It is true that groups magnify the importance of rational thinking, but I don’t think the few examples cited prove that non-x rational thinking was the cause of the success and even if that were proven, it wouldn’t prove that x-rational thinking would (given opportunity cost) make a group better.
The first example is Toyota, but the link isn’t a serious argument that the main cause for their success versus the US auto industry is the continuous improvement, nor that their adoption of continuous improvement was them being rational and the US auto industry not adopting it was them being less rational. I doubt all those claims.
I also doubt that “Companies with slightly better risk management are currently preparing to dominate the financial space.” As best I can tell, this presupposes that the financial crises hit all companies the same and the difference in effects was due to risk management policies. I tend to think that the different crises hit different companies differently because the crisis were varied and somewhat random in their effects, so that some companies got lucky (though some probably did have better risk policies).
And I really don’t understand the claim about certain countries having more rational systems which over centuries led to their current improved “ways of life.” I assume this refers to the highly industrialized countries. Was their growth only .5% more per year than other countries? Was the Tsarist rule of Russia more rational than that of imperial China? Or Great Britain more rational than Denmark? I highly doubt that amounts of rationality is what explains the current economic distinctions between countries.
Finally, there is the cliche about finance professors—if they really understood it, why aren’t they rich? Similarly, why not start a company using x-rationality to guide it? Find, for example, a new small business that is growing, and just do the same thing—only using x-rationality.
From the OP: “Whereas a rational individual is still limited by her individual intelligence, creativity, and charisma, a rational group can promote the single best idea, leader, or method out of hundreds or thousands or millions.”
GIGO. At any given time, the rational group will be limited by their consensus beliefs and mental models. (Indicator of group quality—do their mental models improve over time?) Rationality is just a tool for uncovering truth. I’ve often found that I’ll go to work on a hard problem using rigorous intellectual tools (Mathematics, on which rationality is based) but then I’ll be flummoxed and have to set it aside. Then the answer will pop into my head the next morning as I’m eating breakfast, at which point I’ll use math to validate the intuition I’ve just had.
Sometimes we need to stumble on the truth by accident or other non-rational means. Can rationality help us if we don’t even know the right questions to ask in the first place? I think it’s a powerful tool, not a panacea.
We may well benefit from rationality, but that doesn’t mean all of the answers we seek will come sliding down the chute when we turn the crank on the machine. However, I will say that it is a fantastic filter for revealing which are the wrong answers.
Toyota is an example of a company that utilizes rationality for a competitive edge. Whenever they have an assembly line problem, they go through the “Five Whys” exercise. Ask “why” iteratively five times. Why five? It’s a manageable number, usually enough to get at the real underlying issue, and you have to set some fairly low limit, otherwise employees doing the exercise will keep quitting their jobs and go off to live in the woods to live as philosopher ascetics.
It is true that groups magnify the importance of rational thinking, but I don’t think the few examples cited prove that non-x rational thinking was the cause of the success and even if that were proven, it wouldn’t prove that x-rational thinking would (given opportunity cost) make a group better. The first example is Toyota, but the link isn’t a serious argument that the main cause for their success versus the US auto industry is the continuous improvement, nor that their adoption of continuous improvement was them being rational and the US auto industry not adopting it was them being less rational. I doubt all those claims.
I also doubt that “Companies with slightly better risk management are currently preparing to dominate the financial space.” As best I can tell, this presupposes that the financial crises hit all companies the same and the difference in effects was due to risk management policies. I tend to think that the different crises hit different companies differently because the crisis were varied and somewhat random in their effects, so that some companies got lucky (though some probably did have better risk policies).
And I really don’t understand the claim about certain countries having more rational systems which over centuries led to their current improved “ways of life.” I assume this refers to the highly industrialized countries. Was their growth only .5% more per year than other countries? Was the Tsarist rule of Russia more rational than that of imperial China? Or Great Britain more rational than Denmark? I highly doubt that amounts of rationality is what explains the current economic distinctions between countries.
Finally, there is the cliche about finance professors—if they really understood it, why aren’t they rich? Similarly, why not start a company using x-rationality to guide it? Find, for example, a new small business that is growing, and just do the same thing—only using x-rationality.
From the OP: “Whereas a rational individual is still limited by her individual intelligence, creativity, and charisma, a rational group can promote the single best idea, leader, or method out of hundreds or thousands or millions.”
GIGO. At any given time, the rational group will be limited by their consensus beliefs and mental models. (Indicator of group quality—do their mental models improve over time?) Rationality is just a tool for uncovering truth. I’ve often found that I’ll go to work on a hard problem using rigorous intellectual tools (Mathematics, on which rationality is based) but then I’ll be flummoxed and have to set it aside. Then the answer will pop into my head the next morning as I’m eating breakfast, at which point I’ll use math to validate the intuition I’ve just had.
Sometimes we need to stumble on the truth by accident or other non-rational means. Can rationality help us if we don’t even know the right questions to ask in the first place? I think it’s a powerful tool, not a panacea.
We may well benefit from rationality, but that doesn’t mean all of the answers we seek will come sliding down the chute when we turn the crank on the machine. However, I will say that it is a fantastic filter for revealing which are the wrong answers.
Toyota is an example of a company that utilizes rationality for a competitive edge. Whenever they have an assembly line problem, they go through the “Five Whys” exercise. Ask “why” iteratively five times. Why five? It’s a manageable number, usually enough to get at the real underlying issue, and you have to set some fairly low limit, otherwise employees doing the exercise will keep quitting their jobs and go off to live in the woods to live as philosopher ascetics.