Sapolsky et al. versus Locke et al.
I learned early in my professional career that numbers can be easily manipulated. When asked to perform a valuation of the Halloran House Hotel on Lexington (in NYC) my very elaborate forecast model (made before Excel existed) came up with a net present value of $20 million. But my boss said that our client, Biff Halloran, wanted a value of $25 million. A few tweaks of my conservative estimate (increase beverage margins by one percent, increase average occupancy by a percent or two) and I was able to come up with a valuation of $25 million even though the assumptions in my model could still be considered conservative.
Later in my career, when advising foreign governments on risk management, I would tell them there was only one thing about their very elaborate forecast models (made under the tutelage of the IMF and the World Bank) of which I was certain. The models were wrong. Because forecasting models are always wrong. There are too many variables. The value of financial models is not their accuracy, it is the insight they give you when the forecast is wrong. When things don’t work out as planned, you look at your model and see which variable is not functioning as planned (or which variable you forgot to put into the model in the first place).
Being a banker and not an economist, I always looked askance at economic forecasts. Because the economy produces a lot of numbers, economics is just like mathematics and economists are just like mathematicians and scientists. Right? Wrong! I knew that was wrong and that economic predictions and forecasts were often no more than guesswork. It was only after the Great Recession that people began to say, “See, I told you so.”
Then I read Daniel Kahneman’s book, Thinking, Fast and Slow, for which he won a Nobel prize for economics. But Dr. Kahneman is not an economist, he’s a psychologist. He theorized that the human brain consisted of two parts, a fast thinking intuitive section, and a slow thinking rational section. He further posited that human brains being a lot like people are pretty lazy, and that thinking rationally is hard work, so that the rational section of the brain lets the intuitive part of the brain run things most of the time. But the “science” of economics requires that people make their economic decisions rationally. Thinking intuitively or emotionally (“oh, Man! I just love that little red sports car”) throws all the predictive power of their economic theories into the trash bin.
Then I read Jonathan Haidt’s book, The Righteous Mind, Why Good People are Divided by Politics and Religion. Dr. Haidt theorizes that the purpose of the rational section of the brain is not to override the often dubious choices made by the intuitive section of the brain, but to think up reasons why the choices made by the intuitive section were the right thing to do in the first place. (“That little red sports car handles better than a clunky SUV and is therefore the safe choice”). We have a lot of our ego wrapped up in our gut feelings and will make extensive rationalizations about why those feelings are justified. Who your parents were or what part of the planet you are from has a greater impact on your politics and religion than rational thought.
That led me even further afield and motivated me to read Robert Sapolsky’s book, Behave, The Biology of Humans at our Best and Worst. Dr. Sapolsky explains what part of the brain these gut feelings and rational thoughts come from. He states that these feelings and thoughts are caused by various chemicals produced or initiated by these areas of the brain based on external stimuli perceived by our various senses. He casts doubt on our consciousness and writes that some neurobiologists believe that free will is an illusion. Everything is predictable if you have enough data.
And Yuval Hariri goes even further in his book, Homo Deus A Brief History of Tomorrow, stating free will is an imaginary story we tell ourselves and that our thoughts and feelings are based on chemically derived algorithms shared with many other organisms. Even more, he states that the artificial intelligence of computers and robots, being based on electronically derived algorithms, has the capability of eventually being the equivalent of humans, a fact that would make a majority of our species irrelevant.
Each of these learned men of science take us a little further down the road, away from our vision of ourselves being the rational beings of enlightenment philosophy, toward being more aligned to our evolutionary origins and the other organisms surviving on this planet. Not the enlightened authors using our free will to reason and understand the universe, just an organized bunch of cells that secrete hormones and other organic chemicals, but that remains entrapped in the evolutionally ancient structures within our brains.
These discoveries have not only knocked economics off its high horse and pretensions, they affect also politics and our daily lives. We are easily manipulated. This was not only observed by Richard Thaler and Cass Sunstein in their book, Nudge: Improving Decisions about Health, Wealth and Happiness, but they even encouraged such manipulation. We often make bad decisions. For which the tobacco industry is very thankful (as is the newly burgeoning marijuana industry).
So why does the United State of America even exist? America was founded on the Enlightenment beliefs of John Locke as described in his Second Treatise on Government and our economy is based on rational decision making as outlined by Adam Smith in his book The Wealth of Nations. The existence of America defies both logic and science as was clearly explained by Professors Kahneman, Haidt, Sapolsky and Hariri.
These men are all very smart. They all have PhDs. But can the logical progression of these ideas have merit and, if so, what do we do about it? How can organic chemicals create the Mona Lisa or Guernica? How can algorithms create the Pieta or the Statue of Liberty? How could anyone lacking free will write the Declaration of Independence?
And while we're at it:
Winston Churchill is famously (and erroneously) known for saying, “You can always count on the Americans to do the right thing – after they have tried everything else.” And it seems that the Americans are going to go through that process once again.
It seems that everyone from millennials to Democratic presidential candidates want to make America a leftist socialist country. It’s easy. All you need is a powerful government that can declare the outcomes that it desires and has the ability to compel those outcomes. Et voila! Everything is hunky-dory. Black are now equal everywhere – except in the NBA where they excel. Millennials receive their universal basic income so that they can pursue happiness unencumbered by work. New Democratic voters pour in over the borders. And money previously wasted on tanks and jet airplanes is now devoted to making sure that diet soda gulpers get all the healthcare they need. Life is wonderful in the new socialist America.
If any “running dog, foul-breath capitalist vermin” (as Souvanna tells Tom Tuttle from Tacoma in the movie Volunteers) spout counter-revolutionary slogans from Adam Smith or John Locke, the powerful government knows what to do. The Chinese Communists have around a million such ne’er-do-wells in reeducation camps at this very moment. And we will have all those vacant “concentration camps” along the southern border ready to reeducate recalcitrant capitalists.
Kahneman’s lazy slow-thinking inside of Sapolsky’s frontal cortex agree that the right thing is usually the hard thing. Humans don’t like to do hard things. They would much prefer to be sitting a beach in Tahiti sipping coconut milk through a non-plastic straw. The Venezuelans are now tasked with the hard thing of getting rid of Hugo Chavez’ Bolivarian paradise. But the power granted to socialist governments to deliver all those paradisical delights make such governments hard to be rid of.
So we come back to the question. Given how the good doctors disparage human endeavors, how has America survived for over 230 years. Every human instinct says our democracy should have failed. Even President and Founder John Adams didn’t think that the democracy would last very long and that it would consume itself.
But we have survived. And even flourished from time to time. But we had the will and the gumption to do the right thing. Continuing slavery in the new republic was the easy thing to do, but brave and principled men fought a bloody war to free those slaves. And civil rights marchers ended the segregation of the descendants of those slaves. And it was easy to turn our backs on Europe after the First World War. About as easy as it was to raise tariffs to protect American industry before the Great Depression. It was hard work to defeat the fascist regimes that rose to power in Europe after that war. It was hard to do but it was the right thing.
And now populists on the left and right are offering easy solutions to our problems. Walls and tariffs on one side, free stuff and quotas on the other. Just as new authoritarian regimes are rising over the horizon. The survival of America as a democratic republic is in as much peril as it has even been.
And if we are just a bunch of highly advanced primates reacting to the chemicals and hormones produced in our brains and bodies, we might just allow our liberty to evaporate in the face of hostile forces from within and without. Maybe our free will only exists in our imagination. Even if that is all true, we must not act as if it is true. We must act as free men and women to protect our liberty and independence. It will be hard. But it will be the right thing to do.