Tag: Fallacies

We deal with that world by constructing simplifying narratives. We do this not because we are stupid, or irrational, or have forgotten probability 101, but because storytelling is the best means of making sense of complexity.

In a world full of information and short of our attention, the events that affect behaviour are those that are salient.

Since the ox was no longer being weighed, the key to success lay not in correctly assessing its weight, but rather in correctly assessing what other people would guess. Or what others would guess others would guess. And so on.

The idea that there is something called “the economy”, which is separable from the welfare of society and its citizens, is silly. There isn’t.

Gresham’s Law – bad money drives out good – dates from an era of metallic currency: debased coins circulated, genuine ones were hoarded.

The elevation of credibility into a central economic doctrine has turned a sensible point – that policy stability is good for both business and households – into a dogma that endangers stability.

When we make hiring decisions, or construct risk maps, or undertake investment appraisals we complete templates, the purpose of which is not to help us manage or decide but to rationalise what we already believe we know.

Although it is essential that they do, policymakers and business people have difficulty thinking in terms of systems. The common sense of everyday observation has an appeal that analytic, evidential reasoning can never match.

In conditions of ignorance, people seize on any information available, even if their reason should tell them that it is irrelevant. Just watch the occupants of the airport lounge fiddling with their BlackBerrys.

Modern titans derive their authority and influence from their position in a hierarchy, not their ownership of capital.