Comparing (un)known (un)knowns

I am a big fan of figures that show how various ideas relate to each other.

I use the “2×2 of goods” to explain how water should be managed by economic or social/political means.

I have set out how social sciences relate to each other and how underlying “truth” changes as you move from sciences to humanities. I summarised that difference in this post:

The humanities (language, history, philosophy) illustrate the diversity of human existence just as the sciences (biology, physics, etc.) illustrate our similarities. This explains how scientists can collaborate and agree on the “big picture” while failing to see the point of humanities studies that don’t seem to draw any conclusions (and sometimes seem locked in eternal battles over the “right” element drawn from a pile of subjective perspectives)

…and now I am back with a new figure that maps risk and uncertainty into a 2×2 that overlaps with objective (science) and subjective (humanities) views:

The reason for this figure, as with all my figures, is to highlight how “we” are often talking past each other when we make comments based on unstated assumptions.

Thus: “This cake is good” (lower left) is not the same as “this cake is fresh” (upper left), “this cake uses a secret recipe” (upper right) or “I’m not sure if we’re gonna get cake out of the oven” (lower right).

My one-handed suggestion is that every discussions and debate begin by establishing how each participant “sees” the topic at hand (subjective/objective? humanities/social science/science, etc.), as that reduces confusion related to mismatched baselines.

Interesting stuff

  1. Listen: America’s Math Curriculum Doesn’t Add Up. I really identified with a lot of the problems they discuss, especially from my graduate school years.
  2. Listen: A surprisingly insightful discussion of fashion trends, market disruptions and climate change.
  3. Listen: Richard Thayler’s Nudge 2.0 has some corrections. Related read “The death of behavioral economics
  4. Read: California bans non-recyclable packaging that’s labeled as recyclable (how is this not already illegal?!?)
  5. Read: Maybe people need to do less cancelling and more forgiving? Related: Read “More Americans give up on the Common Good
  6. Read: The ways conspiracies actually spread (a series of subjective half-truths that anyone can embellish)
  7. Read: Cycling injuries in NL (based on hospital admissions) are 3x worse than official figures (based on police reports).
  8. Read: Those on the Left embracing cancel culture (and other post-modern concepts of “relativity”) are embracing the “confessional” tactics of religious conservatives (God as arbitrator of truth, channeled by spokesmen/priests) that the Enlightenment fought on its way to promoting liberal, universal values. Related listen to this debate on meritocracy.
  9. Listen: The disaster of subsidized flood insurance in the US.
  10. Read: “Surgical masks are highly protective [against COVID], but cloth masks fall short” — I just bought a bunch of N95s, as there are too many anti-vaxxers for the Netherlands to be safe.

H/Ts to BZ and PB

20 years after 9/11

On September 12 2001, I wrote:

This events yesterday are indeed beyond our imaginations. Although it would be better if it had never happened at all, it seems that the best impact that it might have (as the perpetrators perhaps wanted), is for us (the USA, the Americans), to reconsider our positions and how we “project” power in the world – before we start bombing…  

If the attack was Muslim (not domestic – like last time in Oklahoma), then start by acknowledging that Christians own and control most of the world. The Muslims get screwed quite often (with support from Christian/Western Governments). Perhaps that is fair (the Strong make the rules), but it hardly seems to be either “what Jesus would do” or “love thy Neighbor”. 

[a long list of examples of Muslims being exploited in many countries]

Before we go off and start shooting (or nuking) all the “rag heads” (as Howard Stern’s listeners want), perhaps we should consider where the perpetrators are coming from in terms of their anger at what “America” has done to them. It’s too bad that US citizens are not called upon to make the decisions that the government makes for them, because, if we knew more of what was happening (there is a clear lack of coverage and bias in most of the US press/television – against Muslims), it is likely that the USA wouldn’t be responsible for as many messes as it is. One clear result of constraint would be a lessening of Israel’s current aggression, not possible without the support of the US government (current UN Racism conference in S. Africa, etc.)

Finally, it is interesting to make a note, when looking for those responsible (Bush’s “Evil” ones), of who gain’s from US anguish and anger. A US backlash against Muslims would strengthen Israel. Perhaps Mossad** is responsible?

Just a few thoughts on this so-predictable tragedy. My regrets to those who died for someone else’s opinion.

