Tuesday, September 17, 2013

The illusion of thinking clearly

kw: book reviews, nonfiction, thinking, logical fallacies

A few years ago I met someone at a reception. He told me he was a philosopher, and that his specialty was the fallacies of formal logic. I happen to know that there are 16 formal fallacies, which are errors in the logic of an argument. I also know, and had recently read a treatise upon, the informal fallacies, which are unknown in number, but there are more than 100 (the Wikipedia article "list of fallacies" notes 59). For some reason, this quite incensed my new acquaintance, to the point that I was concerned he may become violent (a common informal fallacy on his part!).

Winston Churchill said, "Even a fool is right once in a while." This caution alerts us to avoid the most common informal fallacy, the ad hominem attack, which we could describe as, "You must be wrong because you are a bad person", or, "…because I don't like you", or, "…because you are a [substitute your stereotype of choice]". Interestingly, this fallacy is not discussed in The Art of Thinking Clearly by Rolf Dobelli. I suppose he felt is has been sufficiently treated elsewhere, a great many elsewheres. But he does discuss 99 common errors that are so common, so very common it is a surprise any of us can decide anything at all!

Dobelli is Swiss and writes in German; the book was translated to English by Nicky Griffin. Kudos to the translator. Many translations from German produce nearly unreadable English. Clearly, Dobelli has a smooth, conversational writing style which Griffin has captured masterfully. It is great fun to read.

I can't hope to comment on more than a few of the items discussed. I picked a few favorites:

  • Reciprocity, in the chapter "Don't Accept Free Drinks" – Dobelli calls appeals for donations that come in the mail with a "free gift" inside a "kind of gentle blackmail" (I'd call them extortion rather than blackmail). An allied principle is TANSTAAFL: There Ain't No Such Thing As A Free Lunch. Depending on how much spending authority you have, the "free lunch" could range from sports tickets to a "free" vacation. Then there is all the "free" stuff offered if you'll spend 90 minutes listening to a timeshare presentation. It is good to learn to say, "I don't think I can afford your 'free gift'."
  • Confirmation Bias, in two chapters, the second being "Murder Your Darlings" – This has two sides. One is the increasing tendency for search engines, led by Google, to keep track of your preferences and to use them to rank the list of returns from a search you make. As time goes by, you'll only get "hits" that confirm your prejudices. That's why it is a good idea not to search when you are logged in to a Google service such as Blogger, Drive or GMail (or one such as Yahoo Mail if you search using Yahoo). Search as anonymously as possible if you want less biased results. The second side is the tendency of writers to dwell on themes that they love and to give short shrift to others, even if they are trying to discuss "all sides" of an issue. Arthur Quiller-Couch devised the motto, "Murder your darlings", meaning to eliminate the redundant text that inevitably fills your writing about those most-loved themes; pare those sections down to match the less-favored sections.
  • Induction, in the chapter "How to Relieve People of Their Millions" – This is a favorite of mine, based on an ancient scam. Someone who is lucky several times in a row may be considered extra favored or blessed, and if you get tricked by your own good luck, it can lead to a feeling of immortality. It also leads to unneeded depression when your luck turns. But it also explains why "financial advisers" invest each client's funds in a different collection of investments (Those who invest all funds equally are called mutual fund managers, and are more likely to have a modicum of honesty!). Here is a key datum: multiply 2 by itself 10 times, and the result is 1,024. Pick a yes/no question, such as "will the market go up or go down?" Send about 1,000 people an e-mail in which you explain why you think the market will go up in the coming week, and send another 1,000 an e-mail in which you explain why you think it will go down. After a week, it has done one or the other. Suppose it went down. Now send an e-mail to just the second group making a new prediction, again of the yes/no variety. The third week, e-mail just the 500 for whom you've been right twice, with a further prediction, and so forth. After five weeks, assuming you actually started with two groups of 1,024, you now have 64 people who have received five accurate predictions. At this point, ask to be paid for further predictions. Let's say they all agree (keep the cost low at first). Now things get complicated. After your next prediction, send an apologetic e-mail to the 32 who saw you "flub", and offer to refund their payment; send a self-congratulatory e-mail to the others, but don't lay it on too thick. You are likely to keep some of the ones who got the apology. Anyway, after a total of 10 predictions, you now have at least 2 people who think you are infallible! You can ask for stratospheric prices for your answers. Investment advisers are not so blatant about it, but by spreading around their clients' funds, they can avoid being wrong too frequently.
  • The Black Swan, in the chapter "How to Profit From the Implausible" – The actual fallacy is to think that unlikely events are less likely than they really are. For example, how likely is it that someone could throw a basketball over their house, and have it go through the hoop in the back yard? One in a million, or a billion? Yet there are at least two videos out there showing just this happening. One is shown a couple times a year on America's Funniest Home Videos on ABC. Professional statisticians tend to analyze every distribution as a "normal" distribution, even though very few natural phenomena follow a bell curve. For example, women's height is found to be normally distributed, but household income is not. Also, the daily change in a stock's price is typically analyzed as a normal distribution, but large changes are much, much more likely than such a model predicts. Dobelli claims that unlikely events are getting even more likely, and even more consequential, because our civilization is more strongly affected by events outside "the usual range", like a 100-year flood. Before we began building lots of fragile houses some 10,000 years ago, a 100-year flood simply meant moving camp to higher ground for a week. Now it means high insurance premiums (if you have flood insurance in the first place). Also, those who make big incomes don't work for others. Dobelli's advice is to work in an area where a big break can bring big returns, but to save and invest as though such a big break may never come. If it comes, you can profit from it, and if it doesn't, you will have provided for your future.
  • Feature-Positive Effect, in the chapter "Why Checklists Deceive You" – We notice things that are there (but not even all of those!), but it is very hard to notice what isn't there. This is the crux of the Sherlock Holmes story "Silver Blaze", where the important clue was that a watchdog didn't bark. Only Holmes would notice such a fact. Everyone else was busy about evidence they were able to collect, because it existed. Double-talk "explanations" about why something went wrong are solidly based on carefully omitting key facts in the midst of a blizzard of less relevant, but attractive, facts (a related fallacy). Dobelli tells of Beethoven's Ninth Symphony. During its premier many wept. He asks, "Would we be less happy without [it]? Probably not." Had "the Ninth" never been written, we'd never know what we were missing anyway. In the same way, we notice nothing in particular when we are totally well. We really notice any disease or injury.
In a reference section at the end we find 50 pages of bibliographic information, which the author says could easily have become several hundred pages. There is a lot of "thinking about thinking" being written up in the literature. This book is the most accessible of them all in my experience.

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