Friday, December 21, 2012

Two New Books Suggest That Entrepreneurs Are Heroes

One is Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb. Here is a quote from Matt Ridley's review in The Wall Street Journal:
"If trial and error is creative, then we should treat ruined entrepreneurs with the reverence that we reserve for fallen soldiers, Mr. Taleb thinks."
Then there was a review in The Wall Street Journal of The Invisible Hand in Popular Culture: Liberty vs. Authority in American Film and TV by Paul A. Cantor. Here is an excerpt:
"Mr. Cantor believes Martin Scorsese's "The Aviator" provides as clean a rejection of crony capitalism as exists in entertainment. The film's climax takes place during a Senate hearing at which Howard Hughes battles a senator attempting to help a campaign donor form an airline monopoly. This turns Hollywood stereotypes on their head: The entrepreneur is the hero and regulating busybodies in the pocket of a competitor are the villains."
Click here to read that review

Taleb has proposed a National Entrepreneur Day. Here is the post from "The Black Swan Report"
"“We need to respect failed entrepreneurs,” he tells Fast Company. “This would make more people take risks and generate growth.” At the end of the fourth chapter of the book, he proposes a National Entrepreneur Day, one furnished with this message:

“Most of you will fail, disrespected, impoverished, but we are grateful for the risks you are taking and the sacrifices you are making for the sake of the economic growth of the planet and pulling others out of poverty. You our the source of our antifragility. Our nation thanks you.”

Beyond rippling with Taleb’s signature bombast, the quote makes a fair point, one that he rephrases elsewhere in the book: that just as there’s no such thing as a failed soldier (so long as he fights with courage), there’s no such thing as a failed entrepreneur, even if the company goes belly up."
But it looks like there already is, or has been, one. Click here to learn about it. It was November 16, 2012.

Monday, October 1, 2012

Empathy, Neurochemistry, and the Dramatic Arc

Interesting video from neuroeconomist Paul Zac.Empathy, Neurochemistry, and the Dramatic Arc.

Film Synopsis The emotionally charged story recounted at the beginning Dr. Paul Zak’s film—of a terminally ill two-year-old named Ben and his father—offers a simple yet remarkable case study in how the human brain responds to effective storytelling. As part of his study, Dr. Zak, a founding pioneer in the emerging field of neuroeconomics, closely monitored the neural activity of hundreds of people who viewed Ben’s story. What he discovered is that even the simplest narrative, if it is highly engaging and follows the classic dramatic arc outlined by the German playwright Gustav Freytag, can evoke powerful empathic responses associated with specific neurochemicals, namely cortisol and oxytocin. Those brain responses, in turn, can translate readily into concrete action—in the case of Dr. Zak’s study subjects, generous donations to charity and even monetary gifts to fellow participants. By contrast, stories that fail to follow the dramatic arc of rising action/climax/denouement—no matter how outwardly happy or pleasant those stories may be—elicit little if any emotional or chemical response, and correspond to a similar absence of action. Dr. Zak’s conclusions hold profound implications for the role of storytelling in a vast range of professional and public milieus. Empathy, Neurochemistry, and the Dramatic Arc

Monday, August 27, 2012

Great New Book: The Storytelling Animal

Here is the Amazon link: The Storytelling Animal: How Stories Make Us Human by Jonathan Gottschall. Here is the description:
"Humans live in landscapes of make-believe. We spin fantasies. We devour novels, films, and plays. Even sporting events and criminal trials unfold as narratives. Yet the world of story has long remained an undiscovered and unmapped country. It’s easy to say that humans are “wired” for story, but why?

In this delightful and original book, Jonathan Gottschall offers the first unified theory of storytelling. He argues that stories help us navigate life’s complex social problems—just as flight simulators prepare pilots for difficult situations. Storytelling has evolved, like other behaviors, to ensure our survival.

Drawing on the latest research in neuroscience, psychology, and evolutionary biology, Gottschall tells us what it means to be a storytelling animal. Did you know that the more absorbed you are in a story, the more it changes your behavior? That all children act out the same kinds of stories, whether they grow up in a slum or a suburb? That people who read more fiction are more empathetic?

