More about irrationality

Hi,

Today's post is about a piece of writing that I don't really recommend: A report from the French Food Safety Agency called

Efficacy and safety of gluten-free and casein-free diets proposed in children presenting with pervasive developmental disorders (autism and related syndromes)

This report is a splendid example of irrational "scientific" thinking: Intelligent people following what they consider good rules, and ending up with a completely ridiculous result. If you take the logic of the of this report seriously, it would be wrong of health care personell to give mouth-to-mouth first aid to victims of drowning today:

a) The method carries with it several risk factors, like blowing air into the patient's stomach, which can cause the patient to vomit and get gastric acid into his airways. The method also carries with it the risk of over-inflation and lung damage, particularly if the patient is a child with low lung capacity. Heart compressions, which are often advocated along with the blowing, carry with them a severe risk of fractured ribs.

b) No double-blind study has yet been done, where drowned patients have been randomly been assigned to the treatment group and placebo group, and where enough care has been taken to keep observers in the dark about what patient is getting mouth-to-mouth treatment and who's been given placebo.

Before I get back to the drowning victims, I'd like to say something about seven distinct types of irrationality that we may be dealing with here.

1) First and foremost, the authors of this report seem to be suffering from a severe case of irrational loss aversion. This factor was first convincingly demonstrated by Amos Tversky and Daniel Kahneman. Several studies have shown that the motivating force of a potential loss (like the social awkwardness from being on a diet) is much stronger than a corresponding gain (like recovering from autism). This is sometimes also called the pseudocertainty effect – the tendency to make risk-averse choices if the expected outcome is positive, but make risk-seeking choices to avoid negative outcomes.

* On the one hand, they are taking very seriously a small risk for a modestly negative outcome: "No data are available on growth or nutritional status of autistic children subjected to a gluten-free, casein-free diet. Therefore, it is impossible to contend that such a diet has no harmful effect in the short, medium or long term".

* On the other hand, they are completely disregarding the possibility of a positive outcome.

2) Secondly, it seems safe to guess is that the loss aversion in this case is being reinforced by omission bias – the tendency to judge harmful actions as worse, or less moral, than equally harmful omissions (inactions).

* The alternative they are advising against, requires practical action.

* The alternative that they don't mind, consists of inaction.

3) Thirdly, the way the authors justify their position makes me suspect that they also suffer from the observer expectancy effect – they may have manipulated unconsciously the criteria for what they consider valid, in order to find the result they expected.

* On the one hand, they advise that studies should be assigned a credibility of zero, unless they fulfill certain formal criteria: A control group (autistic children without dietary intervention), random allocation of treatment or placebo, and a double blind protocol. These criteria happen to exclude all evidence for an effect from diet on autism.

* On the other hand, this last study is assigned high credibility, in spite of the fact that the study design is such that it didn't actually test the hypothesis that most parents and supporters believe in. It's as if they'd finally gotten around to doing a double-blind placebo-controlled study of mouth-to-mouth resuscitation, ... and were giving the patients 2 inhalations each, without clearing their airways of water first.

4) Fourth, they also seem to have been at risk of falling for the Ambiguity effect - the tendency to avoid options for which missing information makes the probability seem "unknown." I see this as a verision of the Zero-risk bias - the preference for reducing a small risk to zero over a reduction in a larger risk).

* In autism, the total amount of uncertainty will be reduced if nothing is done (although in favour of a truly awful outcome).

5) Fifth, the authors must also have been at risk of Hyperbolic discounting - the risk of having a stronger preference for or against something, the closer to the present the cost or payoff are in time or space.

* In autism, the cost of treatment (financial and in the form of hassle) is certain and immediate, while the benefit is uncertain and several months (years) into the future.

6) Sixth, the authors have also been at risk for the Bandwagon effect – the tendency to do or believe things because many other people do or believe the same. This is related to "groupthink", "herd behavior" and the Semmelweis reflex – the tendency to reject new evidence that contradicts an established paradigm and the Availability cascade - a self-reinforcing process in which a collective belief gains more and more plausibility through its increasing repetition in public discourse (or "repeat something long enough and it will become true").

* No medical authorities have yet had the courage to be the first to make a rational cost-risk-benefit analysis of what this treatment has to offer autistic children.

7) Lastly, it's also possible that the authors (or the authority figures that have created today's medical paradigm in this area) are suffering from Confirmation bias – the tendency to search for or interpret information in a way that confirms one's preconceptions. This factor will be particularly strong if the preconceptions in question have the power cause severe and irreparable damage.

