The Undoing Project by Micheal Lewis

Before the war, Danny and Amos had shared the hope that their work on human judgment would find its way into high-stakes real-world decision-making. In this new field, called decision analysis, they could transform high-stakes decision-making into a sort of engineering problem. They would design decision-making systems. Experts on decision-making would sit with leaders in business, the military, and government and help them to frame every decision explicitly as a gamble, to calculate the odds of this or that happening, and to assign values to every possible outcome.

If we seed the hurricane, there is a 50 percent chance we lower itsAdapted from The Undoing Project: A Friendship That Changed Our Minds, by Michael Lewis wind speed but a 5 percent chance that we lull people who really should evacuate into a false sense of security: What do we do?

In the bargain, the decision analysts would remind important decision-makers that their gut feelings had mysterious powers to steer them wrong. “The general change in our culture toward numerical formulations will give room for explicit reference to uncertainty,” Amos wrote in notes to himself for a talk of his own. Both Amos and Danny thought that voters and shareholders and all the other people who lived with the consequences of high-level decisions might come to develop a better understanding of the nature of decision-making. They would learn to evaluate a decision not by its outcomes—whether it turned out to be right or wrong—but by the process that led to it. The job of the decision-maker wasn’t to be right but to figure out the odds in any decision and play them well. As Danny told audiences in Israel, what was needed was a “transformation of cultural attitudes to uncertainty and to risk.”

Exactly how some decision analyst would persuade any business, military, or political leader to allow him to edit his tis thinking was unclear. How would you even persuade some important decision-maker to assign numbers to his “utilities” (that is, personal value as opposed to objective value)? Important people didn’t want their gut feelings pinned down, even by themselves. And that was the rub.

Later, Danny recalled the moment he and Amos lost faith in decision analysis. The failure of Israeli intelligence to anticipate the Yom Kippur attack led to an upheaval in the Israeli government and a subsequent brief period of introspection. They’d won the war, but the outcome felt like a loss. The Egyptians, who had suffered even greater losses, were celebrating in the streets as if they had won, while everyone in Israel was trying to figure out what had gone wrong. Before the war, the Israeli intelligence unit had insisted, despite a lot of evidence to the contrary, that Egypt would never attack Israel as long as Israel maintained air superiority. Israel had maintained air superiority, and yet Egypt had attacked. After the war, with the view that perhaps it could do better, Israel’s Ministry of Foreign Affairs set up its own intelligence unit. The man in charge of it, Zvi Lanir, sought Danny’s help. In the end, Danny and Lanir conducted an elaborate exercise in decision analysis. Its basic idea was to introduce a new rigor in dealing with questions of national security. “We started with the idea that we should get rid of the usual intelligence report,” said Danny. “Intelligence reports are in the form of essays. And essays have the characteristic that they can be understood any way you damn well please.” In place of the essay, Danny wanted to give Israel’s leaders probabilities, in numerical form.

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Danny and Lanir then presented their probabilities to Israel’s Foreign Ministry. (“The National Gamble,” they called their report.) Foreign Minister Allon looked at the numbers and said, “Ten percent increase? That is a small difference.”

Danny was stunned: if a 10 percent increase in the chances of full-scale war with Syria wasn’t enough to interest Allon in Kissinger’s peace process, how much would it take to turn his head? That number represented the best estimate of the odds. Apparently, the foreign minister didn’t want to rely on the best estimates. He preferred his own internal probability calculator: his gut. “That was the moment I gave up on decision analysis,” said Danny. “No one ever made a decision because of a number. They need a story.” As Danny and Lanir wrote, decades later, after the U.S. Central Intelligence Agency asked them to describe their experience in decision analysis, the Israeli Foreign Ministry was “indifferent to the specific probabilities.” What was the point of laying out the odds of a gamble if the person taking it either didn’t believe the numbers or didn’t want to know them? The trouble, Danny suspected, was that “the understanding of numbers is so weak that they don’t communicate anything. Everyone feels that those probabilities are not real—that they are just something on somebody’s mind.”

- Excerpts from The Undoing Project: A Friendship That Changed Our Minds, by Michael Lewis

Quote of the Day

This planet has - or rather had - a problem, which was this: most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movement of small green pieces of paper, which was odd because on the whole it wasn't the small green pieces of paper that were unhappy.

