Here are the thinkers who help me make sense of the world in an empirical and pragmatic way: Daniel Kahneman and Amos Tversky, Thomas Bayes, Atul Gawande, Karl Popper, Benoit Mandelbrot and Nassim Nicholas Taleb.
Daniel Kahneman and Amos Tversky
Our brain can’t analyse every decision in a fully rational way all the time, so it takes short cuts. Those short cuts look rational. Sometimes they really are rational, but often they are not. This explains a lot of the bad decisions made by politicians, investors and others.
Always start with a forecast. How likely is this to happen? How likely is your project to be successful – based on past statistics, and before you know the specifics of the case? Now look at the specifics of your case. How do those statistics change your prior forecast?
We have more medical knowledge than ever before. Yet people still die unnecessarily in hospital, because a doctor didn’t wash his hands, or the anesthetic wasn’t given at the right time. That’s because we don’t apply what we know. And we often don’t apply it because we know so much – there’s too much to apply. Gawande’s checklist manifesto argues that – however gifted or intelligent we are – we need simple checklists that help us apply what we know systematically and on a day to day basis.
A scientific proposition is a proposition that can be tested in an experiment and proved wrong (“falsifiable”). All scientific knowledge is provisional. It is true until proven false. A powerful antidote to dogmatism.
Fractals are patterns which can be combined to make a bigger version of the same pattern, or divided up into smaller, constituent versions of the same pattern. This has practical applications from data compression to modelling the weather. It explains how powerful trends can arise from the accumulation of initially small events, and subsequently collapse violently. How short periods of time can be “zoomed into” to make them seem long and vice versa.
Nassim Nicholas Taleb
Whenever something happens we think it necessarily had to happen. The probability of something that’s actually happened is 100%, we think. That makes us invent narratives that rationalise this necessity ex-post. So we see someone successful and think “they had to be successful because …” and fill in whatever appears to fit the narrative of their success. Taleb’s great insight is that there was no necessity: if you had replayed history several times, that same person could have also been unsuccessful in one of the many different scenarios. A lot of what seems inevitable to us ex-post was just a matter of chance. But we can’t replay history, so we only see what happened – not all the other things that might have happened.