ECONOMIZING FATE
© Charles Njue 2010
(Approx. Reading Time: 11 mins)
A famous Zen parable goes something like this:
"During a momentous battle, a Japanese general decided to attack even though his army was greatly outnumbered. He was confident they would win, but his men were filled with doubt. On the way to the battle, they stopped at a religious shrine. After praying with the men, the general took out a coin and said, "I shall now toss this coin. If it is heads, we shall win. If tails, we shall lose. Destiny will now reveal itself."
He threw the coin into the air and all watched intently as it landed. It was heads. The soldiers were so overjoyed and filled with confidence that they vigorously attacked the enemy and were victorious. After the battle, a lieutenant remarked to the general, "No one can change destiny."
"Quite right," the general replied as he showed the lieutenant the coin, which had heads on both sides."
There are two types of people in the world; those that see signs, omens, they believe in fate, fatalism - that inevitable and often adverse outcome. They believe that all events are determined by the divine will or some force greater than man, that every event must take place as it does because it has been predetermined. This form the majority of the people, they are easy to know really - ever heard someone tell you that everything happens for a reason? Then there's the other kind - those that see nothing but sheer coincidences, mere happenstance. These are a very rare kind. So which one are you?
Job 14:5
5 Man's days are determined;
you have decreed the number of his months
and have set limits he cannot exceed.
Think about death for instance, do you believe that there's a predetermined fixed moment for an individual to die? This belief was popular among the Greeks and Romans. According to Greek mythology, the fates were three goddesses that span the thread of life, determined its length and cut it.
I don't know which of the two you are, but one thing I know for sure is that smoking is bad for your health and that wearing a safety belt is beneficial no doubt. Why? Because on average smokers die three to four years younger than non smokers, and that fewer accidents are fatal when passengers wear seat belts or when drivers obey traffic laws. No one can dispute the logic behind taking precautions. A battle field during war isn't as safe as one's home away from the war zone. Everyone cares for their health or takes their children to a doctor. The big question is "why should they?" If we truly believe like what a majority of the people believe, that everything happens for a reason, that we have a preordained fate, a destiny, that each one moment and even our manner of death were already fixed at birth or even earlier, why then do we take these precautions? Why do we avoid dangerous situations yet all these precautions will in no way alter mortality rates or time?
I guess the question that we then naturally glide to is – "is everything that happens 'The will of God?'"
Ecclesiastes 9:11
11 I have seen something else under the sun: The race is not to the swift or the battle to the strong, nor does food come to the wise or wealth to the brilliant or favor to the learned; but time and chance happen to them all.
So you may be swift, and still not win the race, and you may still take precautions, and chance still gets the better of you? If we worked under the premise that God preordains everything that happens wouldn't we then be painting a conniving monster of God?
Scientists study past occurrences, and based on an accumulated wealth of experiences are able to make quite accurate predictions about the future. Weather forecasting these days is quite often on spot; your weather forecaster knows exactly what the weather will be like for the next 1 week. He might not like it, and he definitely has no power to alter it, yet still, he knows. Now imagine the wealth of accumulated knowledge that an all knowing God, who has lived eternally might have accumulated over the years. He is in a position to know exactly how your life's going to turn out. But knowing is one thing, and controlling is another.
Proverbs 10:27
27 The fear of the LORD adds length to life,
but the years of the wicked are cut short.
God clearly does know, but doesn't interfere or influence it in any way, he leaves it all to the person's free will, a man's destiny is clearly and entirely in his very own hands. It's like a man with a radio. He knows that the football match airs on Sunday at 4.00pm, but his knowing doesn't uprightly say he will certainly watch the match, he still has to turn on the TV and switch to the specific channel to watch the match. God is so disciplined that despite his ability and capability to turn on the TV and affect people's lives, he chooses not to, he chooses to let them make that decision for themselves.
The world today leans on a number of postulations that seem to lay a finger on occurrences in our daily lives. Man likes to attach a celestial meaning to things, including his very own existence – I have previously mentioned this tendency to symbolism in the article "language; in thine words, there lies the truth". Astrology for instance, I have heard people say that a star is born for every child born, and you can tell the well being of someone's life by examining the strength of their star. Could this be true? It might as well be, quantum physics has given us a clear indication of just how dynamic and interconnected the universe is. New galaxies are born every now ad then and new stars every minute. Celestial bodies are always crashing into each other – it could be ultimately true that the birth of a star represents a new human birth, and death also means the demise of a celestial body, but this scientific knowledge of an expanding and warping space, and black holes that swallow everything are nothing but a fascination to me – astrology is not the thing for me, matter fact, I never paid any attention to the column in the papers.
