big undeveloped continent at their backs and lots of exciting new technologies that could be used to exploit this opportunity. What a chance at pie growing! How these two societies made use of that opportunity turned out quite differently - how immigration was handled can explain a lot of that difference.
Steadily increasing productivity is something incredibly powerful in making our world of today better than yesterday's and our world of tomorrow even better still. But it's new, and it crosses both the harsh limits and fairness instincts in human thinking.
As a result, making it happen takes “outside the box” thinking and a community that is willing to tolerate such strangeness even though it can be gut-level scary and not prescriptively fair. History has shown this kind of toleration is difficult to achieve. Any community experiencing dramatic changes in how things are done is also going to experience dramatic calls for the changing to be “fair” and “environmentally responsible”. These calls can easily become distractions that slow down progress. When that happens, the Golden Age ends.
If we as a community want to keep enjoying the benefits of growing the resource pie, we must be diligent in taming our community instincts which say, “Yes, growth and change are nice, but...” This means we must be diligent about promoting analytic thinking over instinctive thinking. This means we need to be watching carefully what our kids are taught. The more the upcoming generations learn “Let your heart be your guide” (instinctive thinking), the harder it will be to keep growing the resource pie.
This 28 Jul 12 Economist article, “Les Misérables: Europe not only has a euro crisis, it also has a growth crisis. That is because of its chronic failure to encourage ambitious entrepreneurs”, covers similar ground. This article compares the environment for startup business entrepreneurs in Europe with other parts of the world.