The Deadly Tradeoff Between Learning and Safety

Although learning things the hard way is often seen as a benchmark of failure, it often might be the only way to learn. Particularly in situations of first time discovery, repeated failure is all but necessary to produce a meaningful new outcome. Learning things the hard way should only be seen as failure when one is learning something already discovered by another which they had potential to learn. Coddling is almost synonymous with ignorance in humans, and the rule remains true even in large conglomerations of people. Societal and economic learning takes place most effectively in situations where failure is allowed. When citizens’ fear of failure lets them seize regulatory control, a great means of discovery and growth is lost. All societies must navigate the trade-off between failure and safety with an understanding that the strongest long-term growth requires the freedom of businesses and people to feel the effects of failure in their own pursuits.

Failure has no virtue in itself, but the conditions that allow it are necessary to all human growth. This is primarily divided into parts: there must be the freedom to meaningfully act even in unconsidered ways, along with the freedom to feel the results of those actions. The requirement to allow action outside previously delineated paths is vital because entities in power will default towards conditions that are more advantageous to their understanding and control. Discovery is not merely the combination of previously undertaken paths of action, but often the addition of something fundamentally new. While all human action bears likeness to other human action, one cannot hope to create something new without a departure from prior methods. While some discovery is a linear progression in a robustly studied field, other discovery is mere misadventure or people beyond their time who manage to have deeper insights and cut further into reality than those before them. Those with a deep understanding of the advances of the past, but some fundamentally new method or hypothesis, are those who will ultimately contribute most to the canon of human knowledge. The ability to feel the consequences of their own actions in this discovery process is extremely important because of the unbounded potential for loss and return. Only they can gauge their own tolerance for uncertainty, and only they understand the outlay of trade-offs they partake in as they attempt something wholly new. The information of those who discover is so subjective that it is impractical and immoral to coerce any outside groups to either share in the profit or risk of the endeavor. Any requirement for outside involvement that could affect the risk and returns could damage the discovery process by forcing those with vision to diminish their plans to appease those with less understanding of their potential for discovery and loss, and thus limit the growth of collective human capacity.

The people or state desiring to limit negative outcomes and ensure good ones have structural incentives that damage entrepreneurial discovery. It is not necessary to even go into the obvious detriment of higher tax rates on success to see the potential damage done by other methods. Heavy business regulations tend to push entrepreneurs and businesses away from discovery, and towards a more beaten path. The desire to protect business that currently exists along with the difficulty of regulating the unknown makes new forms of business and discoveries receive a difficult task when dealing with legislation. Regulatory capture by big business is no secret, and they often lobby to make new entrants to the market fail before they even begin. Many regulations that might not be intentionally targeted towards one specific type of business have unintended consequences as they operate from an understanding of the world that is formed by what has been observed already, and this problem is only exacerbated by more specific regulation. Regulating something fundamentally new is difficult, so it is no surprise that there are political forces against it. Regulating what has been regulated before is simpler, and those with a new idea are often given the worst interpretations of standing laws or have new legislation written for them that clumsily seeks to hem-in societal tail risks while limiting their upside.

The desire to protect businesses and people from malicious or foolhardy business practices is not wrong, but it must always be seen in perspective. For every measure of regulation and fear of the new, the rate of discovery is slowed. While economic discovery is not the highest good and must be held in contrast with the need to limit anarchy, it is often one of the greatest differentiators between a nation’s failure and success. A nation that allows their business to trample on the rights of citizens or other businesses is not worthy to be called a nation. On the other hand, a nation that dampens the best ideas of the brightest citizens will become lost in the annals of history through domination by a stronger, more innovative nation. Neither of these risks should take precedence over the other, but safety should only be pursued with an understanding of its damage to discovery.