12 results back to index
Skin in the Game: Hidden Asymmetries in Daily Life by Nassim Nicholas Taleb
availability heuristic, Benoit Mandelbrot, Bernie Madoff, Black Swan, Brownian motion, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cellular automata, Claude Shannon: information theory, cognitive dissonance, complexity theory, David Graeber, disintermediation, Donald Trump, Edward Thorp, equity premium, financial independence, information asymmetry, invisible hand, knowledge economy, loss aversion, mandelbrot fractal, mental accounting, microbiome, moral hazard, Murray Gell-Mann, offshore financial centre, p-value, Paul Samuelson, Ponzi scheme, price mechanism, principal–agent problem, Ralph Nader, random walk, rent-seeking, Richard Feynman, Richard Thaler, Ronald Coase, Ronald Reagan, Rory Sutherland, Silicon Valley, Steven Pinker, stochastic process, survivorship bias, The Nature of the Firm, transaction costs, urban planning, Yogi Berra
These people are the ones to watch out for, as they may swell the number of votes for the extreme party. Galam’s models produced a bevy of counterintuitive effects in political science—and his predictions have turned out to be way closer to real outcomes than the naive consensus. THE VETO What we saw in the renormalization group was the “veto” effect, as a person in a group can steer choices. The advertising executive (and extremely bon vivant) Rory Sutherland suggested to me that this explains why some fast-food chains, such as McDonald’s, thrive. It’s not because they offer a great product, but because they are not vetoed in a certain socio-economic group—and by a small proportion of people in that group at that.fn1 When there are few choices, McDonald’s appears to be a safe bet. It is also a safe bet in shady places with few regulars where the food variance from expectation can be consequential—I am writing these lines in the Milan train station and, as offensive as it can be to someone who spent all this money to go to Italy, McDonald’s is one of the few restaurants there.
NEXT This chapter will ease us to the next section: a) rationality resides in what you do, not in what you think or in what you “believe” (skin in the game), and b) rationality is about survival. Book 8 * * * RISK AND RATIONALITY Chapter 18 How to Be Rational About Rationality Restaurants without kitchens—Science from the grave—Do not shoot to the left of piano players—Merchants of rationality My friend Rory Sutherland claims that the real function of swimming pools is to allow the middle class to sit around in bathing suits without looking ridiculous. Same with New York restaurants: you think their mission is to feed people, but that’s not what they are about. They are in the business of overcharging you for liquor or Great Tuscan wines by the glass, yet get you in the door by serving you your low-carb (or low-something) dishes at break-even cost.
/Cela dit, maître Loup s’enfuit, et court encor. fn4 I can’t resist this story. I once received a letter from a person from the finance industry with the following request: “Dear Mr. Taleb, I am a close follower of your work, but I feel compelled to give you a piece of advice. An intellectual like you would greatly gain in influence if he avoided using foul language.” My answer was very short: “f*** off.” fn5 My friend Rory Sutherland (the same Rory) explained that some more intelligent corporate representatives had the strategy of cursing while talking to journalists in a way to signal that they were conveying the truth, not reciting some company mantra. fn6 Universal suffrage did not change the story by much: until recently, the pool of elected people in so-called democracies was limited to a club of upper class people who cared much, much less about the press.
Radical Markets: Uprooting Capitalism and Democracy for a Just Society by Eric Posner, E. Weyl
3D printing, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, anti-communist, augmented reality, basic income, Berlin Wall, Bernie Sanders, Branko Milanovic, business process, buy and hold, carbon footprint, Cass Sunstein, Clayton Christensen, cloud computing, collective bargaining, commoditize, Corn Laws, corporate governance, crowdsourcing, cryptocurrency, Donald Trump, Elon Musk, endowment effect, Erik Brynjolfsson, Ethereum, feminist movement, financial deregulation, Francis Fukuyama: the end of history, full employment, George Akerlof, global supply chain, guest worker program, hydraulic fracturing, Hyperloop, illegal immigration, immigration reform, income inequality, income per capita, index fund, informal economy, information asymmetry, invisible hand, Jane Jacobs, Jaron Lanier, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, labor-force participation, laissez-faire capitalism, Landlord’s Game, liberal capitalism, low skilled workers, Lyft, market bubble, market design, market friction, market fundamentalism, mass immigration, negative equity, Network effects, obamacare, offshore financial centre, open borders, Pareto efficiency, passive investing, patent troll, Paul Samuelson, performance metric, plutocrats, Plutocrats, pre–internet, random walk, randomized controlled trial, Ray Kurzweil, recommendation engine, rent-seeking, Richard Thaler, ride hailing / ride sharing, risk tolerance, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Rory Sutherland, Second Machine Age, second-price auction, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, special economic zone, spectrum auction, speech recognition, statistical model, stem cell, telepresence, Thales and the olive presses, Thales of Miletus, The Death and Life of Great American Cities, The Future of Employment, The Market for Lemons, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, trickle-down economics, Uber and Lyft, uber lyft, universal basic income, urban planning, Vanguard fund, women in the workforce, Zipcar
Does a person who “very strongly” opposes abortion rights mean that she will vote against any candidate who supports those rights, or just that it is one among many factors that she will take into account? FIGURE 2.2: Frequency of participants’ expression positions ranging from strong disagreement to strong agreement with a national ban on abortion in the United States. Source: Adapted from David Quarfoot, Douglas von Kohorn, Kevin Slavin, Rory Sutherland, David Goldstein, & Ellen Konar, Quadratic Voting in the Wild: Real People, Real Votes, 172 Pub. Choice 283 (2017), p. 6. QV offers a solution to this problem. Rather than allowing respondents to freely express any position they wish, a poll based on QV endows each participant with a budget of voice credits and allows her to spend the credits on the range of issues available as she wishes.
