Tim Harford, the "undercover economist", is a good writer who again has presented some complex economic topics to readers is a simple and engaging way. In his new book Adapt: Why Success Always Starts with Failure, he describes how success can come through trying, making mistakes, learning, and finally adapting. Through effective story-telling and case studies, Harford shows how the process of making mistakes we can improve when there is a complex world. This is similar to the work of Malcolm Gladwell in his books Blink and Outlier. Here the message is simple, trial and error works, so make more mistakes.
While this is a nice piece of economics, the real importance of this work is through helping anyone with their decision-making. We will get things wrong in a complex world, but if we except that and rely on experimentation we can improve. Accepting that we will make mistakes is not saying that we should engage in stupid behavior or that we should take risks that will harm ourselves. There has to be balance, but there also has to be the acceptance that there is no one way of doing things. There are multiple approaches for problem solving. There is a need for experimentation. It is this experimentation which leads to success.
The reason why we have to allow for failure or accept failure is that the world is a complex place. Complexity is the result of the interaction of many people and parts. There are no easy solutions so we have to engage in incrementalism through small changes and experimentation. Harford gives the example of the man who tries to build a toaster by himself. He finds that a simple machine like a toaster takes hundred of markets and the input of thousands. The toaster of today is the result of adaptation and failure. "The curious task of economics is to demonstrate to men how little they know about what they imagine they can design", Hayek.
The world is complex and it is hard to forecast. Most experts do not get it right. They make major mistakes given the complexity of the world, so we have to learn to adapt in the fog of complexity that we face. We have to make peace with loses and mistakes. This could be the most important result of behavioral fiance. We have to avoid changing our behavior with loses. As Daniel Kahneman has said, "A person who has not made peace with his loses is likely to accept gambles that would not be acceptable to him otherwise", and this is when there will be the greatest failure.
We have to accept or understand the knowledge of particular circumstances of time and place and this means that we have to adapt to the situation that we face and not be bound by set rules for our decision-making.
This is a rich book with a lot of important concept. You do not have to be an economist to enjoy this read and anyone who reads this book with think differently about the mistakes they make and how they adapt to change.
The reason why we have to allow for failure or accept failure is that the world is a complex place. Complexity is the result of the interaction of many people and parts. There are no easy solutions so we have to engage in incrementalism through small changes and experimentation. Harford gives the example of the man who tries to build a toaster by himself. He finds that a simple machine like a toaster takes hundred of markets and the input of thousands. The toaster of today is the result of adaptation and failure. "The curious task of economics is to demonstrate to men how little they know about what they imagine they can design", Hayek.
The world is complex and it is hard to forecast. Most experts do not get it right. They make major mistakes given the complexity of the world, so we have to learn to adapt in the fog of complexity that we face. We have to make peace with loses and mistakes. This could be the most important result of behavioral fiance. We have to avoid changing our behavior with loses. As Daniel Kahneman has said, "A person who has not made peace with his loses is likely to accept gambles that would not be acceptable to him otherwise", and this is when there will be the greatest failure.
We have to accept or understand the knowledge of particular circumstances of time and place and this means that we have to adapt to the situation that we face and not be bound by set rules for our decision-making.
This is a rich book with a lot of important concept. You do not have to be an economist to enjoy this read and anyone who reads this book with think differently about the mistakes they make and how they adapt to change.
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