Of course, our story instinct has a darker side. It makes us vulnerable to conspiracy theories, advertisements, and narratives about ourselves that are more “truthy” than true. National myths can also be terribly dangerous: Hitler’s ambitions were partly fueled by a story.

But as Gottschall shows in this remarkable book, stories can also change the world for the better. Most successful stories are moral—they teach us how to live, whether explicitly or implicitly, and bind us together around common values. We know we are master shapers of story. The Storytelling Animal finally reveals how stories shape us."

Another connection to economics in addition to advertising mentioned above is that stories are economical. They are low cost simulations of reality and social situations. People who read novels have better social skills than those who don't, even after accounting for personality traits.

Gottschall has written an interesting article called Why Storytelling Is The Ultimate Weapon. Here is the intro:
"In business, storytelling is all the rage. Without a compelling story, we are told, our product, idea, or personal brand, is dead on arrival. In his book, Tell to Win, Peter Guber joins writers like Annette Simmons and Stephen Denning in evangelizing for the power of story in human affairs generally, and business in particular. Guber argues that humans simply aren’t moved to action by “data dumps,” dense PowerPoint slides, or spreadsheets packed with figures. People are moved by emotion. The best way to emotionally connect other people to our agenda begins with “Once upon a time…”"

Gottschall also has a book called The Literary Animal: Evolution and the Nature of Narrative.

Wednesday, June 20, 2012

Interesting Book: The Ajax Dilemma

Paul Woodruff, Professor of Philosophy at the University of Texas in Austin, has done a great job of discussing what is, at least partly, an economic issue using the lens of mythology. Woodruff thanks Betty Sue Flowers, editor of The Power of Myth, for her advice. Here is the Amazon link:

The Ajax Dilemma: Justice, Fairness, and Rewards

It got a good review last December in the NY Times by NANCY F. KOEHN. See

That Eternal Question of Fairness

Here is the description from Amazon and after that will be some of my own observations:

"We live in a world where CEOs give themselves million dollar bonuses even as their companies go bankrupt and ordinary workers are laid off; where athletes make millions while teachers struggle to survive; a world, in short, where rewards are often unfairly meted out.

In The Ajax Dilemma, Paul Woodruff examines one of today's most pressing moral issues: how to distribute rewards and public recognition without damaging the social fabric. How should we honor those whose behavior and achievement is essential to our overall success? Is it fair or right to lavish rewards on the superstar at the expense of the hardworking rank-and-file? How do we distinguish an impartial fairness from what is truly just? Woodruff builds his answer to these questions around the ancient conflict between Ajax and Odysseus over the armor of the slain warrior Achilles. King Agamemnon arranges a speech contest to decide the issue. Ajax, the loyal workhorse, loses the contest, and the priceless armor, to Odysseus, the brilliantly deceptive strategist who will lead the Greeks to victory. Deeply insulted, Ajax goes on a rampage and commits suicide, and in his rage we see the resentment of every loyal worker who has been passed over in favor of those who are more gifted, or whose skills are more highly valued. How should we deal with the "Ajax dilemma"? Woodruff argues that while we can never create a perfect system for distributing just rewards, we can recognize the essential role that wisdom, compassion, moderation, and respect must play if we are to restore the basic sense of justice on which all communities depend.

This short, thoughtful book, written with Woodruff's characteristic elegance, investigates some of the most bitterly divisive issues in American today."
Now my observations:

Although this is a work of philosophy, I believe it gives an accurate depiction of human nature that is consistent with what I have read in books about or based on neuroscience like The Moral Molecule by Paul Zak and The Righteous Mind by Jonathan Haidt. For example, he talks about how justice has to address the whole person, including our rational and irrational sides. People base justice on their values and don't like to see others rewarded who don't share our values (communities need shared values according to Haidt) and justice is what keeps communities together.

Woodruff says justice has to leave communities whole and Haidt says that one of our motives is to belong to a community.

Woodruff discusses the difference between incentives and rewards. Incentives are like regular pay while rewards are for something special that one person did. People like this last one alot.

As an economist, I like how he emphasizes tradeoffs. Like how do you reward the "good workers" like Ajax, who do things well day in and day out, vs. rewarding creative people with innovative ideas. It hard to know what value to even place on the Trojan horse that wins the war.