Reading this 20 years later, I can point at a few developments that (don’t) align with my predictions:

  • Muslims are maybe (not) better governed.
  • The biggest terrorist threat to the US comes from White extremists.
  • The US invasions of Afghanistan and Iraq were complete failures. (I support Biden’s pull out, although the planning sucked.)
  • Americans barely know much more about the world. This has a lot to do with the volunteer army not representing “average” Americans abroad.
  • America has wasted $trillions on war and lost prestige as land of the free, let alone leader of the Free World.
  • Israel has not made any sort of peace with the Palestinians, but former Arab allies have made peace with Israel.
  • Social media and lying Republicans have made it much harder for people to understand what’s happening, to whom and why.

My one-handed conclusion is that Osama Bin Laden and Al Queda “won” 9/11 due to America’s self-harming (and freedom-harming) response, which was naive in the ways that many with experience outside the US could have predicted.

You cannot fight terror and ignorance with terror and ignorance. The only way is to use knowledge, dialogue and cooperation among freedom-loving nations and people’s. I hope the US learns this lesson before too long, but I am not optimistic.

Interesting stuff

  1. Read: Whole milk is back baby! “Why have so many of us turned our backs on dairy in the first place, even if it was not medically necessary? There’s this quest for absolution in the foods we eat.”
  2. Read: How digital media turned us all into dopamine addicts and Stop Giving Companies Your Phone Number
  3. Listen: The Breaking Point Of Democracy …comes when we stop debating and start cancelling
  4. Watch: How Suburban Development Makes American Cities Poorer
  5. From Iceland:
    1. A Pink But Toxic Gold-Rush (of farmed salmon)
    2. The Nature Pass: The Stupidest Tax In History
  6. Read: How Canada is making big money from (exploited) foreign students. (This rings many bells from my time teaching there in 2013-14.)
  7. Read: Climate Change Is Already Rejiggering Where Americans Live
  8. Read: The Surprisingly Big Business of Library E-books (i.e., revenue optimisation models against the basic idea of a library)
  9. Read: Is your name ruining your life?
  10. Read: On 7 Sep, I did a Reddit “ask me anything” on climate, water, drought, floods, fires and how (if?) we can adapt to climate chaos. It got 1200+ upvotes (good for visibility) and attracted 380+ comments (about 1/3rd mine). Read the questions and answered (sort by “popular”) to see what we discussed.

Review: Alchemy

I bought this book (subtitle The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life) immediately after hearing Rory Sutherland debate the relevance of economics to normal people’s behavior on EconTalk.

It was well worth buying, as I made more than 150 notes and highlights while I was reading. (Speaking of notes, Sutherland loves footnotes, and they are funny, so I recommend buying the physical rather than the digital version of the book soo you can enjoy the footnotes.)

Sutherland’s main points are that (1) people are not the hyper-rational calculating machines that some economic models suggest and (2), marketing people  are well aware of the many “irrational” ways people make decisions — and they use that knowledge to sell stuff. Claim (1) is not controversial among economists, but claim (2) is, as that implies a “free lunch” that some people can use and others (including economists) cannot.

Such a situation is no surprise for anyone observing the continued (and annoying) existence of advertisements and marketing, but it’s a bit of a surprise to anyone assuming that humans dislike being fooled and manipulated. That said, the entire field of “behavioural economics” (read my review of Thinking Fast and Slow) more or less tests and measures the degree to which we are reliably manipulated right in front of our eyes!

With that preamble, I’ll now give my (typical) series of notes and quotes (“loc” refers to location in my Kindle copy of the book). Oh, and I am curious to know which of these notes/quotes you find to be the most useful/insightful. Please leave a comment 😇

One more thing: Sutherland is far wittier and concise than Danny Kahneman (Thinking Fast and Slow) in discussing  similar topics. Read this book first.

