As I noted in the first essay in this series, a 21st Century intellectual revolution is currently taking place, involving three disciplines (psychology, economics and neurobiology). Called behavioral economics, this revolution is as if three tectonic plates were coming together, creating majestic mountains but also disturbing earthquakes. In offering a series of essays that explore the implications of this revolution for professional coaching, I offer in this second essay a philosophical (or more precisely an epistemological) framework for understanding the profound nature of the tectonic collision that has taken place.
I have based the concepts I offer in this essay on an interview I conducted with Julio Olalla (Olalla and Bergquist, 2008), a renowned coach and philosopher, as well as work I did several years ago with Kristin Teresa Eggen, my Norwegian colleague, and Simon Selvakumar, my colleague from Singapore. I propose that there are two different perspectives regarding the nature of being and, more basically, the nature of reality which have been challenged by behavioral economists: objectivism and constructivism. Furthermore, each of these perspectives breaks down into two subgroups. I will introduce all four of these frameworks and consider how each one relates to the new field of behavioral economics. In keeping with the theme of this set of essays, I will also consider the implications of these perspectives for those engaged in professional coaching as related to matter of economics and psychology.
Static Objectivism
Advocates for the objectivist perspective assume that there is a reality out there that we can know and articulate. There are universal truths or at least universal principles that can be applied to the improvement of the human condition, resolution of human conflicts, restoration of human rights, or even construction of a global order and community. Donald Schön (1983) suggests that this perspective emerges from and remains closely associated with a tradition that he calls “technical rationality.” We might also refer to this perspective as it applied to the domain of economics. Technical economics would be based on the assumption that money is real and that rational processes can be engaged when dealing with the reality of money. Underlying this perspective would be a set of assumptions regarding the identity and “worth” of money. It is the American dollar that would determine the identity and worth of money. All other financial currencies and items of economic worth would be assessed on the basis of the “almighty US dollar.”
At an even deeper (and in some ways spiritual level), we are witnessing a parallel emergence of what we may call “bio-centrism.” This is an objectivist perspective defining human beings as an objective and stable reality. From this static and objectivist perspective, we begin with the assumption that our identity and our decisions are “wired in” to our neurological structures and basically pre-set at birth. While we certainly should acknowledge that we are not a “blank slate” at birth (Pinker, 2002) we also must realize that much occurs after birth, and the environment impacts in a profound manner even on neurological development prior to birth.
Furthermore, neuroscientists (cf. Rose, 2005) are coming to realize that the level of complexity in neurological structures and processes make it very difficult, if not impossible, to equate mind with brain. There is a level of analysis that moves well beyond neural structures and well beyond the “wet-mind” (biological base of mind) to a “dry-mind” that is transcendent and perhaps even spiritual in nature. Drawing a parallel to the world of economics, we might declare that the static objectivist perspective regarding money suggests that there is such a thing as “dry money” which remains stable and immutable (the almighty US dollar). “Wet money” would that which is dependent on many very human and biological forces such as fear, regret and fast thinking—which is the domain of behavioral economics.
The bio-centric, objectivist perspective has served us well for several centuries. It has enabled us to make great advances in medical and cultural science; however, this perspective has also created many problems with which we now live. From a bio-centric objectivist perspective, the human body, including the brain, was (and is) perceived as an advanced machine that can be altered and repaired. This perspective can be retraced to the central principles of modernity: determinism and progress. While there is a tendency for professional coaches to operate from this perspective, this is a very limited (and limiting) approach to professional coaching—especially when the people we are serving base their notion of “self” and “being” on this perspective – “being” as a given, with some potential for improvement.
This is also a very limiting approach to professional coaching, especially when matters of money are concerned and important economic decisions need to be made. There is no one reality when matters concerning values, priorities and life goals are concerned. An effective coach will listen to their client’s narratives and their aspirational dreams before engaging in any problem-solving or planning-based interventions. Taking an appreciative approach (Bergquist and Mura, 2011), one can even help their client create new narratives based on moments in the past when values and priorities were being fully (or at least partially) engaged in a manner that was not only authentic (aligned) but also successful.