QV shows, for example, the greater intensity of preferences for repealing Obamacare, compared to those for retaining it, which helped fuel the success of Republicans in the 2016 election. FIGURE 2.4: Participant opinions on Obamacare under a standard Likert (left) and QV (right) survey. “Vote strength” in both graphs represents degree of support (on left) or opposition (on right) for Obamacare. Source: Adapted from David Quarfoot, Douglas von Kohorn, Kevin Slavin, Rory Sutherland, David Goldstein, & Ellen Konar, Quadratic Voting in the Wild: Real People, Real Votes, 172 Pub. Choice 283 (2017), p. 6. A nice illustration of this second point is figure 2.5, which shows the voting patterns for two different voters who expressed the most extreme preference on almost every issue under Likert. The survey involved ten public policy questions, and the respondents in both cases gave in to the temptation, possible under Likert, to say that they cared maximally (either pro or con) about nearly all of them.
Part II: Equality of Resources, 10 Philosophy & Public Affairs 283 (1981); Ronald Dworkin, Sovereign Virtue: The Theory and Practice of Equality (Harvard University Press, 2000). 41. Rensis Likert, A Technique for the Measurement of Attitudes, in Archives of Philosophy No. 140, 5–55 (R. S. Woodworth, ed., 1932). 42. Sendhil Mullainathan & Eldar Shafir, Scarcity: The New Science of Having Less and How It Defines Our Lives (Picador, 2014). 43. David Quarfoot, Douglas von Kohorn, Kevin Slavin, Rory Sutherland, David Goldstein, & Ellen Konar, Quadratic Voting in the Wild: Real People, Real Votes, 172 Public Choice 283 (2017). 44. There is still one anomaly in the QV distribution: a dip at 0. This results from a weakness in the weDesign software: we only allow “whole” votes on issues. This may make it impossible to vote a bit more on something you are passionate about once you have already put several votes on this issue, because you may only have a few credits left.
Inside the Nudge Unit: How Small Changes Can Make a Big Difference by David Halpern
Affordable Care Act / Obamacare, availability heuristic, carbon footprint, Cass Sunstein, centre right, choice architecture, cognitive dissonance, collaborative consumption, correlation does not imply causation, Daniel Kahneman / Amos Tversky, different worldview, endowment effect, happiness index / gross national happiness, hedonic treadmill, hindsight bias, IKEA effect, illegal immigration, job satisfaction, Kickstarter, libertarian paternalism, light touch regulation, longitudinal study, market design, meta analysis, meta-analysis, Milgram experiment, nudge unit, peer-to-peer lending, pension reform, presumed consent, QR code, quantitative easing, randomized controlled trial, Richard Thaler, Right to Buy, Ronald Reagan, Rory Sutherland, Simon Kuznets, skunkworks, the built environment, theory of mind, traffic fines, twin studies, World Values Survey
Rather, it was about bringing a more sophisticated and realistic account of how real people live, behave and make decisions, and the implications of this for policy. If the Nudge Unit was to survive in the vortex of No. 10, it had to offer advice and solutions to the PM and other Ministers that was distinctive, and value adding, from all the other advice that poured in through the myriad meetings and river of paper that flows across Whitehall and into the PM’s red box. The curious case of electronic cigarettes Rory Sutherland is a larger than life character. He’s one of those people who positively embraces eccentricity and, with a twinkle in his eye, seeks to push a story or an idea to the point where you’re not really sure if he’s serious. In organisational psychology, he’s what is sometimes called a ‘plant’ – a person you deliberately keep around to produce crazy ideas. Many of these ideas might be completely unworkable, but occasionally one of them will turn out to be brilliant, or at least the spark of something that could be made brilliant.
