The Lily

“The true measure of human genius,” writes Daniel Cloud in The Lily, a poetically dazzling defense of economic freedom, “lies in the fact that we’re able to bring about things that exceed our own comprehension.”

And what is that which we cannot comprehend? A future that is always clouded in uncertainty. This none of us know what tomorrow will bring is a universal fact that unites all of humanity.

Cloud has a radical judgement on this condition. He writes that this position of not knowing is the very source of society’s progress, creativity, inspiration, and productive learning. It is also why we need radical freedom to discover and adapt. He urges us to embrace what most people find scary, learn to love what we do not know, and use uncertainty as our finest tool in building a bright future.

You have never read a defense of freedom like this. It goes to the root of the problem that confronts every intellectual and every society: how can do confront the issue of change? Do we regret it as destabilizing and contrary to rational plans? Or do we welcome it with openness, playfulness, and anticipation of learning tomorrow what we do not know today? His conclusions challenge the very core of the social sciences, including mainstream economics, and the dominant assumptions about politics today.

Cloud has a most interesting background that prepared him to write this expansion on the case for the free society on themes first taught by F.A. Hayek. Cloud teaches the philosophy of science at Princeton University. Before that, he was the manager of several hedge funds and travelled and worked extensively in China. This book brings together his two loves: entrepreneurship in real markets and high-level philosophy with a focus on biological evolution.

In his business life, he observed how enterprise relies most fundamentally on adapting to unknown conditions; those who excel at this difficult task are those most willing to acknowledge the limits of their understanding and learn as they go. They make “irrationality” work in their favor. In contrast, the world of academia is packed with people who are loathe to admit any absence of understanding because they believe that their knowledge of the world and ideas is complete and fully rational.

This book then could be re-tititled “What my academic friends could learn about society from understanding the real world of economics.” The book is called The Lily by way of reference to the famous passage from the Sermon on the Mount: “Consider the lilies how they grow: they toil not, they spin not; and yet I say unto you, that Solomon in all his glory was not arrayed like one of these.” As Cloud renders the passage, the lily was not weighed down by a rational plan for its well being and, for this very reason, adapted and became the most beautiful of all the flowers.

So it is for societies. Free societies beat controlled societies every time. This is not because free societies get more attention and care from the intellectuals and political elites but rather the opposite. The more the intellectuals attempt to think them through and the more the state attempts to provide for them, the more they stagnate and eventually fall to ruin. But societies that are permitted to develop from the internal energy of problem-solving individuals, developing in unexpected and seemingly irrational ways, the more they develop in a manner consistent with the well being of everyone.

This is Professor Cloud’s first major work but it follows on a lifetime of exciting experience in the two very different worlds of capitalist speculation in emerging markets and the stayed and static world of academia. He brings the two together to urge intellectuals to learn from the experience of real-world markets, and for market participants to gain more confidence over their primary role of embracing a changing and developing society.