Fooled By Randomness is a book that will give you a different -- from the universally accepted -- perspective of Wall Street. A few excerpts:
I do not dispute that arguments should be simplified to their maximum potential; but people often confuse complex ideas that cannot be simplified into a media-friendly statement as symptomatic of a confused mind. [p.37]
For an idea, age is beauty.... [p.31]
He [veteran trader Marty O'Connell] calls this the firehose effect. He had observed that firemen with much downtime who talk to each other for too long come to agree on many things that an outside, impartial observer, would find ludicrous (they develop political ideas that are very similar). Psychologists give it a fancier name, but my friend Marty has no training in clinical psychology. [p.73]
[Karl] Popper's falsificationism is intimately connected to the notion of an open society. An open society is one in which no permanent truth is held to exist; this would allow counterideas to emerge. [p.108]
I found in the behavioral literature at least 40 damning examples of such acute biases. Below is the account of a well-known test, and an embarrassing one for the medical profession. The following quiz was given to medical doctors (which I borrowed from the excellent Deborah Bennett's Randomness).
A test of a disease presents a rate of 5% false positives. The disease strikes 1/1,000 of the population. People are tested at random, regardless of whether or not they are suspected of having a disease. A patient's test is positive. What is the probability of the patient being stricken with the disease.
Most doctors answered 95%, simply taking into account the fact that the test has a 95% accuracy rate. The answer is the conditional probability that the patient is sick and the test shows it -- close to 2 %. Less than one in five professionals got it right. [p.159]
This is sort of a bad news, goods news thing. The bad news is that the professionals had a less than 20% success rate. The good news is that the answer is not that difficult and by intervening in the system in strategic places, we may go a long way towards dramatically reducing health care costs.
From page 83 of Growth Management for a Sustainable Future:
The growth orientation suggested by radical-planning formulations was obviously very different from the traditional pro-growth perspectives associated with the earlier types of planning generated by the profession prior to the growth management era. Radical planning proposed that people ought to be freed from a "constrained, bounded, technological way of thinking" that reflects, among other things, a preoccupation with "maximum material productivity." Radical planning suggested that people's well-being was based on something other than materialistic and technological foundations, and questioned the worth of unending economic growth in a manner illustrated by the following citation:
Human development consists of social and economic development and should be contrasted to the present emphasis on economic growth....This desire for growth, sold to the people by the promise of economic well-being, has proven a hollow victory: the emphasis on economic growth has resulted in the alienation of individuals from themselves and from each other...and from their envionment....Some level of economic well-being is necessary for people to exercise choice between survival and risk, but once attained, continued economic growth seems only to prevent further development of the individual.
It is interesting to note that the above excerpt appeared in a 1973 planning journal. Talk about an idea not getting any traction.
More from Growth Management...:
If we are unable to end the extermination of other species on ethical grounds, then perhaps we can be intelligent enough to recognize that such killing represents a threat to our own species and cease on self-serving anthropocentric grounds. [p.27]
From an interview with Wes Jackson at CounterPunch:
...in my lifetime people have burned 97.5 percent of all the oil that has ever been burned. That's an important statistic. We have to face the fact that we are not going to find a technological substitute for the high-density energy that comes out of a gas or oil well. It is thermodynamically implausible.
But I think that the environmental movement is, in many ways, more complicated than the anti-Vietnam war or civil rights movement. We have to deal with the aspect of human nature that wants stuff, wants comfort and security. For some time I think we were naïve and thought these problems could be solved easily.
RJ: What about the people who say that it's important to create alternatives that are, to the degree possible, outside the system? Should people sacrifice involvement in a political movement to create a model of something else?
WJ: We do need those good examples, and people have to work in the area of their passion. When I look at people I start with the question, "Have they joined the fight?" If they have, then you have to be careful in critique, because we don't know enough about what's going to be most effective in the long run. If someone wants to be the good example, then fine. But I think they should be doing it out of intrinsic interest, not out of sense of nobility.
RJ: What about, "We need to spend more time preaching to the choir"?
WJ: That's meant to suggest we need to deepen the discussion. The modern environmental movement really began in 1962 with Rachel Carson's Silent Spring. Before that, environmentalism was mostly about wilderness advocacy, with some focus on soil erosion and water conservation. With those roots in saving wilderness, this new environmental movement lacked the intellectual basis necessary to understand the kinds of problems we face as a consequence of consumerism. Today we have to fight the idea that nature is to be subdued or ignored. In that older view, wilderness was seen as the sacred, and we could afford to allow other parts of the world that served human needs and desires to be profane. Now we realize the planet is seamless and that wilderness is really an artifact of civilization. So, we haven't had a long enough time to deepen the discussion, and that deepening is best done with members of the choir, rather than with people who are just catching on that the planet is in trouble.
The bold emphasis is mine.
Matt
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