TED Talk -- Barry Schwartz: The real crisis? We stopped being wise

I think of Barry Schwartz seems as the anti-Ben Stein. They look somewhat similar, but Schwartz is smart and insightful while Stein is not. Here's Schwartz's fascinating presentation at TED2009 about his research into wisdom.

Barry Schwartz makes a passionate call for “practical wisdom” as an antidote to a society gone mad with bureaucracy. He argues powerfully that rules often fail us, incentives often backfire, and practical, everyday wisdom will help rebuild our world.

Barry Schwartz: The real crisis? We stopped being wise

[#1 posted by noen , February 16, 2009 5:53 PM]

Sure but wisdom is really hard to do. It's much easier to fake it. Because you really can fool some of the people all of the times.

[#2 posted by Petey , February 16, 2009 6:14 PM]

Schwartz's talk sounds all well and good, and, as someone who studies the law, you won't find someone who agrees more that slavish obedience to procedure (neglecting the context within which that procedure arose and the forces which created it; i.e. the spirit of the law, rather than its letter) often creates problems.

But I think he misses the mark.

"A society gone mad with bureaucracy" is dangerously close to the laissez-faire thinking that led to the current financial crisis, for example. Worse, many people have described how what Schwartz calls "practical wisdom" *led* to the crisis.

You can't compare empathy to derivative trading. Does not compute.

[#3 posted by retchdog , February 16, 2009 6:35 PM]

Unfortunately, wisdom is ineffective without the courage to speak it. It's in everyone's (short-term narrow-minded) interest to kowtow to their bosses, who are, by design, unaware of their underlings' circumstances.

Ideally the unawareness would be good, since "interrupts" could propagate up the chain when necessary. But this doesn't happen enough.

[#4 posted by chris , February 16, 2009 7:00 PM]

@#2 PETEY:

""A society gone mad with bureaucracy" is dangerously close to the laissez-faire thinking that led to the current financial crisis, for example."

I would love for somebody to actually convince me of this, and actually clearly and soundly argue this point. I believe that regulation has to be in play to protect people rights, but "laissez-faire thinking" didn't create our economic situation.

I would recommend checking some books out from the library or checking out the many free economics podcasts.

[#5 posted by noen , February 16, 2009 7:12 PM]

@ chris - Laissez-faire thinking has without a doubt lead to the market crisis. We've had over twenty years of free market ideologues at the federal reserve. The proponents of laissez-faire economics have had a free hand for long time. But... this is all off topic.

Barry mentions moral will and character as two things he'd like to see more of. I agree with him and notice that these are traditionally associated with conservative values. It's sad in a way, that these are so lacking from our current conservatives. Perhaps there is an opportunity there?

[#6 posted by pukool , February 16, 2009 7:39 PM]

@NOEN, PETEY

Read "Andrew Cuomo and Fannie and Fredie: How the youngest Housing and Urban Development secretary in History gave birth to the mortgage crisis" by Wayne Barrett in the Village Voice (easily found online through Google).

Last I recall, the Village Voice wasn't a conservative magazine, giving loans to people who can not afford them was not laissez-faire, and HUD was not the Federal Reserve.

If you could provide references that refute these statements, or back up your own, that would be lovely, thanks.

[#7 posted by Shay Guy , February 16, 2009 7:44 PM]

Unfortunately, wisdom is ineffective without the courage to speak it.

Yes, but where does power come into it?

[#8 posted by Brainspore , February 16, 2009 7:47 PM]

So Barry Schwartz's remedy for the economic crisis is "everybody should stop being so stupid?" How does that translate into policy, exactly?

[#9 posted by zuzu , February 16, 2009 7:49 PM]

@ chris - Laissez-faire thinking has without a doubt lead to the market crisis. We've had over twenty years of free market ideologues at the federal reserve. The proponents of laissez-faire economics have had a free hand for long time. But... this is all off topic.

Around and around we go on this, Noen. Your "laissez-faire" is a strawman argument. We've never had anything remote like laissez-faire at least since the USA went off the gold standard (beginning in 1901 to fund the Great War -- c.f. Six Months That Changed the World). "You keep using that word. I do not think it means what you think it means."

From More Awful Truths About Republicans by Robert B. Ekelund and Mark Thornton:

Harmful military spending, unbalanced budgets, fiscal irresponsibility, protectionist and monopoly handouts to friends is the old style Republican playbook. The new style is audacious, unprecedented, and truly awful for the economy. It begins with the Republican-controlled Federal Reserve, which, under Alan Greenspan and Ben Bernanke, has flooded the economy with money and credit and bailed out every economic crisis since 1987. Greenspan's admonitions against "irrational exuberance" apparently were not intended to restrain the Federal Reserve's irresponsible monetary policy. Who in their right mind could honestly say that the Fed had nothing to do with the housing bubble after driving the nominal interest rate to 1% and proclaiming that the mortgage market was well regulated?

