Consider this scenario: You are participating in a decision making meeting, and you go into an inappropriate rage over something that is said that challenges your view. A chill runs through the room; your colleagues are stunned. But in your own mind, you believe you hold the superior position and they deserved everything you said to them.
That night, you have difficulty sleeping; at 3 a.m. you are still awake with the incident on your mind. Without a change of heart, your thoughts continue to justify what you said. In your thinking, you rehearse conversations you will have at work tomorrow when you tell off even more people.
Not exactly a healthy decision making process; but when faced with a problem, it is common to think that a solution requires more of our thinking. Yet, the more we think about the problem, the more intractable the problem seems to be. Why? Einstein explained it best when he wrote: “The world we have made, as a result of the level of thinking we have done thus far, creates problems we cannot solve at the same level of thinking at which we created them.”
In other words, when we analyze a problem we are usually analyzing it from the same level of thinking that created the problem. Fortunately, there’s a natural wisdom that generates fresh insights in human beings when we get our repetitive thinking out of the way. And then, rather than coming up with an answer at 3 a.m. as we bear down on a problem, an answer will often arise via insight when our mind has cleared.
The key to having an insight is to have less certainty about our interpretation of our experience of reality. In other words, there is no need to stew over our problems. Once we let go of our repetitive thinking, fresher thoughts can enter our mind. In the case above, the individual may see that his remarks were inappropriate and experience sincere contrition.
Now, consider this scenario. You are Ben Bernanke. You and your predecessor’s unprecedented meddling in the economy created one of the largest asset bubbles in the history of the world; your solution is even more meddling. After years of forcing interest rates down to nearly zero, the weakness in the economy is still evident. Yet, you continue to believe that “there is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery.”
Question: Is the thought process in the first scenario any different from the thought process in the second scenario? Notice, I said thought process, I didn’t say behavior. In both scenarios, the thinkers stubbornly refuse to consider new courses of action despite the clear evidence of what their previous actions have wrought.
In both scenarios, the thinkers believe what to others are patently absurd notions. The first notion is that one can abuse people and yet somehow reach a goal. In Bernanke’s case, the notion is that the Fed has the wisdom to correctly manipulate interest rates and, in the process, create jobs.
In both scenarios, the thinkers share the same false understanding that they are in control of processes that are far greater than themselves.
If these processes are observed with humility and allowed to function, the processes tend to automatically correct errors. In the case of the economy, weak industries and firms when no longer propped up by low interest rates will shrink or liquidate. Where bad decisions had been made, assets are transferred to those who can make better decisions.
To those enamored with their own thinking and their drive to control, relying on impersonal processes seems incredibly irresponsible. To our ego, the idea that less is more is simply preposterous. Yet, when we get out of the way, there is a deeper intelligence that can take over, both in our own personal life and in the market.
None of us individually can be smarter than this deeper intelligence. We ignore its wisdom at our peril.