  1. The opposite of a good idea can also be a good idea. Don’t design for average. It doesn’t pay to be logical if everyone else is being logical… A good guess which stands up to observation is still science. So is a lucky accident. Test counterintuitive things only because no one else will… If there were a logical answer, we would have found it.” Loc 113
  2. Unfortunately, because reductionist logic has proved so reliable in the physical sciences, we now believe it must be applicable everywhere – even in the much messier field of human affairs. The models that dominate all human decision-making today are duly heavy on simplistic logic, and light on magic – a spreadsheet leaves no room for miracles.” Loc 141
  3. “It is difficult for a company, or indeed a government, to request a budget for the pursuit of such magical solutions, because a business case has to look logical.” Loc 174
  4. This book is not an attack on the many healthy uses of logic or reason, but it is an attack on a dangerous kind of logical overreach, which demands that every solution should have a convincing rationale before it can even be considered or attempted. If this book provides you with nothing else, I hope it gives you permission to suggest slightly silly things from time to time. To fail a little more often.” Loc 322
  5. Evolution, too, is a haphazard process that discovers what can survive in a world where some things are predictable but others aren’t. It works because each gene reaps the rewards and costs from its lucky or unlucky mistakes, but it doesn’t care a damn about reasons. It isn’t necessary for anything to make sense: if it works it survives and proliferates; if it doesn’t, it diminishes and dies.” Loc 391
  6. The single greatest strength of free markets is their ability to generate innovative things whose popularity makes no sense.” Loc 457
  7. It is impossible for human relations to work unless we accept that our obligations to some people will always exceed our obligations to others. Universal ideas like utilitarianism are logical, but seem not to function with the way we have evolved… And in reality ‘context’ is often the most important thing in determining how people think, behave and act: this simple fact dooms many universal models from the start.” Loc 476
  8. ‘At the federal level I am a Libertarian. At the state level, I am a Republican. At the town level, I am a Democrat. In my family I am a socialist. And with my dog I am a Marxist – from each according to his abilities, to each according to his needs.’ Loc 548
  9. ‘The trouble with market research is that people don’t think what they feel, they don’t say what they think, and they don’t do what they say.’ … we simply don’t have access to our genuine motivations, because it is not in our interest to know.” Loc 687
  10. Science seems to fall short of its ideals whenever the theoretical elegance of the solution or the intellectual credentials of the solver are valued above the practicality of an idea.” Loc 889
  11. E-cigarettes and cognitive dissonance: “If you have spent the last 20 years as a public health advisor promoting policies designed to create shame, alongside colleagues who all believe the same thing, the last thing you want to hear is ‘Don’t worry about that, because a bloke in China has come up with a gadget which means that the problem to which you have dedicated your life and from which your social status derives is no longer a problem any more.’ Even worse, the inventor was a businessman rather than a health professional.” Loc 910
  12. I am willing to bet that there are ten times as many people on the planet who are currently being paid to debate why people prefer Coke or Pepsi than there are being paid to ask questions like ‘Why do people request a doctor’s appointment?’, ‘Why do people go to university?’” Loc 982
  13. Water! “One of the great contributors to the profits of high-end restaurants is the fact that bottled water comes in two types, enabling waiters to ask ‘still or sparkling?’, making it rather difficult to say ‘just tap’.” Loc 1129
  14. In maths, 10 x 1 is always the same as 1 x 10, but in real life, it rarely is. You can trick ten people once, but it’s much harder to trick one person ten times… Imagine you have ten roles to fill, and you ask ten colleagues to each hire one person. Obviously each person will try to recruit the best person they can find – that’s the same as asking one person to choose the best ten hires he can find, right? Wrong. Anyone choosing a group of ten people will instinctively deploy a much wider variance than someone hiring one person. The reason for this is that with one person we look for conformity, but with ten people we look for complementarity.” Locs 1270, 1298
  15. Metrics, and especially averages, encourage you to focus on the middle of a market, but innovation happens at the extremes… It’s true that ‘what gets measured gets managed’, but the concomitant truth is ‘what gets mismeasured gets mismanaged’…  I have never seen any evidence that academic success accurately predicts workplace success.” Locs 1351, 1360
  16. Nicholas Taleb applies this rule to choosing a doctor: you don’t want the smooth, silver-haired patrician who looks straight out of central casting – you want his slightly overweight, less patrician but equally senior colleague in the ill-fitting suit. The former has become successful partly as a result of his appearance, the latter despite it.” Loc 1380
  17. We may be more prone to ascribe ‘outsider status’ to someone of a different ethnic background, but this does not mean that we cannot easily adopt anyone of any ethnic background into an ‘in group’ in a different setting.” Loc 1398
  18. Architectural quality comes low on the list – and is further devalued because it isn’t quantifiable [such as floor area]. If you can convince yourself to value something which other people don’t, you can enjoy a fabulous house for much less.” Loc 1479
  19. A nervous and bureaucratic culture is closed-mindedly attaching more importance to the purity of the methodology than to the possible value of the solution, which leads us to ignore possible solutions not because they have been proven to be wrong, but because they have not been reached through an approved process of reasoning.” Loc 1527
  20. The more data you have, the easier it is to find support for some spurious, self-serving narrative. The profusion of data in future will not settle arguments: it will make them worse.” Loc 1628.
  21. I asked them what they did to make their telephone operators so good… ‘To be perfectly honest, we probably overpay them.’ The call centre was 20 miles from a large city; local staff, rather than travelling for an hour each day to find reasonably paid work, stayed for decades and became highly proficient. Training and recruitment costs were negligible, and customer satisfaction was astoundingly high. The staff weren’t regarded as a ‘cost’ – they were a significant reason for the company’s success.” Loc 1641
  22. The market mechanism is loosely efficient, but the idea that efficiency is its main virtue is surely wrong, because competition is highly inefficient… The reason this inefficient process is necessary is because most of the achievements of consumer capitalism were never planned and are explicable only in retrospect, if at all.” Loc 1695
  23. We don’t value things; we value their meaning. What they are is determined by the laws of physics, but what they mean is determined by the laws of psychology.” Loc 1743