But an insidious form of "market-based policy" is also a real culprit in the current mess. In 1999 a bill was passed by a Republican Congress and signed by Democratic President Bill Clinton that rescinded the Depression era's divorce of commercial banking activities from investment banking, called the Glass-Stegall Act of 1933. That opened a floodgate of "creative" financial instruments backed by notes and other commercial paper. Much of the banking regulation of the Roosevelt administration — including abandonment of the gold standard — made absolutely no sense, but markets can fail with dire short-run consequences under a fiat monetary system. With Glass-Stegall, Congress put its finger on and mitigated the tendency and temptations of banks to create massive costly externalities to society, in this case, by holding bundled mortgage-backed securities which were deemed safe by rating agencies but which ultimately failed the market test.

The Financial Services Modernization Act of 1999 would make perfect sense in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance; but in the world as it is, this "deregulation" amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly. Such government privileges are nothing new to Republicans — consider the effective subsidies to the pharmaceutical, sugar, and steel industries — but this particular gift to financial institutions is what allowed the credit bubble to expand to such absurd proportions, because it allowed banks of all types to engage in increasingly risky transactions and to greatly expand the leverage of their balance sheets. As the crisis unfolds, credit continues to contract, the risk of bank failures increases, and the possibility of far more serious economic consequences become more apparent. The S&L crisis cost the taxpayers a few hundred billion, but this crisis has the potential of saddling the taxpayer with several trillion in bailouts.

So far, the Republican solution has been to bail out lenders — wealthy financial-industry professionals for the most part — who made unwise market decisions with subsidies and election-year subventions. With Hank Paulson, the former CEO of Goldman Sachs, as Secretary of the Treasury and the big banks on the Board of Directors of the New York Fed, it should not be too surprising that the Fed has been listening only to Wall Street while ignoring Main Street.

[#10 posted by Uland , February 16, 2009 7:52 PM]

NOEN- I think you're right to identify the nugget at the center of his speech as Conservative in nature.
Calls for deep-rooted wisdom are lacking in mainstream Conservativism, sure, but there are plenty of holdouts.
Ive found the Post Modern Conservative blog to be a good resource:
http://culture11.com/blogs/postmodernconservative/

[#11 posted by zuzu , February 16, 2009 7:53 PM]

Unfortunately, wisdom is ineffective without the courage to speak it. Yes, but where does power come into it?

Rather than trying to take away power from those who have it (who will also use said power to protect it), we must generate tools of power to those who are currently lacking -- such as publishing via the Internet, Free Software, open-source hardware, amateur radio, chemistry, and DIYbio.

In other words, disruptive technology: Tools for Conviviality / tools for thought.

[#12 posted by zuzu , February 16, 2009 7:56 PM]

So Barry Schwartz's remedy for the economic crisis is "everybody should stop being so stupid?" How does that translate into policy, exactly?

John Taylor Gatto has some ideas for the compulsory education system.

c.f. hidden curriculum, Pedagogy of the Oppressed

[#13 posted by zuzu , February 16, 2009 8:11 PM]

In other words, disruptive technology: Tools for Conviviality / tools for thought.

Barry Schwartz makes a passionate call for “practical wisdom” as an antidote to a society gone mad with bureaucracy. He argues powerfully that rules often fail us, incentives often backfire, and practical, everyday wisdom will help rebuild our world.

I also want to take this opportunity to again highlight how amazing Doug Engelbart is. From his Augmenting Human Intellect thesis:

By "augmenting human intellect" we mean increasing the capability of a man to approach a complex problem situation, to gain comprehension to suit his particular needs, and to derive solutions to problems. Increased capability in this respect is taken to mean a mixture of the following: more-rapid comprehension, better comprehension, the possibility of gaining a useful degree of comprehension in a situation that previously was too complex, speedier solutions, better solutions, and the possibility of finding solutions to problems that before seemed insoluble. And by "complex situations" we include the professional problems of diplomats, executives, social scientists, life scientists, physical scientists, attorneys, designers--whether the problem situation exists for twenty minutes or twenty years. We do not speak of isolated clever tricks that help in particular situations. We refer to a way of life in an integrated domain where hunches, cut-and-try, intangibles, and the human "feel for a situation" usefully co-exist with powerful concepts, streamlined terminology and notation, sophisticated methods, and high-powered electronic aids.

