#17 - The Expertise Pandemic
On A Philosophy of Bullshit, Revenge Effects, Effects of Tuberculosis on Victorian Fashion and few ideas from Buffett's letter to shareholders (1981)
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Greetings from the Curious Cat.
With a smartphone in their hand powered by cheap internet, anyone can find the answers to complex questions that were earlier considered the area of subject matter experts. From performing self-diagnosis on whether they show symptoms of hypertension to prescribing solutions on climate change, from predicting the next spike in the virus cases to forecasting the movement of stock prices, inflation trends and predicting economic growth based on elaborate theories. Everyone is an expert. Those who were previously considered experts due to their demonstrated credibility, knowledge, peer affirmation, talent, dedication to the field are considered wrong and ill-informed by the new internet experts, sometimes even belittled and mocked. The epidemiologists of yesterday become economists of today due to a low entry barrier of information on the Internet. They might become the oncologists of tomorrow.
By saying that this pretense of acquired expertise is due to various cognitive biases is a boring analysis of the situation. The new experts will tell you that the cognitive bias you are referring to is called Dunning - Kruger effect.
Despite this proliferation of expertise that I assert, there is also massive ignorance that accompanies this widespread phenomenon. An excessive reliance on internet consumed knowledge without understanding the nuances, contexts or sometimes, even the question presents a comical or a serious situation depending on your personality type. A generalized sense of shallow expertise is the new pandemic which is not called a pandemic by WHO.
You don’t know that you don’t know but you know that you know. What you can know is that you don’t know.
Interesting tongue twister!
In today’s edition, we look at -
A Philosophy of Bullsh*t
Revenge Effects of Technology
How Tuberculosis Shaped Victorian Fashion ?
Key Ideas From Warren Buffett’s letter to Berkshire Hathaway Shareholders - 1981
A Philosophy Of Bullsh*t - Pseudoscience and Pseudophilosophy
Read the article here (Read Time ~ 6 mins)
Dr. Moberger argues that what makes something bullshit is a "lack of epistemic conscientiousness," meaning that the person arguing for it takes no care to assure the truth of their statements. This typically manifests due to systemic errors in reasoning and the frequent use of logical fallacies such as ad hominem, red herring, false dilemma, and cherry picking, among others.
Two commonly encountered kinds of “bullshit” are pseudoscience and pseudophilosophy. The latter is less frequently considered, but can be explained with examples of its two most popular forms. The first is dubbed "obscurantist pseudophilosophy." It often takes the form of nonsense posing as philosophy using copious amounts of jargon and erroneous reasoning connecting a mundane truth to an exciting, fantastic falsehood. The second is "scientistic pseudophilosophy" and is often seen in popular science writing. It frequently manifests when questions considered in scientific writing are topics of philosophy rather than science.
There is no sharp boundary between bullshit and non-bullshit. Pseudoscience, pseudophilosophy and other kinds of bullshit are very much continuous with the kind of epistemic irresponsibility that we all display in our daily lives. We all have biases and we all dislike cognitive dissonance, and so without realizing it we cherry-pick evidence and use various kinds of fallacious reasoning.
Critical thinking and intellectual humility are two tools to filter out the nonsense. A great deal of the pseudoscience and pseudophilosophy we deal with is characterized not by being false or even unfalsifiable, but rather by a lack of concern for assuring that something is true by the person pushing it. Oftentimes, it is presented with fairly common logical fallacies and bold claims of rejecting the scientific consensus.
While having this definition doesn't remove bullshit from the world, it might help you avoid stepping in it.
Revenge Effects of Technology
Read the article here (Read Time ~ 6 mins)
Revenge effects describe the ways in which technologies can solve one problem while creating additional problems, or shift the harm elsewhere. Revenge effects occur when the technology for solving a problem ends up making it worse due to unintended consequences that are almost impossible to predict in advance. A smartphone might make it easier to work from home, but always being accessible means many people end up working more.
There are four types of revenge effects:
Repeating effects: occur when more efficient processes end up forcing us to do the same things more often, meaning they don’t free up more of our time.
Recomplicating effects: occur when processes become more and more complex as the technology behind them improves.
Regenerating effects: occur when attempts to solve a problem end up creating additional risks.