Dynamic Objectivism: The Platonic Ideal
While many of the critiques of static objectivism are products of late 20th century and early 21st century thought, there is a much earlier source: Plato offers a dynamic objectivism through his allegory of the cave. Let’s briefly visit this cave. According to Plato, we are all living in a cave and never gain a clear view of reality. Instead, we view the shadows that are projected on the walls of the cave. We live with an image of reality (shadows on the wall of the cave) rather than with reality itself, which makes our sense of reality quite dynamic and a source of considerable tension. Plato, an idealist, notes that we have no basis for knowing whether we are seeing the shadow or seeing reality, given that we have always lived in the cave. Plato thus speaks to us from many centuries past about the potential fallacy to be found in a static objectivist perspective regarding the world—since we can never know whether we are living in the cave or living in the world of reality outside the cave.
Today, we live with an expanded cast of characters in the cave. First, there is something or someone standing near the opening of the cave. It can be cultural or personal narratives or perspectives we have encountered during our daily life. These narratives and perspectives block out some of the light coming into the cave. Not only don’t we actually see reality, sometimes the narrative or perspective determines which parts of objective reality get projected onto the wall. This is what makes the Platonic objectivism dynamic—for those holding the partition have grown up in the cave but may hold a quite different agenda from other cave dwellers. There is yet another character in our contemporary cave. This is the interpreter or reporter or analyst. We actually don’t have enough time in our busy lives to look directly at the wall to see the shadows that are projected on the wall from the “real” world. The cave has grown very large. We often can’t even see the walls of the cave and the shadows. We wait for the interpreter to tell us what is being projected on the wall and what the implications of these images are for us in our lives.
We are thus removed three steps from reality. We believe that the shadows on Plato’s cave are “reality.” We don’t recognize that someone is standing at the entrance to the cave and selectively determining which aspects of reality get projected onto the wall. Finally, someone else is standing inside the cave offering us a description and analysis. Julio Olalla (2004) offers us the hope of direct experience and suggests that a professional psychologist can assist in this process. Yet, we remained confused about what is “real” and often don’t trust our direct experience. We move, with great reluctance and considerable grieving, to a recognition that reality is being constructed for us and that we need to attend not only to the constructions, but also to the interests and motives of those who stand at the entrance to the cave and those who offer us their interpretations. We must move, in other words, from an objectivist perspective (whether it is static or dynamic) to a constructivist perspective.
What about the Economic Cave in which we are now living. There are many interpreters of the monetary shadows that are cast of the cave wall. These interpreters tend to rely on the images they see coming in from the outside world or inside the cave itself (as in the images swirling around the main floor of Wall Street). As in the case of the Static Objectivism perspective, the Dynamic Objectivism perspective is reliant on concrete, tangible images—such as US dollars, profit-and-lost statements, stock values, and the US GNP. If it can’t be measured, then images of a more “fanciful” (psychological and sociological) nature are dismissed. At best, these images are labeled “intangible.” Factors such as reputation (a premodern concept), customer satisfaction (a modern concept), loanable funds (postmodern) and even “endogenous money transmission belt” (post post-modern) are often not easily measured or are profoundly complex. Stick with the dollar amount and the shifting value of the stock or bond.
Plato’s cave and his dynamic objectivism do provide us with the opportunity to gain insights as professional coaches in a session with our client about the nature of the economic cave, the images that are projected onto this wall of the cave, and the nature and agenda of the interpreters. It is not our job to be financial consultants or money managers; however, we can assist our coaching client in determining what kind of financial advice they might get—if they need any at all. We should also consider whether or not to invite our client to step outside the cave (direct experience). Perhaps they should visit a company where they hope to invest. They might partake of some services being provided by a nonprofit organization to which they wish to donate some money (or time).
