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Wednesday, November 25, 2009

Where are our blind spots?

Hindsight is 20/20. Yes, it may be cliche but it is also a truism. Nowhere is this so obvious as when a major scam or hoax is uncovered. When Bernie Madoff's Ponzi scheme was revealed, the warning signs were so obvious in retrospect.

Many things change but one thing that does not is for us to thrive (both individually and together), we must be trusting to some degree. In being so we are prone to be scammed and when we or someone else is the victim of a scam or hoax, we scratch our heads and ask, how could we (or anyone) be so gullible?

Being a person of science, I am reasonably well steeped in the concepts of skepticism and testable hypotheses. One of the great things about the scientific method is the emphasis on testing things in an environment where one has a good handle on most of the key variables. The problem is that context has only limited applicability to the real world. Most of the circumstances we find ourselves in real life which require some sort of decision are one shot deals where we do not even begin to know all the variables. We will experience an outcome where we are not able to make any reasonable comparisons to alternative outcomes. We will be able to decide whether we are happy with our respective outcomes and nothing more.

Under only the rarest of circumstances do people live without the need for interactions with other people. We require "things" as well as emotional support from our fellow humans, much of which which obtain through formal and informal exchange. Ideally, the exchange which occurs results in each party benefiting from the exchange. There are circumstances where it is obvious when one of the parties has been deceitful and the exchange is asymmetric, and it becomes obvious in a time frame where those affected understand the outcome.

In contrast, there are many instances throughout history where entire populations have been "scammed" for generations. Perhaps the most obvious examples have been ruling elites who employed sages, priests, wizards, and the related classes of experts who provided purported glimpses into the future. Many models were used. The ancient Chinese used broken bones from animals and the Greeks and Romans consulted the Oracle of Delphi. Perhaps it is too strong to use the term scam since this implies some sort of intentional deceit. Still experts sold themselves as having skills beyond what they could actually deliver. No one caught on for hundreds of years because there was not way to demonstrate their predictions were actually wrong.

There is constancy throughout history in that widely held beliefs are found to be simply wrong at a later period of time when tools or circumstances allow for actual testing of hypotheses. It is very unlikely that this has changed or will change in the near future. The question arises, what widely held beliefs do we now have that will prove to be completely wrong?

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