Fact, Meet Value
And The Moneyball Method
Because good systems begin at the beginning, Part I of The Moneyball Method deals with economic philosophy. And to break that down, the book sets up five choices that seem to conflict but are in fact compatible and complementary. Known as false dichotomies, they are theory vs. practice, reason vs. emotion, faith vs. force, moral vs. practical and fact vs. value. This brief essay will highlight fact vs. value.
Facts
As Boston attorney John Adams famously said in 1770: “Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.” This may seem obvious, but it identifies a potential conflict between facts and desires.
Known as the Is-Ought dichotomy, it claims that goals and values (ought to be) are not related to observable facts (what is). This thinking, which also originates in the 18th century, has grown since government mandated schools hit 1850 Massachusetts and it has accelerated with progressive education. Think of that whenever you hear “my reality” or “my truth.”
Values
Never mind that the literacy rate in 19th century Massachusetts was already 97%. The collectivist goal is equality of values regardless of facts. And by neutralizing cause and effect, the resulting chaos justifies more State intervention, bureaucratic control and artificial complexity. However well-intentioned, when passions are disconnected from reality, it doesn’t end well.
It is not only destructive to disconnect values from reality – it is impossible. Your existence is a fact and your pursuit of life sustaining values are reality. Like theory and practice, reason and emotion, or moral and practical - facts and your values are codependent variables that should sustain and enrich your life. And even more so when those values are rationally chosen and explicitly defined. Why? Because facts are values.
Moneyball
The same is true when making decisions that combine money with goals, markets with aspirations and risk capacity with a lifetime of purpose. Accordingly, the Moneyball process begins with an understanding of the Principles, Propositions and Procedures (Chapter Seven). The next step is qualitative - the Site Map (Chapter Eight), because it helps you identify the value domains of your life and the important themes that drive those.
The last steps are quantitative. They translate those chosen values into their timing and monetary requirements. Ultimately, the Facts and Values Matrix will help balance them in the context of uncertain markets and Risk Capacity.
This a unique and essential feature of the Moneyball Method - the ability to anticipate extreme market events caused by progressive chaos, calculate their impact and have a continency plan. And to further prove the Method, the first essay in this series addressed the theory vs. practice dichotomy.