So ends the month of November. 21 posts in 30 days. Wrote about UpWing/DownWing thought, networks (as a form of human organization), proceduralization of decisions, and more »Comments closed
Month: November 2013
I. The Apparent Direction of My Writing The Fogbanking Blog, an only-vaguely-planned expression of my day-to-day thoughts on my reading, revolves around my interest in more »Comments closed
The year I was born, Douglass North published a paper [pdf] in the Journal of Economic Perspectives, titled “Institutions”.
Institutions are the humanly devised constraints that structure political, economic and social interaction. They consist of both informal constraints (sanctions, taboos, customs, traditions, and codes of conduct), and formal rules (constitutions, laws, property rights). Throughout history, institutions have been devised by human beings to create order and reduce uncertainty in exchange. Together with the standard constraints of economics they define the choice set and therefore determine transaction and production costs and hence the profitability and feasibility of engaging in economic activity. They evolve incrementally, connecting the past with the present and the future; history in consequence is largely a story of institutional evolution in which the historical performance of economies can only be understood as a part of a sequential story. Institutions provide the incentive structure of an economy; as that structure evolves, it shapes the direction of economic change towards growth, stagnation, or decline.
Douglass demarcates Institutions from the more tribal, specific, directed units called Organizations. In practice, I don’t know that these two ideas are easily separable.
Writing process for this month: daily, write 100 words of notes or summaries. Flesh out over the weekend and in spurts during the week. Release a few of the more complete posts once per weekday until material empties.
A half-thought about running large things using vocabulary I’ve been flinging around.
Procedural decision patterns are not driven consciously, but are instead the result of either completely learned behaviors (and thus requires almost no attention) or completely externalized behaviors to the environment (and thus requires almost no attention).
A leader is a person who changes procedural patterns in order to simplify decisions for others, by installing their principles and inclinations into people’s heads and/or into the environment. While a strong feedback loop to their tribe/institution and the outside world is good for creating smart mental models, leadership is fundamentally authoritative: the objective is to seed everything with a single broad mental model in order for the organization to be able to row in relative sync. Good leadership generates elegant (ie, cheap+useful) heuristics for decision making.Comments closed
On Ramit Sethi, the writer behind “I Will Teach You To Be Rich” (How’s that for a name?)
“[…] Willpower is a depleting resource. We should focus on setting up systems, automating behaviors we want to happen.”
Sethi’s self-help shtick involves getting twenty- and thirtysomethings—of whom he has 500,000 online followers—to put as much of their financial life on autopilot as possible, setting up automatic deductions for 401(k) plans, student-loan repayments, credit card bills. He even came up with a way to force himself to go to the gym.
Instead of cleaning up my physical space, I’ve been cleaning up my behavior a little bit (example: I now love Mint), proceduralizing things. Paperwork cripples me, so I set up as much automation as possible.
In this post, I’m try to sync the vocabularies and ideas of a couple of threads on this idea of behavioral proceduralization.