Can we actually step outside the cave—whether as a coaching client or as a coach? How does the professional coach assist their client in stepping outside the cave? Is it safer to remain inside the cave than it is to venture outside without the help of interpreters? Should we (and can we) face the profound challenge of unmediated experiences? Should (and can) a professional coach or consultant assist us by inviting us to step outside the cave (as Julio seems to be suggesting) and by helping us recognize ways in which we still carry the cave shadows and cave interpreters with us when stepping outside the cave?
Can we really trust our “instincts” when visiting some company or availing ourselves of some NGO? As we step outside the cave, are we likely to confront some objective reality through our experience, or is the experience itself constantly shifting depending on setting, context, interpersonal relationships and the nature of our own past experience? These questions lead us down a path to constructivism. It is a path that has received considerable attention in recent years by the behavioral economists, who write about the power and potential abuse of a process they call “heuristics.”
The Promise and Perils of Heuristics
What is this thing called a “heuristic?” How do the behavioral economists engage the concept of “heuristics” when relating to these two objectivist perspectives? First, they challenge these two perspectives in a comprehensive manner. This is especially the case with static objectivism which holds sway in most contemporary societies. Behavioral economists suggest that cave dwellers are actually four steps removed for reality. Not only are the cave dwellers (each of us) relying on the interpretation offered inside the cave, they are also doing their own modifications of the interpretations given – making use of a series of conceptual tools that behavioral economists call “heuristics.”
In setting a broad context for this notion of heuristics, we turn first to an important distinction being drawn by one of the founders and leaders of this field, Daniel Kahneman (2011). As the first psychologist to win a Nobel Prize (not counting Pavlov, who was actually a physiologist), Kahneman partnered with Amos Tversky to present a remarkable analysis of the ways in which human beings actually operate in their environment. In essence, Kahneman proposes that there are two ways in which human beings process information and make decisions. He calls these System 1 and System 2:
“System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control.
System 2 allocates attention to the effortful mental activities that demand it, including complex computations. The operations of System 2 are often associated with the subjective experience of agency, choice, and concentration.
The labels of System 1 and System 2 are widely used in psychology, but I go further than most in this book, which you can read as a psychodrama with two characters.
When we think of ourselves, we identify with System 2, the conscious, reasoning self that has beliefs, makes choices, and decides what to think about and what to do. Although System 2 believes itself to be where the action is, the automatic System 1 is the hero of the book. I describe System 1 as effortlessly originating impressions and feelings that are the main sources of the explicit beliefs and deliberate choices of System 2. The automatic operations of System 1 generate surprisingly complex patterns of ideas, but only the slower System 2 can construct thoughts in an orderly series of steps. I also describe circumstances in which System 2 takes over, overruling the freewheeling impulses and associations of System 1. You will be invited to think of the two systems as agents with their individual abilities, limitations, and functions.”
Daniel Kaheman was soon joined in his work on System 1 and System 2, by a fellow Israeli, Dan Ariely. While Kahneman (and Tversky) won the Nobel Prize, Ariely had the best-selling book (Predictably Irrational) and did much to bring behavioral economics into the mainstream of management and the decision sciences. Ariely emphasizes the ways in which System 1 thinking operates though a set of fast decision-making processes, called heuristics.
The Societal Invention of Heuristics
Social constructivism has offered Western thought quite a challenge (Berger and Luckmann, 1966). Advocates believe that we construct our own social realities, based in large part on societal inventions—the traditions and needs of culture and the social-economic context in which we find ourselves. There are no universal truths or principles, nor are there any global models of justice or order that can be applied in all settings, at all times, with all people. While this constructivist perspective is often considered a product of late 20th century thought (at least in the Western world) the early versions of social constructivism can be traced back to the anthropology and sociology of the early 20th century. Reports from these disciplines documented radically different perspectives operating in many non-western societies and cultures regarding the nature of reality and ways in which members of diverse communities view themselves and their interpersonal and group relationships.
