When should you trust an expert’s empirical predictions? Says Daniel Kahneman in Thinking Fast and Slow:
When do judgments reflect true expertise? When do they display an illusion of validity? The answer comes from the two basic conditions for acquiring a skill:
- an environment that is sufficiently regular to be predictable
- an opportunity to learn these regularities through prolonged practice
When both these conditions are satisfied, intuitions are likely to be skilled. Chess is an extreme example of a regular environment, but bridge and poker also provide robust statistical regularities that can support skill. Physicians, nurses, athletes, and firefighters also face complex but fundamentally orderly situations. The[ir] accurate intuitions… are due to highly valid cues that the expert’s [intuitive] System 1 has learned to use, even if [the rational] System 2 has not learned to name them. In contrast, stock pickers and political scientists who make long-term forecasts operate in a zero-validity environment. Their failures reflect the basic unpredictability of the events that they try to forecast….
Some regularities in the environment are easier to discover and apply than others. Think of how you developed your style of using the brakes on your car. As you were mastering the skill of taking curves, you gradually learned when to let go of the accelerator and when and how hard to use the brakes. Curves differ, and the variability you experienced while learning ensures that you are now ready to brake at the right time and strength for any curve you encounter. The conditions for learning this skill are ideal, because you receive immediate and unambiguous feedback every time you go around a bend: the mild reward of a comfortable turn or the mild punishment of some difficulty in handling the curve if you brake either too hard or not quite hard enough. The situations that face a harbor pilot maneuvering large ships are no less regular, but skill is much more difficult to acquire by sheer experience because of the long delay between actions and their noticeable outcomes. Whether professionals have a chance to develop intuitive expertise depends essentially on the quality and speed of feedback, as well as on sufficient opportunity to practice….
Some aspects of any professional’s tasks are much easier to learn than others. Psychotherapists have many opportunities to observe the immediate reactions of patients to what they say. The feedback enables them to develop the intuitive skill to find the words and the tone that will calm anger, forge confidence, or focus the patient’s attention. On the other hand, therapists do not have a chance to identify which general treatment approach is most suitable for different patients. The feedback they receive from their patients’ long-term outcomes is sparse, delayed, or (usually) nonexistent, and in any case too ambiguous to support learning from experience.
Among medical specialties, anesthesiologists benefit from good feedback, because the effects of their actions are likely to be quickly evident. In contrast, radiologists obtain little information about the accuracy of the diagnoses they make and about the pathologies they fail to detect. Anesthesiologists are therefore in a better position to develop useful intuitive skills.
I just finished reading Hernando De Soto’s The Mystery of Capital. The book was great, and I wholeheartedly recommend it to anyone who cares about capitalism, globalization, development, or third world poverty. It is cliche to say that a book “challenges expectations”, but it certainly did mine, perhaps more than any book I have read. De Soto makes a very intriguing claim about third world poverty – that it is exacerbated by a clash between inflexible law and actual human practice – that has difficult ramifications for property laws in the third world.
I intend to follow up this post with a few of the more tangential thoughts I had while reading. For a very powerful elaboration of the main argument (bad laws create extralegality, which exacerbates poverty) get the book!
The Mystery of Capital was The Atlas Network’s #1 pick for pro-liberty book of the decade. I have read and also recommend their #2 pick Radicals for Capitalism.
I’ve decided to inaugurate another series: “Reviewed Briefly”, in which I will try to present some brief thoughts on books that I have finished reading recently. I may put up a few reviews of books that I read a bit longer ago to get the series rolling. Caveat lector: some of the books may be fiction, and the reviews may include spoilers!
The incentives and knowledge of bureaucrats create another peculiar problem for “rule by experts”. On the one hand, the bureaucrats that operate the various governmental agencies are necessarily the “experts” on these programs. Who can be expected to know more than the managers of the myriad administrative fiefdoms? On the other hand, these specialists are the least likely people to desire limiting these bureaucracies, because they have self-selected to their agency of choice. Milton Friedman makes this point in his typically understated manner on pages 186-187 of Capitalism and Freedom:
The issues involved become very technical and complex. The layman is often incompetent to judge them. Nationalization means that the bulk of the “experts” become employees of the nationalized system, or university people closely linked with it. Inevitably, they come to favor its expansion, not, I hasten to add, out of narrow self-interest but because they are operating within a framework in which they take for granted governmental administration and are familiar only with its techniques…
Effective control by Congress over the operations of such agencies as the Social Security Administration becomes essentially impossible as a result of the technical character of their task and their near-monopoly of experts. They become self-governing bodies whose proposals are in the main rubber-stamped by Congress. The able and ambitious men who make their careers in them are naturally anxious to expand the scope of their agencies and it is exceedingly difficult to prevent them from doing so. If the expert says yea, who is there competent to say nay? So we have seen an increasing fraction drawn into the social security system, and now that there remain few possibilities of expansion in that direction, we are seeing a move toward the addition of new programs, such as medical care.
