Incentives are the cornerstone of modern life.
Knowing what to measure, and how to measure it, can make a complicated world less so.
The conventional wisdom is often wrong. And a blithe acceptance of it can lead to sloppy, wasteful, or even dangerous outcomes.
Correlation does not equal causality. When two things travel together, it is tempting to assume that one causes the other. Married people, for instance, are demonstrably happier than single people; does this mean that marriage causes happiness? Not necessarily. The data suggest that happy people are more likely to get married in the first place. As one researcher memorably put it, “If you’re grumpy, who the hell wants to marry you?”
The absurdly talented George Bernard Shaw—a world-class writer and a founder of the London School of Economics—noted this thought deficit many years ago. “Few people think more than two or three times a year,” Shaw reportedly said. “I have made an international reputation for myself by thinking once or twice a week.”
One thing we’ve learned is that when people, especially politicians, start making decisions based on a reading of their moral compass, facts tend to be among the first casualties.
It has long been said that the three hardest words to say in the English language are I love you. We heartily disagree! For most people, it is much harder to say I don’t know.
As Daniel Patrick Moynihan was famous for saying: “Everyone’s entitled to their own opinion but not to their own facts.”
The world is also thick with “entrepreneurs of error,” as the economist Edward Glaeser calls them, political and religious and business leaders who “supply beliefs when it will increase their own financial or political returns.”
…ultracrepidarianism…“the habit of giving opinions and advice on matters outside of one’s knowledge or competence.”
Think back to the soccer player who was about to take a life-changing penalty kick. Aiming toward the center has a better chance of success, but aiming toward a corner is less risky to his own reputation. So that’s where he shoots. Every time we pretend to know something, we are doing the same: protecting our own reputation rather than promoting the collective good. None of us want to look stupid, or at least overmatched, by admitting we don’t know an answer. The incentives to fake it are simply too strong.
While one might expect that suicide is highest among people whose lives are the hardest, research by Lester and others suggests the opposite: suicide is more common among people with a higher quality of life. “If you’re unhappy and you have something to blame your unhappiness on—if it’s the government, or the economy, or something—then that kind of immunizes you against committing suicide,” he says. “It’s when you have no external cause to blame for your unhappiness that suicide becomes more likely. I’ve used this idea to explain why African-Americans have lower suicide rates, why blind people whose sight is restored often become suicidal, and why adolescent suicide rates often rise as their quality of life gets better.”
“It is the brain, not the heart or lungs, that is the critical organ,” said the esteemed neurologist Roger Bannister, best known as the first human to run the mile in less than four minutes.
Thinking like a Freak means you should work terribly hard to identify and attack the root cause of problems.
Small questions are by their nature less often asked and investigated, and maybe not at all. They are virgin territory for true learning.
Isaac Bashevis Singer, who won the Nobel Prize in Literature, wrote across many genres, including children’s books. In an essay called “Why I Write for Children,” he explained the appeal. “Children read books, not reviews,” he wrote. “They don’t give a hoot about the critics.” And: “When a book is boring, they yawn openly, without any shame or fear of authority.” Best of all—and to the relief of authors everywhere—children “don’t expect their beloved writer to redeem humanity.”
We’ll often say one thing and do another—or, more precisely, we’ll say what we think other people want to hear and then, in private, do what we want. In economics, these are known as declared preferences and revealed preferences, and there is often a hefty gap between the two.
Once people are asked to donate, the social pressure is so great that they get bullied into giving, even though they wish they’d never been asked in the first place.
But let’s consider a different set of parents: the ones whose children are currently dying in traffic accidents. Around the world, some 180,000 kids are killed each year, or roughly 500 a day. In wealthy countries, this is easily the leading cause of death for kids from ages five to fourteen, outpacing the next four causes—leukemia, drowning, violence, and self-inflicted injuries—combined. In the United States alone, traffic accidents kill more than 1,100 kids, age fourteen and under, each year, with another 171,000 injuries.
As scientists like to say: The plural of anecdote is not data.
Anecdotes often represent the lowest form of persuasion.
That’s the idea behind a “premortem,” as the psychologist Gary Klein calls it. The idea is simple. Many institutions already conduct a postmortem on failed projects, hoping to learn exactly what killed the patient. A premortem tries to find out what might go wrong before it’s too late. You gather up everyone connected with a project and have them imagine that it launched and failed miserably. Now they each write down the exact reasons for its failure. Klein has found the premortem can help flush out the flaws or doubts in a project that no one had been willing to speak aloud. This suggests one way to make a premortem even more useful: offer anonymity.
We might add that Winston Churchill, despite his famous advice to those Harrow schoolboys, was in fact one of history’s greatest quitters. Soon after entering politics he quit one party for another, and later he quit government altogether. When he rejoined, he quit parties again. And when he wasn’t quitting, he was getting tossed out. He spent years in the political wilderness, denouncing Britain’s appeasement of the Nazis, and was returned to office only when that policy’s failure had led to total war. Even in the bleakest moments, Churchill did not back down one inch from Hitler; he became “the greatest of all Britain’s war leaders,” as the historian John Keegan put it. Perhaps it was that long streak of quitting that helped Churchill build the fortitude to tough it out when it was truly necessary. By now, he knew what was worth letting go, and what was not.
from the notes section:
Family firms in Japan have a long-standing solution to this problem: they find a new CEO from outside the family and legally adopt him. That is why nearly 100 percent of adoptees in Japan are adult males.
In defense, however, of Germanic Catholicism: a new research project by Spenkuch argues that Protestants were roughly twice as likely as Catholics to vote for the Nazis.