Errors from Bad Theory or Unlabeled Assumptions?

People love to criticize a bad theory.  It must be bad, because it was wrong.  The theory predicted a specific outcome that did not come true or failed to predict an outcome that did come true.  Most theories missed the “Internet bubble” and the “financial crisis.”  The theories prescribed certain actions to achieve greater well-being and they failed to achieve that greater well-being.  They are also not able to explain what actually happens in examples of success.  Should we therefore throw out all of these theories?

I suggest that we don’t.  Many of theories were developed by very smart people working very hard over long periods of time, attempting to describe rigorously the actual phenomenon they observed.  So there might be something there we want to preserve.  What might, then, be another explanation for why the theories seem to not help us see what is happening?

I suggest that many of the recent errors in predictions come from unlabeled assumptions.  When we assume that the universe must work in a specific way, we take for granted some very important assumptions.  As we take them for granted, they often remain hidden, so we never test them.  I suggest that for most of us, political economics and the implications it has on our daily lives is full of this kind of unlabeled assumptions.  In this blog, I will briefly share anecdotal, qualitative data I have to support this, as well as initial quantitative data, and a deep review of the political-economic literature.

Anecdotally, I have asked thousands of people in over one hundred groups in a handful of countries in the Americas and Europe, over the past five years, about their experience of awful groups and great groups.  Through these conversations, we discover that people know the difference between awful and great groups, and they prefer great groups, yet they spend most of their life in energy-depleting group settings they describe as awful. They almost always say that the reason they do this is because they have to.  Then they always ask, “Don’t I?”  Yet when they compare these energy-depleting groups with energy-enhancing groups, they realize that the difference is in the explicit choice of the agreements.  They then realize that in most of the energy-depleting groups they never questioned the underlying agreements, which I have called the 4 questions that changed the world in an earlier blog post, and in many of the energy-enhancing groups they clearly chose the agreements.

This anecdotal evidence is supported by survey data we have collected from 1,750 individuals describing their experience of groups in 89 countries.  In these responses, we see that in the energy-depleting, fatiguing, low vibrancy groups, the agreements are given and people tend not to even realize they have accepted these agreements.  In the energy-enhacing groups much time is given to continuously exploring, testing, and being clear on the agreements that guide the group’s interactions.

From the literature review, we find these four big assumptions, which are described as separate fields of inquiry:  resource theory; allocation mechanism theory; value theory; and organization theory.  Each field has its own practitioners, philosophers, journals, conferences, language, and industry-wide standards of excellence.  And they are separated from each other.  They are so abstract, as I describe in a previous blog post, that they are unseen.

Put into plain English, these fundamental assumptions determine: how much we see of the resources around us (resources); who decides and enforces how to allocate those resources (allocation mechanism); the criteria they use for that allocation (value); and how people interact with each other and those resources to generate that value (organization).  These are not separate, unrelated disciplines, rather I suggest they are four different lenses on the same experience.

By labeling these assumptions, we can begin to see them, and we can begin to see how the different political-economic theories we have today work with and influence them.  Until we make these fundamental assumptions explicit, by giving them common labels, we cannot see what we have learned from the insights of billions of people living in these systems for centuries.  It is time we started labeling them.

One thought on “Errors from Bad Theory or Unlabeled Assumptions?

  1. Pingback: Money, Power, and a 3rd Metric for Thriving — Recommended Reading « Jim Ritchie-Dunham

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