Another hat tip to David Morey; we have a dialogue going between emails, Facebook and the blogs, and David keeps picking up excellent source references. Here the latest example: A conference speech from the Bank of England analysing the banking crisis.
The Tower of Basel metaphor is about less is more – a few simple rules are better than a stack of complex regulations (a recurring theme in itself). Why ? Well, the opening quote says most of it:
Catching a frisbee is remarkably common. Casual empiricism reveals that it is not an activity only undertaken by those with a doctorate in physics. It is a task that an average dog can master. Indeed some, such as border collies, are better at frisbee-catching than humans.
So what is the secret of the dog’s success? The answer … is to keep it simple. For studies have shown that the frisbee-catching dog follows the simplest of rules of thumb: Humans follow an identical rule of thumb.
I’ve used the tennis player returning a fast serve before (the example quoted from Wegner) but the principle is the same. In reacting to dynamic situations (like living life, for example) it doesn’t pay to rationally analyse and calculate every objective variable involved, not forgetting all questions of predictability. Remember in the tennis example, there are two humans involved – add in game theory – not just one dog / human and an inanimate ball / frisbee. I’ll let you decide which is closer to economic behaviour. But, to succeed, it pays to have a minimum number of heuristic rules of thumb that can be applied instinctively.
This isn’t to say that objective, scientific analysis and empirical testing of all variables doesn’t add to knowledge of the situation (obviously), nor that heuristic rules shouldn’t be updated in the light of feedback from both theoretical and practical knowledge (again, obviously) – but remember, that dog isn’t actually doing calculations, even with simple rules.
The rules regulating reality should remain simple heuristics that can be applied instinctively – without rational objective analysis and calculation as part of the process of regulation.
“It’s not reality but it works better.”
To quote McGilchrist.
[Post Note : For the Wegner and McGilchrist references – see indirectly via this previous post, also bringing Dave Snowden into this whole agenda – the latter in particular is closest to this business management consulting context in recognising important pitfalls around simple and simplistic, chaotic, complex and complicated.]