I just finished reading Sowell’s Knowledge and Decisions and thought I should transcribe one of his critiques of expertise for this series. It’s difficult to decide what part of the book to offer, as one of the book’s main two themes is a criticism of “rule by experts”. Three fourths of the last eighty-page chapter constitute a sustained blistering criticism of the political contributions of “intellectuals”. But I think the heavily abridged selection below from pages 102-104 presents a coherent (and less polemical) version of his argument.
Sowell contrasts different decision making processes. He calls the process of intellectuals “articulation” – linguistic elaboration of premises and logical conclusions. Social and economic processes, on the other hand, may be completely unarticulated, in that no particular individual may be able to explain why they are beneficial. Nonetheless, through price (and other feedback) systems they effectively convey objective knowledge about costs and preferences, despite their silence on the exact source of this information.
Given the imperfections of language and the limitations of specific evidence, it is by no means a foregone conclusion that the mere formally logical articulation is in fact more rational, much less empirically correct When the choice between the two processes is not within one individual but between one individual and another (or between one group and another), it is even less likely that the more articulate position is the more valid position. This is not an argument for mysticism rather than logic. It is simply a recognition that the weight of generalized but unrecorded experience – of the individual or of the culture – may be greater than the weight of other experience which happens to have been written down and spelled out….
When culture is conceived of as an evolutionary product – an ecology of human relations – it is by no means clear that any and all well-articulated reasons for changing particular parts of this social ecology must be valid. Even if plausible in the specific case, a policy’s unintended consequences throughout a complex system is a weighty consideration. Articulated rationality can seldom predict very far or very specifically, and much depends on the speed and accuracy of social feedback mechanisms – and on whether the feedback includes incentives to adjust or abandon counterproductive policies….
In short, the Darwinian “natural selection” principle may mean a natural selection of the “fittest” situation or process, not necessarily individuals. The degree of rationality in the process is by no means limited to the degree of rationality of the individuals, as is often erroneously claimed. Rather, “mankind has achieved things which have not been designed or understood by any individual,” though their value has been retrospectively authenticated by millions who could judge the results without being able to judge – much less design – the process.
A large part of the political narrative is the celebration of elites and denigration of populism, or vice versa. Personally, I find myself instinctively disgusted by the tone and politics of most politicians commonly described as “populist”. But I doubt that a more or less complete political ideology requires that one affiliate with one of the two camps. Definitions of elitism and populism range so widely as to border on absolute incoherence.
But there is one sense in which I think a philosophy glossed as “populist” has a crucial advantage over “elitist” conceptions. That is to the extent that populism distrusts the policy “solutions” of experts and specialists. In short, specialists err because of an insufficiently general viewpoint. While well informed as to the benefits of a certain market intervention, they rarely consider or care for the costs that these interventions will impose in areas outside of their purview. Furthermore, they often mistake the subjective preferences of some experts within a certain field for an objective preference.
Rather than trying to unfold this criticism in all its complexity myself, I will be initiating a Commentarius series quoting various theorists’ contributions to this series. The first quote is an extensive set of excerpts from pages 98-99 of Hayek’s Road to Serfdom. Hayek notes that specialists are frustrated by what they often fail to recognize is the multiplicity of ends. Their frustration can yield a desire to simply impose their own, necessarily subjective, desired ends.
There is little question that almost every one of the technical ideals of our experts could be realized within a comparatively short time if to achieve them were made the sole aim of humanity. There is an infinite number of good things, which we all agree are highly desirable as well as possible, but of which we cannot hope to achieve more than a few within our lifetime, or which we can hope to achieve only very imperfectly. It is the frustration of his ambitions in his own field which makes the specialist revolt against the existing order. We all find it difficult to bear to see things left undone which everybody must admit are both desirable and possible. That these things cannot all be done at the same time, that any one of them can be achieved only at the sacrifice of others, can be seen only by taking into account factors which fall outside any specialism, which can be appreciated only by a painful intellectual effort – the more painful as it forces us to see against a wider background the objects to which most of our labors are directed and to balance them against others which lie outside our immediate interest and for which, for that reason, we care less….
In our predilections and interests we are all in some measure specialists. And we all think that our personal order of values is not merely personal but that in a free discussion among rational people we would convince the others that ours is the right one. The lover of the countryside who wants above all that its traditional appearance should be preserved and that the blots already made by industry on its fair face should be removed, no less than the health enthusiast who wants all the picturesque but unsanitary old cottages cleared away, or the motorist who wishes the country cut up by big motor roads, the efficiency fanatic who desires the maximum of specialization and mechanization no less than the idealist who for development of personality wants to preserve as many independent craftsmen as possible, all know that their aim can be fully achieved only by planning – and they all want planning for that reason. But, of course, the adoption of the social planning for which they clamor can only bring out the concealed conflict between their aims….
The hopes they place in planning, however, are the result not of a comprehensive view of society but rather of a very limited view and often the result of a great exaggeration of the importance of the ends they place foremost.