Rearranging effects: occur when costs are transferred elsewhere so risks shift and worsen.
While we cannot anticipate all consequences, we can prepare for their existence and factor it into our estimation of the benefits of new technology.
How Tuberculosis Shaped Victorian Fashion
Read the article here ( Read Time ~ 4 mins)
By the mid-1800s, tuberculosis had reached epidemic levels in Europe and the United States. The Victorians romanticized the disease and the effects it caused in the gradual build to death. For decades, many beauty standards emulated or highlighted these effects. And as scientists gained greater understanding of the disease and how it was spread, the disease continued to keep its hold on fashion.
The second half of the 19th century ushered in a radically transformed understanding of tuberculosis when, in 1882, Robert Koch announced that he had discovered and isolated the bacteria that cause the disease. By then, germ theory had emerged. Preventing the spread of tuberculosis became the impetus for some of the first large-scale American and European public health campaigns, many of which targeted women’s fashions. Doctors began to decry long, trailing skirts as culprits of disease. These skirts, physicians said, were responsible for sweeping up germs on the street and bringing disease into the home. Corsets, too, came under attack, as they were believed to exacerbate tuberculosis by limiting the movement of the lungs and circulation of the blood.
Men’s fashion was also targeted. In the Victorian period, luxuriant beards, sculpted mustaches and extravagant sideburns had been all the rage. The trend can be partly credited to British soldiers who grew facial hair to keep warm during the Crimean War in the 1850s. The Victorian ideal of looking consumptive hasn’t survived to the current century, but tuberculosis has had lingering effects on fashion and beauty trends.
Given the current pandemic trends, it would be interesting to see whether we see more variants and designs of masks or any other trend becoming mainstream.
Key Ideas from Buffett’s letter to shareholders - 1981
Last week, we summarized few ideas expressed in the letter written in 1980. While we summarize the key ideas in the letter, we encourage the readers to read the entire letter to capture the context in which the thoughts were expressed by Buffett.
On acquisitions: Our acquisition decisions will be aimed at maximizing real economic benefits, not at maximizing either managerial domain or reported numbers for accounting purposes. (In the long run, managements stressing accounting appearance over economic substance usually achieve little of either.)
On identifying best companies for acquisitions: In fairness, we should acknowledge that some acquisition records have been dazzling. Two major categories stand out. The first involves companies that, through design or accident, have purchased only businesses that are particularly well adapted to an inflationary environment. Such favored business must have two characteristics: (1) an ability to increase prices rather easily (even when product demand is flat and capacity is not fully utilized) without fear of significant loss of either market share or unit volume, and (2) an ability to accommodate large dollar volume increases in business (often produced more by inflation than by real growth) with only minor additional investment of capital. Managers of ordinary ability, focusing solely on acquisition possibilities meeting these tests, have achieved excellent results in recent decades. However, very few enterprises possess both characteristics, and competition to buy those that do has now become fierce to the point of being self-defeating. The second category involves the managerial superstars - men who can recognize that rare prince who is disguised as a toad, and who have managerial abilities that enable them to peel away the disguise.
On inflation - adverse effect of price increase: For inflation acts as a gigantic corporate tapeworm. That tapeworm preemptively consumes its requisite daily diet of investment dollars regardless of the health of the host organism. Whatever the level of reported profits (even if nil), more dollars for receivables, inventory and fixed assets are continuously required by the business in order to merely match the unit volume of the previous year. The less prosperous the enterprise, the greater the proportion of available sustenance claimed by the tapeworm. Under present conditions, a business earning 8% or 10% on equity often has no leftovers for expansion, debt reduction or “real” dividends. The tapeworm of inflation simply cleans the plate. (The low-return company’s inability to pay dividends, understandably, is often disguised. Corporate America increasingly is turning to dividend reinvestment plans, sometimes even embodying a discount arrangement that all but forces shareholders to reinvest. Other companies sell newly issued shares to Peter in order to pay dividends to Paul. Beware of “dividends” that can be paid out only if someone promises to replace the capital distributed.)
Afterthought
“An expert is a person who has found out by painful experience all the mistakes that one can make in a very narrow field”
-Niels Bohr
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