  24. If you declare something highly exclusive and out of reach, it makes us all want it much more – call it ‘the elixir of scarcity’. Frederick knew this and so posted guards around his potato patch to protect his crop, but gave them secret instructions not to guard the patch too closely. Curious Prussians found they could sneak into the royal potato patch and could steal, eat and even cultivate this fabulously exclusive vegetable.” Loc 1822
  25. Framing and gender: “A course previously entitled ‘Introduction to programming in Java’ was renamed ‘Creative approaches to problem solving in science and engineering using Python’. The professors further divided the class into groups – Gold for those with no coding experience and Black, for those with some coding experience. They also implemented Operation Eliminate the Macho Effect, in which males who showed off in class were taken aside and told to desist. Almost overnight, Harvey Mudd’s introductory computer science course went from being the most despised required course to the absolute favourite.” Loc 1878
  26. In Belgium and the Netherlands, he (or she) simply explains I can’t drink tonight, I’m Bob’ – a Dutch acronym* for Bewust Onbeschonken Bestuurder or ‘deliberately sober driver’… creating a name for a behaviour implicitly creates a norm for it.” Loc 1896
  27. Knowledge of the human physique is considered essential in designing a chair, but a knowledge of human psychology is rarely considered useful, never mind a requirement, when someone is asked to design a pension scheme, a portable music player or a railway. Who is the Herman Miller of pensions, or the Steve Jobs of tax-return design?” Loc 1966
  28. We naturally assume that something that only does one thing is better than something that claims to do many things… Google is, to put it bluntly, Yahoo without all the extraneous crap cluttering up the search page, while Yahoo was, in its day, AOL without in-built Internet access. In each case, the more successful competitor achieved their dominance by removing something the competitor offered rather than adding to it.” Loc 2007, 2018
  29. On asymmetric information: “Trust is always more difficult to gain in cities because of the anonymity they afford, and [medieval] guilds help to offset this problem. If it is costly and time-consuming to join one, the only people who enter are those with a serious commitment to a craft. Guilds are also self-policing; the upfront cost of being admitted adds to the fear of being ejected” Loc 2060. Guild members also recover those costs via higher charges.
  30. Solving a problem for a customer at your own expense is a good way of signalling your commitment to a future relationship.” Loc 2144
  31. Bits deliver information, but costliness carries meaning. We do not invite people to our weddings by sending out an email… Imagine you receive two wedding invitations on the same day, one of which comes in an expensive envelope with gilt edges and embossing, and the other (which contains exactly the same information) in an email. Be honest – you’re probably going to go to the first wedding, aren’t you?” Loc 2187
  32. Water! “The psychophysicist Mark Changizi has a simple evolutionary explanation for why water ‘doesn’t taste of anything’: he thinks that the human taste mechanism has been calibrated not to notice the taste of water, so it is optimally attuned to the taste of anything that might be polluting it.” Loc 2197
  33. It is therefore impossible to generate trust, affection, respect, reputation, status, loyalty, generosity or sexual opportunity by simply pursuing the dictates of rational economic theory. If rationality were valuable in evolutionary terms, accountants would be sexy. Male strippers dress as firemen, not accountants; bravery is sexy, but rationality isn’t.” Loc 2233
  34. Economists tend to dislike the idea of branding and are inclined to see it as an inefficiency, but then they might view a flower as an inefficient form of weed. The reason they might not understand the flower’s extravagance in squandering its resources on producing scent and colour is that they don’t fully understand what it is trying to do or the decision-making and information-transfer context in which it is trying to do it” Loc 2344 NB: I oppose advertising (read more) but not branding. Brands, as Sutherland explains, are costly to produce and defend. Advertising is cheap talk that “does whatever it takes” to sell the good. What’s the difference? A brand helps you find a product you know. Advertising induces you to try a product you don’t.
  35. Why does Coca-Cola advertise? It’s in an “empty-promises” arms race with Pepsi. Related: “We find that almost all brands seem to be over-advertising, and that they are earning a negative R.O.I. from advertising in an average week” and “Online advertising wears the emperor’s new clothes” [it’s often worthless].
  36. Modern environmentalists also suggest that status-signalling competition between humans [e.g., flying into space] is destroying the planet… the widespread conviction that humans could be content to live without competing for status in an egalitarian state is nice in theory, but psychologically implausible. Yet the status markers for which we compete don’t have to be environmentally damaging; people can derive status from philanthropy as well as through selfish consumption.” Loc 2436
  37. Most people will avoid giving credit to sexual selection where they possibly can because, when it works, sexual selection is called natural selection… Why are people happy with the idea that nature has an accounting function, but much less comfortable with the idea that it also has a marketing function?” Locs 2472, 2481
  38. The Soviets soon found that, without a maker’s name attached to a product, no one had any incentive to make a quality product.” Loc 2528
  39. Notice that ordinary people are never allowed to pronounce on complex problems. When do you ever hear an immigration officer interviewed about immigration, or a street cop interviewed about crime? These people patently know far more about these issues than economists or sociologists, and yet we instead seek wisdom from people with models and theories rather than actual experience.” Loc 4147 [Seems I stopped highlighting for many pages. Now you have to read the book, to uncover what I censored 😉 ]
  40. You attend a meeting with the UK Government, no biscuits are provided. It saves something like £50m a year. The hidden cost is that every meeting takes on a slightly unpleasant timbre by violating the most basic principles of hospitality. I don’t even like biscuits, but it still pisses me off. Chatting in the absence of biscuits feels less like a cooperative meeting and more like being interrogated by a Serbian militia. Under any Sutherland regime, scones will be mandatory.” Loc 4224
  41. Having various gods and goddesses of fortune – Ganesha, Tyche, Fortuna, etc. – ancient religions were perhaps more objective than modern rationalists, since they were not inclined to attribute all outcomes to individual human rational agency.” Loc 4363
  42. Strictly speaking these [“pocket”] radios were not pocket-sized, but in an early manifestation of his genius, Morita ordered shirts with outsized pockets for his employees. If you can’t make the radio smaller, make the pocket larger.” Loc 4459
  43. Modernism isn’t particularly efficient as an architectural style, by the way. Arches are better than beams for supporting a load, and flat roofs are awful in engineering terms. But modernist architecture, like economics and management consultancy, is good at creating the appearance of efficiency.” Loc 4519