An interesting quote on theology from Mises’s Human Action:
Scholastic philosophers and theologians and likewise Theists and Deists of the Age of Reason conceived an absolute and perfect being, unchangeable, omnipotent, and omniscient, and yet planning and acting, aiming at ends and employing means for the attainment of these ends. But action can only be imputed to a discontented being, and repeated action only to a being who lacks the power to remove his uneasiness once and for all at one stroke. An acting being is discontented and therefore not almighty. If he were contented, he would not act, and if he were almighty, he would have long since radically removed his discontent. For an all-powerful being there is no pressure to choose between various states of uneasiness; he is not under the necessity of acquiescing in the lesser evil. Omnipotence would mean the power to achieve everything and to enjoy full satisfaction without being restrained by any limitations. But this is incompatible with the very concept of action. For an almighty being the categories of ends and means do not exist. He is above all human comprehension, concepts, and understanding. For the almighty being every “means” renders unlimited services, he can apply every “means” for the attainment of any ends, he can achieve every end without the employment of any means. It is beyond the faculties of the human mind to think the concept of almightiness consistently to its ultimate logical consequences. The paradoxes are insoluble. Has the almighty being [p. 70] the power to achieve something which is immune to his later interference? If he has this power, then there are limits to his might and he is no longer almighty; if he lacks this power, he is by virtue of this fact alone not almighty.
I just finished reading Brideshead Revisited. The novel gives a good sketch of my grievances with religion. Religion drives apart family, friends, and lovers, without hint of preventing or punishing the evils – adultery, alcoholism, homosexuality, divorce – it supposedly condemns. It destroys the happiness of believers and unbelievers alike – and then celebrates their self-inflicted suffering.
Brideshead Revisited is a ringing indictment of religion. Or so I thought, and perhaps I merely reveal my cynical lack of religion. It turns out that the author, Evelyn Waugh, was a committed Catholic and intended the book to be a celebration of “the operation of Grace”. I wonder, can a religious person read Brideshead and really celebrate the “Grace” of a god content to tend his flock through the destruction of his follower’s lives? It appalls to think that a Catholic could be excited to watch Sebastian, in the final stages of delirious alcoholism, crawl into the embrace of another comforting narcotic – monastic orders. Or that they would be relieved, and not heartbroken, to see Julia and Charles part, childless, loveless, and alone for the rest of their lives. Or that they would cheer the priest as he attempts repeatedly, against the advice of the doctor, to deliver the last rights to an apparently unwilling and apostate Lord Marchmain.
Religion, in its own portrayal, is the enemy of life in this world. It is so not by accident, but by necessity. It could have no power over us if it did not claim the irrelevance of happiness in the material world. It must hold that the deepest misery and tragedy here is merely a backdrop against its own imperceptible supreme good. It must hold that good and bad are something unknowable (yet taught) rather than instinctively known. To be religious is to read Brideshead Revisited as a sweet story of redemption, rather than what is so plainly is – a tragedy.
In this essay – apparently tacked on to some editions of The Constitution of Liberty, Hayek explains why he is not a conservative – and why he does not love conservatism. Conservatism, says Hayek, is not an ideology, but an attitude. As such, it has some practical value but no inherent validity. Hayek prefers an ideology – of freedom, whatever it is called.
The essay is available here.
From Two Concepts of Liberty:
I am the possessor of reason and will; I conceive ends and I desire to pursue them; but [when] I am prevented from attaining them I no longer feel master of the situation. I may be prevented by the laws of nature, or by accidents, or the activities of men, or the effect, often undesigned, of human institutions. These forces may be too much for me. What am I to do to avoid being crushed by them? I must liberate myself from desires that I know I cannot realise. I wish to be master of my kingdom, but my frontiers are long and insecure, therefore I contract them in order to reduce or eliminate the vulnerable area. I begin by desiring happiness, or power, or knowledge, or the attainment of some specific object. But I cannot command them. I choose to avoid defeat and waste, and therefore decide to strive for nothing that I cannot be sure to obtain. I determine myself not to desire what is unattainable.
In a world where a man seeking happiness or justice or freedom (in whatever sense) can do little, because he finds too many avenues of action blocked to him, the temptation to withdraw into himself may become irresistible. It may have been so in Greece, where the Stoic ideal cannot be wholly unconnected with the fall of the independent democracies before centralized Macedonian autocracy. It was so in Rome, for analogous reasons, after the end of the Republic. It arose in Germany in the seventeenth century, during the period of the deepest national degradation of the German States that followed the Thirty Years War, when the character of public life, particularly in the small principalities, forced those who prized the dignity of human life, not for the first or last time, into a kind of inner emigration. The doctrine that maintains that what I cannot have I must teach myself not to desire, that a desire eliminated, or successfully resisted, is as good as a desire satisfied, is a sublime, but, it seems to me, unmistakable, form of the doctrine of sour grapes: what I cannot be sure of, I cannot truly want.