Paul Graham has an interesting post, Is It Worth Being Wise?, where he addresses what wisdom is, and how it differs from (“merely”) being smart or intelligent. He dismisses two supposedly-popular accounts:

  • wisdom applies to human problems, and intelligence to abstract ones
  • wisdom comes from experience, while intelligence is innate.

He suggests an alternative:

  • “wise” means one has a high average outcome across all situations, and “smart” means one does spectacularly well in a few.

Without discussing each in detail, I’d say that we have here what JS Mill regarded as the most common situation, i.e., each of a set of apparently conflicting opinions has some part of the truth:

the conflicting doctrines, instead of being one true and the other false, share the truth between them; and the nonconforming opinion is needed to supply the remainder of the truth, of which the received doctrine embodies only a part. Popular opinions, on subjects not palpable to sense, are often true, but seldom or never the whole truth. They are a part of the truth; sometimes a greater, sometimes a smaller part, but exaggerated, distorted, and disjoined from the truths by which they ought to be accompanied and limited. (On Liberty, Ch.2)

Graham’s own suggestion seems to me not quite right, not least because it will be hard to distinguish being smart from being lucky, which on occasion makes some decision turn out spectacularly well. Indeed, in non-trivial domains (“subjects not palpable to sense”), luck is plausibly the operative factor in most decisions which turn out spectacularly well. Curiously, the words “luck” and “fortune” don’t appear in Graham’s essay.

Having had a career in academic philosophy, hanging out at times with people at the top levels, and now having spent a few years in business, I have my own hunch about the difference between wisdom and smartness. It is probably only part of the truth, but worth throwing into the mix.

Academic philosophers are often smart – sometimes spectacularly so – but are rarely wise. Hence, for example, the proliferation of inane opinions supported by powerful-seeming arguments. Meanwhile, in my limited experience of business, the proportion of people who strike me as very smart seems rather less than in academia – but at the same time there seems to be somewhat more wisdom around.

As the “CEO” of a small software enterprise, I’ve found that one of the most demanding parts of the job is being required so often to make decisions on matters where the consequences may be quite large, but there are multiple relevant factors, huge unknowns, and no reliable method of making a decision, at least in any reasonable time-frame.

Wisdom is being able to generally make good choices when confronted with such decisions.

Smartness, on the other hand, is being able to “figure things out.” A good example in our company is when Dan, our lead programmer, figured out the mathematical equations governing the elegant shape of the curvy lines in analysis mode. (I’m not suggesting that Dan isn’t wise, only that he is smart.)

In business decisions, very often you’re simply not able to figure things out. You don’t have the information, the time, or even a reliable method or tools. All you can really go by are your hunches, which are grounded in

  • your own personal experience of similar situations
  • your general background knowledge. For example, you may learn quite a lot from reading books, blogs, etc.
  • relevant insight you can glean from discussions you have with colleagues, company directors, friends etc.

From these sources you get a vague “sense” of the situation which recommends (for better or worse) a way to go. Wise people have more experience (from which they’ve been able to learn); more background knowledge; good colleagues etc; and are able to exploit these resources by synthesizing relevant parts of it into a reasonable “take” on the problem.

Practically speaking, to go beyond just relying on the intuitive hunch based on a sense of the situation, there seem to be two strategies:

  1. Apply some simple decision structuring framework – SWOT, multi-attribute utility matrix, etc.
  2. Follow an “ideology” – a prior commitment to a strategy, goal or approach which simplifies and guides the decision.

“Smart” people will of course dismiss both of these as being intellectually childish. But people who are merely smart have the luxury of being smart because, generally, they don’t have to be wise. If they were required to be wise, my guess is they’d end up doing much the same thing, and wouldn’t be so quick to dismiss apparently simplistic approaches.

So in short, being wise is making a reasonable choice in an inherently speculative or vague situation, a choice guided by a good sense of the situation which in turn is based on the knowledge one has immediately at hand – prior experience, background knowledge, and the people around you.  Often, with decisions demanding wisdom, you’ll never really know ifyou were right, i.e., if one of the other choices would have been better.  Being smart is being able to apply general intellectual resources to “think through” a problem and arrive at a recognisably “right” answer.

Being wise is not intrinsically better than being smart. Both have their place, and of course one would like to be both.