10 reasons why the combined intelligence of 7 billion people = global stupidity

[Memorize these and you'll never have to accidentally implode the world economy.]

1. Availability bias, which causes us to base decisions on information that is more readily available in our memories, rather than the data we really need;
2. Hindsight bias, which causes us to attach higher probabilities to events after they have happened (ex post) than we did before they happened (ex ante);
3. The problem of induction, which leads us to formulate general rules on the basis of insufficient information;
4. The fallacy of conjunction (or disjunction), which means we tend to overestimate the probability that seven events of 90% probability will all occur, while underestimating the probability that at least one of seven events of 10% probability will occur;
5. Confirmation bias, which inclines us to look for confirming evidence of an initial hypothesis, rather than falsifying evidence that would disprove it;
6. Contamination effects, whereby we allow irrelevant but proximate information to influence a decision;
7. The affect heuristic, whereby preconceived value-judgments interfere with our assessments of costs and benefits;
8. Scope neglect, which prevents us from proportionately adjusting what we should be willing to sacrifice to avoid harms of different orders of magnitude;
9. Overconfidence in calibration, which leads us to underestimate the confidence intervals within which our estimates will be robust (e.g. to conflate the 'best case' scenario with the 'most probable'); and
10. Bystander apathy, which inclines us to abdicate individual responsibility when in a crowd.

-Niall Ferguson, The Ascent of Money [based on Eliezer Yudkowsky, 'Cognitive Biases Potentially Affecting Judgment of Global Risks', in Nick Bostrom and Milan Cirkovic (eds), Global Catastrophic Risks (Oxford University Press, 2008)]

See also, Tower of Babel, problems during construction of

Meltdown?

(My hardline-conservative yet somehow marxist comment on "No more cash for CBC, Heritage Minister says" ~www.globeandmail.com)

From my few years observing the cosmos, here's what I've learned of how the Canadian economy works when things go bad: Those closest to the Government are able (via lobbyists and their friends) to line up first at the trough to save their skins. Those closest to the trough (CBC, car makers) are the ones who deserve the money least, because they have been coddled the longest. [This includes the government workers themselves who basically control the trough, who ARE the trough - and who are most hysterical about a downtown in the economy, because it means we may actually wake up and demand accountability for our vote and our money.] Those who have been coddled the longest are theoretically most able to withstand the downturn because they've been getting the money all along, but they are also the ones who cry the loudest when things go bad.

This recession is not a tragedy in and of itself, but only a tragedy of relative expectations and disappointment. Our society is ridiculously wealthy and incremental decreases in GDP will cause no suffering that compares in any way to the great depression of the 1930s. The squeaky wheel gets the grease, because the squeaky wheel is the one that doesn't do any work. Those who suffer most are also the most accustomed to suffering when things go bad are furthest from the trough, because they have learned to live without government support. Call it the virtue of honest work, the spirit of capitalism - the lack of honest work, the prevalence of cronyism --> This is how the establishment remains the establishment: by milking honest workers, honest workers who have learned not to depend on government to bail them out but to work to find a way no matter what. This is also why voting is important, so we can deliver justice at times of reckoning which are right now.