My one-handed conclusion is that this book is worth your time, whether you’re an economist or normal person, as we need to better understand our  “irrational but powerful” desires and impulses, lest someone else take advantage of our misunderstanding them. FIVE STARS.


Here are all my reviews.

Interesting stuff (on-the-road edition)

I’m in Iceland, but that doesn’t mean I haven’t been reading and listening to amazing stuff. Enjoy!

Covid-related

(1) Read: Supply chain shortages underline the “anti-globalization” aspect of C19

(2) Listen: A sociologist on how academics and policy makers failed to grasp C19

(3) Read: Those with long-Covid are taking care of themselves as medicine fails them

(4) Read: Covid will evolve as we grapple with it, and we may not win. Related: C-19 is here forever

Climate-chaos related

(5) Read: CC is intensifying fires, rain, etc., and we can’t flee

(6) Read: CC is bankrupting small towns (too much damage; not enough wealth or subsidies

Other cool stuff

(7) Read: How the Lebanese are using crypto to escape a failing banking system

(8) Listen: A podcast on the plumbing of mega financial firms that *may be* manipulating crypto markets

(9) Listen: The story of Sadie Alexander, the first Black economist in the US. She could not get a job as an economist (sexual/racial discrimination) but her insights have been recovered

(10) Listen: The “West” should cut ties with Saudi Arabia (holy shit, the “pro side” was amazing)