NOTES Preface 1 The use of images for speeding offences was based on an account from a French official. I do not know if they ran it as a systematic trial. The last bit, about ‘threatening’ to send it, was shameless embellishment. Chapter 1: Early Steps 1 One of the most basic psychological effects is how familiarity breeds liking, from random sequences of notes to how much we like and trust institutions. 2 I’m grateful to Rory Sutherland for first drawing my attention to the fascinating example of how Frederick the Great encouraged Prussians to adopt the potato. 3 Quoted in Quarterly Journal of Military History, August 2009. 4 UCLA Department of Epidemiology, School of Public Health; http://www.ph.ucla.edu/epi/snow/victoria.html. 5 The Rotherhithe Tunnel was opened around 1908, and today carries the A101 road from Limehouse to Rotherhithe.
The team and I are also indebted to the work and counsel of many others, especially to Daniel Kahneman and Cass Sunstein; and also David Albury, Dan Ariely, Jon Baron, Christian Bason, Maurice Biriotti, John Britton, Iris Bohnet, Max Bazerman, Bob Cialdini, Cary Cooper, Angus Deaton, Paul Dolan, Angela Duckworth, Bobby Duffy, Carol Dweck, Gerd Gigerenzer, Ben Goldacre, Pelle Hanson, Tim Hartford, John Helliwell, Felicia Huppert, Paul Johnson, Mike Kelly, Beau Kilmer, Dom King, Christian Kroll, David Laibson, Richard Layard, Steve Levitt, John List, Donald Low, Mike Luca, Robert McCorquodale, Mike Norton, Beth Novack, Philip Oreopoulos, Ben Page, Bob Putnam, Matt Rabin, Todd Rogers, Marty Seligman, Nigel Shadbolt, Eldar Shafir, Jonathan Shepherd, Dilip Soman, Rory Sutherland, Richard Suzman, Larry Sherman, Andrew Skates and Kevin Volpe. Most of all, I would like to thank the wonderful and talented people who make up and support the Behavioural Insights Team itself. A particular thanks is due to Owain Service, who has been central to building a cohesive team and navigating the complexities of moving from inside government to the current form, and to Andy Jackson and Olly Nguyen to delivering a functioning organisation.
Evil by Design: Interaction Design to Lead Us Into Temptation by Chris Nodder
4chan, affirmative action, Amazon Mechanical Turk, cognitive dissonance, crowdsourcing, Daniel Kahneman / Amos Tversky, Donald Trump, en.wikipedia.org, endowment effect, game design, haute couture, jimmy wales, Jony Ive, Kickstarter, late fees, loss aversion, Mark Zuckerberg, meta analysis, meta-analysis, Milgram experiment, Netflix Prize, Nick Leeson, Occupy movement, pets.com, price anchoring, recommendation engine, Rory Sutherland, Silicon Valley, Stanford prison experiment, stealth mode startup, Steve Jobs, telemarketer, Tim Cook: Apple, trickle-down economics, upwardly mobile
In comparison, the gold hat had little utility as headgear but probably a high emotional value in religious ceremonies. The intangible value isn’t inherent in the materials used, or necessarily in the time and care taken to create the object. Instead the intangible value is assigned by our perceptions of and relationship with the object. It’s the emotional aspect of this intangible part of the value equation that generates lust. Rory Sutherland, the executive creative director at Oglivy & Mather UK, suggests that most value-related problems are problems of perception rather than function, and so it’s often much more productive to tinker with perceptions rather than reality. Disney theme parks, for instance, just don’t have sufficient space on their rides to seat every visitor at the same time. Rather than trying to resolve that problem, which would be prohibitively expensive, they have made the act of traveling between rides and waiting in line for a ride into an intangibly valuable experience.
Predictably Irrational: The Hidden Forces That Shape Our Decisions. New York: HarperCollins, 2008. Instagram terms of service: Bryan Bishop. “Instagram's new terms of service: from overreaction to retraction.” The Verge (verge.com). December 20, 2012. Retrieved March 2013. Chad’s garage comic: “Instagram” © Randall Munroe, xkcd.com. Sell the intangible value Goldhut photo credit: Chris Nodder. Problems of perception: Rory Sutherland “Perspective is everything” Ted talk, (ted.com). Make a request in order to be seen more favorably Benjamin Franklin quote: The Autobiography of Benjamin Franklin. Boston: Houghton Mifflin & Co., 1906. p. 107. Return the money you won: Jon Jecker and David Landy. “Liking a person as a function of doing him a favour.” Human Relations 22.4 (1969): 371–378. Lustful behavior Third person effect: Richard M.
Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life by Rory Sutherland
3D printing, Alfred Russel Wallace, barriers to entry, basic income, Black Swan, butterfly effect, California gold rush, call centre, Captain Sullenberger Hudson, Cass Sunstein, cognitive dissonance, Daniel Kahneman / Amos Tversky, Dava Sobel, delayed gratification, Donald Trump, double helix, Downton Abbey, Elon Musk, Firefox, George Akerlof, gig economy, Google Chrome, Google X / Alphabet X, Grace Hopper, Hyperloop, Ignaz Semmelweis: hand washing, IKEA effect, information asymmetry, James Dyson, John Harrison: Longitude, loss aversion, low cost airline, Mason jar, Murray Gell-Mann, Peter Thiel, placebo effect, race to the bottom, Richard Feynman, Richard Thaler, Rory Sutherland, shareholder value, Silicon Valley, social intelligence, Steve Jobs, supply-chain management, the map is not the territory, The Market for Lemons, The Wealth of Nations by Adam Smith, ultimatum game, universal basic income, Upton Sinclair, US Airways Flight 1549, Veblen good
.’, Lucas Derks and Jaap Hollander, Essenties van NLP (1996). ‘. . . for leather car seats than for books on tape.”, Daniel Kahneman, ‘Focusing Illusion’, Edge (2011). About the Author RORY SUTHERLAND is vice chairman of Ogilvy. A columnist for The Spectator, he is former president of the Institute of Practitioners in Advertising, the professional body for advertising, media, and marketing communications agencies in the United Kingdom. His TED Talks have been viewed more than 6.5 million times. He lives in London. Discover great authors, exclusive offers, and more at hc.com. Copyright ALCHEMY. Copyright © 2019 by Rory Sutherland. All rights reserved under International and Pan-American Copyright Conventions. By payment of the required fees, you have been granted the nonexclusive, nontransferable right to access and read the text of this e-book on-screen.
Deep Value by Tobias E. Carlisle
activist fund / activist shareholder / activist investor, Andrei Shleifer, availability heuristic, backtesting, business cycle, buy and hold, corporate governance, corporate raider, creative destruction, Daniel Kahneman / Amos Tversky, discounted cash flows, fixed income, intangible asset, joint-stock company, margin call, passive investing, principal–agent problem, Richard Thaler, riskless arbitrage, Robert Shiller, Robert Shiller, Rory Sutherland, shareholder value, Sharpe ratio, South Sea Bubble, statistical model, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Tim Cook: Apple
Paul Meehl—one of the founding fathers of research in the field—said in 1986:63 There is no controversy in social science which shows such a large body of qualitatively diverse studies coming out so uniformly in the same direction as this one . . . predicting everything from the outcomes of football games to the diagnosis of liver disease and when you can hardly come up with a half a dozen studies showing even a weak tendency in favour of the clinician, it is time to draw a practical conclusion. Meehl’s practical conclusion is this: For a very wide range of prediction problems, statistical prediction rules—often very simple models—make predictions that are at least as reliable as, and typically more reliable than, human experts. This observation is now so well-accepted as to be known as The Golden Rule of Predictive Modeling.64 Rory Sutherland, the vice-chairman of Ogilvy Group UK—the advertising agency founded by David Ogilvy, who was an early advocate of quantification and research in advertising—is a self-described champion of the application of behavioral economics in advertising. Sutherland believes that we are more likely to follow simple, absolute rules—“if X, then Y”—that work 142 DEEP VALUE with our nature than others that are subtle, and require a “continuous exercise of self-restraint:”65 Let’s consider the old rule of restricting yourself to a maximum number of units of alcohol a week.
Aswath Damodaran. “Value Investing: Investing for Grown Ups?” (April 14, 2012). Available at SSRN: http://ssrn.com/abstract=2042657 or http://dx.doi. org/10.2139/ssrn.2042657. Ibid. Catch a Falling Knife 149 63. Michael A. Bishop and J. D. Trout. “50 years of successful predictive modeling should be enough: Lessons for philosophy of science.” Philosophy of Science 69.S3 (2002): S197–S208. 64. Ibid. 65. Rory Sutherland. “The Wiki Man: If you want to diet, I’m afraid you really do need one weird rule.” The Spectator, April 13, 2013. 66. Benjamin Graham. “A Conversation with Benjamin Graham.” Financial Analysts Journal, Vol. 32, No. 5 (1976), pp. 20–23. 67. Bishop and Trout, 2002. 68. Ibid. 69. Benjamin Graham and David Dodd. Security Analysis: The Classic 1934 Edition. (New York: McGraw-Hill) 1996. 70. Ibid. 71.
