Every so often, a book hits the shelves and becomes the “must read business book of the month.” I’m a bit behind the times, so I only now am picking up a copy of Never Split the Difference: Negotiating as if Your Life Depends on It. It was published in 2016, which in today’s news cycle makes it, I guess, “retro.”
Regardless, it deserves a revisit today. Not because of the core thesis of the book — how to negotiate effectively — but because it made a small side-note observation about academia eight years ago that we are seeing on full display today.
Written by top FBI negotiator Chris Voss, Never Split the Difference takes the reader inside the real and practical world of the top crisis and hostage negotiators in the world. His work literally saved lives. Then, in 2006, he decided to take Harvard Law School’s Winter Negotiation Course as a nice easy bit of professional development for a career FBI agent.
What Voss learned was that academia was decades behind the real world in practical skills.
“It was as if we were playing different games, with different rules,” Voss reports as he not only won every student-versus-student negotiation game but bested the faculty as well. As Voss beat every round, he found that “[w]ith my old-school, experiential knowledge, I was killing guys who knew every cutting-edge trick you could find in a book.”
Harvard Law School had a problem. Its negotiation training was based on deeply analyzed logical and mathematical calculations, assuming all parties were weighing all options and looking to expertly calculate their highest success. It may work in a textbook and on a spreadsheet, but at their root, the academics had removed any human element to teaching negotiation.
Voss notes:
In my short stay I realized that without a deep understanding of human psychology, without the acceptance that we are all crazy, irrational, impulsive, emotionally driven animals, all the raw intelligence and mathematical logic in the world is little help in the fraught, shifting interplay of two people negotiating.
Why is this so relevant today?
Because the economics departments at nearly every major university are committing the exact same error!
Yes, I took economics in college, and, no, in the real world, equilibrium price does not equate to Qd = x + yP.
If you don’t know what that formula means, don’t worry. It doesn’t matter. Price is not simply the supply and demand formula, nor is it the “labor plus materials” calculation socialists use.
Price is whatever people will pay. Any good businessman knows that.
And humans are irrational, emotional, impulsive, and driven by all types of underlying motivations. Anyone with two eyes and a brain knows that.
Two months ago, who would have thought that a fight over the Stanley Cup would refer to anything other than hockey. A year ago, who would have thought that the Kansas City Chiefs would be selling out merchandise to 28-year-old white girls (thanks, Taylor!).
When Voss waltzed into Harvard Law’s negotiating class and proceeded to hand everyone (including the faculty) their rear ends, he did so because his practical experience proved that humans are not just calculating robots but robust psychological beings. It wasn’t just that he was a better practiced negotiator; it was that the entire system he was using was based on reality, while the text-book negotiation classes were all based on raw theory. (READ MORE: A Dialogue With the Dead: Gary Saul Morson’s Wonder Confronts Certainty)
Mises, Hayek, and the entire Austrian and Chicago schools of economics are largely based on economics as psychology, not science. This generates sneers throughout the world of academia but consistently runs rings around the scientific and mathematical calculations of Keynesian economics. It’s time the universities caught up to the real world.
Voss caught it eight years ago in negotiation classes, and conservative students catch it every day as economics professors prattle on about deficit spending. The gap between theory and practice regardless of discipline is palpable, and until this problem is fixed, starry-eyed economics grads are going to wonder why we can’t spend our way out of a recession, and journalists everywhere will continue to have fodder for articles on “the crisis in higher education.”