* In autism, it can be postulated that the medical authorities will be less and less disposed towards changing their policy, the more children that have suffered irreparable brain damage as a result of those policies.

There is probably a strong synergistic interaction between all these kinds of irrationality.

Now, back to the drowning victims. Do I hear voices saying that it's unethical not to treat them with whatever means we have at hand, as long as there's a chance that we might save them?` Thank you very much. That's exactly my point. Why shouldn't the same rule be applied to autistic children? Untreated autism leaves the patient to suffer for a lifetime (irreversible brain damage), along with his parents (burned-out), his siblings (neglected), and the rest of society (stuck with the bill when the patient grows up).

We still have a chance of saving at least some of these children. Why are these people insisting that we don't even try?

- o 0 o -

Before you can say you have a rational solution to the autism-and-diet question, you need to do the math involved in a structured risk analysis. I recommend that everyone who is interested in this issue, start by setting up a risk analysis matrix around at least five risk factors:

1) The patient 's physical growth is retarded because of a well monitored GFCF diet,
2) The patient develops irreversible brain damage, from untreated autism
3) The patient's social life becomes more complicated because of a GFCF diet,
4) The patient's social life becomes more complicated because of autism
5) The patient's parents incur some expense because of the GFCF diet,

They should then assign a probability of 1-100% to each of these factors, under the following alternatives:

a) The patient does not try the diet.
b) The patient tries the diet, has no effect from it, and discontinues it after 6 months.
c) The patient tries the diet, experiences an average *) reduction in symptoms, and continues.
d) The patient tries the diet and recovers completely.

*) The average outcome of dietary experiments is still unknown. Even if it were known, it would be impossible to extrapolate from that figure to what was going to happen to one specific patient. For that patient, the full range of outcomes must still be reckoned with, from nothing to a full recovery. The actual treatment decision must therefore always be based on possibilities, rather than probabilities. Even so, I've attempted to assign a value to this column, based on my best assessment of the total amount of evidence available.

Next, they should assigned a numerical value (for example 1-100) for the importance of each of the problems above, relative to the worst possible outcome in the most serious of the categories, to make them comparable.

Lastly they should multiply probability and importance. The resulting numbers will tell something about how important you consider it is to guard against each of these factors.

My conclusion at the bottom of my personal risk analysis matrix, was that a lifelong diet needed to produce a recovery rate of around 4%, or a reduction in severity of the autistic outcome of the same size order, in order to outweigh the costs. If we take into consideration that patiens who don't benefit from the diet, can discontinue it after 6 months, the figure falls to under 1%.

This is all based on my personal value system, i.e. how I (for example) prioritize a 100% certain loss of social convenience (being able to eat anything in birthday parties) versus a somewhat lower chance of irreversible brain damage.

I'm longing for the day when the Government's medical researchers starts doing this kind of math. When they come clean about their priorities. When they start looking at ALL the available evidence, including the lab reports that show the opoid peptides right there, physically present in the blood and urine ... just because it isn't part of a randomized double-blind placebo controlled crossover study.

And I'm longing for the day when the same people start paying attention to study designs, and start laughing - along with me - of studies that are so badly designed that they can't prove anything - even though they fulfill all those sensible criteria, with randomization and crossover and all.

:-J

IQ and rationality

I'm reading about the distinction between intelligence and rationality these days:

What Intelligence Tests Miss: The Psychology of Rational Thought
by Keith E. Stanovich

There's one aspect of the book that I'd like to comment on so far:

Intelligence has to do with the processing power of the brain. Rationality has to do with how we form our beliefs.

In other (my) words: You don't have to be unintelligent to believe that you're safer with a gun in your house, or that lower taxes are always better. You just have to be irrational.

What do I mean with irrational? It's a lot of things, but an important element is our common tendency to be more impressed by evidence that supports our worldview, than by evidence that contradicts it.

Let's start with the pistols and revolvers. Of course, it's easy to create in our minds a scenario where you're safer with a gun in your house than without it. "You hear an intruder. You have time to find your gun and load it before the intruder finds it. You know how to use it effectively and responsibly, even when your adrenaline is sky high. The intruder is either unarmed or unprepared." And at the end of the story, you are the hero, unhurt, and the intruder is either dead, wounded or (hopefully just) in chains.

The problem is that this scenario is far more appealing than it is likely. Most people are shot by their own family members or by acquaintances, or by themselves. Not by intruders. If you let objective statistics, and not your wishful thinking be your guide, you'll know that having a gun in your house is far more likely to get you or one of your loved ones shot, than to protect them from getting shot.

