On casting

The first contribution (rather too long) in the newly launched ‘On series’ will focus on intelligence and degrees of intelligence as I see it. It will briefly outline three casts of intelligence or stupidity as one might say (the one who sees glasses half empty rather than half full) – smart, average and stupid. Furthermore, we will explore their life prospects and coexistence with other casts. Of course, theory is far from complete or perfect and as such it does not encompass all aspects of life or outliers (e.g. professor of physics from former Soviet Union country who cleans toilettes in CALTECH, or Will Hunting who is social outcast and ignored by the system). Anyway, if you find it boring please skip it and wait for more interesting travel topics :)

The whole theory is based on axiom of motivation to work. This axiom (invented during some excessive drinking sessions and following deliriums in December 2009 and January 2010) states that all of us are motivated to work only by two things – remuneration (or money) and self-realisation. Please note that this is in line with basic assumptions of classical economics* :) We try to maximize our utility and this can be done either by buying things (for money) or by creating something lasting / useful (sort of self-realisation).

The world as I see it, is a home to three distinct casts of people: a) those who are smart enough to establish their own companies, posses unique brain power to invent and come up with world altering solutions, b) average or not-so-smart people who are smart enough not to work manually and use (sort of) their brain to earn their living, and last but not least c) stupid. Third cast’s name is not meant in derogative form and I would personally refer to it as rather imprecise but all encompassing and generalising. It is used only due to fact that cast includes also people of wrong character who do not deserve any other title. Besides criminals it complies of all manual workers who live by their hands and administration employees (e.g. state and government bureaucracy).

As already mentioned first cast is of Brims and Gates who establish their companies and boldly explore opportunities market economy offers**. Alongside entrepreneurs we should put scientists who have gift of superior intelligence and decide to use it in research rather than commercial way. To those individuals belongs my biggest admiration (also I am compensating for my lack of intelligence as I do not see myself anywhere in their company :) ). Unlike entrepreneurs, scientists never become ultrarich but are happiest folks of them all anyway. Commercially successful inventors become rich beyond any measure but need extensive network of ‘mediocre’ protectors – more on that in a moment. Only certain individuals of ultrarich ‘businessmen’ who exploited lawlessness following fall of communism are included in this cast. 99% of them are criminals but that one percent is smart enough to keep their riches together and increase their wealth even after law and order was brought to town.

Second cast, the cast where I humbly position myself, people of mediocre intelligence who are not capable of great things but are good enough for middle management. They are employees of private sector working on management positions and creating standards and templates to facilitate understanding of processes and tasks. Second cast is the buffer cast separating the bright from the stupid. Included in this cast are all the advisory firms which feed of potential and ideas of the smart ones. Any accounting, financial advisory and services firm is basically creating buffer between inventors and consumers and criminals. Basically we can say that finance industry is run by average for protection of smart from stupid. While smart invent, average play with numbers so the stupid buy the ideas of smart and / or do not steal from smart. This was handily summarised by prof. K. J. Arrow in his lecture given at Fudan University in Shanghai, China on 30 October 2008: ‘Economists are the guardians of possibilities of civilisation’ (I am 99% sure he meant something different but anyway...).

Third and the last cast is the cast of those who mindlessly consume products invented by smart and sold by average. Of course, same stupid need to manually produce these products in a first place :) In order to avoid manual work they cheat or try to get into one of the previously mentioned classes. This attempt is encouraged by government (usually by attempting to increase percentage of college educated population) which itself comprises of stupid.

We assume that no smart man will waste his time and energy on politics (fairly obvious observation) as he will find better remuneration or self-realisation in research or business. Assumption was violated in 19th century when institutional environment and blending of public and private institutions (e.g. East India Company) enabled satisfactory self-realisation for young men in service of her majesty.

Mingling of the categories is possible as some of the average end up in first class - by exploiting certain circumstances specific for time and place (e.g. Central and Eastern Europe in 1990’s and China today, offering opportunities for eager and bold students to study in the US); some of the stupid end up in second cast (mostly criminals who in attempt to disguise their lack of brain or ability, cover their tracks in illegal manner – e.g. cases of Nick Leeson and Jerome Kerviel) and vice versa (for both examples listed). Although jumping two classes above or below your abilities is extremely difficult it is possible in certain extraordinary circumstances (e.g. revolutions, dictatorship, military junta or anarchy).

This mingling of the casts is main facilitator of economic crisis as in time of plenty we (especially average – charged with protection of smart) let our guard down and allow sufficiently high number of stupid to enter our ranks and to wreak havoc in the system. Imagine giving control panel (managed by average) of nuclear arsenal (assembled by smart ones) to a toddler (guess who). Same goes with mingling of first and second cast as system encourages sufficiently high number of average to enter the cast of smart and dilute the invention process (some degenerate rip off of Schumpeter’s business cycle theory).

Anyway, as you can see although broadly outlined this theory still does not cover all aspects of life. Additional angles can be revealed later in other posts or in comments section. This post’s aim was to sketch ideas I was playing with in past few months and propose simple explanation of some aspects of our lives. If you find it interesting please do not hesitate to post your comments below (usual decency rules apply).

Notes: * JFGI; ** Cases of other regimes will be discussed in following posts.