“Suppose that a great commotion arises in the street about something, let us say a lamp-post, which many influential persons desire to pull down. A grey-clad monk, who is the spirit of the Middle Ages, is approached upon the matter, and begins to say, in the arid manner of the Schoolmen, “Let us first of all consider, my brethren, the value of Light. If Light be in itself good—” At this point he is somewhat excusably knocked down. All the people make a rush for the lamp-post, the lamp-post is down in ten minutes, and they go about congratulating each other on their un-medieval practicality. But as things go on they do not work out so easily. Some people have pulled the lamp-post down because they wanted the electric light; some because they wanted old iron; some because they wanted darkness, because their deeds were evil. Some thought it not enough of a lamp-post, some too much; some acted because they wanted to smash municipal machinery; some because they wanted to smash something. And there is war in the night, no man knowing whom he strikes. So, gradually and inevitably, to-day, to-morrow, or the next day, there comes back the conviction that the monk was right after all, and that all depends on what is the philosophy of Light. Only what we might have discussed under the gas-lamp, we now must discuss in the dark.“
GK Chesterton
It’s easy to see why theory gets, and often even deserves, the bad rap – because it so often is little more than high level hand-waving, devoid of any relevance to reality.
It’s very easy, and gratifying to talk at a high level.
It sounds important so it feels good. And it impresses others – and impressing others also feels good.
And it pays much better – as anyone who makes a living off PowerPoints would know.
You get paid a lot more to talk about how to improve teaching than to actually teach kids yourself, or to talk about how to reform governance than to actually try to do it.
And you’re not responsible for the outcome either because you don’t have any skin in the game. So you don’t need to care about delivering results, because you’ll get paid anyway.
You can have your cake and eat it too, feel good about doing something without actually doing anything.
Theory
The story of the lamp-post is the story of practicality without theory, which is the most impractical thing there is.
Theory gets a lot of flak for being impractical, but there’s nothing more impractical than doing away with theory.
In one world, that is the world of PowerPoints and conferences, you’ll be looked down if you try to get your hands dirty and actually do something.
And in another world, in the trenches at the front, if you start theorizing, you’re seen as an academic type, which is a euphemism for ineffective. Someone impractical, of no use – someone who can only talk, not do.
It’s the person of action, the one always rushing about, now here, now there, one day yelling at someone, another day crying with someone else, who’s the one who gets things done.
Taking a step back, pausing to reflect, looking before you leap – who has time for any of that?
Too busy trying to knock down the lamp-post to discuss the desirability of light first.
And once the lamp-post is knocked down, too busy trying to get it back up to learn from what just happened.
“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”
Abraham Lincoln
In a way, that’s the pitfall of Lincoln’s tree – that the one who sharpens his axe is, in the eyes of onlookers, doing nothing.
The action-oriented hero starts chopping immediately, no dilly-dallying for him.
After several hours, he’s far ahead.
And the theorist sits and thinks. And spends hours sharpening his axe.
To the world, though, it looks as though the man of action is making progress, and the theorist hasn’t even started.
Things being what they are, with the inevitable comparisons between them, all the action oriented fellows will push themselves on ever more, chopping away harder and harder.
Sometimes, it makes sense – it’s faster to close your mind and use brute force if it’s a very tiny tree, rather than think for hours how to go about it. But that’s if you know you’ve got to chop only one tiny tree.
Capex v/s Opex
I always think of it as the capex v/s opex tradeoff – is it better to invest a lot on capital, or just get it done through routine operating expenses?
The analogy makes sense through an example.
If I had a small store making shirts, I face the question – should I pay a lot of money for a machine that’ll lower the cost of producing each shirt?
Or should I just hire workers to produce the shirts? That’ll save me the money I’d spend on the machine, though the cost of production per shirt would be higher.
The answer is, of course, ‘it depends’.
It’s more tangible if you put in numbers:
A machine costs $10000 up front, and the cost of labour is $5 per shirt (which you get from the wages per hour and shirts produced per hour), and with a machine it costs only $0.5 per shirt. And a shirt sells for $55.
If I was going to produce 100 shirts, I’d never pay for the machine, because I’d end up spending 10K and making only (55-0.5)*100 = $5,450 – a loss of $4,550 after deducting the cost of the machine. Whereas by hiring people I’d make a profit of (55-5)*100 = $5000.
If I was going to produce 10000 shirts though, with the machine I’d make (55-0.5)*10000 = $545,000 – $10,000 (the cost of the machine) = $535,000. And by hiring people I’d earn (55-5)*10000 = $500,000. Which means I’d make more money by investing in a machine.
It’s easy to see the breakeven point – the number of shirts I need to produce to make it worthwhile to invest in a machine.
The machine costs $10,000, and it saves me (5-0.5) = $4.5 per shirt.
So $10,000 / 4.5 = 2,223 shirts. Anything beyond that, and it makes sense to invest in the machine (with a lot of unstated assumptions behind this that I won’t get into – like the fact that the price of a shirt wouldn’t be affected by my increased production).
After the breakeven point, the machine starts paying for itself.
Incidentally, the example isn’t entirely hypothetical – I can recall doing the same calculations before investing in a washing machine and debating whether to build a home gym (capex) or pay for membership (opex).
Or whether to put in the effort to automate some work or just do it manually. Automation sounds nice, but if the effort to automate is going to be more than the effort to just get it done, and if I’m never going to do that work again, maybe it’s not that smart.
Something small, something you know is one-time, i.e. you’re only going to be doing once – perhaps it’s not worth making a capital investment.
But if you know you’re going to be repeating something countless times – why wouldn’t you invest in making it as efficient as possible?
A tiny amount, compounded many times, grows to be huge.
Or more simply, something that saves you ten minutes every day is worth far more than something that saved you a day once. Something that saves you a dollar everyday is worth far more than something that saved you a hundred dollars once.
Investing
Thinking through theory is like investing in capital – the work doesn’t produce shirts in itself, but it creates something that makes it much easier to produce shirts subsequently.
I can’t imagine chopping a gigantic tree through brute force without sharpening my axe.
That’s like being too miserly to pay for a machine when you’re planning to produce millions of shirts.
Penny wise, pound foolish.
It’s getting to work immediately and finding out you chopped the wrong tree because you didn’t bother to think about it first. In other words – tunnel vision, looking only straight ahead.
Too busy to take a few hours to think, but not too busy to rush around mindlessly for days on end.
Even if you succeed through brute force, the sheer amount of redundant effort is a massive opportunity cost. Like destroying a building to kill an insect – it might get the job done, but is it necessary? You could have got the same result with far less effort by a smarter route.
And it’s far more likely you’ll mess something up, as Chesterton’s lamp-post illustrates.
Tunnel vision might get me out of the tunnel, but if I haven’t first thought about which exit to aim for, getting out of the tunnel isn’t likely to help much.
Far too many examples abound, but there are two that I’ve seen too often.
The organizations perpetually in fire-fighting mode, running today to douse out this fire, and tomorrow that one, because there never was any system to deal with fires, no one to see beyond the immediate requirements towards a longer term vision.
As soon as a fire arises, the whole organization turns to deal with it, and forgets everything else, and no one watches for the other fires waiting to spring up.
The second – the individuals who jump into a maze and sprint furiously without trying to figure out the key to the maze first.
They end up working double or triple the hours and without anything to show for it, while others win with far less effort.
It’s not really ‘genius’ that’s the difference – it’s only the ability to think abstractly at a higher level than the immediate, beyond the task immediately right before you to the broader vision you aim at.
Practice without theory is the equivalent of joining the dots on one of those kid’s drawings without bothering about which order you’re going to join them in.