Where's the Sechel*?
Edward D. Weinberger, Ph.D.
It isn't what we don't know that gives us trouble, it's what we know that ain't so.
. -- Will Rodgers
In 1969, my admission to MIT suggested that I was among the best of American high school students. Nevertheless, in 1973, immediately upon graduation from MIT, I joined a religious cult. This short history illustrates a great tragedy: that the modern university offers knowledge, when what is so often wanted is wisdom. And in these difficult days, both for our universities and for our society as a whole, an appreciation of this distinction is equally necessary.
Looking across cultures to various "wisdom traditions," we learn that wisdom is usually acquired from painful experience, from making mistakes and acknowledging them. But to acknowledge mistakes - including a mistake that I participated in that concludes this essay - requires humility, perhaps the single biggest difference between mere knowledge and true wisdom, which embraces the vastness of our unknowing.
Yet we currently don't allow our students to fail, and thus the possibility of learning from failure! Instead, we make a cult of winning, of tireless self-promotion. Considering the background of the professorate, this should not be a surprise: if a successful academic career is won by a string of ever greater successes combined with said self-promotion, why would we expect anything different of our students?
However, I remind readers of the tragic tale told by the modern history classic, The Best and the Brightest; in particular, how Robert McNamara and McGeorge Bundy, the architects of the Vietnam disaster, began their careers as academic stars, Bundy as the youngest ever dean at Harvard and McNamara as youngest assistant professor at the Harvard Business School at the time. Also relevant is a more subtle point: despite their boss's book Profiles in Courage, neither McNamara nor Bundy were willing to risk their careers or their presidents' popularity by telling the American people the truth about the unwinnability of the war. The Best and the Brightest only hints at the contrast between the careerism of the Kennedy crew and the self-sacrifice of the previous generation, but this contrast reminds us of another difference between, say, McNamara's brute assembly of "facts" and true wisdom: that knowledge so easily leads to narcissism, and thus defensiveness, but the humility born of wisdom fosters acceptance, even courage.
The elegiac tone of The Fog of War, a movie consisting of 11 "lessons" offered by a humbled McNamara in 2003, presents a notable contrast with the "can do" McNamara of the war years. Among these lessons are "empathize with your enemy" and "be prepared to re-examine your reasoning". McNamara and Bundy empathized with the North Vietnamese so little that the "domino theory," their justification for the war, made no historical sense. In fact, the Vietnamese had spent centuries fighting against foreign domination, so the last thing they wanted was to be one of the "dominos" in the foreign hegemony that we were supposedly fighting to prevent.
The same year that The Fog of War was released, two academic stars of the next generation, Condoleezza Rice and Paul Wolfowitz, convinced America to launch the invasion of Iraq. Like McNamara, who failed to use the unwillingness of almost of all of America's allies to send troops to Vietnam as an occasion to re-examine his reasoning, Rice and Wolfowitz were also full of answers, albeit, once again, to the wrong questions.
It might seem surprising that a professor of financial engineering, who must necessarily teach specialized knowledge of finance, mathematics, and computer science, should distract himself with such matters. Nevertheless, I first formulated the thoughts in the beginning of this essay as part of an application for a faculty position in my discipline (though, not surprisingly given the above, I didn't get the job). I also noted there that
Nowhere was that [lack of wisdom] as much in evidence as in the financial crisis of 2008, in which deeply unwise investment decisions were enabled by highly knowledgeable "quants". As a result of that massive failure of quantitative finance, the regulators have finally embraced the need for more wisdom surrounding the use of quantitative models. They have mandated a holistic understanding of the entire process of model development and use, including a thorough, independent model validation by those capable of an "effective challenge," a key phrase in the regulatory guidance documents.
In other words, regulators are forcing upon us the humility to admit that we might actually be wrong! But, given Warren Buffett's famous 2002 characterization of financial derivatives as "weapons of mass destruction," shouldn't financial engineering instructors already have been instilling the wisdom needed to manage such a great responsibility?
I know that I wasn't.
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