- Douglas Adams, The Hitchhiker's Guide to the Galaxy

Quote of the Day

The means of defence against foreign danger have been always the instruments of tyranny at home. Among the Romans it was a standing maxim to excite a war, whenever a revolt was apprehended. Throughout all Europe, the armies kept up under the pretext of defending, have enslaved the people.

-  James Madison, Notes of Debates in the Federal Convention of 1787 Reported by James Madison

Quote of the Day

After all, the guy will probably resign or be impeached within a year. The future is closer than you think.

- David Brooks

Wisdom Of The Week

The mistake in the analysis lies deeper, perhaps—in the assumption that only a strange and traumatic sequence can have made this happen. What can be causing Trumpism? We ask, and seek for an earthquake, or at least a historical oddity or a series of highly specific causal events. The more tragic truth is that the Trumpian view of the world is the default view of mankind. Bigotry, fanaticism, xenophobia are the norms of human life—the question is not what causes them but what uncauses them, what happens in the rare extended moments that allow them to be put aside, when secular values of toleration and pluralism replace them.

It is a touching thing that Oscar Hammerstein had his people sing, apropos racial prejudice, that “You’ve got to be carefully taught.” Alas, as poor Oscar would have realized if he had stopped to think about the events that had led all those American soldiers and sailors to the South Pacific in the first place, you don’t have to be carefully taught to hate. The Hitlerians and the Japanese militarists hadn’t been carefully taught; they rushed to their lesson in the face of all evidence. Human groups, particularly those fuelled by religious fanaticism or the twentieth-century equivalent, blind nationalism, always tend toward exclusion. To eliminate the tribal instinct may be impossible, but to raise the accidental practice of pluralism to a principle is what enlightened societies struggle to accomplish. And they have.

It just turns out to be a horribly hard triumph to sustain. Along comes 1914, or 1933—or, God forbid, 2016—and the work comes crashing down. What really needs explaining is not why the Trumps of the world come forward and win. It is why they sometimes lose.

Not long ago, I had occasion to write of the divide in virtue that separates us from Shakespeare, making the point that Shakespeare believed in fate, order, and forgiveness, whereas we believe in history, justice, and compassion, and that, superior though our moral progress may seem, there are bitter truths in the old trinity. For, as Shakespeare would have grasped at once, there is no explaining Trump. He is one of those phenomena that rise regularly in history to confound us with the possibility—and black comedy—of potent evil: conscienceless, cruel and pathologically dishonest. That evil magnetizes followers of all kinds is another permanent truth. Overexplaining its rise is as foolish as pretending that it can be easily defeated. The threat it makes to an order that, however imperfect, is worth sustaining and defending reminds us of that order’s fragility. As to forgiveness, much will be demanded, even if the best happens—or the worst, at least, is avoided.

-  Adam Gopnik and Again Adam on What Will We Tell Our Children:

We teach our children history, and the history that many of them have learned in the past decade or so, at American schools and colleges, is, perhaps, unrealistic in remaining unduly progressive in tone. They learn about the brave path of the slaves’ fight for freedom, about the rise of feminism, and with these lessons they learn to be rigorously skeptical of the patriarchy—without necessarily seeing that the patriarchy survives, enraged. The strangest element of this sad time is surely that our departing President, a model of eloquence and reason, is leaving office with a successful record and a high approval rating. How Trump’s strange rise and Obama’s high rating can have coincided in the same moment will remain one of the permanent conundrums of our history.

The lesson of history—one of them, anyway—is that there is no one-way arrow in it, that tragedy lurks around every corner, that the iceberg is there even as the mighty Titanic sails out, unsinkable. Having a tragic view of life is compatible with having a positive view of our worldly duties. This is a big and abstract thought to share with children, of course, and perhaps, like so many like it, it is teachable only as a pained—at this moment, acutely pained—daily practice.

Jonathan Haidt had "predicted" this couple of decades ago. People read his books but when time comes to implement them, they go back to their old ways.... I think, that is one of the reasons that an ego maniac will soon have the nuclear button. Jonathan Haidt interview:



Actually, I think ... Empathy is a very, very hot topic in psychology, and it's a very popular word on the left in particular. Empathy is a good thing, and empathy for the preferred classes of victims. So it's important to empathize with the groups that we on the left think are so important. That's easy to do, because you get points for that.


