Article Highlights
We trained a generation to build tools, not understand consequences. Technology keeps revealing just how dangerous that gap has become.
American courts have been undergoing an experiment by way of a study that might (should) heavily influence everyone in appreciating how important it is that decision makers are well informed. Finally seeing more light with the publication of the research in The Quarterly Journal of Economics, through the Manne Economics Institute for Federal Judges, judges were trained not just in law, but in law and economics.
Empirically measurable, statistically significant shifts in legal outcomes, behavior, and ideology; judges exposed to these workshops sentenced more harshly, leaned more favorably toward markets over regulation, and adopted language that mirrored classical economic reasoning.
Not because of lobbying. Not because of political pressure, social pressure, nor even institutional change; Because of a short course in thinking like an economist.
Now, before I go on, I want to head-off the political extremist views that I know will come at me, since they just did when I waded into the California tech tax; yes, the Antonin Scalia Law School at George Mason University, affiliated with the Manne Law & Economics Center, is conservative. If you’re itching to come at me that this is just wrong, simply because of the source, you’re missing the forest for the trees, and frankly I’m not here for it. Months ago, the other side (which I’ll go with calling it since I’m not here to pick either side), went hard at this study for being right wing or some ideology to take over the justice system. We are NOT here for that and what I hope you’re capable of is the critical thinking that I am advocating is needed in society, by seeing how easily education influences very consequential leadership and decision making.
What happens when we don’t give entrepreneurs, voters, or founders the same grounding?
Illiterate entrepreneurs and illiterate voters are realizing a problem
We accept, almost without debate, that uninformed voters are a threat to democracy. We acknowledge but poorly support that the same logic applies to startup ecosystems. Bad policy is visible and slow; bad companies are opaque and fast. But they both stem from the same source: people making consequential decisions without any understanding of systems, incentives, or economics.
Voters follow narratives because policy is abstract while founders follow playbooks because markets are opaque. Both default to intuition, social proof, and bias because no one taught them the rules underneath the game.
So what we get is a generation of builders with no comprehension of supply and demand, incentive distortion, pricing theory, or opportunity cost. Founders can ship software, raise capital, and make viral TikToks but most can’t explain what value is or how markets discover it. What’s lacking is the primary reason startups fail.
And now we’ve dropped artificial intelligence into this intellectual vacuum.
On a Titanic in Icy Waters
We are flooding every domain (product design, investing, journalism, governance) with tools that can mimic intelligence. That doesn’t mean the people using them understand anything. They’ve just been handed a calculator and told it’s a brain. Before thinking this is a critical concern I’m raising about AI, appreciate that this is merely an observation of what’s been happening for decades – Google accomplished the very same, teaching people to “Google it.”
Our nature to be easily influenced by Facebook or TikTok is nothing more than the natural outcome of a skill taught in standardized education: What you need to know is what you are told is correct.
Decades of education oriented to preparing people to be IN the workforce, or choose a specific profession (architect, doctor, construction, lawyer, or judge) have resulted in a society happy consume what we’re told, as fact. Allow me to get political for a second (though I said I didn’t want to)? Because Obama said so… because Trump said so… is the same red flag about our future that we should appreciate in falling victim to the first result on Google, the hallucination of ChatGPT, the biased post on Facebook, or the judge who says they’re right… or the criticism of the Manne Program and results, because of a conservative source.
I read the results of Ideas Have Consequences: The Impact of Law and Economics on American Justice with a critical eye and what I took from it is the mere fact that when exposed to economics, judges make different rulings. Which means, my left OR right leaning friends, we have judges sitting on the bench making clearly personal opinion conclusions, that shape lives and society, when what is considered among the most fundamental of rational thinking, changes those conclusions… only to be attacked by a political bias. Forget the outcome or the biases, can you see the red flag??
When founders disregard marketing, regulators treat tech as ideology, and voters chase meme coins because a politician said to, it’s not disruption, it’s waste and harm driven by ignorance. What we’re watching isn’t innovation, it’s a consequence of a society where everyone learned how to use tools and no one learned how to think about them.
The AI “skills gap” everyone is talking about? It’s not Python. It’s Econ 101.
Marketing and economics are studies of understanding behavior which, when oblivious of, humans are easily influenced by propaganda, agenda, and misinformation.
AI, at scale, will create content, code, and campaigns. But only people trained in economics, communication, and strategy will be able to direct that toward opportunity instead of noise since any work that we’re doing to create opportunity requires critical thinking and understanding markets – something we can’t rely on artificial intelligence trained on existing knowledge to do.
Why we need to teach economics, not engineering
If a six-day workshop changed the American judicial system, then the refusal to teach foundational economics to our entrepreneurs is malpractice.
Let me make sure we’re on the same page: economics is not finance, it’s not investing, it’s not business, and it’s not about money. In the same breath that I rant that marketing isn’t about customers, advertising, or promotion, I realized that the reason so few founders embody the most fundamental of understandings that drive startup success, is the same issue facing uninformed voters, easily reframed judges, and people being taken advantage of by a Facebook post. Economics and Marketing are about behavior under scarcity, tradeoffs, systems, second-order effects, and incentives.
