The Free Energy Fallacy

I’ve seen a number of novice rationalists committing what I shall term the Free Energy Fallacy, which is something along the lines of, “This system’s purpose is supposed to be to cook omelettes, and yet it produces terrible omelettes. So why don’t I use my amazing skills to cook some better omelettes and take over?”

And generally the answer is that maybe the system from your perspective is broken, but everyone within the system is intensely competing along other dimensions and you can’t keep up with that competition. They’re all chasing whatever things people in that system actually pursue — instead of the lost purposes they wistfully remember, but don’t have a chance to pursue because it would be career suicide. You won’t become competitive along those dimensions just by cooking better omelettes.

— Eliezer Yudkowsky in Inadequate Equilibria

I find this is a fallacy that I struggle against more than most. In a business context it explains good ideas that go bad.

A perfect illustration is Robert Maxwell’s account of how he tried opening a restaurant, and how it ruined his life. He writes:

“I naïvely figured I could do it as well as the restaurant lifers, the tattooed dude-chefs and the nut-busting empire builders. What I lacked in experience I could make up for in enthusiasm.

He presumed that there was free energy in the restaurant system, and that he was competing on enthusiasm (transmuted into better food than the competition). He could cook decently, so why shouldn’t he try competing with other restaurants?

The reason, he slowly discovers, is that restaurants are competing on ability to manage chaos, not food. Location, building codes, equipment failures, hiring struggles, capital requirements, incorporation, taxes, liquor licenses, etc. Running a restaurant is an obstacle course, not a cooking competition. There’s a reason most people who are good cooks do not open a restaurant.

The funny thing about this story is that things even go well along the axis he thought he was competing on — he got a fantastic review from the local paper!

“I had to read it three times to believe it — the Beech Tree had earned four stars from the Toronto Star, one of only a handful of such reviews in the last decade.”

In a sense he had been right that there was some energy to be captured by cooking better food than others. But it wasn’t free energy — it came at the cost of losing his home, tax problems, potential personal bankruptcy, and ownership of the business. He ended up selling the restaurant to someone with more experience who could fulfill those competitive requirements better.

Competency may not be worthless, but competency along the wrong axis certainly is.