Tuesday, March 14, 2017

Raising Kids Part Four, Independent, Critical Thinking

“In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual.”
                                                          ---Galileo Galilei


The year was 1958. In China, chairman Mao had ushered in the era of the Great Leap Forward. The thinking goes, China needs to modernize, and since steel production is a sign of modernization, and China is mostly rural, Mao has asked all the farmers to produce more steel. The thinking also goes, that the pests like rats and birds are eating too much of the crop, so besides taking the labor to produce the steel, they organized the villagers to bang on their pots to scare away the birds.

The precious labor that was diverted from farming melted down useful metal parts like door hinges and bells from temples and turned them into useless low grade steel if they were lucky, in many cases, they failed to produce even that. The banging of the pots and pans killed off the birds, who also ate the worms and insects. The next year there was insect infestation that ate far more crops than the birds ever did. All the manpower that went into making useless steel means not enough people are tending the fields. By some count, fifty million people, 7-10% of the population at the time, died due to the shortage of food in the ensuing three years, marking it one of the worst man made disasters in recent Chinese history.

How does a nation, with one of the highest IQ in the world, marched locked step like lemmings into the path of disaster based on the directives of one person? It is quite simple. The Chinese culture, based on the Confucius tradition of filial and piety, does not allow subordinates to question the authority. Any dissent, real or imaginary, was brutally put down at the directive of Mao. Many of the capable leadership inside the Communist party were purged because Mao fear that they might dethrone him.

Least you think that this only happens to a conforming Asian culture, we need to go no further than 2007 in the U.S. to see that this also happens in the West. We are a society that pride ourselves in freedom of the press and land of financial professionals. The paradigm at the time was that housing could never go down much. Of course this is absurd based on the law of economics. There were enough signs of danger that a few people like Robert Shiller, Bill McBride and John Paulson saw the train wreck coming, but for the rest of us, including all the very smart people with fancy degrees from Harvard and such, we never saw it coming until we felt the reverberation of the Titanic hitting the iceberg. Massive financial institutions like Lehman Brothers disappeared in spite of having legions of PhDs in Finance and Economics from all the fancy schools.

Ray Dalio of Bridgewaters, the largest financial management firm in the world, built the firm on the culture of "Radical Transparency". Every meeting, no matter how high up, is recorded and opened to everyone in the firm, high or low, to read and provide feedback. This would certainly drastically reduce the chance that the firm would go down the wrong path.

A kid needs to be taught from an early age to use reason and logic. He also need to follow his own compass. If we see something that is different from what we inherently felt to be true, we should analyze it with our own logic and come to an unbiased conclusion. If we are wrong, we should accept the new thinking and incorporate it into our knowledge, but if we are right, we should have the courage to follow what is right. Only if a culture allows challenge from others, only if a leader is comfortable soliciting objection from subordinates can we minimize the repeat of things like the Great Leap Forward.

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