Monday, April 14, 2014

141. The soft power of Yin

 In Taoism, of the two forces of Yin and Yang, Yin is seen as the most fundamental. This, I believe, connects with the role and importance of trust versus control that I discussed in items 68 to 75 of this blog.

The comparison may work as indicated in the table below.

Yin                                                     Yang
yielding, submission                          conquering, control
à                                                                                                à
cooperation                                        rivalry
altruism                                              egotism

In items 54 and 55 I discussed the intellectual, spiritual and moral importance of collaboration, and in item 66 its economic importance. In item 67 I discussed the ensuing problems of collaboration. Later in this blog, in a series on economics and markets I will elaborate on these themes.

A large literature, in economics and business, has given attention to the tension between collaboration and rivalry, and in dealing with them, the tension between trust and control. Both are needed. Rivalry is needed for achievement, efficiency and innovation from competition. That is Yang.

On the other hand, often mental, spiritual and economic flourishing arise from utilizing differences between people (and organizations), or what I called cognitive distance. That requires an investment that is specific to the relationship, i.e. is lost when the relationship breaks. Thus, the investment will made and will come to fruition only when there is a perspective for a certain duration of the relationship. That requires mutual forbearance and yielding to each others interests, and the the building and maitenance of trust. That is Yin.

So the Yang of innovation and breakthrough needs the Yin of stability, forbearance and trust.

Specific investments create dependence, and a risk of losing the investment if the partner breaks the relationship. There is a Yang way and a Yin way of dealing with such risks of dependence.

The Yang way is power play and control, by hierarchy, in monitoring and imposing constraints on conduct, or by incentives, threats and rewards, to elicit proper conduct. There is an underlying threat of exit, breaking a relationship, when demands are not satisfied.

The Yin way is give and take, in voice, openness in deliberation to identify problems and cooperate to solve them, based on trust.

Yin is certainly the most difficult of the two, requiring wisdom, constraint, and empathy. It is also the most rewarding, in terms of both costs (lower costs of control) and revenues (more depth of relationship), as well as in intrinsic value of the relationship.

Here, as elsewhere, Yin and Yang are complementary, and they meet. Trust needs to begin where control ends and control needs to begin where trust ends. Behind voice there is exit as the last resort. A relationship may begin with control and soften intro trust when things go well. It may begin with trust but gather controls when risks increase or trust meets its limits.

Does the use of the notions of Yin and Yang help in these issues? Perhaps not. But it is still nice, to my taste, to see that some familiar issue in the economy can be fitted into such a wider philosophical matrix. And perhaps, the other way around, this issue of rivalry and collaboration may help to elucidate the notions of Yin and Yang, and to make them more concrete.

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