On resolving contradictions by gambling and relying on miracle

Altshuller created TRIZ with an objective in mind to expel trials and errors from problems solving. He proposed a step by step procedure, ARIZ, which solves problems by means of revealing contradictions and resolving them. ARIZ, he believed, rendered both talent and "trials and errors" needless.

Nevertheless, it is transpired recently that some contradictions cannot be resolved other than by gambling (which is a sort of trials and errors, of course). They are the so called hopeless contradictions, when whatever you do (A or anti-A), it will likely result in a negative effect, to the best of your knowledge and ability to foresee. (The Russian folklore, by the way, is a good source of such contradictions: "if you go left, you will drown in a sea; if you go right - you will loose your head; if you go straight - you will fall off a cliff", etc.)

When you face a hopeless contradiction the best way to cope with it is just do something. Just bet on some of the options and hope for a miracle to happen ! Desperate people and geniuses resorted to this technique numerous times throughout the history. Just read Bible. Or, even better, just take a look at the recent record of the US Federal Reserve (Fed) !

In the year 2001 stocks were falling unstoppable. Everybody was yelling: do something ! But what could the Fed do ? Raise rates ? Lower rates ? Some suggested the first. Others the second. (There is no clarity in theory although simplistic models favor rates cuts in such situations.) And the Fed gambled on cuts. Did it work ? Not at all. Stocks continued to fall. But instead the real estate market unexpectedly started to boom. With every new rates cut stocks went down whereas houses prices went up.

And that turned out to be an unexpected saving miracle for economy. Because the housing market boom stimulated construction, appliances manufacturing, etc. etc. and so far kept economy afloat.

Eventually the Fed stopped saying that rates cuts were intended for lifting stocks. And people forgot about it. Who cares what motives were, if actions resulted in a positive effect (albeit not that which was hopped for).

It was not for the first time, by the way, that the Fed was lucky with its gambling. Back in 1992/93 it lowered interest rates too. That time the objective was opposite: lifting the falling real estate market. The result was nil. Houses' prices continued to drop. But low interest rates unexpectedly sparked stocks growth, which continued unstoppable until 2000. A miracle happened back then too !

Now after having slashed interest rates to almost zero during 2001 - 2003, the Fed is again facing a hopeless contradiction: if it leaves rates alone, it will lead to inflation; but if it raises the rates, it will suffocate everything. It is quite possible that inflation is a better choice under these circumstances. However yesterday the Fed bet on the rates increase. It is possible that, as in the past, this decision will not achieve its objective and inflationary processes will accelerate anyway. It is also possible that, as in the past, the Fed's move will actually result in another positive outcome (rather than containing inflation). Nobody can see such a positive outcome yet. But its possibility remains. The only question is whether will the Fed be lucky again, the third time in a row ? 1

Gambling and hoping for miracle is a very productive strategy in hopeless situations. It can be called a method of resolving hopeless contradictions, when whatever you do, the result is predictably negative. There is no way to resolve such contradictions by separating contradictory requirements. Only miracle can help. And miracle cannot come other than through betting on one of the seemingly hopeless options.

Since such betting is just another form of "trials and errors" (where trial has to be not an error) we arrive at a conclusion that trials and errors cannot be expelled from problem solving. Similarly, ARIZ cannot render talent needless. Because to resolve hopeless contradictions by gambling successfully many times in a row, one has to have a very specific talent and acumen. Such as that of Alan Greenspan, for example.


Afterword of August 2008:

1 The Fed was not lucky this time.