As regular readers are all too well aware, I am committed to data-driven analysis and investing. We’re suckers for stories, of course, and are ideological through-and-through, but the goal is to make sure that our investment decisions are based on real, quantitative evidence (at least to the extent possible).
That’s easier said than done, of course. We are prone to all sorts of cognitive and behavioral biases — perhaps most prominently confirmation bias — all of which threaten our analysis. We are also highly susceptible to bias blindness, the inability to see our own biases even when others’ are crystal clear. And now comes further evidence that our reasoning abilities are even worse than we thought. Continue reading →
In his Friday philosophizing today, my friend Barry Ritholtz offers the famous B.F. Skinner claim that free will is an illusion and suggests that Skinner is mostly right. Indeed, much of the academic world asserts that Skinner is entirely right either by granting his determinism whole hog (because cause and effect are relentless via biological or genetic determinism) or by calling determinism “freedom” — so-called compatibilism. To the compatibilist, “freedom” doesn’t mean we could do otherwise, it merely means we weren’t coerced. It’s odd to consider, but this view is pretty much just like Calvin’s view of election and predestination: we’re free to choose God but will never do so if left to our own devices.
If determinism is true, of course, most of our societal structures are incoherent. Our theories of justice are predicated upon personal responsibility yet someone doing what s/he is hard-wired to do can hardly be deemed responsible in any meaningful way. Similarly, the idea that we can earn anything or that we should be rewarded for special skills and accomplishments doesn’t make any sense. Moreover, the whole concept of creativity is meaningless if determinism is true.
Determinism is supported by the pioneering research of the late Benjamin Libet and those following him who showed that “our” brains make decisions for “us” before “we” are aware of them (the quotes reflect the perception we all share of our minds being separate from our brains, a perception that most scientists reject). Libet’s research showed that the brain region involved in coordinating motor activity fired a fraction of a second before test subjects “chose” to push a button. Later studies supported Libet’s theory that subconscious activity precedes and seems to determine conscious choice. In other words, the idea suggests, we’re merely meat machines — albeit highly sophisticated meat machines — simply doing what we’re programmed to do. Nothing more. Nothing less. Whatever we do, we could not have done otherwise. We aren’t free.
I disagree and have an alternate interpretation of the facts. Continue reading →