Antifragile: Things That Gain From Disorder by Nassim Nicholas Taleb
Air France Flight 447, Andrei Shleifer, banking crisis, Benoit Mandelbrot, Berlin Wall, Black Swan, business cycle, Chuck Templeton: OpenTable:, commoditize, creative destruction, credit crunch, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, discrete time, double entry bookkeeping, Emanuel Derman, epigenetics, financial independence, Flash crash, Gary Taubes, George Santayana, Gini coefficient, Henri Poincaré, high net worth, hygiene hypothesis, Ignaz Semmelweis: hand washing, informal economy, invention of the wheel, invisible hand, Isaac Newton, James Hargreaves, Jane Jacobs, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Arrow, knowledge economy, Lao Tzu, Long Term Capital Management, loss aversion, Louis Pasteur, mandelbrot fractal, Marc Andreessen, meta analysis, meta-analysis, microbiome, money market fund, moral hazard, mouse model, Myron Scholes, Norbert Wiener, pattern recognition, Paul Samuelson, placebo effect, Ponzi scheme, principal–agent problem, purchasing power parity, quantitative trading / quantitative ﬁnance, Ralph Nader, random walk, Ray Kurzweil, rent control, Republic of Letters, Ronald Reagan, Rory Sutherland, selection bias, Silicon Valley, six sigma, spinning jenny, statistical model, Steve Jobs, Steven Pinker, Stewart Brand, stochastic process, stochastic volatility, Thales and the olive presses, Thales of Miletus, The Great Moderation, the new new thing, The Wealth of Nations by Adam Smith, Thomas Bayes, Thomas Malthus, too big to fail, transaction costs, urban planning, Vilfredo Pareto, Yogi Berra, Zipf's Law
A Legal Way to Kill People If you want to accelerate someone’s death, give him a personal doctor. I don’t mean provide him with a bad doctor: just pay for him to choose his own. Any doctor will do. This may be the only possible way to murder someone while staying squarely within the law. We can see from the tonsillectomy story that access to data increases intervention, causing us to behave like the neurotic fellow. Rory Sutherland signaled to me that someone with a personal doctor on staff should be particularly vulnerable to naive interventionism, hence iatrogenics; doctors need to justify their salaries and prove to themselves that they have a modicum of work ethic, something that “doing nothing” doesn’t satisfy. Indeed, Michael Jackson’s personal doctor has been sued for something equivalent to overintervention-to-stifle-antifragility (but it will take the law courts a while to become directly familiar with the concept).
To return to finance, the barbell does not need to be in the form of investment in inflation-protected cash and the rest in speculative securities. Anything that removes the risk of ruin will get us to such a barbell. The legendary investor Ray Dalio has a rule for someone making speculative bets: “Make sure that the probability of the unacceptable (i.e., the risk of ruin) is nil.” Such a rule gets one straight to the barbell.3 Another idea from Rory Sutherland: the U.K. guidelines for patients with mild problems coming from alcohol are to reduce the daily consumption to under a certain number of grams of alcohol per day. But the optimal policy is to avoid alcohol three times a week (hence give the liver a lengthy vacation) then drink liberally the remaining four. The mathematics behind this and other barbell ideas are outlined with the later discussion of Jensen’s inequality.
Acknowledgments Peter Bevelin, Jazi Zilber, Peter Tanous, and Rolf Dobelli read the entire manuscript several times in several different versions in great detail and provided generous comments or hints on relevant research. I had exceptional and enthusiastic contributions from Will Murphy, Evan Camfield, Alexis Kirshbaum, Cynthia Taleb, Will Goodlad, Stefan McGrath, and Asim Samiuddin, who witnessed the progress of the book and contributed to its development. Generous comments and help: Peter Nielsen, Rory Sutherland, Saifedean Ammous, Max Brockman, John Brockman, Marcos Carreira, Nathan Myhrvold, Aaron Brown, Terry Burnham, Peter Boettke, Russ Roberts, Kevin Horgan, Farid Karkaby, Michael Schrague, Dan Goldstein, Marie-Christine Riachi, Ed Frankel, Mika Kasuga, Eric Weinstein, Emanuel Derman, Alberto Mingardi, Constantine Sandis, Guy Deutscher, Bruno Dupire, George Martin, Joelle Weiss, Rohan Silva, Janan Ganesh, Dan Ariely, Gur Huberman, Cameron Williams, Jacques Merab, Lorenzo Savorelli, Andres Velasco, Eleni Panagiotarakou, Conrad Young, Melik Keylan, Seth Roberts, John McDonald, Yaneer Bar-Yam, David Shaywitz, Nouriel Roubini, Philippe Asseily, Ghassan Bejjani, Alexis Grégoire Saint-Marie, Charles Tapiero, Barry Blecherman, Art De Vany, Guy Riviere, Bernard Oppetit, Brendon Yarkin, and Mark Spitznagel; and my online helpers Jean-Louis Reault, Ben Lambert, Marko Costa, Satiyaki Den, Kenneth Lamont, Vergil Den, Karen Brennan, Ban Kanj, Lea McKay, Ricardo Medina, Marco Alves, Pierre Madani, Greg Linster, Oliver Mayor, Satyaki Roy, Daniel Hogendoorn, Phillip Crenshaw, Walter Marsh, John Aziz, Graeme Blake, Greg Linster, Sujit Kapadia, Alvaro De La Paz, Apoorv Bajpai, Louis Shickle, Ben Brady, Alfonso Payno de las Cuevas, “Guru Anaerobic,” Alexander Boland, David Boxenhorn, Dru Stevenson, and Michal Kolano.
