Liberating Management from Newtonian Consciousness

      There has been little argument about the cause of the 2008 Crash: collapse of the U.S. housing bubble, followed by an implosion of financial markets. But those explanations fall short of accounting fully for what precipitated the worst financial crisis 80 years. A solid case can be made that the root cause of the 2008 Crash lies in how we organize and run our businesses, governments and personal lives.

       In negotiating our professional and private we work primarily from a mode of consciousness better suited to the horse and buggy age – perhaps because it originated then. In those days, life unfolded at a slower pace, with less complexity and little change from one year to the next. There was about life a certain mechanistic predictability. The seasons came and went, with little happening to distinguish one year from the next except for experiences that have been part of human life for thousands of years. 

The times we now live in are radically different. They unfold at a pace bewildering to a brain that evolved to accommodate a slower moving and less complex world. These sometimes numbingly challenging times call for a consciousness that heeds Einstein’s wise observation that at times problems arise that cannot be solved in the same consciousness that created them.

       It is not too much to say that human survival could ultimately depend on our ability to enter a new consciousness, one that liberates the human imagination from old, outdated ways of approaching life’s challenges.

For more than two centuries, we have carried on life mainly as seen through the lens of a consciousness drawn from Newtonian science. This consciousness promotes worldviews that are simple and unambiguous. It is rooted in a materialistic conception of life in which nearly everything that happens has a clear-cut cause whose effects can be anticipated. In this way of looking at the world, what cannot be measured is unworthy of attention. Reality is tangible. Nuance and uncertainty exist only in people’s minds, not in how reality unfolds. There are no surprises in Newton’s clockwork universe. When we fail to anticipate an event it is either because we lacked enough information to anticipate it, or it didn’t matter much to us in the first place.

From falling apples to heavenly bodies hurtling through space, Newton believed all motion in inorganic nature occurs in predictable ways. This has inspired scholars for more than two centuries to seek out the Holy Grail of the social sciences: the equivalent of Newton’s three laws of motion that would make people as predictable as comets. No field of study has been more obsessed in this pursuit than economics.

To this day, Newton’s mechanistic view of the universe still influences those who try to divine the twists and turns of markets But alas, no one has yet discovered the basic laws of economics – or more fundamentally and necessary to the task –  the basic laws of human behavior. Lately, however, it seems a growing number of minds are realizing that humans really are unpredictable in any kind of Newtonian sense. We are not stimulus-response organisms whose every act has a direct cause that makes every act predictable. Were it otherwise, free will would be an illusion.

So what drives scholars, analysts and others to strive fruitlessly for over two centuries, doing the same thing over and over, hoping for a testable unified theory of markets? Some wags have joked, “It’s physics envy. Economists want the certainty that physicists can count on.” 

But maybe that’s not much of a joke, after all. We often hear in newscasts after a surprisingly bad day in stocks, “Wall Street hates surprises.” There are no surprises in a Newtonian universe. Natural events in the inorganic world are knowable in advance.  But think about this: if the same were true on Wall Street, there would be no Wall Street. Stock markets are games of chance; surprise is part of the deal.

So there you have it. Untold numbers of very smart people, some of whom have won Nobel prizes for their brilliant output, devoting professional lifetimes to an unobtainable goal: removal of surprises from scenarios involving human behavior in the marketplace and elsewhere.

We would all be served better were more effort spent in figuring better ways to deal with unpredictable events than is common in business. Companies need to liberate themselves from the constraints of linear Newtonian consciousness. They will stand a better chance of surviving by reorganizing themselves to better cope with emergent events – events that cannot be predicted. Professor Jeffrey Goldstein of Adelphi University’s School of Business defines emergence as "the arising of novel and coherent structures, patterns and properties during the process of self-organization in complex systems." Emergent events seem to come from out of nowhere, sometimes with great disruptive power. They do not appear and unfold in linear Newtonian fashion as a consequence of a singular system of causes.

Take the Internet – the most disruptive emergent event perhaps in all of human history. No one anticipated its awe-striking power to transform virtually every facet of  our lives before it began breaking over the shorelines of civilization the world over.  When World Wide Web inventor Tim Berners-Lee executed the first successful communication between an HTTP client and server via the Internet in 1990 no one anticipated that by the end of the decade over a billion people would be doing the same thing.  

The Internet has led to the failure of countless businesses, reshaped entire industries, and radically changed the rules of marketplace engagement. And yet, many businesses, from the very largest to the smallest, remain ill-prepared to survive the effects the Internet is having on their business models and in industries. These companies are frozen in their tracks by the bias of Newtonian consciousness toward the status quo – toward always returning to the way things were successfully done in the past.

Next: Embracing a New consciousness

 

 

Comments

[Sid Raisch]

For some people, change is easy to resist, when it isn't their idea. So it takes time. The very people who are adapting to the new ways sometimes don't realize they are. I know someone with the very cool iPhone formerly pooh poohed the PDA in favor of their PAD (writing pad). I won't tell him it is a PDA as well as a phone.

[joared]

"We are not stimulus-response organisms whose every act has a direct cause that makes every act predictable." I couldn't agree more, but why do so many people think we are?

The unexpected is what makes life so interesting in my opinion, but we do come naturally to trying to give order and structure to everything. We just can't be rigid about it and must be nimble in response based on the knowledge the unpredictable can happen.

[dissertation write up]

Blogs are good for every one where we get lots of information for any topics nice job keep it up !!!

[Annie]

this is a helpful blog for my research

[Downriver Businesses]

Change is good - just hard to accept for many.

Tim
Michigan Business Directory

[Matt]

i got some help from this blog for my research.thanks a lot