Friday, October 16, 2009

Wait A Second

Dan Drezner links to my comments on the Trillin piece and summarizes thusly:
Everyone and their mother is linking to this Calvin Trillin op-ed from a few days ago...This has led to many nodding heads in the blogosphere about how smart people can be so dumb and greedy, etc.

Except that, if one takes Trillin's tale at face value, the problem isn't the smart guys -- it's the fact that the dumb guys are supervising the smart guys. They're no less greedy than the smart guys... just less intelligent. Even if one takes Trillin's model as sound, it's the combination of smart and stupid that's the problem.

Now, there are two directions one can go from that conclusion. One could fire the smart guys so the dumb guys don't get put in that position ever again... or one could hire smart guys for both management and operations.

I'll assume that he just googled the Trillin piece, found my post and half read it, and decided to link to it while in a hurry because I was actually making a point about meritocracy versus aristocracy. That has little to do with intelligence. It's a matter of orientation and habituation.

I do think, however, that the problem is that the MBAs are in charge of the quants, and the latter are smarter than the former. Or, more specifically, the MBAs don't know enough math.

And to the point of hiring smart guys for both positions, I don't even think the smart guys full comprehend the issues with the mathematical models they created. There are certain assumptions intrinsic to them that make sense in physical systems, but might not in human one with a feedback loop.

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