Viswanathan K's Thoughts

Why do people believe false things?   Dan Williams takes a stab at that question… in a very different way. Before we get into his analysis, let’s first understand the method he uses for this and other questions. Take a different question: Why is there poverty in the world? Invert the question. In this case:             Why is there wealth in the world? Ask yourself which of the two conditions – wealth or poverty – has been the norm through most of our history: “(Poverty) is humanity's default state. Until very recently, everyone lived in what would now be regarded as shocking poverty.” Wealth then is the surprise. So try answering why there is so much wealth today. “Wealth creation depends on complex, improbable, and fragile institutions and incentives for coordinating human activity and the division of labour.” The Industrial Revolution. Property rights. Rule of law. Infrequent wars. Competitive markets. ...

In her awesome book, Being Wrong , Kathryn Schulz writes: “When we make mistakes, we shrug and say we are human. As bats are batty and slugs are sluggish, our own species is synonymous with screwing up.” Sure, you knew that already, and yet: “There is no experience of being wrong. There is an experience of realizing that we are wrong, of course… Call it the Heisenberg Uncertainty Principle of Error: we can be wrong, or we can know it, but we can’t do both at the same time.” Take our beliefs. Not just religious or political beliefs, but nearly every kind of belief we hold: “Our beliefs often seem to us not so much constructed as reflected, as if our minds were simply mirror in which the truth of the world passively appeared.” And that is exactly what leads to, well, errors: “Believing something on the basis of messy, sparse, limited information really is how we err.” Once we have a belief, we then only notice the data that supports it: “Looking for counterevidence...

The famous economist, John Maynard Keynes supposedly said: “When the facts change, I change my mind. What do you do, sir?” And yet, it is so hard to do for most people most of the time. In his book, Superpredictors , Philip Tetlock has a great explanation as to why people resist changing their minds (no, the reason’s not always ego): “Visualize the children’s game Jenga, which starts with building blocks stacked one on top of another to form a little tower. Players take turns removing building blocks until someone removes the block that topples the tower. Our beliefs about ourselves and the world are built on each other in a Jenga-like fashion.” When people find a core belief proven wrong, the reason they resist is: “It’s a lot harder to pull that block out without upsetting other blocks.” A big chunk of the tower of beliefs may come crashing down: that’s why people are so pig-headed. This made a whole lot of sense. It also explains why kids seem so open to chang...

Monopolies are evil. Or at least that’s the common belief. The obvious fear with monopolies is that a company with monopoly status can raise prices and we’d have no alternatives but to cough up. Another less commonly known reason (until you hear it) is that a monopoly kills competition and thus kills innovation, something that is bad in the long run. And monopolies inevitably use their monopoly status in one segment to promote their products in another segment. Remember how Microsoft used its Windows OS monopoly status to force Internet Explorer down our throats a little over a decade back? As with everything else, monopolies get complicated in the age of the Internet. Google argues that while it is a monopoly in search, people can switch to competitors like Yahoo or Bing in a jiffy (if they want to). And if users can switch so easily, what is the danger of Google’s monopoly status, they ask? Then there’s the flipped version of monopoly: monopsony (“a dominant buyer with the...