And talking of fascinations, few things do actually fascinate me; the theory of relativity, the human mind and its warped perceptions on reality, or just simply a well crafted story in a novel or a movie. Another fascination I confess to is and Economics. I truly believe that a good grasp on economics can help one make a great deal of sense of the world and how it works; a better understanding of God, or of
Think about a market for instance; See how it coordinates individual's actions in a very impersonal manner. No one orders buyers to reduce quantity demanded when price increases, they just do it. No one orders sellers to increase quantity supplied when price increases, they just do it. No one orders more resources to be moved into the production of personal computers when the demand and price for personal computers increases. The market coordinates individuals; bankrupting some and turning others into billionaires without them even knowing it. They might think they are doing it but are they? These coordinated actions lead suppliers and demanders to find mutual satisfaction at equilibrium.
"Individuals in a market setting are 'led by an invisible hand to promote an end which was not part of their intention"
Economist Allan Smith.
We might say it's the hand of God, or Darwin might have argued its natural selection – survival for the fittest – at play, but that's just how it is, the invisible hand is always at play – coordinating and influencing everything – we all sense it, and interpret it in numerous ways – it acts impersonally, with little regard to individual players, but none can escape it, even the so called 'New Agers' and 'Free Thinkers', that's just how it is with reality – it's hard to lay a finger on it, it remains a mystery, invisible and behind the veil, inescapable, inexplicable, inevitable.
Our feeble minds can only start making sense of the 'way of things' by splitting the whole into constituent units. An economist is aware of the invisible mysterious hand of the market, to try and make sense of it he splits the market into its constituent firms. Now he can contrast the invisible hand of the market with the visible hand of a manager in a firm. Who tells the employee in the office to put in extra hours? The manager does. Who tells the employee to design a new brochure, to paint the walls green, to put kunde and fish on the menu? The manager does. Thus both the invisible hand of the market and the visible hand of the manager of a firm can coordinate individual's actions. There's in other words, two levels of coordination – market and managerial coordination. And so it is also with all of reality and existence. There's the invisible hand at play, the hand of God if you allow me, then there's our own managerial capacity which we exercise through decision taking. The invisible hand might represent fate, destiny, you may argue, beyond our control – but our decisions throw our input right into the thick of things.
Fate, Destiny or Choice? I'd think both. But the question still lingers, we still insist – how can it be both? We can only settle for either – both is not a good enough answer for us – we just have to label things into either black or white, gray areas aren't acceptable within the confines of our intelligence. Why do we humans insist on labeling the world into right and wrong, high or low, to be or not to be. So we'll go ahead and indulge the play. An economist would therefore ask,
"If the market is capable of guiding and coordinating individual's actions, why did firms (and Managers) arise in the first place?"
Why do firms exist in other words, if the invisible hand is capable of running things, why grant us choice, why free will? I have said quite a bit on free will previously in the article "A Choiceless Effortless World" and what a fallacy the concept might be, but let's look at this afresh, from another perspective. Economics suggests an answer to this age old question:
Synergy: sometimes the sum of what individuals can produce as a team is greater than the sum of what they can produce alone.
Consider 11 individuals, all making wooden carvings. Each working alone produces 10 carvings per day, for a total daily output of 110 carvings. If they work as a team, however, the same 11 individuals can produce 140 carvings. The added output 30 carvings may be reason enough for them to work together as a team. If the maximum speed attainable by rolling a round marble down a slope was 50kph, what would be the fastest speed if you let go ten marbles at one go? Would it not still be 50kph, what if you could somewhere fit the marbles into one big round marble? Doesn't their combined weight build up a momentum that increases the speed to more than 50Kph? So the invisible hand tolerates the visible hand in order to tap into the synergies of collective action. Collective action plays for the greater good of all.
