By Solomon Tesfaye
Reality is in the eye of the beholder. Certainly we have all heard the old adage that beauty is in the eye of the beholder but the expression can be extended further to posit that our evaluations of our existence are constructed by cognitive biases based on our own experiential history and theories of the world. We create our own realities through our language, modes of thinking, and behavior. Thus, when Robert Chambers, in his book Whose Reality Counts?, wrote that “economists have come to feel what can’t be measured, isn’t real,” he was partially right only insofar that it describes the professional socialization and values of many economists or other professionals in a field of quantification. The question isn’t so much, Is what can’t be measured not real? as it is: It isn’t real for whom? And this is the whole premise behind the title Whose Reality Counts?
Learnings from physics and psychology illustrate that our perceptions of both physical and personal reality are based on a web of socially constructed approximations and distortions.
The wave-particle duality concept in quantum mechanics stipulates that an object may be described in terms of both particles and waves. We assume that our measurements of a quantic entity will have no bearing on its nature. However, that assumption is incorrect. A group of Australian scientists recently published findings in Nature Physics which demonstrate that a particle’s wave or particle nature is essentially undefined until it is measured. What has been measured becomes our reality.
This reality is an artifact and we see this occurring at both the micro and macro level. For instance, the Hawthorne effect is a psychological phenomenon which suggests that people change their behavior or performance in response to observation or receiving attention from researchers rather than any manipulations in independent variables. The Hawthorne effect has also been observed in clinical trial settings where improvements in rheumatoid arthritis were seen from increased attention through participation in the clinical trials. Again, we see that the very act of observation affects what is observed.
To say that the “truth is always an amount – count numbers; only numbers count” is symptomatic of a neoliberal culture that serves to simplify reality into standard categories. The leading measure of well-being, at least among most economists, is GDP (Gross Domestic Product); yet, much ill-being contributes to GDP. Historically, GDP measures only output that is bought and sold. Thus, if I drove to a pub, got drunk, drove back home, crashed and died, I would have increased the real per capita GDP by thousands of dollars. The alcohol, costly fuel, insurance fees, ambulance and repair costs would have contributed to GDP and hence my country’s well-being.
In 2013, the act of selling drugs such as cocaine and paid sex-work was added to the EU calculation of GDP and the changes increased UK’s GDP by approximately £10bn. Yet, the biggest omission in measures of GDP is unpaid care work or “home production” by women, which is often neglected in global and regional economic policy agendas. The OECD (Organization of Economic Co-operation and Development) found that adding such inputs in calculations of GDP would increase the GDP of its member countries between 20-50%. Convenience simplifies diversity. In Robert Kennedy’s words: “it [GDP] measures everything in short, except that which makes life worthwhile.”
So, does this matter? Yes, it matters. Where energy flows, attention goes. Thus, where, how, and what we measure affects where we place our energy and resources. Unfortunately, GDP is still used to set targets for growth among several countries and remains to be a proxy for development and well-being. Under America’s Marshall plan, countries also had to produce an estimate of GDP in order to receive post-war aid. Such measures held power and determined public policies that affected the reality of diverse livelihoods—and they still do.
Even within our organizations and performance measurement systems, we attempt to reconstruct reality to make it manageable. In annual performance reviews you see the biases to measure and weight parcels of human nature in questions like “if you had to put [employee] on a scale, where would you place him/her?”; a question asked in order to rank individuals for analysis. To be fair, standardization simplifies evaluation and makes comparisons easier but such imputed values treat people as entities and completely misses the mark on truly capturing each person’s individuality–which requires more thought and judgment.
When asked if his organization measures work-life balance, I once heard a senior executive say, with a smirk: “Of course! It’s called profitability”. I presume the assumption imbedded in that statement is that profitability is positively correlated with work-life balance, which is a misconception that can lead to high attrition rates. Attrition reduces overall profitability. When we attempt to colonize the unmeasurable, we revert to crude approximations that end up being costly and unsustainable.
Why count at all then? Don’t get me wrong, measurements are critical tools for determining progress and understanding our environment. However, if our measurements are wrong then our actions—based on those measurements—will also be wrong. We need to adopt a bottom-up learning process because “counting promotes the counter and demotes the counted” (Robert Chambers). Thus, we have to enable “local” people—or the subjects of our measurements—to undertake their own analysis instead of applying our reductionist criterion. For instance, in Bulgaria certain communities’ criteria of well-being and wealth emphasizes children’s education, good health, and good humored nature—no GDP nonsense involved. The wealthiest person in the community is often ranked in the lower tiers if he is unhappy or has a bad temper.
To deem the unmeasurable to be unreal is—according to the McNamara fallacy—an act of suicide. In our ever-changing and unpredictable world, flexibility is required. Flexibility is lecturing less and listening more. Flexibility is decentralization and empowering face-to-face managers. Flexibility means management by walking around to the front lines—a concept known as the Gemba walk in Japan. Flexibility is not profitability.
Solomon Tesfaye comes from an analytic background as a behavioral neuroscientist by training but primarily working as a consultant for a strategy and insights firm (Kantar). He’s currently an MPA candidate at the Woodrow Wilson’s School at Princeton. Whenever he’s not being a fool, he enjoys playing chess and learning how to fail.