The fact that founders still ask whether revenue is the same as profit is not their fault, it’s ours.
We taught them to pitch. We didn’t teach them to think.
We teach people to know what they’re told, to believe what they read, and to trust what they hear.
As the barrier to building drops to near zero, but the barrier to understanding why to build has not changed. We’re not create more entrepreneurs; we’re creating more waste, unless we reorient education along the same lines that voters need for good governance.
We need founders who can think about economics the way marketers think about psychology: as the bedrock of how things actually work. Not how we hope they’ll work.
We need voters who can think about economics the way marketers think about psychology: as the bedrock of how things actually work. Not how we hope they’ll work.
Founders Trained Like Judges?
That misses the point entirely. The study that kicked this off proves the concern we should have. Train people in an economic worldview, and their decision-making changes. Permanently. Across domains.
The judges in the Manne program rewired how they assessed evidence, harm, responsibility, and consequences. You don’t need to agree with the outcomes to grasp the significance of the mechanism.
So, why are we teaching founders to code and pitch instead of reason and explain?
Entrepreneurship is not product design; it’s economic development and it’s labor allocation, it’s capital deployment and social influence. And in every domain, people are being outmatched by tools, manipulated by algorithms, and gamed by people who know how psychology and incentives work.
The future will be run by people who can wield AI as a tool of influence far more than intelligence. That means understanding how people think, what they respond to, and where systems break. It means teaching marketing, communication, behavioral econ, and strategic reasoning as core curriculum.
You want job creation? Teach opportunity cost.
You want startup success? Teach market dynamics.
You want AI alignment? Teach ethics, power, and incentives.
You want empowered people? Teach the implication of ignorance of this.
Teach People How to Think with Behavioral Sciences over STEM
The startup world doesn’t need more hackathons. It needs founders who understand why their idea shouldn’t exist. It needs people trained in criticism, risk modeling, and persuasion. People who know what happens when the wrong thing scales, because they’ve seen it in law, in markets, and in governance.
What The Quarterly Journal of Economics study reveals is that worldviews beat tools by exposing the reality that people sitting in judgement change that judgement when exposed to how things work rather than ideals. Institutions bend to the frameworks their leaders are taught to use. If we want innovation to serve society, we need to train founders the way we should’ve trained voters: not in what to think, but in how to recognize when someone else is lying.
If we don’t? The people shaping markets, deploying models, and writing laws will still be doing so based on vibes and influence, not value or consequence.
Admit it, we’re all sort of feeling like we’re on a ship destined to sink… whether in your anger about the current administration, AI eliminating all our jobs, feeling like university is a waste, knowing that healthcare is bankrupting us, or pissed off that you can’t afford a home, this an era of uncertain concern. The Titanic sank because of ignorance, overconfidence, and foregoing agency to just do what the captain says. If you want to argue with me because of a political extreme, take it elsewhere, I’m here so ships don’t sink.
This.
I highly recommend that first time Startup Founders and the people who work with them read Paul O’Brien’s Post here.
At Startup IQ, we see too many good innovations stall or fail for lack of business fundamentals and disregard for economics.
As a Startup Community, we need to collaborate on improving this.
Ping me to start a dialog.
Wow John, thank you. Nothing frustrates more than decades of work with startups, seeing the research, and knowing we should not have so much failure; that most of it is simply because of disregard of what we know matters.
Good morning, Sir. Your posts, when I take the time, are always engaging, and have more directions that I can get my arms around. You are bright and it shows through the complexity of the message. I know you have a thousand ideas flooding your brain and it must be hard many days to coral them so that you can get get to the central frustration to bring to the surface.
I agree with many of your conjecture here in that we continue to live in a world where decisions are more often made by those who see very little of what should be required to make the vote or pull the trigger on the new idea, and sadly, you know that this is not going to change. The Google Sage lead us deeper down a path that we were sure was the path to truth, and GPT is now going take the drivers seat and push the G to the back of the bus. We see what we want to see. We walk down single paths that we have chosen in the belief that this path gets us to where we will be fulfilled (emotionally and/or financially). Yes, we need to learn how to think first, before we learn how to engineer and certainly we need to learn how to think before we continue to hire politicians who only spend their time getting elected and justifying their next election (while they get wealthy). But we have not learned to think. We have only learned how to listen and absorb what we are told is right.
So, who is responsible? How did we get here? Did it start with Google? Of course, the answer is no. We have been on this path all of my life time and arguably–much longer. Our universities must take much of the responsibility for teaching students that feelings are more important than science, than economics, than logic, and even basic biology. We have a supreme court now that has members who are afraid to admit that the most fundamental foundations of science are NOT based on feelings. We have legal systems that allow judges to openly violate the laws of the land. We have a congress that has vacated the role for which they were hired. And yes, we have a divided society that is driven by feelings and gang colors, first and foremost. Not a thoughtful process of what works, why it works and why or why not something should be considered.
