“It is a great principle in psychiatry that ‘all symptoms are overdetermined.’ This means that they have more than one cause….
I want to scream this from the rooftops: ‘All symptoms are overdetermined.’” M. Scott Peck, In Search of Stones
Malcolm Gladwell has a new article out. Gladwell fans wait for these with great anticipation. And, as usual, it does not disappoint. This time, he tackles the financial crisis, and the problems of Wall Street. His title reveals his view: COCKSURE: Banks, battles, and the psychology of overconfidence. Here’s his take:
“Since the beginning of the financial crisis, there have been two principal explanations for why so many banks made such disastrous decisions. The first is structural. Regulators did not regulate. Institutions failed to function as they should. Rules and guidelines were either inadequate or ignored. The second explanation is that Wall Street was incompetent, that the traders and investors didn’t know enough, that they made extravagant bets without understanding the consequences. But the first wave of postmortems on the crash suggests a third possibility: that the roots of Wall Street’s crisis were not structural or cognitive so much as they were psychological.”
Gladwell wrestles with the problems of overconfidence:
“Of course, one reason that over-confidence is so difficult to eradicate from expert fields like finance is that, at least some of the time, it’s useful to be overconfident—or, more precisely, sometimes the only way to get out of the problems caused by overconfidence is to be even more overconfident.”
It is a complex issue!
Critics are weighing in quickly. Conor Friedersdorf, for a vacationing Andrew Sullivan on The Daily Dish (where I was first tipped off to the article), states his opinion in his title: A Cocksure Malcolm Gladwell Gets It Wrong. He argues that the structural explanation has great merit, and Gladwell fails to see such merit.
Elsewhere, the Gawker argues that Gladwell should not reduce it to the psychological explanation only.
I say, they are all right. Because, there is no one explanation – the causes are overdetermined. There are multiple causes, all feeding on and reinforcing each other. And since there are multiple causes, there is no one simple solution. The simple, easy solutions only work in Hollywood – especially in your typical 30 second commercial (young man, just spray your body with AXE and the beautiful women will all chase you…) But in a world as complex as ours, with problems as big as ours, we need all the possible diagnoses, and all the possible cures, we can get.
There have been some pretty good minds at work on this question, so why haven’t they solved it by now? What did go wrong? They are seaching for an answer – no, they are searching for the answer. From the disagreements, we should learn that there is no the answer. And we should grasp, and understand, and acknowledge our “ignorance.” It might keep us humble, and help us not be so cocksure to the point of disaster.
There’s a line in the movie Live Free or Die Hard. The young computer wiz Matt Farrell is astonished at the arrogant ignorance of Bowman, the FBI “expert,” “The things he does not know,” Farrell says to John McClane.
So it is for all of us – the things we do not know.
• For a terrific article on why Malcolm Gladwell is so good, so valuable, check out: Why do book clubs love Malcolm Gladwell? He reads deeply and writes clearly, in plain English by Shelley Blanton-Stroud.
• You can order synopses of my presentations for all three Gladwell books, The Tipping Point, Blink, and Outliers, at our companion web site, 15 Minute Business Books.