MMA Root

Blinded Rationality

During the journey of life, individuals often happen to be at a point from where they have to choose a path from among the many paths set before them. Once they choose a certain path, the other paths are automatically closed and will never be available to them in their lives. Individuals think that the path they have chosen is better than other paths and begin to believe that this is the right path for them. But really, there is every chance that one of the other paths could be better. The irony is that the other path cannot be seen or seen unless selected. This alternative path cannot be imagined or imagined and the people imagine that the other path is more favorable than the chosen path. I call this situation ‘blinded rationality’ because its rational but blinded choice is by the limitation explained above.

It is important to understand this concept because we as individuals, an organization or an institution make decisions for ourselves or for a group or for the community to achieve a particular goal. Even the chosen path has fundamental problems and opportunities. Each selected path has multiple lanes and each lane takes us to different destinations. We reach different destinations depending on how we manage our problems and opportunities. For example, what would be the state of the U.S. economy if they chose some ‘X’ as their President instead of President Trump? What might be the situation in the economies of other countries or regions? It could be better or worse but we would never be able to see that. The world under ‘X’ would be different with its underlying problems and opportunities. These problems and opportunities may have been managed by various policy decisions. As a result, he may have given us a different destination, one that is unimaginable and unimaginable. No one can prove that. It is best that it can only be in our minds or in paper.

Another example of a site is the Indian stock market. India’s growth rate was around 8% from 2014-2016. Since then it has not seen the previous level although it is growing at or above Hindu growth rate. However, the Indian stock market has climbed to its recent historic peak. The stock market community rejoiced and celebrated the achievement. Skeptics in the media questioned why the stock market is climbing and India is registering a lower growth rate over the last 2 years. Let’s see the BSE Sensex from 2014-2020. The highest Sensex numbers from 2014 to 2020 are 27739, 28044, 27714, 32683, 37128, 38460, and 40478 respectively. In the first 3 years, the index did not grow. It is stagnant while India is registering an 8% growth rate. The Sensex grew more than 15% while the growth rate of India was less than 8%. The following year, Sensex grew around 15% again although India registered a lower growth rate than the previous year. Over the last 2 years, Sensex has registered less than 5% while the Indian economy has registered a growth rate of more than 5%. The recent peak was really overdue. If we do a little math multiplying 27739 by the growth rate of India in that period, we reach the level of almost 40000. This peak is typical according to the growth rate of India. However, people look at this figure in a different way. Some think it is an irrational exaggeration. Some others think that the Sensex should have reached 45000 if the growth rate over the last 3 years was around 8% or more. What is true is 40000 because of the path we have chosen. The 45000 or 50000 is not in our minds or in paper but because the other paths are closed as a path was chosen with some rational thinking. However, 45000 or 50000 was not incredible. We cannot prove that because of human limitation. We cannot see a different world at the same time.

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