Failure

I've been thinking about this post a lot in the past few weeks. I hope you enjoy it in all its counterintuitive glory.

A month or so ago I was sitting in an economics class when lightning struck my brain. What was this great epiphany, you ask? It was simple really: failure is what makes the world go round.

That's right, folks. Its not money. Not technology. Its definitely not government. Failure is our friend.

Let me explain.

My epiphany came as a result of a discussion on market equilibrium - when the quantity that people want is supplied by the firms in a given market. (Don't worry, I'm not going to bore you with any details. Just bear with me.) My mind drowsily awakened from the spell that had been cast on it from yet another disjointed lecture and perceived that there was more to the story than that suppliers and consume magically coordinate their efforts to produce and consume at some optimal level.

How is this level really found? Its simple really - sometimes a firm doesn't make enough product, or overproduces, isn't efficient enough, etc. and then it dies. If it doesn't, then it reforms in some significant way. Really, the optimal output level is a product of repeated failure.

This, of course, makes sense. You and I, we make decisions. At times, we mess up. We burn our hands on the cookie sheet, so to speak, but we eventually learn how to live more efficiently and avoid negative side effects.

By now you should be rolling your eyes and thinking, "This guy is really dumb. This is obvious." And you would be right in that assumption if I didn't carry the idea one step further.

If failure is so important and leads to optimal behaviors in individuals, firms, markets, governments, etc., what happens when we prevent it from occurring?

(Stop now and re-read the previous paragraph...please.)

With regard to firms, when we prevent failure, we eliminate the signal sent to the rest of the market that it is 1) saturated with firms and there are no profits, or 2) that the behavior is not suboptimal. In other words, we subsidize the inefficiency.

Parents understand this principle very well. (Well, good parents anyway. Yes, that is a judgmental statement. Deal with it.) If you remove the negative consequences to a bad deed, you teach a child that it is okay to continue that behavior.

Government is the same way. This is why republican democracy is the most efficient form of government. We the people identify failure on the part of our elected officials and vote in people we think have learned the lesson and will carry us onward.

One more thing...

If you are a Christian, and more especially so if you are a Mormon, you believe in a pre-earth life and that there was a great conflict there between God and Satan (Job 38:7; Jeremiah 1:5; Luke 10:18; John 8: 58; Revelation 12:4, 7-9). This conflict centered around the plan of God to grant to all man the power to choose for ourselves - to be tested in this life as to whether we would follow Jesus Christ. This is called moral agency. Satan's rebellion centered on revoking that gift and thereby forcing all men to choose only his way. It is my personal opinion that the devil was afraid of failing and therefore sought to implement a different plan whereby he would be assured success. (For more on this and the power of agency: Moses 4:1-4; 2 Nephi 2:27; Mosiah 5:8; Helaman 14:30-31;Note: These references are from what we as members of The Church of Jesus Christ of Latter-day Saints refer to as "modern scripture").

Essentially, what I am saying, if I am saying anything at all, is that failure is crucial to God's plan. We all are meant to fail, to learn, to realize that it is only through the grace of Christ, by means of His atonement for sin, that our failures can be rectified.

Also, what I am implicitly stating is that failure is an essential process and a true principle in every field be it theology, economics, sociology, etc. What I am also concluding is that denying failure as it should occur as an indicator in: markets, in behavioral development, in government, etc. is nearly always a product of fear and is selfish. It revolves about the idea that somehow we can't learn, won't learn, or around the corruption of private interests.

I believe in the gift of failure and in the ability in the human soul to shape it into the greatest tool we may ever have.

Of course, not all people learn the right lesson from failure...