Man's population and gross product are increasing at a considerable rate, but the complexity of his problems grows still faster, and the urgency with which solutions must be found becomes steadily greater in response to the increased rate of activity and the increasingly global nature of that activity. Augmenting man's intellect, in the sense defined above, would warrant full pursuit by an enlightened society if there could be shown a reasonable approach and some plausible benefits.

This report covers the first phase of a program aimed at developing means to augment the human intellect. These "means" can include many things--all of which appear to be but extensions of means developed andused in the past to help man apply his native sensory, mental, and motor capabilities--and we consider the whole system of a human and his augmentation means as a proper field of search for practical possibilities. It is a very important system to our society, and like most systems its performance can best be improved by considering the whole as a set of interacting components rather than by considering the components in isolation.

This kind of system approach to human intellectual effectiveness does not find a ready-made conceptual framework such as exists for established disciplines. Before a research program can be designed to pursue such an approach intelligently, so that practical benefits might be derived within a reasonable time while also producing results of longrange significance, a conceptual framework must be searched out--a framework that provides orientation as to the important factors of the system, the relationships among these factors, the types of change among the system factors that offer likely improvements in performance, and the sort of research goals and methodology that seem promising.

[#14 posted by noen , February 16, 2009 8:26 PM]

Zuzu et al. I'm not going through this again. There's no point and it's off topic. I'm sorry I even brought it up.

@ Uland - Post Modern Conservativism? Whoa, thanks for that. I'd never heard of it before. Though one has to wonder how something like that (and I'm not even sure what it is at the moment) would take hold or replace today's conservatives.

"Unfortunately, wisdom is ineffective without the courage to speak it. Yes, but where does power come into it?"

I'm not sure but I think that what Barry is talking about is that the leader of any organization would cultivate an environment where one is encouraged to speak up. That excessive attention to ethics classes and incentives are counter productive.

[#15 posted by chris , February 16, 2009 9:55 PM]

@ZUZU: Thanks for the time and effort to post more eloquently than I have time for.

@NOEN: Is all this off-topic? I think it is the heart of the conversation. We need to be able to think for ourselves and make our own decisions... we don't need to have a large central government making every decision for us.

I think debate is what makes humanity great, and topics like these are very heated, and I welcome them to be discussed ad nausem. : )

p.s. I'm reading "The Road to Serfdom" by Hayek, so my thoughts have been very focused on many of the themes presented in the book.

[#16 posted by Ugly Canuck , February 17, 2009 5:12 AM]

This guy...how is this "wisdom" any different than the "wisdom" peddled by Stein?
Here's some wisdom: He who f***s nuns, will later join the Church.
Of course the wealthy and fawned-upon have always been wise, eh? At least, they were wise to something...

[#17 posted by Ugly Canuck , February 17, 2009 5:31 AM]

yeah let's spend our time jawboning about wisdom - then we'll have less time to look at what has been going on...like this (bigger fraud than madoff, brought to you by the US Army and their wise free-market friends)...but it won't get much media play, for that would not be wise (or lucrative):

http://www.independent.co.uk/news/world/americas/a-fraud-bigger-than-madoff-1622987.html

yeah, that's the problem, we were not wise enough...

[#18 posted by GuidoDavid , February 17, 2009 6:47 AM]

Power is not a zero sum game.

[#19 posted by Alexandre Van de Sande , February 17, 2009 7:50 AM]

he says on the video:
"Too many rules stop jazz musicians from being great"

I thin this sums up what I mostly disagree with the video: great people are those who learned the rules enough to incorporate them and be able to know when and how to break them. A great jazz musician will be able to break the rules and go on his own, while the rules will help tons of average musicians do a nice (not great no mediocre) job.

In no place this rule is more evident than in modernist architecture. By breaking all conventions and saying that no rules are really needed the greatest Modernist Architects built beautiful works of arts of pure concrete. But the greatest architects were always able to build the greatest works of art, rules or no rules.

Meanwhile, the mediocre architects of the world -those who build the things we actually live and work in - built those horrific cement blocks we see in in the city. In past centuries, simple rules - like "follow a golden proportion" "build metopes between two triglyphs of a Doric frieze" have allowed mediocre architects to build thousands of passable houses and temples.

[#20 posted by Anonymous , February 17, 2009 8:53 AM]

Yeah...Ben Stein is so dumb that multiple presidents selected this complete idiot to write speeches and be an adviser to them. Oh, but the presidents were stupid right? Well, they only ran the single most powerful entity in the entire world..the United States of America...so they must have been truly stupid.

Ever since Stein's documentary came out he's been labeled stupid and an idiot. News flash: He didn't change. His IQ didn't drop. Your opinions of him probably did change. Everyone knows that if you don't believe in Evolution, you're an idiot right? That being the case, 6 out of 10 Americans are idiots.