Wayne Wilson on Companies in Transition

A pretence of knowledge

Many areas of the modern world - including politics , business, and economics - suffer from the same malady: a pretence of knowledge.

We claim knowledge to justify our decisions, actions and opinions when in reality we are often "making it up  as we go along." Assumptions (often undisclosed) take the place of empirical evidence, rationalization masquerades as theory, and unspoken biases underpin our "thoughtful opinions."

Occasionally, a truth teller emerges to call his fellow travelers to account. Such is Paul Romer, chief economist at the World Bank, who has recently begun castigating his fellow macroeconomists for what might be termed their wooly thinking. (The Economist, 9/24/16)

Sound decision making requires clarity about what we know and what we don't know, what the risks are and how much risk we are willing to take, and what we might do next when our plans inevitably fail to pan out the way we had hoped. 

Vision and sacrifice - two sides of the same coin

In the current presidential contest, the pundits have often referred to a particular candidate's vision or lack thereof. President Obama has a vision although many people may not like it. Governor Romney often seems to have none or at least none that he is willing to share clearly.

The real question has to do with the other side of the coin: the sacrifices that must be made to achieve a particular vision.

Mr. Obama has been clear. His vision encompasses a European style big government empowered to address all the basic needs of its citizens. Unlike the Republican candidates, he is at least partially willing to talk about the sacrifices which must be made to achieve his vision - more and higher taxes.

Initially, Mr. Obama claims that only the rich must pay more (an easier message to deliver to the middle class). But he too is disingenuous. A European-style welfare state will require everyone to pay more in taxes - a lot more.

Visions require sacrifice.

Remember John Kennedy on America's defense of freedom: "ask not what your country can do for you; ask what you can do for your country."

And Ronald Reagan's "shining city on a hill" was backed up by the Star Wars defense initiative used to defeat the old Soviet Union - we beat them by out spending them.

Unfortunately, in politics, the sacrifices are often intended to be born by someone other than the visionary and those to whom he/she is appealing.