Yet Another Group of Useful Maxims
This is my seventh group of the many short principles that help clarify reasoning, decision-making, or analysis. I am featuring some of them in a series of posts, expositing a few of them each time.
19. Sayre’s Law claims that trivial disputes arouse the fiercest passions.
Named after Columbia Professor Wallace Stanley Sayre, it claims that disputes where the stakes are low often arouse the most intense and bitter arguments. It is often incorrectly attributed to Henry Kissinger in the form: “Academic politics are so vicious because the stakes are so small,” but it was Sayre who first suggested that people spend much energy on trivial details, while ignoring the big issues. He said that the intensity of the dispute is inversely proportional to the value of what is at stake.
The suggestion is obviously jocular, but because academic disputes often lack significant real-world impact, the participants focus their passion and competitive energy on minor, symbolic, or petty differences. A committee might pass approval of a nuclear power plant in 15 minutes, then spend an hour or two arguing passionately as to whether the door should be coloured red or green.
It possibly points to a trait in human psychology that leads them to dispute fervently the trivial matters of which they have some knowledge and opinion, rather than the more important real-world issues on which their knowledge is more limited.
20. The Black Swan Principle developed by Nassim Nicholas Taleb suggests that random and unpredictable events have unforeseen consequences that we subsequently claim, wrongly, form part of a narrative that we could have predicted, given more knowledge.
At its heart is our desire to control our environment and to form theories about how society develop and responds. Taleb’s insight is that there are sometimes shocks that come at random that are by their nature unpredictable, yet have a huge impact on events. Nothing in the past enables us to incorporate them into our pattern of regular expectations.
Taleb suggests that our response should not concentrate on trying to predict the unpredictable, but on building resilience and robustness into our systems to reduce the negative effect these shocks might otherwise have. Since we cannot predict them, we should arrange our affairs so that we can handle them when they come.
21. Gresham’s Law tells us that bad money drives out good.
Sir Thomas Gresham wrote about money and minting in the 16th Century and observed that when Henry VIII altered the English shilling by adding more base metal to it, people hoarded the silver coins because they had more value than the new ones. Bad money circulated more because it held less value than its face value. Good money, which could appreciate, disappeared from use. People chose to use bad money first and hold onto the good money. The bad coins drove it out.
The law applies most under government-mandated exchange rates where two types of money are given the same value, despite differences in their real value. The notion of legal tender is of money that cannot be refused in payment of a debt. It has the force of law behind it. Without legal tender, Gresham’s Law could be reversed, in that people would insist on being paid in the high value money instead of the depreciated money, and good money would drive out bad. More likely would be a gap between the official value and the market value. I still have a 1,000 trillion note of Zimbabwe dollars.
Sometimes the concept of Gresham’s Law is used metaphorically where low-quality goods or practices displace high-quality ones because they are cheaper. It happens in competing human groups or organizations. When bad behavior has taken root, it becomes difficult, and occasionally impossible, to drive out the bad behaviour.
Madsen Pirie