“What cannot be measured cannot be managed or improved upon” is a common mantra we hear often, not just in the professional context but also among fitness enthusiasts with wearables measuring everything from glycaemic index to sleep quality. But there’s also the good old Goodhart’s Law which states that “When a measure becomes a target, it ceases to be a good measure.” Neither is a law of nature to be considered true in every context.
This is a transcript of a podcast where Derek Thompson interviews C. Thi Nguyen who is the author of the book The Score: How to Stop Playing Somebody Else’s Game, discussing the pros and cons of metrics.
Derek lays out the context: “I care a lot about my Oura ring heart-rate variability score. But I’ve found that my HRV is negatively affected in the short term by all sorts of activities that I enjoy: not just strenuous workouts, but also staying up late with a friend, or having a cocktail after 7pm with someone I love. A life lived exclusively by HRV-maxing would be profoundly boring. There is no fitness-tracker metric for good friendships.”
Nguyen relates this to his love for rock climbing: “…with rock climbing, you fall in love with an activity. You find a metric that at first seems to push you toward becoming a more advanced rock climber. But ultimately that metric becomes the single thing that you focus on. It takes over your life.”
He calls this ‘Value Capture’: “Value capture is what happens when your values are rich, subtle, or developing. Then you’re put in an institution, or near a technology, that gives you a simplified measure, typically quantified, and then, that version takes over. Like me going into philosophy for love of philosophy and then aiming at the rankings. Or starting to exercise for health and fitness and becoming obsessed with BMI or VO2 max or some other simple measure. Or in education, one of the things that I’ve become really obsessed with is this gap between wanting to educate students for wisdom, curiosity, and reflectiveness, and then the institution coming to be focused on a few easy measurables, like speed of graduation and starting salary.
I think the best way to describe the problem of value capture is that when you’re value captured, you’re outsourcing your values. Instead of developing your values on your own, you are taking them off the rack. You’re taking them in a particular formulation that comes from somewhere else, that has other people’s interests embedded in it.”
Buffett fans might get reminded of the inner scorecard. Both Derek and Nguyen agree that metrics aren’t bad: “Metrics are useful because they compress information. They are dangerous because they compress information.…One is to say it’s not that these metrics aren’t measuring something real and that they aren’t objectively tracking something that we want to know about; it’s that they speak so loudly that they threaten to drown out other nearby qualities that are also incredibly valuable but are harder to measure. I think there’s a particular kind of quality or character to what’s easy to metrify… an example I think about a lot is in health policy is saturated fat and correlations to lifespan and heart attack rate.
And then there’s the other stuff like the deliciousness of brie, the joy of a perfectly ripe cheese, the tradition involved, the happiness of it. And these are much harder to quantify. My claim isn’t that lifespan and heart attack rates are unimportant. It’s that this other stuff tends to not be weighted at all in large scale social conversations, because it’s hard to measure.”
Nguyen then introduces the concept of ‘Striving Play’ by stating the difference between a goal and a purpose – “When you have friends over for cards, the goal is to win, but the purpose is to have fun…Striving play is when you’re trying to win, not because winning is valuable, because you want something about the process. Party games make this particularly clear, because when you have your friends over and—unless you’re a complete asshole—if you try to win, but you lose, and you all had a great time, you don’t think the evening has been wasted.
You have to understand that for some people, winning is the purpose. Their goal and purpose are one. If they just want to win, they just want to win. But for some of us, I rock climb to clear my mind. And what’s interesting is I cannot clear my mind by trying to clear my mind. So the philosophers have a name for this: a self-effacing end. You cannot clear your mind by trying to clear your mind. You try to clear your mind by trying to climb the rock as hard as you can and forgetting that you’re trying to clear your mind.”
Derek refers to this beautiful quote in the book from Bernard Suits: “To play a game is to voluntarily take on unnecessary obstacles for the sake of making possible the activity of overcoming them”
Nguyen elaborates on the meaning of games and meaning of life before Derek invokes Nietzsche to summarise Nguyen’s point:
“Nietzsche rejected the ethics of Judeo-Christianity because he thought it offered a system of values that separated people from our instinct. It made us kind, not for the sake of kindness, but for the sake of getting into heaven. He despised external forces of morality and invited people to reject those traditions and get in touch with their own instincts—our own Dionysian impulses—and to create a life and a system of values that was true to us and not just true to whatever system enforced itself on us. In short: Don’t be who Christianity wants you to be; don’t be the person whom external systems of values want you to be; be the kind of person that is most authentic and even playful and artful that you can possibly muster.
And in a way, what you are doing here is saying let’s have more art, let’s have more play, let’s have more instinct. Let’s have a class whose grading is determined by the instincts of the class and not by the administration that I happen to be employed by. Don’t be played by the metrics and the games that you find yourself sort of fallen into. Develop your own sense of what is valuable and play that game that you choose”
Nguyen ends on a high note combining Aristotle and Kant: “the meaning in life comes from difficult activity that you voluntarily chose yourself”.
We would recommend listening to the podcast or reading the transcript in its entirety to learn about Nguyen’s innovative approach to grading his students and why ‘Pick up artists’ aren’t having fun as one would assume, among other things.
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Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.
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