What to Think About Machines That Think: Today's Leading Thinkers on the Age of Machine Intelligence by John Brockman
agricultural Revolution, AI winter, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, algorithmic trading, artificial general intelligence, augmented reality, autonomous vehicles, basic income, bitcoin, blockchain, clean water, cognitive dissonance, Colonization of Mars, complexity theory, computer age, computer vision, constrained optimization, corporate personhood, cosmological principle, cryptocurrency, cuban missile crisis, Danny Hillis, dark matter, discrete time, Douglas Engelbart, Elon Musk, Emanuel Derman, endowment effect, epigenetics, Ernest Rutherford, experimental economics, Flash crash, friendly AI, functional fixedness, global pandemic, Google Glasses, hive mind, income inequality, information trail, Internet of things, invention of writing, iterative process, Jaron Lanier, job automation, Johannes Kepler, John Markoff, John von Neumann, Kevin Kelly, knowledge worker, loose coupling, microbiome, Moneyball by Michael Lewis explains big data, natural language processing, Network effects, Norbert Wiener, pattern recognition, Peter Singer: altruism, phenotype, planetary scale, Ray Kurzweil, recommendation engine, Republic of Letters, RFID, Richard Thaler, Rory Sutherland, Satyajit Das, Search for Extraterrestrial Intelligence, self-driving car, sharing economy, Silicon Valley, Skype, smart contracts, social intelligence, speech recognition, statistical model, stem cell, Stephen Hawking, Steve Jobs, Steven Pinker, Stewart Brand, strong AI, Stuxnet, superintelligent machines, supervolcano, the scientific method, The Wisdom of Crowds, theory of mind, Thorstein Veblen, too big to fail, Turing machine, Turing test, Von Neumann architecture, Watson beat the top human players on Jeopardy!, Y2K
TOPOL A New Wisdom of the Body ROGER HIGHFIELD From Regular-I to AI GORDON KANE We Need More Than Thought SCOTT ATRAN Are We Going in the Wrong Direction? STANISLAS DEHAENE Two Cognitive Functions Machines Still Lack MATT RIDLEY Among the Machines, Not Within the Machines STEPHEN M. KOSSLYN Another Kind of Diversity LUCA DE BIASE Narratives and Our Civilization MARGARET LEVI Human Responsibility D. A. WALLACH Amplifiers/Implementers of Human Choices RORY SUTHERLAND Make the Thing Impossible to Hate BRUCE STERLING Actress Machines KEVIN KELLY Call Them Artificial Aliens MARTIN SELIGMAN Do Machines Do? TIMOTHY TAYLOR Denkraumverlust GEORGE DYSON Analog, the Revolution That Dares Not Speak Its Name S. ABBAS RAZA The Values of Artificial Intelligence BRUCE PARKER Artificial Selection and Our Grandchildren NEIL GERSHENFELD Really Good Hacks DANIEL L.
On the other hand, these technologies may undermine fairness by augmenting the seemingly inevitable monopolistic goals of corporations that are leading us into the Information Age. The path we take depends more on us than on the machines and is ultimately a choice about how human the intelligence that will guide our dominion ought to be. More precisely, the question to ask is which aspects of human intelligence are worth preserving in the face of superhuman processing. MAKE THE THING IMPOSSIBLE TO HATE RORY SUTHERLAND Creative director and vice-chair, Ogilvy Group, U.K.; columnist, The Spectator (London) One possibility, of course, is that some malign superintelligence already exists on Earth but is shrewd enough to disguise its existence, its intentions, or its intelligence. I don’t think this act of deception would be particularly difficult; we aren’t very good at spotting what to fear. For most of evolutionary time, the most salient avoidable threats to our survival came from things that were roughly the same size as we were and actively wanted to hurt us—ferocious animals, for instance, or other people.
