Is all this relevant to business? We will see that it is as Parfit leads us to.
Desires are essentially irrational, but the object of reason is to determine how to achieve what we want but not what we want. The world would have been different if we would have been unreasonable to the extent that we would have explored differently.
The choices we make in this world are driven by desires and our reasons take us to where we want to be. Time plays a very important role as what we are today is different from what we could be tomorrow and thus the state of our being is as time dependent as experiential.
This is my simple summary of what Derek Parfit wanted to explain through his life’s pursuit of knowledge.
This is a tribute to the greatest Philosopher of our times, Derek Parfit, who helped to unravel some mysteries around identity and self-interest that may have taken us closer to understanding of some puzzles why we behave the way we behave.
Derek Parfit died on the 1st of January this year and he has remained high on the list of the greatest thinkers of 20th and 21st century. His magnum opus “Reasons and Persons” & “On What Matters” are two of the greatest books of our times.
Our understanding of identity has been influenced by Locke and his emphasis on consciousness. Personal identity must have continuity in some way and this is achieved through consciousness of our being. In the book Identity & Diversity, Locke established the concept of repeated self-identification of oneself as a vehicle to continuity, which makes a person remain what he is as distinct from others. Thus the substance or the body is different from the consciousness, which gives the identity of a person and is the source of continuity over time.
David Hume pointed out some loose elements that change over time that could influence identity and that is where personal experiences became important. Derek Parfit went much further to explain the relation of mental states to identity and how experience and memory play the role of shaping identity, which could bind some elements together for continuity while keeping the field open to traverse in many directions.
What does all this lead us to and is this relevant in business at all? It is because the understanding of self-interest is crucial and Derek Parfit gives us some vital clues.
According to Parfit as he argues in “Reasons and Persons” that the pursuit of self-interest is irrational and he has given many examples where a person has acted against his self-interest. We would see around us many examples of this and I would try to give some of my examples as well.
Our ability to look at the current well-being versus future well-being is a direct confirmation of Parfit’s brilliant analysis as in Reasons and Persons. My example is the following:
Think of the discount rates we use for present value of future cash flows. The entire concept of NPV is a vindication that we want to entrap the value of the future in current times by using a discounting rate which must balance the current self-interest with a future self-interest.
This seems irrational why a person should prepone the ability to enjoy or postpone given that he must equally provide for his future generations what he intends to enjoy today.
The balancing of current versus future is one of the many examples where Parfit is so right that self-interest must take a holistic view and cannot be narrowly defined to meet certain definitive objectives. The very fact that one objective clashes with another makes it even harder; the human mind does not always optimize like the best algorithms do in linear programming models.
Forced with multiple choices, the human mind cannot distinguish between a better self-interest now versus a lower self-interest in the future or vice versa. Even between two competing options the one he could end up choosing could be the one least beneficial to him; between self-interest and self-sacrifice thus he is always treading on a thin line.
The object of reason, had it looked at what it is that we should want as a person, we would have had a different objective function in our lives.
On the contrary, we want to pursue desires that could be “unreasonable”, while our mind could be toying with “reasons” that lead us to these goals.
Perhaps this is why humans finally achieve the unreasonable desires, by striving to do things that would appear unreasonable to an ordinary person.
Parfit’s book, “Reasons and Persons”, could not have been better named.