Adapted from Chapter 1 of my Wealth Creation book

To a large extent, life consists of overcoming problems we encounter in our attempts to achieve our purposes. Along with the easy problems in life, say, fixing a flashlight that no longer works by replacing the batteries, are the enormously complex and difficult problems such as developing and sustaining the social attitudes and institutions that promote individual freedom and the general welfare.

What makes the flashlight problem so easy is our reliable knowledge about the straightforward, linear cause and effect relationship involved. But, approaching complex problems with an overly simplistic linear mindset will often make matters worse instead of better. Complex problems would be considerably less difficult if our notions about how the world works were more reliable.

Based on an analysis of the work of people, especially scientists, who have been extremely successful in solving complex problems, I believe there are three especially important concepts for a better understanding of knowledge building:

(1) Reality as we know it is just our perception of it—our individual map of reality, not the true territory of reality (see my paper, “A Transactional Approach to Economic Research”).

(2) We improve our worldviews by embracing the diverse opinions of others as part of organizing feedback that can identify: (a) the outright obsolescence of one or more of our key assumptions, and (b) promising new ideas which may be inconsistent with our existing worldviews.

(3) Our perceptions of reality, our use of language, and knowledge building are intertwined.

Putting these concepts into practice takes conscious effort, because much of our life experience has been spent dealing with the outside world as independent components of reality for which one-way, or linear, cause and effect thinking is sufficient.

The Knowledge Building Loop (illustrated on the home page on this website) stresses that knowledge building is a unified transaction. The researcher is as much a part of whatever is being investigated as the other aspects chosen for attention.

The researcher's complex web of experiences has contributed to a worldview that is an unavoidable part of inquiry and can cause biased thinking of which the researcher is not at all aware. A researcher's biases affect what is perceived as the problem, the initial selection of which variables are important, the first hunch about how the variables might be related, and the feedback mechanisms to be used for evaluating the hypotheses.