But empathy really should get you points if you do it when it's hard to do. And, I think ... You know, we had a long 50-year period of dealing with our race problems and legal discrimination, and that was our top priority for a long time and it still is important. But I think this year, I'm hoping it will make people see that we have an existential threat on our hands. Our left-right divide, I believe, is by far the most important divide we face. We still have issues about race and gender and LGBT, but this is the urgent need of the next 50 years, and things aren't going to get better on their own. So we're going to need to do a lot of institutional reforms, and we could talk about that, but that's like a whole long, wonky conversation. But I think it starts with people realizing that this is a turning point. And yes, we need a new kind of empathy. We need to realize: this is what our country needs, and this is what you need if you don't want to -- Raise your hand if you want to spend the next four years as angry and worried as you've been for the last year -- raise your hand. So if you want to escape from this, read Buddha, read Jesus, read Marcus Aurelius. They have all kinds of great advice for how to drop the fear, reframe things, stop seeing other people as your enemy. There's a lot of guidance in ancient wisdom for this kind of empathy.

Quote of the Day

We do not become satisfied by leading a peaceful and prosperous existence. Rather, we become satisfied when reality matches our expectations. The bad news is that as conditions improve, expectations balloon.

- Yuval Noah Harari, Homo Deus: A Brief History of Tomorrow

The Republic Repeals Itself

I will leave you with these words about what has now happened to America. Someone saw it coming a long time ago:

The alternate domination of one faction over another, sharpened by the spirit of revenge, natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism. But this leads at length to a more formal and permanent despotism. The disorders and miseries, which result, gradually incline the minds of men to seek security and repose in the absolute power of an individual; and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation, on the ruins of Public Liberty.

That was George Washington’s Farewell Address.

A country designed to resist tyranny has now embraced it. A constitution designed to prevent democracy taking over everything has now succumbed to it. A country once defined by self-government has openly, clearly, enthusiastically delivered its fate into the hands of one man to do as he sees fit. After 240 years, an idea that once inspired the world has finally repealed itself. We the people did it.

- Andrew Sullivan

Quote of the Day

Among other things, you'll find that you're not the first person who was ever confused and frightened and even sickened by human behavior. You're by no means alone on that score, you'll be excited and stimulated to know. Many, many men have been just as troubled morally and spiritually as you are right now. Happily, some of them kept records of their troubles. You'll learn from them—if you want to. Just as someday, if you have something to offer, someone will learn something from you. It's a beautiful reciprocal arrangement. And it isn't education. It's history. It's poetry.

- J.D. Salinger, The Catcher in the Rye

Quote of the Day

Barbarism is never finally defeated; given propitious circumstances, men and women who seem quite orderly will commit every conceivable atrocity. The danger does not come merely from habitual hooligans; we are all potential recruits for anarchy. Unremitting effort is needed to keep men living together at peace; there is only a margin of error left over for experiment however beneficent. Once the prisons of the mind have been opened, the orgy is on. … The work of preserving society is sometimes onerous, sometimes almost effortless. The more elaborate the society, the more vulnerable it is to attack, and the more complete its collapse in case of defeat. At a time like the present it is notably precarious. If it falls, we shall see not merely the dissolution of a few joint-stock corporations, but of the spiritual and material achievements of our history.

- Robbery Under Law, Evelyn Waugh

Quote of the Day

It also happened that part of my research in risk overlaps with complexity theory. The first thing one learns about complex systems is that they are not a sum of body parts: a system is a collection of interactions, not an addition of individual responses. Your body cannot be trained with specific and local muscle exercises. When you try to lift a heavy object, you recruit every muscle in your body, though some more than others. You also produce a variety of opaque interactions between these muscles.

This complex system method applies to all situations, even when you engage in physical therapy, as I did for an injured shoulder. I discovered that doing the more natural barbell presses and (initially assisted) pull-ups, works better and more robustly than the complicated and time consuming multi-colored elastic bands prized by physical therapists. Why don’t physical therapists make you do these robust barbell exercises? Simply, because they have a rent to pay and, just as with gyms, single-exercise machines look fancier and more impressive to the laity.

- Strength Training is Learning from Tail Events, Nassim Nicholas Taleb