The Topic: The Illusion of Knowledge
The Guest: Christopher Chabris
The Episode: iTunes – Download – Stitcher – RSS – Soundcloud
Remember when the United States stock market crashed a few years back? You know, the implosion famously featuring credit default swaps and collateralized debt obligations? Does it seem strange to you that all those experts who couldn’t predict the economic collapse are still on television giving advice and offering predictions?
The people who were wrong continue to work because they provide you with an illusion of knowledge, a belief that the market can be understood by one person, and that person’s understanding can become your understanding. They continue to claim insight into chaotic, impossibly complex nebulae of shifting data, and they continue to profess powers of divination even though research shows they are slightly less reliable than a coin toss. They can still get paid to squawk because they continue to make their claims with confidence. No one wants a sage who deals in maybes.
Take a look at those bicycles at the top of this post. Which one would you say is the most accurate portrayal of a real bike? Psychologist Rebecca Lawson once put together a study that revealed even though most people are very familiar with bicycles and know how to ride them, they can’t draw one to save their lives, and they can’t even pick a proper one out of a lineup. Despite this, most people rate their knowledge of how a bicycle works as being very good. Remember that when someone claims to understand something a bit more complicated, like a sub-prime mortgage. (This is a picture of a real bicycle.)




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