Success and Luck: Good Fortune and the Myth of Meritocracy by Robert H. Frank
2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, attribution theory, availability heuristic, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Daniel Kahneman / Amos Tversky, David Brooks, deliberate practice, en.wikipedia.org, endowment effect, experimental subject, framing effect, full employment, hindsight bias, If something cannot go on forever, it will stop - Herbert Stein's Law, income inequality, invisible hand, labor-force participation, lake wobegon effect, loss aversion, minimum wage unemployment, Network effects, Paul Samuelson, Report Card for America’s Infrastructure, Richard Thaler, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Rory Sutherland, selection bias, side project, sovereign wealth fund, Steve Jobs, The Wealth of Nations by Adam Smith, Tim Cook: Apple, ultimatum game, Vincenzo Peruggia: Mona Lisa, winner-take-all economy
With apologies to those I neglect to mention explicitly, I’d like to express my sincere gratitude to Peter Bloom, Summer Brown, Bruce Buchanan, CAU seminar participants, Philip Cook, Richard Dawkins, David DeSteno, Nick Epley, Alissa Fishbane, Chris Frank, David Frank, Hayden Frank, Jason Frank, Srinagesh Gavernini, Tom Gilovich, Piper Goodeve, Janet Greenfield, Jon Haidt, Ori Heffetz, Yuezhou Hou, Graham Kerslick, Kathi Mestayer, Dave Nussbaum, NYU Paduano Seminar participants, Sam Pizzigati, Dennis Regan, Russell Sage Foundation seminar participants, Kirsten Saracini, Eric Schoenberg, Barry Schwartz, Larry Seidman, Amit Singh, Rory Sutherland, David Sloan Wilson, Andrew Wylie, and Caitlin Zaloom for their advice and encouragement. They of course bear no responsibility for any remaining errors. I’m also grateful to Honor Jones and Kathleen Kageff for their skillful editorial assistance. And finally, I thank Peter Dougherty and Seth Ditchik at Princeton University Press for their enthusiastic support and, above all, for their enduring faith that books still matter. 1 WRITE WHAT YOU KNOW Writers are told to “write what you know,” and that’s one reason I began writing about luck several years ago.
The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations by David Pilling
Airbnb, banking crisis, Bernie Sanders, Big bang: deregulation of the City of London, Branko Milanovic, call centre, centre right, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, Credit Default Swap, credit default swaps / collateralized debt obligations, dark matter, Deng Xiaoping, Diane Coyle, Donald Trump, double entry bookkeeping, Erik Brynjolfsson, falling living standards, financial deregulation, financial intermediation, financial repression, Gini coefficient, Goldman Sachs: Vampire Squid, Google Hangouts, Hans Rosling, happiness index / gross national happiness, income inequality, income per capita, informal economy, invisible hand, job satisfaction, Mahatma Gandhi, market fundamentalism, Martin Wolf, means of production, Monkeys Reject Unequal Pay, mortgage debt, off grid, old-boy network, Panopticon Jeremy Bentham, peak oil, performance metric, pez dispenser, profit motive, purchasing power parity, race to the bottom, rent-seeking, Robert Gordon, Ronald Reagan, Rory Sutherland, science of happiness, shareholder value, sharing economy, Simon Kuznets, sovereign wealth fund, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, transaction costs, transfer pricing, trickle-down economics, urban sprawl, women in the workforce, World Values Survey
Interview with author, September 2013. See also David Pilling, “Lunch with the FT: Ha-Joon Chang,” Financial Times, November 29, 2013: www.ft.com. 10. Murad Ahmed, “Your Robot Doctor Will See You Now,” Financial Times, January 13, 2016: www.ft.com. 11. “Why the Japanese Economy Is Not Growing: Micro-barriers to Productivity Growth,” McKinsey Global Institute, July 2000. 12. This hilarious example is taken from Rory Sutherland, “Life Lessons from an Ad Man,” TED Talk, July 2009: www.ted.com. 13. From a telephone interview with the former head of the Bureau of Economic Analysis, Steve Landefeld, or Mr. GDP as I like to call him, February 2017. 14. Adam Sherwin, “Welsh Town Moves Offshore to Avoid Tax on Local Business,” Independent, November 10, 2015. 15. Brian Czech, Supply Shock, New Society Publishers, 2013, p. 26. 16.
Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society by Will Hutton
Andrei Shleifer, asset-backed security, bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, Bretton Woods, business cycle, capital controls, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, choice architecture, cloud computing, collective bargaining, conceptual framework, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, debt deflation, decarbonisation, Deng Xiaoping, discovery of DNA, discovery of the americas, discrete time, diversification, double helix, Edward Glaeser, financial deregulation, financial innovation, financial intermediation, first-past-the-post, floating exchange rates, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, Hyman Minsky, I think there is a world market for maybe five computers, income inequality, inflation targeting, interest rate swap, invisible hand, Isaac Newton, James Dyson, James Watt: steam engine, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liberal capitalism, light touch regulation, Long Term Capital Management, Louis Pasteur, low cost airline, low-wage service sector, mandelbrot fractal, margin call, market fundamentalism, Martin Wolf, mass immigration, means of production, Mikhail Gorbachev, millennium bug, money market fund, moral hazard, moral panic, mortgage debt, Myron Scholes, Neil Kinnock, new economy, Northern Rock, offshore financial centre, open economy, plutocrats, Plutocrats, price discrimination, private sector deleveraging, purchasing power parity, quantitative easing, race to the bottom, railway mania, random walk, rent-seeking, reserve currency, Richard Thaler, Right to Buy, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, Rory Sutherland, Satyajit Das, shareholder value, short selling, Silicon Valley, Skype, South Sea Bubble, Steve Jobs, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, unpaid internship, value at risk, Vilfredo Pareto, Washington Consensus, wealth creators, working poor, zero-sum game, éminence grise
It was my agent Ed Victor who once again persuaded me to embark on the madcap enterprise of writing a book – and who helped shape the first doodles into the proposal that became Them and Us. Thank you, Ed. I have shown a number of people chapters in draft, and their feedback has been fantastically helpful and supportive. In particular I would like to thank Richard Layard, David Held, David Miliband, Alan Rusbridger, Paul Webster, Ruaridh Nicoll, Andrew Haldane, Helena Kennedy, Lindsay Mckie and Tim Horton for their comments and criticisms. Steve Gaskell, Ed Sweeney and Rory Sutherland also offered interesting and illuminating comments, as did Zamila Bunglawala, John Denham, Josie Cluer, Andy Westwood and Stuart White. David Held organised a seminar at the LSE with, Eva-Maria Nag, Paul Kelly, Hakan Seckinelgin and Tim Horton to discuss Chapters 2 and 3, which led to important redrafting. The comments on the first draft of the book from my editor at Little, Brown, Richard Beswick, were subtle and illuminating; and thanks to Tim Whiting, who weighed in at the end.
