RE: Resistance to new ideas

["Jonathan Siegel" <jmsiegel@yahoo.com>]

Herbert A. Simon, philosopher, psychologist, computer scientist,
adaptive learning theorist, and much else, received the 1978 Nobel
Memorial Prize in Economics for his work on "Bounded Rationality" (see
below), despite the fact that he was never trained as an economist. His
work is well examining, not only because he developed a critique of
classical economics of interest to a Deming student and was an early
student of the processes of decision-making, creativity, and adaptive
learning, but simply because he, like Deming, reflected a range and
breadth of interdisciplinary thinking and practice which seems to be
needed for truly breakthrough work. (Like Deming, Simon got his
background from a lifetime of study, not a couple of weeks of seminars).

In his work "An Empirically-based Microeconomics," and in "Models of
Bounded Rationality, Vol. 3: Empirically Grounded Economic Reason,"
Simon examined  key assumptions of classical economics and made a strong
case for treating economics as an empirically based science, rather than
as a quasi-mathematical enterprise centered on theories deducted from
axioms. He argued that such an approach would require major changes in
thinking from economics as it currently exists. This alone makes Simon
well worth noting.  

A key element of classical economics involves "rational choice theory,"
which presupposes that people are capable of making "rational" choices.
This assumption, as practiced, essentially requires assuming that people
are omniscient, for assuming that people know how to choose what is good
for them requires assuming that people know their present and future
circumstances. It is from such assumptions that classical economics,
through its limit theorems, concludes that market conditions will result
in prices converging to equilibria following a theoretically temporary
and uninteresting transitory phase.

Simon noted that nobody has ever seen a market equilibrium for any
substantial length of time; classical economics' assumptions lead to
predicting events which simply never come to pass.

Simon developed a theory he called "bounded rationality": he observed
that people tend to make choices based on limited knowledge and with a
limited ability to see into the future or determine what is best from
them. He introduced concepts from computer science, in which searching
for solutions, far from being an instantaneous, taken-for-granted thing,
takes time and has a cost. He argued for investigating how people behave
when they actually look for solutions to problems and make choices in
the real world. And he developed theories based on his investigations.
He theorized that people in practice generally engage in what he called
"satisficing." People don't generally seek optimal solutions, because
they usually lack time or resources to arrive at them. He suggested that
in practice, most people take the first solution that meets their
minimum requirements and stop there. (If it suffices, they're
satisfied). 

I do not know if Simon is right on this point. But I would nonetheless
suggest that an empirically based theory as to how and why people
choose, say, one improvement method over another, may be something very
useful to have. It may not be what people in the improvement business
want to hear, but an empirically-based theory at least provides a basis
for action and helps one see how to move forward. It beats
hand-wringing. 

Note: There is a relationship between Simon's work and Shewhart's, and
for that matter C.I. Lewis', because all three critiqued mathematical
theories requiring assumptions about convergences to limits (among other
issues). These theories tend to assume we can know things without taking
into account the cost of finding out. 

Sincerely,

Jonathan Siegel
(734) 657-1900
jmsiegel@yahoo.com