With rapid advances in data analytics, the distant philosophical debate between ‘free will’ and ‘determinism’ is coming closer to leadership teams.
In 1814, the Marquis de Laplace, a French mathematician, held the following argument in his ‘Philosophical Essay on Probabilities’: ‘An intellect which at any given moment knew all of the forces that animate nature and the mutual positions of the beings that compose it, if this intellect were vast enough to submit the data to analysis, could condense into a single formula the movement of the greatest bodies of the universe and that of the lightest atom; for such an intellect nothing could be uncertain, and the future just like the past would be present before its eyes.’
Given a specific way things are at any given time, the way things go after that is fixed as a matter of natural law. Cause-effects relationships are mechanically unbreakable, in line with the idea of determinism. The present informs the past and the future, which is thus pre-determined. The ‘intellect,’ which Laplace calls a super-intelligent ‘demon,’ sees it all, as anyone in its position would.
Anticipating that knowable future is precisely what data scientists are attempting to do. to reach this objective, they are developing advanced predictive tools in manufacturing or supply chain management and 'nowcasting' solutions in macroeconomics.
As data gathering, storage, and analytics technologies expand and improve, the role and responsibilities of leadership teams might be increasingly questioned. With its data-dependency mantra, the Fed is a case in point: it can be on autopilot, with decisions automatically derived from external factors through a smart ‘formula.’ From that point of view, Mr. Powell is just a button-pusher.
Similarly, if all the data related to Michael Porter’s five forces were accessible and analyzed by a super-intelligent computer, any given company’s optimal course of action could be defined. Under such circumstances, executives would implement decisions by following a ‘formula.’
In the past, leadership teams would operate with little information and assume that the future would depend upon their decisions and free will. Only Laplace’s demon knew that the future is pre-determined and that human free agency is ‘an illusion of the mind.’ From now on, this will become more apparent to everyone thanks to the evolution of Big Data.
Determinism is faced with objections from many philosophers, including Descartes and Kant, although there is little agreement about the leading counterarguments. Some, such as Thomas Aquinas, propose adopting compatibilism as a compromise.
To me, the whole debate matters as far as it relates to accountability – whether in a firm or, more broadly, in society. Under a deterministic approach, there is little to none of it: individuals are passive subjects. Assuming the existence of free will leads to an opposite conclusion: individuals are active players.