Enlightenment Now: The Case for Reason, Science, Humanism, and Progress by Steven Pinker
3D printing, access to a mobile phone, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Albert Einstein, Alfred Russel Wallace, anti-communist, Anton Chekhov, Arthur Eddington, artificial general intelligence, availability heuristic, Ayatollah Khomeini, basic income, Berlin Wall, Bernie Sanders, Black Swan, Bonfire of the Vanities, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, clockwork universe, cognitive bias, cognitive dissonance, Columbine, conceptual framework, correlation does not imply causation, creative destruction, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, dark matter, decarbonisation, deindustrialization, dematerialisation, demographic transition, Deng Xiaoping, distributed generation, diversified portfolio, Donald Trump, Doomsday Clock, double helix, effective altruism, Elon Musk, en.wikipedia.org, end world poverty, endogenous growth, energy transition, European colonialism, experimental subject, Exxon Valdez, facts on the ground, Fall of the Berlin Wall, first-past-the-post, Flynn Effect, food miles, Francis Fukuyama: the end of history, frictionless, frictionless market, germ theory of disease, Gini coefficient, Hans Rosling, hedonic treadmill, helicopter parent, Hobbesian trap, humanitarian revolution, Ignaz Semmelweis: hand washing, income inequality, income per capita, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), invention of writing, Jaron Lanier, Joan Didion, job automation, Johannes Kepler, John Snow's cholera map, Kevin Kelly, Khan Academy, knowledge economy, l'esprit de l'escalier, Laplace demon, life extension, long peace, longitudinal study, Louis Pasteur, Martin Wolf, mass incarceration, meta analysis, meta-analysis, Mikhail Gorbachev, minimum wage unemployment, moral hazard, mutually assured destruction, Naomi Klein, Nate Silver, Nathan Meyer Rothschild: antibiotics, Nelson Mandela, New Journalism, Norman Mailer, nuclear winter, obamacare, open economy, Paul Graham, peak oil, Peter Singer: altruism, Peter Thiel, precision agriculture, prediction markets, purchasing power parity, Ralph Nader, randomized controlled trial, Ray Kurzweil, rent control, Republic of Letters, Richard Feynman, road to serfdom, Robert Gordon, Rodney Brooks, rolodex, Ronald Reagan, Rory Sutherland, Saturday Night Live, science of happiness, Scientific racism, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Simon Kuznets, Skype, smart grid, sovereign wealth fund, stem cell, Stephen Hawking, Steven Pinker, Stewart Brand, Stuxnet, supervolcano, technological singularity, Ted Kaczynski, The Rise and Fall of American Growth, the scientific method, The Signal and the Noise by Nate Silver, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, total factor productivity, union organizing, universal basic income, University of East Anglia, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, urban renewal, War on Poverty, We wanted flying cars, instead we got 140 characters, women in the workforce, working poor, World Values Survey, Y2K
And just think of all the plastic, metal, and paper that no longer go into the forty-odd consumer products that can be replaced by a single smartphone, including a telephone, answering machine, phone book, camera, camcorder, tape recorder, radio, alarm clock, calculator, dictionary, Rolodex, calendar, street maps, flashlight, fax, and compass—even a metronome, outdoor thermometer, and spirit level. Digital technology is also dematerializing the world by enabling the sharing economy, so that cars, tools, and bedrooms needn’t be made in huge numbers that sit around unused most of the time. The advertising analyst Rory Sutherland has noted that dematerialization is also being helped along by changes in the criteria of social status.37 The most expensive London real estate today would have seemed impossibly cramped to wealthy Victorians, but the city center is now more fashionable than the suburbs. Social media have encouraged younger people to show off their experiences rather than their cars and wardrobes, and hipsterization leads them to distinguish themselves by their tastes in beer, coffee, and music.