Fairness and justice are not the same thing. Fairness might be treating everyone the same but you can't treat Ajax and Odysseus the same.

One problem is that Ajax already distrusts the system and its leader, Agememnon, who is not a good leader. He has not set a good moral and ethical example for his soldiers and has not been treating them justly up to this point. But this is an army at war and it might be hard to expect justice and compassion with all the testosterone flowing around. As Zak points out, testosterone can get in the way of trust and empathy, things that Ajax needs.

When Woodruff talks about compassion and how it means we can imagine the pain of others it reminds me of Adam Smith and his book The Theory of Moral Sentiments where he talks about sympathy and where Zak talks about empathy.

He talks about "proportional equality" when discussing fairness. When Haidt talks about fairness he says people want "proportionality."

Woodruff discusses John Stuart Mill and utilitarianism. Haidt does, too. Both seem to think that utilitarianism is too rational to lead to justice. Justice means that all people feel like they are getting their due.

Woodruff says that different groups need to appreciate each other if we are to avoid civil conflict and have harmony. I think Haidt says the same thing when talking about conservatives and liberal. But this is hard when the two groups don't share the same values.

One thing about leadership is that it is based on testosterone. As Zak points out, groups need moral enforcers and testosterone makes us feel good to punish a transgressor. So it might be difficult to get empathy in an army.

"The consumate leader tells beautiful tale, and the tale is believed." This sounds like myth. My favorite line from Haidt's book is "The human mind is a story processor, not a logic processor." So the leader needs to do this to create a just reward system and honor people based on their unique contributions, something that Ajax wants but does not get.

In a footnote, Woodruff says a middle manager who is asked to rate his workers and fire the bottom 10% should resign. But that might be hard if the economy is in a recession.

Friday, June 8, 2012

In a highly empowered, productive life, usually the division between work and play is blurred

That is a quote from Stuart Brown, a psychiatrist and a leading expert in the field of play. See 'Importance of Being Playful' conference at UC by Stephanie M. Lee of The San Francisco Chronicle. Here are some excerpts and they remind me of Joseph Campbell and following your bliss:

""There are consequences in adulthood when we don't engage in getting into a state of play," Brown said. "That means we're less flexible, less adaptive, less resilient and poorer stress managers.""

"His first interviews - with young men convicted of murder and their relatives - revealed a common theme in the killers' childhoods. "There was abuse, suppression, a failure of engaging in rough-and-tumble play," he said. "There was a vast difference between those individuals and those we studied who hadn't engaged in homicide."

"Play is strongly linked to physical and mental health, said Brown, who defines play as apparently purposeless, voluntary, inherently appealing and potentially improvisational."

"The brain science behind play is still not entirely understood. But playful social interaction is strongly affected by dopamine, endorphins and other neurotransmitters that are also intimately linked to the motivational and pleasurable aspects of food, drugs and sex, studies show. The brain regions where positive emotions and motivation originate also mediate play." "

"When you look at a highly empowered, productive life, usually the division between work and play is blurred," he said. "Work is play. There is a sense of joyfulness about engaging and being a lab scientist or entrepreneur or whatever.""

I'm glad they mentioned entrepreneurs, because I have written about how they are heroes. And Campbell said they were heroes, too.

Related posts:

Paul Krugman Thinks Like A Small Child. Krugman talks about how economists need to play with ideas in hypothetical settings. This post also mentions Alison Gopnik's book The Philosophical Baby. It also emphasizes play in development.

Does Neuroscience Prove That You Should Follow Your Bliss?

Are You More Likely To Be Successful If You Do Something You Love?

Joseph Campbell on Entrepreneurship

The Creative-Destroyers: Are Entrepreneurs Mythological Heroes?

The Calling of the Entrepreneur (Published in The New Leaders: The Business Bulletin for Transformative Leadership, November/December 1992.)

Friday, June 1, 2012

"The Moral Molecule" By Paul Zak

Paul Zak is an economist who coined the term "neureconomics." His new book is called The Moral Molecule. I have more on it at my Dangerous Economist blog. It is a great book and he disucsses the role that hormones and neurotransmitters play in trust and empathy, especially oxytocin.

