Looking for Truth in All the Wrong Places: On Nate Silver’s The Signal and the Noise

Standard

The numbers have no way of speaking for themselves. We speak for them. We imbue them with meaning. Like Caesar, we may construe them in self-serving ways that are detached from their objective reality. Data-driven predictions can succeed— and they can fail. It is when we deny our role in the process that the odds of failure rise. Before we demand more of our data, we need to demand more of ourselves.

—Nate Silver, The Signal and the Noise

 

We have access to more information than at any time in human history and yet we find ourselves light years further from the truth. This is the primary lesson from The Signal and the Noise, Nate Silver’s outstanding book on forecasting.

Most of us in the United States are aware of this, having just been through a presidential campaign steeped in bullshit flowing from both sides. We heard President Obama’s version of the truth and Mitt Romney’s version of the truth and concluded that neither version had much to do with past, present or future reality. With no valid information to go on, we pretty much cast our vote based on shared values, common beliefs or the candidate’s likability.

“Whew! Glad that’s over!” was the overwhelming sentiment when the campaign finally ended. But “that” is still with us. By “that” I mean the simple truth that wherever we look, we are surrounded with spin, salesmanship and selectivity. People use facts today to support positions, beliefs and biases rather than discover truth. This is true in every field, from politics to science to economics. Facts are the weapons we select to advance whatever cause we want to advance.

Let’s look at economics, a field that Silver singles out as one of the weakest when it comes to forecasting the future. The truth is that all economic systems are based on the arbitrary assignment of value to goods and services. No thing or act has an absolute price in the same sense that gravity is a universal truth. For a long time, people agreed that the standard of value was gold, and there are still people who argue that all of our economic problems would be fixed if we would return to the gold standard.

What a strange belief! I couldn’t give a shit about gold. It has no value to me. For me, chocolate and cinnamon are far more valuable substances. I could also go with the wine standard, or the tits standard or the music standard—all of which I find of far more value to me than a silly metal. Wouldn’t it be a better and happier world if we decided that the wealthiest countries were those who produced the highest quality art?

These are, of course, completely subjective beliefs. What I have going for me is that I fully admit my subjectivity. The problem, as Silver noted in the quote above, is that most human beings refuse to admit that. They cling to the notion that their data is objective, and therefore the Greeks have to suffer and the Germans get a pass. The truth is that the Greeks are being punished because in the opinion of those who have more of what we call wealth, they have violated certain beliefs that the wealthy claim to hold sacred: prudence, balanced budgets, following the rules and the work ethic. What they refuse to admit is that the entire system is arbitrary; our existence in the universe does not depend on having an economic system of a particular kind. We could blow it up tomorrow if we wanted to, forgive all debts and hit the reset button. We don’t do this in part because we believe this would lead to chaos, in part because those who gain power through the system have no interest in changing it.

This is a good example of human shortsightedness. The truth is that the global economic structure has generated a relatively small amount of haves and a whole lot of have-nots. The have-nots are very resentful of their status, and this resentment often manifests itself in conflict, disruption, terrorism and war. By sustaining the economic system and supporting it with large defense budgets, the haves try to maintain a lifestyle grounded in denial . . . and denial eventually leads to disaster.

Things are unlikely to change, for our biases are protected by the human fear of change. Coming up with a new system focused on helping human beings achieve their potential rather than competing against each other to get more of a fictional substance called money would cause massive disruption, at least for a while. It’s easier to pluck facts out of the air to protect our self-destructive self-interests than try to make the world a safer and more vibrant place to live.

As Nate Silver noted, this state of affairs is likely to continue for some time, thanks to the information explosion. Speaking of the first “information age” (initiated by the printing press), Silver demonstrated that this tendency for human bias is deeply rooted in human nature:

Meanwhile, exposure to so many new ideas was producing mass confusion. The amount of information was increasing much more rapidly than our understanding of what to do with it, or our ability to differentiate the useful information from the mistruths. Paradoxically, the result of having so much more shared knowledge was increasing isolation along national and religious lines. The instinctual shortcut that we take when we have “too much information” is to engage with it selectively, picking out the parts we like and ignoring the remainder, making allies with those who have made the same choices and enemies of the rest.

As long as we ignore the pursuit of truth for the pursuit of power, we will continue to exist in this confused world of allies and enemies, ignoring the essence of the human condition:

For in the final analysis, our most basic common link is that we all inhabit this small planet. We all breathe the same air. We all cherish our children’s futures. And we are all mortal.

—John F. Kennedy

 

Photo Credit: © Kaetana | Stock Free Images &Dreamstime Stock Photos

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s