By granting individuals the freedom of choice, does that promote or inhibit collective action? One might argue that choice implies preference and a preference is of course synonymous with an individual's personal liking. A preference is undoubtedly a bias towards what's perceived as beneficial to oneself, which would seem to directly advocate selfish tendencies to promote individual gain.But like we have learnt in this column so often now, we have to raise a mutiny to question the obvious, and also the not so obvious. Questioning is the key to awareness. Before answers come questions. The most important question is sometimes simply "Why?" Economists ask "why do firms exist?" This may seem as obvious as asking "why is there a sun?" but as we have seen many a times before, asking seemingly obvious questions, as well as less obvious ones, and then attempting to answer them, can expand our knowledge of the world. Why is the price of a car 850,000/=. Why do consumers buy more when price falls? Economists and other scientists are a lot like kids, they are forever asking why? So our why question for today then becomes:
"If preference advocates for selfishness, why does the invisible hand – God – encourage it?"
"You must take personal responsibility.
You cannot change the circumstances,
the seasons, or the wind, but
you can change yourself"
- Jim Rohn
How does the freedom of choice translate to collective action? The insatiable motive of every human, and probably of every species, to benefit themselves sooner than later drives them to realize the possibilities of synergies in teamwork. It's a paradox really, that individualistic motives, self enhancement and preservation, leads to collective action. We are so keen on self preservation that we are willing to collaborate with others so long as we gain more. Sooner than later we realize that:
Together
Each one of us
Achieves
More
TEAM.
So the invisible hand gives us these selfish motives so that he can achieve his intentioned end faster. This suddenly does seem like very high level manipulation.
But like with all things, good or bad, there's another side to the coin. Despite the apparent benefits of collective action, it also brings some disadvantages. Back to economics, one problem of people working in a firm as a team is shirking – which refers to workers putting forth less than agreed effort. The amount of shirking increases in teams because the costs of shirking to individual team members are lower than when they work alone. Consider five individuals working together to produce porcelain cups on an average day they produce 140 cups and sell each for 20 shillings. Total revenue is 2800/= and each individual takes home 560/=. Then Mark begins to shirk and production falls to 135 cups per day and total revenue to 2700/=. Each person now receives 540/=. Notice that Mark did all the shirking and that revenue fell by 100/= but Mark's reduction is only 20/=. Mark causes all the trouble, but only suffers a fifth of the consequences.
In such situations where one person receives all the benefits of shirking and pays only a part of the costs, it's easy to predict there will be more shirking than in situations where the person who shirks bears the full cost of his shirking. In a way, working together as a team increases the temptation for one to take advantage of others – it introduces a vice into the system. This is so especially considering that shirking comes with some form of satisfaction, from which individual obtains utility – isn't it a form of leisure.
In the very same way, by introducing the freedom of choice, the invisible hand also introduced vices into the system – the temptation for others to take advantage of other people increased the need for shortcuts, and thus evil and sin were born.
Taking care of shirking
To take care of shirking, individuals in a firm agree to appoint one of their own to be a monitor (manager). This is an internal control; a manager is the person who reduces the amount of shirking by firing shirkers and rewarding the productive members of the firm. In the same token, individuals also have an internal self correction/check mechanism that ensures they serve for the greater good – a conscience.
So our conscience serves as our own personalized internal manager; judging, rewarding and reprimanding. But even in a society or even in a firm made up exclusively of extremely conscientious and hardworking people, shirking still remains a problem, especially if the perceived cost of shirking, or committing vice, is seen to be considerably lower than the utility obtained (pleasure derived). In other words the lower the cost of shirking the more individuals will shirk – ceteris paribus. Given the chance, some people will shirk more than others – people will always have inclinations to shirk.
To curb this, there must be a seemingly severe mode of punishing vice and rewarding virtue. So besides just the internal consciencetal control, the invisible hand also checks shirking through an incentive based reward/reprimand system. Call it KARMA, hell and heaven, kismet, happenstance or whatever you may, but universally, all our actions and/or inactions have more than just obvious consequences, it's the action/reaction principle at play, good bears good and evil sires evil – and that can be seen as fate, destiny, coincidence or choice whichever works for you.
Can you now see the power of the "WHY?". WHY the coin MUST have two sides to it? WHY some traders survive the market and other don't? WHY there has to be billionaires and destitutes? WHY you are able to discern right from wrong - the conscience? WHY there has to be a heaven and a hell - Karmic Laws? Is it FATE? Is it DESTINY? or is it just old lady LUCK? RANDOM events? Maybe it's CHOICES, maybe its APTITUDE? As is the case always, you be your own judge. As for me; aluta continua - the search continues. See you around.
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