To paraphrase the Nobel acceptance speech of Austrian economist Friedrich Hayek:

If managers are to do more good than harm in improving organizational performance, they must learn that in a complex environment, they can’t acquire sufficient knowledge to orchestrate the desired outcomes. Instead, they must use whatever knowledge they have not to shape results as a craftsman shapes a piece of handiwork, but to cultivate growth by providing a proper environment, much as a gardener does for plants.

Sahlins concluded that in many hunter-gatherer societies, and potentially for most of human history, scarcity was not the organizing feature of human economic life and hence that “the fundamental economic problem,” at least as it was described by classical economics, was not the eternal struggle of our species.

16. The blind watchmaker

If there is a one-line explanation of the power of obliquity, it would be: ‘Evolution is smarter than you are.’

Evolutionary models show that complex organisms— well-ordered corporations, well-functioning societies, prosperous economies— could be produced without omniscience, not that, they were produced without omniscience. So planners, business executives and political leaders who have such omniscient knowledge, or believe they do, have no need of obliquity. The rest of us, however, do.

Such co-evolution— of people and their foodstuffs, of science and technology, of social, political and economic institutions— is the history of economic development.

In business, in politics and in our personal lives, we do not often solve problems directly. The objectives we manage are multiple, incommensurable and partly incompatible. The consequences of what we do depend on responses, both natural and human, that we cannot predict. The systems we try to manage are too complex for us to fully understand. We never have the information about the problem, or the future, we face that we might wish for.

Satisfactory responses in these situations are the result of action, but not the execution of design. These outcomes, achieved obliquely, are the result of iteration and adaptation, experiment and discovery. Re-engineering— ‘tossing aside old systems and starting over’— is called for only when systems are seriously dysfunctional. And in almost all cases. The best means of re-engineering is not ‘going back to the beginning and inventing a better way of doing work’ but trying models that have been successfully tested elsewhere. This is equally true of our personal lives, our corporate organisations and our social and economic structures.

Friedrich Hayek described the issues well in his 1974 Nobel Prize lecture, which he delivered under the title ‘The Pretence of Knowledge’. Hayek observed:

I regard it in fact as the great advantage of the mathematical technique that it allows us to describe, by means of algebraic equations, the general character of a pattern even where we are ignorant of the numerical values which will determine its particular manifestation. ... It has led to the illusion, however, that we can use this technique for the determination and prediction of the numerical values of those magnitudes; and this has led to a vain search for quantitative or numerical constants.

He continued:

compared with the precise predictions we have learnt to expect in the physical sciences, this sort of mere pattern predictions is a second best with which one does not like to have to be content. Yet the danger of which I want to warn is precisely the belief that in order to have a claim to be accepted as scientific it is necessary to achieve more. This way lies charlatanism and worse. To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm.