How’s your ‘adaptive efficiency’?

I’m two-thirds of the way through Arnold Kling’s and Nick Schulz’s book From Poverty to Prosperity and I highly recommend it.  The authors’ prose is crystal clear and for each of their concepts they include the dialogue of interviews with folks who were key in discovering or developing the idea, which I find extremely useful and interesting.

One such interview is with Douglas North, 1993 winner of the Nobel in economics.  In it, North describes what is meant by adaptive efficiency.  It’s worth understanding.

The idea is that the world is changing and (p. 158):

…since you don’t know which way the world is changing and you don’t know what’s right or what’s wrong with these things, one characteristic of adaptive efficiency is that you must permit lots of trials and errors in the world.  That means you encourage institutions that allow people to make mistakes, that allow them to try new ideas, and you encourage the destruction of institutions that don’t work, because one of the problems with organizations that are created by institutions is that they tend to create vested interests and then you can’t get rid of them.

I think this captures the key to a long-running, successful organization.  Organizations that allow the vested interests to block trial and error adaptation will eventually lose out to organizations that encourage it.

A few pages later, North makes a parallel observation in regards to individuals (p. 163):

We should be very tentative about how we understand the world.  That doesn’t mean you don’t do things. You’ve got to do things, but you’ve got to recognize you may be wrong. We don’t know enough.  And so it’s terribly important to recognize that you can be wrong, and to be, therefore, very susceptible to modifying the theories you hold in the light of new evidence.

Now as I said, that doesn’t mean you don’t do anything; you’ve got to do things.  It does mean that you’re willing to be adaptively efficient [in the face of] change and to rethink the problems as you evolve.

These passages are similar to advice from Felix Dennis that I’ve posted about previously.  Be persistent, but not to the point of being stubborn.  If something’s not working, realize it, drop it and move to the next thing (persistence), don’t keep doing the same thing over and over again (stubbornness).

These passages also made me think of two norms built into our mental models that resist change for the better.

One norm is the belief that failure is bad.  The other is that we don’t like to be wrong.

Both norms are tied into our individual pride and self-esteem and I believe they are reinforced from an early age and may be at the very heart of what is wrong with our education system.

This also reminds me of Salman Khan’s statements about learning in this post.  Folks master bicycle riding because the “institutions” (or our beliefs) around bicycle riding encourages trial and error (“if you fall down, get back on and try again”) and expects mastery.  But with math and reading, our “institutions” (education system) penalizes trial and error and failure, but does not expect mastery.

How are you raising your kids?  Do you encourage them to experiment and that it’s okay to be wrong or to fail?  As a father, I know that’s tough.  You naturally want to see your kids succeed and you definitely don’t want them to experiment and fail with stupid stuff like irresponsible behavior (though facing the consequences of such behavior usually inspires some quality learning).  But, maybe we should give them a little more leeway to experiment and fail in productive pursuits.

How’s the adaptive efficiency in the organizations that you are a part of?  It’s not good with mine.  There’s an abundance of folks that believe they need to get it right the first time, and are often disappointed when they don’t.  There’s also an abundance of folks that seem to try the same things over again even when past experience gives plenty of clues that it will not be successful.

I will post more from the Kling and Schulz book in future posts.



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