This initial version of constructivism is essentially static, for these social constructions are based on deeply rooted beliefs and assumptions of specific societies and cultures. There are specific communities that espouse their own unique ways of knowing. These communities may consist of people who are living together or people who are working together. Organizations create their own culture and their own constructions of reality. The leaders of these organizations are among those most responsible for reinforcing the tangible image of money as the primary measuring stick of success.
The bottom line becomes an economic heuristic that is as powerful as such heuristics as recency and primacy. Specific ways of knowing and ways of determining economic “worth” and “success” are based on and reinforced by the community and do not allow for significant divergence among those living in the community. Furthermore, while these ways of knowing may themselves change over time and in differing situations, such changes are gradual and often not noticed for many years.
We thus find a constructivism that is static and a process of restricted and restrictive professional coach that focuses on surfacing these stable, but often unacknowledged and very powerful, societal assumptions and beliefs. It is the role of the effective professional coach to challenge these assumptions and beliefs and to help clients trace out the implications of economically focused societal constructions for their own actions as members and even leaders of these societies and cultures.
As anthropologists and sociologists, professional coaches should understand something about the culture of their society—or of a specific organization. Along with Vikki Brock (Bergquist and Brock, 2008), I wrote about six unique cultures that exist in most contemporary organizations. Each of these cultures has its own stable construction of reality and is resistant to change. Professional coaches themselves dwell in one or more of these six cultures. Hence, they have their own biased perspectives that are created by and reinforced within these cultures. Thus, it is critical for professional coaches to not only help their clients become aware of their social constructions but also become aware of the ways in which they, as professional coaches, construct their own realities.
Static Constructivism: Contextual Interactions
While the objectivist perspective was prevalent during the modern era, and is still influencing our notions about “being,” the static constructivist perspective often played a role as counterpoint in 20th century social discourse. This static constructivism has been a source of many challenges that have upset the modernist stance on epistemology and ethics. Static constructivists have encouraged or even forced many of us to move from an absolute set of principles to a more situation-based relativism. The emergence of a constructivist perspective represents a revolutionary change in the true sense of the term
Language, narratives and self
Story and performance are hallmarks of dynamic constructivism. We live in a world of constructed realities that are constantly shifting. We live in a world of language, semiotics and narratives. Language is no longer considered simply a handmaiden for reality, as the objectivist would suggest, nor does it construct a permanent or at least resistant reality as the traditional social constructivists would argue. Furthermore, language is not a secondary vehicle we must employ when commenting on the reality that underlies and is the reference point for this language.
The dynamic constructivists often take this analysis one step further by proposing that language is itself the primary reality in our daily life experiences. Language, originally and primarily relationship-based, assumes its own reality, and ceases to be an abstract sign that substitutes for the “real” things. The language of economics, in particular, constructs a reality that profoundly influences the decisions we make and actions we take in the world of money and finances. Our economic cave is filled with language and conversations. This is reality. There is nothing outside the cave (or perhaps the cave doesn’t even exist).
While objectivism is based on the assumption that there is a constant reality to which one can refer (through the use of language and other symbol/sign systems) and static constructivism is based on the assumption that there is a constant societal base for our constructions of reality, dynamic constructivism is based on the assumption that the mode and content of discourse and the relationship(s) that underlie this discourse are the closest thing we have to a reality. We are constantly reconstructing our reality because this reality is based on the specific relationship through which we are engaged via our discourse.
We need not stay within Plato’s cave, because the relationship and the discourse is itself reality. These are not just a reflection of the reality. The inside and outside of the cave are one in the same thing. The cave doesn’t exist. Economics becomes an extended conversation about not just money, but also priorities, values and life aspirations. This conversation is constantly shifting as not only the economic environment shifts but also our own needs, wants, fears and regrets shift.
