The myth of a level playing field

I unconsciously subscribe to the view that each day starts anew with new possibilities; I start fresh with no residue from the past. I call this a level playing field. Whatever happened yesterday is of no consequence to today. Decisions that were made yesterday have no ripple into today. This does not agree with reality and is a new feature captured in the theoretical treatment I give to decisions, see Geometry, Language and Strategy, Thomas, 2006, World Scientific (New York).  Some actions carry through while others die out. There are consequences to our actions that sometimes extend into days, weeks or years.

So why do I subscribe to this short-term view knowing full well that there are significant exceptions? I think it is related to similar ideas in mathematics and physics that it is easier to visualize events as local occurrences. For example, we see the earth as flat and stationary. That is our local frame of reference. The earth’s curvature is not easy to grasp. The effects of its rotation about its axis and around the sun are equally hard to grasp.

We make a similar simplification in business when we focus too closely on local effects. We totally understand the consequences of hiring an experienced person versus an inexperienced person in terms of their quality of work. It is less clear how such differences are expected to show up in terms of project schedules.  It is hard to see how such simple mechanisms work together to create system behaviors. In this case as in physics, it is easy to grasp local effects but hard to grasp global effects.

The idea of a level playing field is analogous to the idea that the earth is flat. This assumption is often useful  even though it may ignore important (global) effects that are not important unless you look at large “behavioral distances” or long “behavioral times”. For example if you deny a portion of the population education, adequate nourishment and shelter, this may contribute to the greatest good for the greatest number of people. We say such behavior is not just either because of our ethical position or because logically, we understand that over a long period of time, you have created an unstable society, one that may reverse the roles of the populations.

The problem in economics and in society is that our current theories are local, not global. They highlight the obvious advantages of a flat earth but fail to take into account its curvature when looking beyond the local. it is hard to translate these differences into our expectations of what should happen. And yet we know that a long-term view is essential to understanding. I conclude that however useful, the concept of a level playing field is a myth.

I have argued for the importance of considering both short-term cycles and long-term cycles. That concept I think is particularly helpful in moving beyond the myth of a level playing field. We can still wake up each day and start fresh as long as we understand that we are missing some of the long-term cycle effects. We must be prepared to predict the consequences of the composite behaviors: there will be some situations in which one or the other dominates, and other situations where both are comparable.

I believe that the goal of a theory in physics or in society should be to help provide a mechanism for discussion. The theory must be able to take into account all relevant and significant mechanisms. I argue here that one of those mechanisms is the degree to which the field is not level.

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