Wednesday, June 18, 2008

The Divine method for success

Intro: Dibros' need for motivation

In his intro to the Torah, Ralbag presents Torah as a divine method for success. Key to this method are the Dibros -a ten step approach to implementing the divine method. As Ralbag explains it these “steps” follow a specific order-one must first liberate oneself from an opposing method for failure and then incorporate a method for success. While this approach seems to make some intuitive sense, it also fails in an important way. The reader naturally asks himself-what exactly is the experiential basis for this approach of the Ralbag and where do we see evidence for this basis in our own lives? Surely if we are currently enslaved to a method for failure, the consequences should be readily apparent in our experience! Only the reader who has been persuaded of the failure of his current method would ever consider seeking liberation via a new course for success.

In reality this evidence is embedded in the premises of Ralbag, these merely need to be revealed. Let us begin with the first Dibrah- Lo Tachmod.

Lo Tachmod- liberation from Ego centric methods for failure

In his treatment of “Do not Covet” Ralbag identifies the root cause of failure- egocentrism. One who covets, by definition, formulates a world ordered around himself. In order to appreciate the true impact of such an act,the immeasurable destructive power it has to the success on man, we must consider the way in which success must be pursued.

Successful people, be they craftsman, professionals or whatever, succeed by virtue of planning. This commitment to planning is hard won. It is not accidental that so many businesses fail. We want to believe that our dream, beloved to ourselves is realistic, will be beloved to all and will necessarily succeed. Rarely if ever is this the case. The economy is littered with vast numbers of businesses more than 90%, of businesses that fail. At the macro level we saw this in the internet bubble.The fundamental premise of the bubble was that the internet released man from the laws of economics. The result was that the fantasy bubble burst, leaving so many businesses in bankruptcy, thousands of dreams shattered. More recently we saw this in the credit industry. Here too the false assumptions that loans could be somehow spun to poor risk borrowers, in contradiction to economic realities. The result again was that the fantasy bubble burst, leaving so many businesses in bankruptcy, thousands of dreams shattered.

It is experience of and a healthy dread for such magical thinking, the notion that one may merely dream without taking account of underlying causal factors that is the bedrock of success. The chazal crystallize this lesson into a dictum in Pirkei avot- אין בור ירא חטא- a dreamer without experience has no dread of magical thinking.

To covet anothers house, wife or any other beloved possession is to plan one's own benefit in total disregard for the concept of man as a social being who gets benefits through intelligentally managing shared economic resources. As pleasant as the tactical “benefit” may be- it comes at the expense of strategic loss. The pyrhic victory is dreadful to the experienced man. How could one not dread reconnecting oneself to the dreaded magical thinking that has been the source of all failures?

1 comment:

Haimson said...

Very interesting post,
A few things...

The basis of a market economy is the fact that we covet each others assets. That is what makes the system work. That is why private property is a success while state/bureaucratically controlled lands and businesses are failures.

The fact that most businesses fail is not due to the inadequacy of man's planning, but due to the tumult of the marketplace. Inorder to succeed in the market one must invest capital and labor into a concept that is based on one's own flawed sense of perception of the demands in the marketplace. The fact that we were able to advance this far with such an anarchic system speaks volumes of the benefits of the system.

Also, don't forget that many businesses fail after a long period of success, that is another aspect of the market (creative destruction). Ask the buggy makers how they felt after Henry Ford starting his work.

Now when it comes to bubbles you have to realize that bubbles form around all booming industries. The life cycle that most new industries follow are quite standard: An individual or group of individuals revolutionize the marketplace with a new innovation, they go through a period of isolation or doubt from the market until they are shown to be profitable, slowly the elite of the market jump on the train as it's leaving the station and you have a runaway success. The problem begins when it becomes so mainstream that the mainstream market believes that they too can prosper from it, what happens then is that you have huge malinvestment due to the hubris of many credit institutions that release more credit into the market than can be handled. This over investment causes huge problems which develop into a bubble and can only be fixed by a correction (most economists cannot predict when or if a bubble has formed). Then you usually see a mass wipeout of mainstream investors, and then the industry that has grown up around the new innovation settles down and becomes more stable (Tech Sector is pretty hot today).

But the interesting thing that happens is that the over investment during the bubble years may have long term benefits, such as the Trillions of dollars spent on fiber optics that have never been used (And that caused Global Crossing and the like to go bankrupt) are being used by developing nations at marginal cost, helping develop huge nations and bring jobs and new businesses to the world market.

Self interest and a dynamic free market have been the hallmark of human achievement in my view. What you (and the Ralbag) are suggesting is quite vague and similar in sound to other plans that call for economic planning in the mold of an elite or some philosophy. While I agree that this cycle is quite destructive to some parts of humanity, there really is no other system out there.

And just to make a final point, it is impossible to enlighten everyone to the point that they realize that by acting in accordance with a higher philosophy when it comes to their economic affairs is the best way to go, and we must realize that having people act in their own interest has worked thus far. Whenever we don't have self interest (brilliantly understood by the proponents of private property) we have inefficiencies in the economy that cause undue suffering to the entire population.

http://en.wikipedia.org/wiki/Tragedy_of_the_commons