Intelligence and Wisdom

Intelligence is having strong cognitive abilities. Wisdom is good judgement.

Those who are intelligent do well at analyzing complex data. Data by its nature is historical. The intelligent are good at explaining the past. The wise are good at assessing current situations and determining the likelihood of future outcomes.

From early childhood our intelligence is measured by tests and school grades. This is a easy measurement as it’s ex-post. Those perceived as highly intelligent are put on fast tracks and given many opportunities to excel to the top of their classes or organizations. They excel at many technical skills like  math and verbal communication. Their minds can be microscopic and/or telescopic, able to view that about which people of average intelligence seem clueless.  They can make sense of an otherwise ambiguous past which gives them and their audience confidence in their ability to predict how things will transition in the future. However, there is little relationship between those who most convincingly understand the past and those who are best at predicting the future. As everything is forever transitioning and everything is unique, using the past as a basis to predict the future puts limits on one’s imagination. This is significant as we can’t see what we can’t imagine.

The wise are best at assessing current situations and predicting how they will transition over time.  Their wisdom is generally more valuable than the perspectives of those considered intelligent. However, it is difficult to measure and identify those who are wise. To do so would require measuring ex-ante outcomes which would take time for forecasts to be realized (or not) and require many forecasts.  Moreover, excellent forecasters give different scenarios percentage probabilities which is not what an interested audience generally wants as percentages don’t give their audience as much confidence about going forward as do definitive forecasts. Thus, because of the difficulties of measurement and little demand by the general public, identifying those who are wise is not done systematically. However, those in the interested audience who are self-confident want forecasts from those who are wise, not those who are intelligent.

The difference between the intelligent and the wise is clear as academics are intelligent and successful business people tend to be wise (and/or lucky). Academics are great at explaining the past and confidently predicting the future. But if the value of an individual’s contribution to society is simply measured by the amount of money they earn, academics aren’t highly valued as predictors. Successful business people are paid considerably more for their predictive abilities as they are able to profit from correctly predicting future markets and cost-effectively providing what those market want. They are wise.

A good metaphor is the hedgehog and the fox. Hedgehogs are best at digging through a hedge. But that’s all they can do well, like an idiot savant who is narrowly intelligent. The fox doesn’t do anything particularly well but can consider many approaches to obtaining what he wants. Ultimately, always bet on the fox rather than the hedgehog to survive.

Modern society (more so than primitive tribal societies where wise elders are often consulted) are lead by those considered intelligent. This often results in relatively poor choices.

As our social system doesn’t measure and identify those who are wise, how do we personally identify them? The fox would say to not listen to those most intelligent and best at explaining the past as they are unlikely to be good predictors of the future; best to take advice from those who know the past as a multifaceted amalgam of not necessarily related events and can speak of the future in probabilistic terms.