He also mentions how people are affected by stories, myths, drama and narrative. How rituals affect our brains is also discussed and ritual are enactments of myths. He even mentions Greek mythology:

"In the same way that oxytocin and testosterone operate as antogonists, the Greek myths held that Eros, the god of sex, was the child of Aphrodite, who represented love, and Ares, the god of war."

In the book, Zak explains how oxytocin helps make us open to others and willing to trust them and have empathy while being to open can be dangerous, so we have testosterone to keep us wary. I think it is interesting he would use mythology to help make his point.

Monday, April 16, 2012

Tyler Cowen Ties Signals And Symbols Together

See Invisible Hand to Mouth by GRAEME WOOD of The Wall Street Journal. It is a review of Tyler Cowen's book An Economist Gets Lunch.

The passage that got my attention was
"The second category is classic Cowen advice—heterodox, clever and preposterously, sometimes uselessly, specific. He advises, for example, looking for Thai restaurants attached to motels (more likely to be family-run and not desperate to make rent). For authenticity, he awards points to Pakistani restaurants that feature pictures of Mecca, since they're more likely to cater to Pakistani clientele. ("The more aggressively religious the d├ęcor, the better it will be for the food.")"

So he is using religious symbols as economic signals. This reminds me of a paper I wrote which was the subject of the first post of this blog. Click here to read that post. The article I wrote was "The Intersection of Economic Signals and Mythic Symbols." Here is the abstract:
""Mythic symbols and economic signals represent more than what they are. Symbols represent universal ideas and themes and evoke feelings and emotions while economic signals are simple, efficient signs that stand for a more complex set of costly to learn characteristics and information. Symbols deal with the irrational and economic signals deal with the rational. Many of the signals cited in the economic literature work well because they have a symbolic element that speaks to people's emotions. By evoking emotions, a signal makes the receiver feel more confident about the truthfulness of the information it represents. The intersection of symbols and signals illustrates the relationship between the rational world of facts and irrational world of emotions and values, a relationship which needs to be explored as part of the development of the ideal type of homosocioeconomicus, the selfish yet value and community driven person.""

Monday, February 13, 2012

Does Neuroscience Prove That You Should Follow Your Bliss?

See Never Too Late to Learn. It is a book review from Saturday's WSJ. The book reviewed was Guitar Zero by Gary Marcus. Here is the passage:
"Brain scans show that musicians' new neuronal connections vary according to the instrument they play. Violinists have their signature brain changes, brass players theirs. Loving what we do helps to form these new connections, because the same dopamine chemistry that gives us the pleasurable rush of reward consolidates new brain connections."
Of course, mythologist Joseph Campbell said "follow your bliss."

What does it mean to follow your bliss? In general, it means three things:

1. Money and material things are secondary (Campbell, 1988, pp. 148,229). The following is dialogue between Joseph Campbell and Bill Movers from The Power of Myth (1988,p. 148):

C: My general formula is "Follow your bliss." Find where it is, and don't be afraid to follow it.
M: Is it my work or my life?
C: If the work you're doing is the work that you choose to do because you are enjoying it, that's it. But if you think, "Oh, no! I couldn't do that!" that's the dragon locking you in. "No, no, I couldn't be a writer," or "No, no, I couldn't do what So-and-so is doing."
M: In this sense, unlike heroes such as Prometheus or Jesus, we're not going on our journey to save the world but to save ourselves.
C: But in doing that, you save the world (emphasis added).

Elsewhere, Campbell says that the savior is the one who can transcend the pairs of opposites (Briggs & Maher, 1989, p. 45). This means going beyond the duality of individual and group that is stressed in socio-economics (Campbell 1988, p. 229):

C: Each incarnation has a potentiality, and the mission of the life is to live that potentiality. How do you do it? My answer is, "Follow your bliss." There's something inside you that knows when you're in the center, that knows when you're on the beam or off the beam. And if you get off the beam to earn money, you've lost your life. And it you stay in the center and don't get any money, you still have your bliss.

