Monday, October 23, 2017

Knowledge and utility

"The real test of knowledge is not whether it is true, but whether it empowers us. Scientists usually assume no theory is 100 per cent correct. Consequently, truth is a poor test for knowledge. The real test is utility. A theory that enables us to do things constitutes knowledge."
Youval Harari
And, so what's the argument here?
It seems to be: Knowledge which has no practical utility is like the sound of one hand clapping. If you can't apply it, if you can't do something with it, if it doesn't improve your project or business, then such knowledge is "worthless" in the "utility space".

And that, more or less, brings us to the insight that "value" is dynamic and not constant everywhere.(*) Dynamic value means dynamic mapping of objective value into utility value. To wit: objective value, like truthful knowledge, may be value-less in some circumstances. Or, put another way, there is a non-linear, and perhaps even unpredictable, relationship between valuations

Example (used often, so I claim no authorship): If you need five dollars cash and you don't have it, then five dollars has real objective value. But if you have five dollars and don't need it because you actually have 100 dollars handy, then the utility -- meaningful value -- of five dollars is less than it's objective value because your circumstances probably don't change whether or not you have $100 or $95 handy.

In other words, value is dynamic depending on need, application, timeliness. Knowledge shares these same properties: if it comes too late, it may be true, but it has no utility. If it's irrelevant to the project objectives, again it may be true, but it has no utility.

The real test of knowledge is not whether it is true, but whether it empowers us.  How true!
(*) OMG! Project cost is objective and constant everywhere, but project value is dynamic and not constant. What does that do to the business case, the ROI, and all the rest of project finance that depends on comparing a constant-value input with a constant-value outcome? Grist for another posting!

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