Narratives of our time and of our self
We are often distant from many of the most important events that impact on our lives. As Julio Olalla has so eloquently noted, we live in a complex, global community and we have many connections to a vast world. Yet, we can no longer have direct experience of, nor can we have much influence over, this world. The economic cave has grown much larger than Plato might have imagined. This cave is either flat and accessible to all members of the global community (Friedman, 2007) or it is hot and potentially unsustainable (Friedman, 2008). The cave might instead be curved and both volatile and dangerous (Smick, 2008). Actually, the economic cave may no longer even exist given the shattering of national boundaries.
The only access we have to this vast world is through diverse languages and narratives. A single “grand narrative” no longer exists. The “almighty US dollar” is now not as almighty or as stable. As a result, we often share multiple narratives about things and events rather than actually experiencing them. Language itself becomes a shared—(and often confusing or even contradictory-) experience. On first impression, this perspective does not differ greatly from that offered by Plato. The narratives can be considered nothing more than second-hand conversations about the images of the cave’s walls. Yet there is a difference, for, as Julio Olalla suggests, the narratives and conversations are not just about experiences, they are themselves experiences.
Dynamic Constructivism: Conversation Is Reality
This sense of a constructed reality that is reinforced by narrative and conversation is a starting point for dynamic constructivism—just as it is a starting point for traditional and static forms of constructivism. The key point with regard to dynamic constructivism is that each specific conversation is itself a reality. Shared narratives and language are where we actually meet self and others, self and society, self and shared cultural narrative. From this perspective, our stories about self will constitute our fundamental sense of self. They are the building blocks of our identity.
Perhaps our stories about self are everything we mean by the term “self.” This would suggest that our stories about childhood, about major adult accomplishments, and about difficult lifelong disappointments may be the basic building blocks of self-image—whether or not they are accurate. Contemporary professional coaches, like Julio Olalla (Olalla, 2004) and David Drake (Drake, Brennan, and Gørtz, 2008), emphasize the role of narrative for a good reason. Narrative is a very powerful and influential tool. We are profoundly impacted by two often unacknowledged (or even unseen) forces in these narratives.
First, we are influenced by the broad-based social constructions of reality which are conveyed through the stories of the society and organization in which we find ourselves. This is the contribution made by static constructivists. This is the source of many economic and money-based constructions. Second, we are influenced by a more narrowly based personal construction of reality that is conveyed through stories we tell about ourselves (and perhaps stories that we inherit from and about our family and immediate community). These are the much “softer” and “intangibly based” stories that inform us of the meaning of money in our life and the ways in which we best determine our personal “worth.”
The hermeneutic circle and use of metaphors
There is actually a third level of narrative which makes the dynamics of constructivism and professional psychologizing even more complex and challenging. We are co-creating narratives (and ultimately creating reality) with other people—those with whom we are interacting. All meanings or statements refer to a system of narratives and semiotics, but this is in itself an open-ended system of signs that refer to other signs that refer to yet another set of signs. No concept can therefore have an ultimate, unequivocal meaning.
I can illustrate this complex, nested dynamic—called the hermeneutic circle—by turning to narratives and conversations that occur within a workplace. For example, once the manager of a specific department has spoken about some economic matter, the reality that was created when she spoke is no longer present. Even if she says the same words, they are spoken in a different economic context, hence have somewhat different meaning.
Thus, even when our manager is “speaking”—in the form of vocalized or written words or in the form of other images (visual, tactile)—these words or images will have different meaning each time they are interpreted. Economic meaning will shift depending on who hears the statement, what the setting is in which the communication takes place, and which words or images have preceded and will follow these efforts at communication. According to the dynamic constructivists, therefore, economic (and noneconomic) reality for the 21st century manager is a shifting phenomenon that is subject to change and uncertainty, meant to be expressed in nuanced, ever-changing ways, again and again, in response to new contexts.
