Industrial Policy, Theory of Constraints and Avoiding Self-Deception

Your weekly 5 things from the mind of Miles Lasater

Happy Saturday! Here are your 5 things from the mind of Miles for this week.

  1. Industrial Policy. I had pretty much accepted the idea that the government should not have an industrial policy. Arguments like: Don’t pick winners. Level playing field. Follow the way of Ricardo and embrace your comparative advantage. But I’ve enjoyed learning some of the counterarguments from the book Concrete Economics (and elsewhere). What if the government has an important role in shaping a country’s comparative advantage? For example, I was definitely fuzzy on the history of high-tariff and low IP protection in the US. Now, I’m less certain I know the right answer here.

  2. TOC and Corkscrew Thinking. I recently read Corkscrew Solutions which is a short, accessible guide to one of Theory of Constraints’ tools: the cloud thinking process. I’ve struggled to fully internalize it before and found the book to be helpful. Do you face any dilemmas? It is a great thinking tool for that. What is the Theory of Constraints you ask? Oh, you are in for a treat! Start with The Goal. And make sure to learn about Critical Chain Project Management, too. (Maybe with Critical Chain?) If you are in retail or have any inventory in your business, read Isn’t It Obvious. If you are in tech, check out Rolling Rocks Downhill. I’d love to hear your thoughts. Have you ever implemented TOC concepts successfully?

  3. (Self) Deception. Read Lying for reasons why (and a bit on how) not to deceive other people. Read Scout Mindset for why (and more on how) not to deceive yourself. (Remember Feynman’s admonition: “you must not fool yourself and you are the easiest person to fool”.) For example, Scout Mindset includes a wonderful insight on the difference between social confidence and epistemic confidence. We want leaders who act self-assured in body language and tone. Even if the words they say reflect their uncertainty about the future, we can follow them. Although I think we want leaders who express a clear view on next steps.

  4. Conserving As of When? In the spirit of John Stuart Mills (“He who knows only his own side of the case knows little of that... Nor is it enough that he should hear the opinions of adversaries from his own teachers, presented as they state them, and accompanied by what they offer as refutations. He must be able to hear them from persons who actually believe them...he must know them in their most plausible and persuasive form.”) and Daniel Dennett’s Rapoport’s Rules, I continue to listen to the Conservative Minds podcast. One thing that has struck me is how they advocate for tradition in many ways but support and accept the changes in gender and race relations over the last ~100 years. And I think they accept the role of OSHA and worker safety laws. It made me wonder how the hosts would have reacted to the changes as they were happening? It also reminded me of the impulse of some to preserve nature. But “nature” as of which point in time? 

  5. Probability Management. The book How To Measure Anything has so many good nuggets. For example, the more uncertain you are about a subject the more a measurement however crude will help you. Another one that I keep pondering is managing uncertainty in the enterprise. If a business is attempting to forecast an uncertain future in a coherent way, then it probably wants to use a consistent and auditable methodology for key variable distributions. That way each business unit or department is using forecasts that are meaningful in relation to each other. For more see the SIPMath standard. Do you know anyone that has implemented probability management?

Until next week,

Miles