Many fools are certain when the wise remain doubtful. We crave certainty in a world where much is both unknown and unknowable and we refuse to accept that because it creates anxiety. In addition, much of what we think we know is not so; instead it is greatly distorted by human bias, cultural orientation, and preconceptions:
– A recent attempt to duplicate the findings of 100 psychological studies was only able to replicate 36%
– A survey of 131 economists by Anthony Randazzo and Jonathan Haidt revealed that responses to world view questions (definition of fairness) correlated strongly with replies to economic questions (austerity v. government stimuli).
– In my own world of real estate after forty years I’ve never experienced a 10 year period without an economic downturn of some kind and yet I’ve read hundreds of 10 year pro forma’s (projection of operating results for an investment) and none of them contained an economic downturn. Who is kidding whom? Collective, massive willing suspension of disbelief with no one willing to say (or hear?) “The Emperor has no clothes.”
– Public opinion polls are trumpeted almost daily and yet we all know that the words used (undocumented v. illegal) and phrasing of the question powerfully impacts responses. Also, the content of the preceding questions can predispose respondents’ answers (Do you see yourself as an empathetic person? Are you a good neighbor? How do you feel about x?).
– Studies come out frequently supporting this or that and time after time it has been demonstrated that the view point of the party commissioning the study powerfully impact the outcome. A recent survey of professionals purportedly hired as expert witness in a criminal case and RANDOMLY assigned to the defense or the prosecution found significant differences in their expert findings and conclusions after examining the evidence and yes, surprise, it correlated with which side (tribe?) they were assigned. We humans bond rapidly and unrealized bias quickly enters at the subconscious level in the best of us.
Little of this reflects intentional bad faith, most of it is a symptom of our universal need for much greater self-awareness, both individually and collectively. I’ve found a healthy dose of polite skepticism goes a long way in ferreting out reality and making better decisions. That as well as a willingness to accept that not everything can be known or known with precision. Indeed, not all that can be measured matters and not all that matters can be measured.
Closing Quotes:
“All the incentives push us to over confidence…You want to be on the front page of the Wall Street Journal? Of course you do. So you make a bold claim.” – Russ Fellows, Hoover Institution fellow
“Value-free (i.e. no agenda, no political bias) economics is no more likely to exist than the frictionless world of high school physics problems.” – Milton Friedman
“I care nothing for simplicity this side of complexity, everything for simplicity the far side of complexity.” – Albert Einstein
“The fastest way out of a complex situation is often the quickest way back in.” – Principle of System Theory
As always, I share what I most want/need to learn. – Nathan S. Collier