More than ever, the economics operating in our organizations are based on and dependent on these dynamic interpersonal conversations and shifting, context-based narratives. Most people, resources and attention in present-day organizations are devoted not to the direct production of goods or direct provision of services, but to the use of verbal and written modes of communication about these goods and services. Given these conditions, storytelling and narratives about economic conditions are central to 21st century leadership. Stories are the lifeblood and source of system maintenance in both personal and organizational lives. The construction of stories about economic successes and failures by leaders is critical to the processes of personal and organizational transformation.
Clearly, the conversations that are most effective in bringing about organizational integration frequently take the form of metaphors that are conveyed through stories. Metaphors are used to portray something about an organization—in particular something about leadership, authority, and values. These metaphors are central to the organization, for they contribute to the conversations that are at the heart of the organization. They point to a shared set of signs and narratives, and as such create, recreate and strengthen the experience of shared values, The “almighty dollar” and the “bottom line” are themselves metaphors. They often carry great power and bring many important (but often untested) assumptions about the economic world with them. The metaphor of “bottom line,” for instance, not only carries the assumption that short-term profits are most important, but that the general accounting procedures are the best (and only credible) way to measure these profits (and losses).
Bridging the Past, Present and Future
The stories of an organization are important to fully appreciate for yet another reason: they are critical bridges between the present and past. Organizations exist at the present moment in time. The past life of an organization exists largely in present conversations, i.e., the stories about the past. It also exists in the conversations that are now taking place about past conversations (via archival records). The formal economic records of the organization are based on conversations that take place between people who are of the present and the past. Similarly, the organization’s future is shaped in current conversations about this future. Narratives actually do more than tell stories, they create a framework in which the identity of the organization is perceived and presented. Storytelling is a central ingredient in relationships. Relationships, in turn, become important in the reconstruction of reality—whether this reality be personal or organizational in nature.
Several questions arise from this dynamic constructivism. In what way(s) do the personal and organizational narratives and images influence or alter one another? Is there a shift in the organization’s economic narrative when a new assessment of the organization’s profits and losses is completed, or an announcement is made about results from the yearly audit? How about more indirect influences on the economic statis (and “bottom line’) of an organization. What happens when a new top manager is hired, or the organization itself is restructured? Does the economic narrative change? From the perspective of the professional psychologist, there are major concerns with regard to the nature of narrative and identity that is being conveyed by the organization and the narrative and identity of each employee –and in particular the person receiving professional coaching services
Conclusions
The movement from an objectivist to a constructivist ontology and from a static to a dynamic ontology requires commitment and courage—particularly courage. Our sense of self and reality—our ontological reality—is always in flux. How do we live with this ontological uncertainty? Especially when it involves our “pocketbook” and the potential payment of our child’s college education. What kind of courage is needed to make a negative financial report available to those working in the organization or those expected to invest in the organization? Does a financial VP have the “guts” to prepare a valid report regarding economic challenges that are facing her organization? Wouldn’t it be easier to “adjust” the expenses a bit so that things don’t look so bleak?
Many years ago, the theologian, Paul Tillich (2000), wrote about the existential (and theological) “courage to be”—the courage needed to acknowledge one’s being and one’s becoming in the world. If human beings are minds, and not just brains, then they are also inherently spiritual in nature or at least there are spiritual demands being made on them as they are confronted with the challenging universe in which they live.
As spiritual beings, we have the capacity to reflect on our own experiences and to place these experiences in space and time. This is the human challenge, the human opportunity and the human curse of transcendence. Our sense of a constantly reconstructed universe, based in our interactions with other people, leads us inevitably to a sense of bewilderment. At a more immediate level, we are confronted as leaders and professional coaches with the economic complexity, unpredictability and turbulence of contemporary organizational life (Bergquist, 2025). How does one find the courage to stand in the face of this “awe-full-ness”? And more to the point, what is the role to be played by professional coaches in assisting their clients (as well as facing their own personal challenges)?
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References
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