Finally, Leeming sums up the Jungian importance of myths:

The person who lives without myths lives without roots, without links to the collective self which is finally what we are all about. He is literally isolated from reality. The person who lives with a myth gains 'a sense of wider meaning' to his existence and is raised 'beyond mere getting and spending" (Leeming, 1973, p. 321).
2. If you follow your bliss, doors (opportunities) will open up for you where they would not have opened up before. They will also open up for you where they would not have opened up for anyone else (Cousineau, 1990, p. 214). This echoes one of Campbell's favorite writers, Goethe:

Concerning all acts of initiative and creation, there is one elemental truth-the ignorance of which skills countless ideas and splendid plans: that the moment one definitely commits oneself, the Providence moves, too. All sorts of things occur to help one that would never otherwise have occurred (Catford & Ray, 1991, p. 5).

3. Following your bliss has to be contrasted with following a system or a social system. A system creates roles for us that are not of our own choosing. This dehumanizes us (Campbell, 1988, p. 143-144). The following is also dialogue between Joseph Campbell and Bill Movers from The Power of Myth (pp. 143-144):

M: Do movies create hero myths? Do you think, for example that a movie like Star Wars fills some of that need for a model of the hero?
C: I've heard youngsters use some of George Lucas' terms-"the Force" and "the dark side.' So it must be hitting somewhere. It's a good sound teaching, I would say.
M: I think that explains in part the success of Star Wars. It wasn't just the production value that made that such an exciting film to watch, it was that it came along at a time when people needed to see in recognizable images the clash between good and evil. They needed to be reminded of idealism, to see a romance based upon selflessness rather than selfishness.
C: The fact that the evil power is not identified with any specific nation on this earth means you've got an abstract power, which represents a principle, not a specific historic situation. The story has to do with an operation of principles not of this nation against that. The monster masks that are put on people in Star Wars represent the real monster force in the modern world. When the mask of Darth Vader is removed, you see an unformed man, one who has not developed as a human individual. What you see is a strange and pitiful sort of undifferentiated face.
M: What is the significance of that?
C: Darth Vader has not developed his own humanity. He's a robot. He's a bureaucrat, living not in terms of himself but in terms of an imposed system. This is the threat to our lives that we all face today. Is the system gong to flatten you out and deny you your humanity, or are you going to be able to make use of the system to the attainment of human purposes? How do you relate to the system so that you am not compulsively serving it? It doesn't help to try to change it to accord with your system of thought. The momentum of history behind it is too great for anything really significant to evolve from that kind of action. The thing to do is to learn to live in your period of history as a human being. That's something else, and it can be done.
M: By doing what?
C: By holding to you own ideals for yourself and, like Luke Skywalker, rejecting the system's impersonal claims upon you.
M: When I took our two sons to see Star Wars, they did the same thing the audience did at that moment when the voice of Ben Kenobi says to Skywalker in the climactic moment of the last fight, "Turn off your computer, turn off your machine and do it yourself, follow your feelings, trust your feelings." And when he did, he achieved success, and the audience broke out into applause.
C: Well, you see, that movie communicates. It is a language that talks to young people, and that's what counts. It asks, Are you going to be a person of heart and humanity-because that's where the life is, from the heart-or are you going to do whatever seems to be required of you by what might be called "intentional power"? When Ben Kenobi says, "May the Force be with you," he's speaking of the power and energy of life, not of programmed political intentions.

In the movie Star Wars, Luke Skywalker turns off his computer (the impersonal system) and relies on the "Force" or his intuition to destroy the Death Star.

Generally speaking, following your bliss unlocks your creative potential because you separate from your community or system. "You can't have creativity unless you leave behind the bounded, the fixed, all the rules" (Campbell, 1988, p. 156). Attaining the joy of being a creative, spiritually fulfilled person is probably the best thing we can do for ourselves.


Briggs, D., & Maher, J.M. (1989). An open life: Joseph Campbell in conversation with Michael Toms. New York: Harper and Row.

Campbell, J. (1988). The power of myth. New York: Doubleday.

Catford, L., & Ray, M. (1991). The path of the everyday hero. Los Angeles: Tarcher.

Cousineau, P. (1990). The hero's journey: Joseph Campbell on his life and work. San Francisco: Harper.

Leeming, D.A. (1973). Mythology: The voyage of the hero. Philadelphia: J. B. Lippincott.