How bloggers are fooled by randomness

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If there is one thing that each of you needs to read it is Fooled By Randomness by Nassim Nicholas Taleb. Some people are hopelessly ensnared by their own frame of reference and are destined to remain fooled by randomness forever. For others, a light will go on, and their perspective will be adjusted.

It is easier to understand the principles of randomness by pointing out when it fools us, so here’s a list of examples that I have seen.

1. Mixing up cause and effect – T. Cummins on the Commitment Matters blog provides a couple examples in one of his most recent posts. Check it out here. In this case, the apparent recent decline in collaboration is due to a decline in trust. So, humans decided 20-30 years ago to stop trusting each other? He mentions greater anonymity, but is there greater or lesser anonymity now than 40 years ago? He also mentions greater competition. So, in the past, people did not strive as hard to make money? He mentions impersonal business relationships, globalization, and lack of concern about the environment. So in the early 1900’s Ford motor company had personal, trusting relationships with its suppliers? The DuPont behemoth violating the Sherman anti-trust act was acting out of a deep-rooted connection with its workers, the public, and the environment? Coal mining companies were less interested in making lots of money and more concerned about the environment in which they worked?  Sorry, the good old days argument just doesn’t hold up.

2. Randomness in selecting time intervals – It is not entirely clear, but inferring from the context of the Commitment Matters blog, it seems as though the time horizon chosen is the last 100 years or so. Why is the last 100 years more instructive than the last 50,000? Selecting a recent time interval allows small changes in human behavior to seem large when much of our evolution took place thousands of years ago, not hundreds.

3. Blame America cop-out – If you are an average person in America, you most likely believe that everyone just kind of recognizes that the US is a world leader given the position of power it currently occupies. Having lived in the UK for the last 3.5 years, I assure you that even my last statement will be slightly controversial. However, the tacit acceptance of this position of power comes in the form of blaming the US for some of the ills of the business world such as increased litigation, less collaboration, adversarial negotiating style, etc. What is not clear is why these things have necessarily inserted themselves into the global culture. The US Department of Exporting Bad Business Practices (USDEBBP) is just not that good. There are many causes of trends…created by a system so complex than anyone reducing it to “It came from America!”….um, not much to say to those people.

4. The world is moving faster – may be a sub-set of number 2, but this one deserves its own post due to its having wormed its way into conventional wisdom. We hear phrases like “of course, innovation these days is moving at lightning speed,” and “our lives are so much more hectic than before,” and concepts that make things seem really complex like “mass customization.” How do you think a textile producer in the early-mid 1700’s felt when he used to make textiles starting from raising the sheep through to selling it in the marketplace, and then found himself as only one link in the chain after the introduction of the factory system. How about the farmer that used to measure his day by the sun rising and setting and then began to work in a factory built on the concepts of Taylorism for 12 hours per day? How fast was his world moving? How do you think today will look through the lens of 50 years from now? From our own very limited perspective, it may seem that the world is moving faster, but step off the train for a moment, look at the big picture, and it will tell a much different story. We really aren’t that special.

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One Response to “How bloggers are fooled by randomness”

  1. tcummins Says:

    But of course at no point do I suggest that there was a conscious decision to stop trusting each other. IN fact, quite the opposite. Change has crept up on us and in the process it has fundamentallychanged our world. Greater anonymity – yes, absolutely there is greater anonymity. 20 yeasrs ago, the majority of b2b negotiations were local and involved face to face interaction. Today, a very high proportion are international and an overwhelmeing majority are ‘virtual’. Massive change? Of course it is. Tell me how many e-auctions there were 20 years ago? Tell me how much offshore outsourcing there was 20 years ago? Explai to me why most transactions in Europe 30 years ago did not need contracts?

    The erosion of trust – in business in institutions, in other epople – is a well-recorded finding (not least in the UK). It has been associated with multi-culturalism and also in the increased transparency in large part resulting from modern technology. Both of these factors are also major influences in business relationships.

    Within the blog, at no time do I suggest that competition is new. I simply suggest that it has become more fierce as a result of global forces and market expectations. Again, this is not exactly original thinking.

    By your comment that the the article confuses cause and effect, are you suggesting that it was collaboration that first declined and that trust was eroded as a result? I don’t think I make any assertion about sequence. I simply make – and based on the facts at my disposal continue to assert – that there has been a significna treduction in both trus and collaboration in recent times and this has a consequence that is largely negative.

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