Sunday, May 19, 2013

Beware - Experts Abound. The Psychology of Experts and Their Work

When we think of “experts” we think of them as knowing, informed and more likely to be right than wrong about that in which they are expert. Macro economists who specialize in understanding the economic dynamics of nations must be better at understanding and predicting the economy of a nation (especially one they have studied in depth) than the man in the street. Climatologists must understand the dynamics of the climate and are able to predict the future climate.

It turns out that this assumption of “knowing” experts is problematic. Experts in the stock market are often no better than a dice thrower at predicting the future of a stock. In a systematic study of hundreds of trades it was found that the stocks that traders sold did significantly better than the stocks that traders bought.

The psychologist Daniel Kahneman  who won the Nobel Prize in Economics for his work on decision making, has looked at the issue of “experts” and why they often get things wrong. In his new book Thinking Fast and Slow he points to several aspects of their psychology as factors, but highlights two: the illusion of understanding and the illusion of validity. These are primary causes of experts getting it wrong.

The illusion of understanding refers to the idea that the world is more knowable than it actually is. In particular, experts believe that they have an in-depth and insightful understanding of the past and this enables them to better understand the future. They use what Kahneman refers to as the WYSIATI rule – “what you see is all that there is” and this provides the basis for their confidence. For example, it must be the case that high levels of government indebtedness (levels of debt:GDP above 90% is the most recent version of this) stifle the economy and reduce investor and entrepreneurial confidence. Or it is obvious that human generated C02 is the major cause of climate change. Both of these understandings are based on a particular view of historical data and “facts” and an extrapolation of these views into the future.

The views exist independent of the evidence to support them. Just as financial advisers are confident that they are successful in predicting the future behaviour of stocks, so macro-economists are confident that their views of austerity have the weight of history behind them. Those committed to the view that human produced CO2 is the primary cause of climate change are not deterred by evidence that it may not be or that climate change has stalled for the last eighteen years.

Experts are sustained in their beliefs by a professional culture that supports them. Austerians have their own network of support as do they Keynesian who oppose them. Anthroprocene climatologists have their own network of support among climate change researchers and politicians while the skeptical climate scientists also have their networks. All remain ignorant of their ignorance and are sustained in their belief systems by selected use of evidence and by the support of stalwarts. These supportive networks and environments help sustain the illusion of validity. It is an illusion because evidence which demonstrates contrary views to those of the “experts” are dismissed and denied – the expert position, whatever it may be, is valid because they are expert.

Indeed, using Isaiah Berlin’s 1953 work on Tolstoy (The Hedgehog and the Fox) , austerians and climate experts are “hedgehogs” – they know one big thing, they know what they know within a coherent framework, they bristle with impatience towards those who don’t see things their way and they are exceptionally focused on their forecasts. For these experts a “failed prediction” is an issue of timing, the kind of evidence being adduced and so on – it is never due to the fact that their prediction is wrong. The same is true for macro economists  Austerians who look at the failure of their policies in Europe, for example, suggest that the austerity did not go far enough; anthroprocene climatologists see the lack of warming as proof that they are right, it is just that the timing is a little out.

Phillip Tetlock, in his powerful 2005 book Expert Political Judgement – How Good is it? How Can We Know? (Princeton University Press), demonstrated these illusions in a powerful way. He interviewed some 284 of the leading political pundits in the United States and documented over 80,000 predictions they may with confidence during his interviews. He then tracked what actually happened against these predictions.  The results were devastating. As Kahneman observes “people who spend their time, and earn their living, studying a particular topic produce poorer predictions than dart throwing monkeys”.

Tetlock observes that “experts in demand were more overconfident that those who eked our existences far from the limelight”. We can see this in spades in both economics and climate change. James Hanson, recently retired from NASA and seen to be one of the worlds leading athropocene climatologists, makes predictions and claims that cannot be supported by the evidence he himself collected and was responsible for. For example, he suggested that in the last decade it's warmed only about a tenth of a degree as compared to about two tenths of a degree in the preceding decade” – a claim not supported by the GISTEMP data set. This overconfidence and arrogance comes from being regarded as one of the leading climate scientists in the world – evidence is not as important as the claim or the person making it. Hanson suffers from the illusion of skill.
Kahneman recognizes people like Hansen. He suggests

“..overconfident professionals sincerely believe they have expertise, act as experts and look like experts. You will have to struggle to remind yourself that they may be in the grip of an illusion.”  
There are other psychological features of the expert which are worthy of reflection. For example, how “group think” starts to permeate a discipline such that those outside the group cannot be heard as rational or meaningful – they are referred to as “deniers” or “outsiders”, reflecting the power of group think. The power of a group (they will claim consensus as if this ends scientific debate) to close ranks and limit the scope of conversation or act as gatekeepers for the conversation. Irving Janis documented the characteristics of group think in his 1982 study of policy disasters and fiascoes[i]. He suggests these features:

  1. Illusion of invulnerability –Creates excessive optimism that encourages taking extreme risks. We can see this in the relentless pursuit of austerity throughout Europe.
  2. Collective rationalization – Members discount warnings and do not reconsider their assumptions. We see this in relation to both climate change and austerity economics.
  3. Belief in inherent morality – Members believe in the rightness of their cause and therefore ignore the ethical or moral consequences of their decisions. Austerians appear to willfully ignore the level of unemployment and the idea of a lost generation of youth workers, especially in Greece and Spain. Anthropecene climate researchers always present themselves as morally superior.
  4. Stereotyped views of out-groups – Negative views of “enemy” make effective responses to conflict seem unnecessary. Climate “deniers” and suggestions that they be prosecuted are not uncommon.
  5. Direct pressure on dissenters – Members are under pressure not to express arguments against any of the group’s views. This has occurred in climate change research community, since grants appear to favour those who adopt the view that man made CO2 is the primary cause of climate change.
  6. Self-censorship – Doubts and deviations from the perceived group consensus are not expressed.
  7. Illusion of unanimity – The majority view and judgments are assumed to be unanimous. This is especially the case in “consensus” (sic) climate change science and amongst austerians.
  8. Self-appointed ‘mindguards’ – Members protect the group and the leader from information that is problematic or contradictory to the group’s cohesiveness, view, and/or decisions.
- all of these characteristics can be seen to be in play in the two examples used throughout this short note.

There is also the issue of the focusing illusion. Kahneman sums this up in a single statement: “nothing in life is as important as you think it is when you are thinking about it”. “Government debt is the most important economic challenge facing society today” says a well known economists, or “climate change is a life and death issue” says US Secretary of State, John Kerry.  Neither of these statements are true for anyone unless they are obsessive. Society faces a great many challenges, much will depend on our own preoccupations and what focus one take for the concerns you have. Some are more concerned about the future of Manchester United or Chelsea football clubs than they are about debt, deficits or climate change. The illusion is that one person’s focus is, by definition, better than another’s because they are expert in this field.

The bottom line here: beware of experts, especially those who behave as if their focused illusion is the “ultimate truth” and they threaten dire consequences of failing to follow their predictive prescriptions. There is good evidence that they are likely to be wrong.

[i] Janis, Irving L.  (1982).  Groupthink: Psychological Studies of Policy Decisions and Fiascoes.  Second Edition.  New York: Houghton Mifflin.

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