I think startup founders are irrational, crazy optimistic, because the odds of making it compared to the effort put in are completely off. But they get to do what they enjoy, perhaps for a while. This is possibly even more true for the employees in such companies.
Rational people go into corporations, and get an MBA, which is at its core a course in (economic) rationality. And the result of this rationality is bottom line is everything, even if it means to suck the soul out of everything or even shrinking the company, or even destroying the Earth.
I admit, I despise (economic) rationality. Rationality is only ever reactive, it cannot give you a goal, or a vision. It cannot give society any values. The values or goals have to be irrational, by definition.
There are some nice examples from game theory underlying this, but probably the best is Varoufakis' story about students of economics and business he taught.
When Yanis came to his game theory class, he gave a proposal to students, instead of them having to work and getting a mark for the course based on their knowledge, the students would just secretly vote on what mark they should get and they would all get the minimal mark anybody voted for. But the proposal would only be implemented if all the students agree. Inevitably, there were some people against this. Later Yanis asked these students in private, why did they vote against the proposal, they could certainly save themselves a lot of effort! They always, and without any hint of irony, told him that they believe there would be some idiot who would irrationally put in a bad mark. The irony being, of course, it was them, who was irrational!
I think this story beautifully underlies the futility of the quest for ultimate rationality.
And I find it hilarious that while free market ideology touts rationality as the ultimate goal, the reality of capitalism is that it actually requires people to create startups and small businesses, which is inherently irrational behavior.
You equivocate, as we all do, on the meaning of "rational".
If "rational people go into corporations" then it can't be the case rationality serves other values (as you also note) because in that case we'd need to know the employee's values.
"But they get to do what they enjoy, perhaps for a while." <-- Then pursuing a startup is perfectly rational if you prize doing what you enjoy. I don't think you'd disagree, just noting that multiple meanings we ascribe to "rational" complicates discussions like this.
Yeah, but I think the point is, whatever meaning of "rational" do you pick, then you seemingly always encounter a similar problem, i.e. some clearly innovative behavior will not fit the bill of being rational.
Money and free market (and economic rationality) is our current best shot at defining rationality (what makes sense to do) through a mechanism (algorithm).
We can talk about utilons instead of money. But then any theory of decision making is worthless, because we cannot apply it to groups of people, they have different units! It pushes the problem one level away.
We all have powerful non-pecuniary motives: friendship, honor, adventure, etc., and we view ourselves as applying rationality to these pursuits. For example: "If I'm really a friend to Billy, then what I should do here is ...". On your view, that would not constitute rational deliberation.
In a way yes, I think we never apply the rationality to it rigorously, we for example might not question that relationship. So it is a matter of where do you draw the line, and that seems to be a personal choice, which defies an explanation. (And in fact people who try to be rational rigorously seem to behave like psychopaths.)
Don't take this thread the wrong way, I like rationality, and I like Julia's writing on the topic. But it seems to have a fundamental limit, so there is a bit of irrationality always required.
You misrepresent economic rationality, which is not defined based on some particular accounting standards. You also sound like you've read enough to know better.
It sounds to me like your problem is other people don't share your values, and you are calling this "rationality", whereas other people have the same issue, but often call it "irrationality". Yet you are saying at the same time that rationality is orthogonal to values. If so, then it doesn't oppose them. It all seems incoherent yet cliched to me.
Well, if what you're saying is that for a decision (say, to pursue a certain path which leads to innovation) you need to have both rationality and values, then you're already admitting that rationality is not enough, and therefore you need (at least a little bit of) irrationality.
But I think the paradox is deeper, and it ultimately means that we cannot really define "rationality", it is contradictory. And I think that's what economists are trying to do (and what they teach MBAs), to make a theory of how to make the best decision, regardless of values. The paradox seems to be that you cannot follow any theory like that blindly.
Perhaps it is cliched, I don't know. I wish Yanis would write a popular book about the paradox (he is certainly fond of it, see his book Economic Indeterminacy).
I think startup founders are irrational, crazy optimistic, because the odds of making it compared to the effort put in are completely off. But they get to do what they enjoy, perhaps for a while. This is possibly even more true for the employees in such companies.
Rational people go into corporations, and get an MBA, which is at its core a course in (economic) rationality. And the result of this rationality is bottom line is everything, even if it means to suck the soul out of everything or even shrinking the company, or even destroying the Earth.
I admit, I despise (economic) rationality. Rationality is only ever reactive, it cannot give you a goal, or a vision. It cannot give society any values. The values or goals have to be irrational, by definition.
There are some nice examples from game theory underlying this, but probably the best is Varoufakis' story about students of economics and business he taught.
When Yanis came to his game theory class, he gave a proposal to students, instead of them having to work and getting a mark for the course based on their knowledge, the students would just secretly vote on what mark they should get and they would all get the minimal mark anybody voted for. But the proposal would only be implemented if all the students agree. Inevitably, there were some people against this. Later Yanis asked these students in private, why did they vote against the proposal, they could certainly save themselves a lot of effort! They always, and without any hint of irony, told him that they believe there would be some idiot who would irrationally put in a bad mark. The irony being, of course, it was them, who was irrational!
I think this story beautifully underlies the futility of the quest for ultimate rationality.
And I find it hilarious that while free market ideology touts rationality as the ultimate goal, the reality of capitalism is that it actually requires people to create startups and small businesses, which is inherently irrational behavior.