All this, and we have not even gotten to what I believe is the real underlying causal factors driving all of it–yep, you knew I would end up here. God Almighty. Not just any God. Not Casper. Not an imaginary bearded guy in the sky. And ultimately, the real beginning of all of this, did not look like technology. This has been brewing for a much longer time than even the best historians will attribute. Yes, it’s bad today and probably far worse than it was when I was an adolescent. We have definitely lost our way and the age of a Renaissance Man is gone. Most of us don’t even know what that means. As a culture and as a nation, we have lost what it means to be able to code and build. To do the math on the back of an envelope, to make a decision, rather than asking the search engine to direct our paths. We are losing our ability as a nation to think, and yes, those who see through the cloud of ai will be those who understand how to leverage it. Seeing ai for what it is, at least in its “current state”, will be the key to those who can walk 360 degree around it and ask the questions: What is it? What can it do or be? Why does it matter? How will it affect my world and how will it affect “the world”? Do I want to play in this sandbox? Where can ai best help?
[I am currently completing my first ai application. 3 months of development and I expect to launch soon. I have learned the short-coming of ai in its current incarnation, but I am not foolish enough to believe that every day is not a new day and it is not a moving target of change. The skill of being able to think more critically than ai will be the thing that sets those apart who are successful in this first generation of ai tools, from those who use it to push g to the back of the bus. I am always available to you if you want to talk about the other thing. You know. The God thing. Blessings brother.]
Good read. Solid post.
GREAT post. Keep up the good work.
Old Guy, Appreciate this, sincerely. You’re wrestling with the very things I hoped would come through; not that there’s a singular villain to point to, but that the system is producing outcomes perfectly consistent with how we’ve taught people to think (or not).
We’ve made “knowledge” a product to consume, and now we’re surprised that most people don’t question what they’re given. We designed education to produce compliance, not capability. And we turned information systems into markets that reward virality over validity. So yes, of course we’re here. But I don’t buy the idea that this can’t change. That feels too much like resignation disguised as wisdom.
You’re right: this didn’t start with Google. It’s older than that. But Google (then Facebook… and now GPT) scaled the problem. It made passive knowledge acquisition feel like mastery. And we designed our schools and our politics around the same illusion: that knowing what’s “correct” is more valuable than understanding how anything works.
I wrote this not to find scapegoats, but to call out that worldviews can be taught, and when they are, decision-making changes. We’ve just abdicated that responsibility in the name of politics, profit, or comfort.
Appreciate you being in the work with me. Would love to hear more about your AI project; especially what you’re learning the hard way. That’s the storytelling we need to hear more.
Timothy, Just making it up as we go
Great stuff Paul O’Brien and 100% agree
Very thoughtful piece…thanks Paul O’Brien
I would add critical thinking skills to economics…incredibly, we’re now seeing pitches from entrepreneurs who can’t answer follow up questions because they’ve used gen AI as the ultimate shortcut.
James Barrood interestingly, that’s not dissimilar from when it’s evident that a startup will fail because the TEAM can’t even pitch it; you have founders who aren’t even on the same page with a team as passionate and familiar.
re: “So, what we get is a generation of builders with no comprehension of supply and demand, incentive distortion, pricing theory, or opportunity cost.”
For the most part yes, agreed. But what’s worse is they have no comprehension that there are relationships / connections between all those “nodes”.
Put another way…
The problem (to me) is simple: We’re over 25% into the 21st Century, and too many people (e.g., politicians, academics, LinkedIn influencers, etc, etc. etc.) are still playing Jeopardy. That is, overly impressed with their knowledge of “facts”, while at the same time suffering from Dunning Kruger when it comes to recognizing the power is in the connections the dots. It’s not the dots that matters, it’s the space and connections between them,
/rant.
Happy New Year.
Mark Simchock great thesis for an article / book, connecting the dots is not about the dots but how you get from one to the to the other, and the image that emerges as you progress.
“We need founders (voters) who can think about economics the way marketers think about psychology: as the bedrock of how things actually work. Not how we hope they’ll work.”
This ^^^. Insightful as always Paul. Thanks for sharing.
Tim R. Holcomb Ph.D. hoping that strikes some chords because we are infected with this virus that refuses to understand that marketing and economics aren’t based on ideals or desires, they’re observations of the way things are; if people want to be successful (or influence government), we need everyone familiar with those studies. Only then can someone meaningfully ask or understand how to change things.
Yes, true enough but I think it’s deeper than economics, funders especially in tech swim in the sea of late stage capitalism, siloed off from any real connection to the consequences of what they do. Voters have been successfully trained to be cheerleaders (and stormtroopers) for the home team regardless of the consequences.
Critical thinking is key. Economics is just part of the picture. It is seeing how things fit together that is essential. Focusing too much on one thing can produce distortions.
Focusing on Economics is both part of the problem and part of the solution.
We tend to move in the direction we are looking and focusing. If we want to improve things then we don’t need to just look at economics but also past it in order to see why it matters and so we can put it in the context of the other things that matter.
Robin Hughes Agreed