As for the taxes, of course it's tempting to believe that we get richer, the more of "our" earnings we're allowed to keep. If you let objective statistics be your guide, however, you'll see that the easiest way to get richer is to live in a rich society, and that rich societies on average have higher tax rates. This doesn't prove that higher taxes will make you rich, but it does suggest, at least to me, that that it's pure wishful thinking to imagine that "my" earnings are "mine", and to forget that the opportunity to make so much wasn't a free lunch.

If you sort the lists of countries by GDP (adjusted for purchasing power) and tax rates (as percentages of GDP), the poorest 25 have an average tax rate of 13,6%, and the richest 25 have 37,2%. Coincidence? Hardly.

History is awash with politicians idealists: People whose grandiose, but irrational beliefs caught on with the masses, and ended up creating major disasters. Marx? Lenin? Hitler? I believe that they all belonged to that category.

If you want to comment on this thread, please let the thread be one of dialogue ("yes, and......"), not debate ("no, because...."). One question I'd like your opinions on, is who the 3 most popular politicians or political movements today are, that stand out by the irrationality of their beliefs?

:-J



Top 25 countries by GDP (adjusted by purchasing power)

GDP Tax Country GDP Tax as % of GDP
rank rank
1 151 Luxemb. 57.640 36,40
2 172 Norway 56.050 43,60
3 47 Singap. 49.850 13,00
4 126 USA 46.730 28,20
5 163 Netherl. 40.510 39,50
6 177 Sweden 38.560 49,70
7 170 Austria 38.550 43,40
8 133 Australia 38.210 30,50
9 150 Denmark 37.720 50,00
10 139 Canada 37.590 33,40
11 161 UK 37.360 39,00
12 99 Germany 36.960 40,60
13 175 Belgium 36.520 46,80
14 100 Finland 34.430 43,60
15 171 France 33.980 46,10
16 165 Iceland 33.390 40,40
17 144 Ireland 33.280 34,00
17 122 Japan 33.280 27,40
19 158 Spain 31.630 37,30
20 168 Italy 31.330 42,60
21 93 Greece 28.440 33,50
22 117 Korea S 27.310 26,80
23 154 Israel 27.040 36,80
24 162 Slovenia 26.340 39,30
25 124 Trin.&Tob. 25.100 28,00
26 153 Czech R. 23.610 36,30
27 156 Portugal 22.870 37,00
28 129 Slovakia 21.600 29,50


Bottom 25 countries by GDP

GDP Tax Country GDP Tax as % of GDP
rank rank
156 50 Liberia 290 13,20
155 40 Congo,DR 300 13,20
154 75 Burundi 390 17,40
153 35 Niger 660 11,00
152 19 C.African R 750 7,70
151 92 Malawi 760 20,70
150 27 S.Leone 790 10,50
149 68 Togo 850 15,50
148 52 Mozamb. 880 13,40
147 134 Ethiopia 930 11,60
146 56 Rwanda 1.060 14,10
145 36 Burkina F. 1.170 11,50
144 33 Nepal 1.180 10,90
142 63 Mali 1.190 15,30
142 45 Uganda 1.190 12,60
141 8 Chad 1.230 4,20
140 71 Zambia 1.280 16,10
139 106 Comoros 1.300 12,00
138 26 Gambiae 1.330 18,90
137 42 Tanzania 1.350 12,00
136 166 Ghana 1.480 20,80
135 65 Benin 1.510 15,40
134 83 Kenya 1.570 18,40
133 22 Banglad. 1.580 8,50
132 54 Côte d'Ivoire 1.640 15,30

Source: Wikipedia
Selection: Countries with data in both columns

Bob Herbert's vision of the class war ... and mine

The NYTIMES columnist Bob Herbert had an article in this morning's online edition entitled

Winning the Class War

Reading this against the background of just having finished Tolstoy's "War and Peace" was fascinating. Herbert describes an American system anno 2010 that is remarkably similar to Russian system anno 1810, in the sense that wealth and power are to a higher and higher degree inherited. Americans anno 2010 don't call themselved "Count" and "Prince", and they no longer feel obliged to take care of and provide for their serfs. Those are the main differences.

Of course I'm exaggerating. Herbert is, too, when he says that "Aristocrats were supposed to be anathema to Americans. Now, while much of the rest of the nation is suffering, they are the only ones who can afford to smile". There's still a middle class out there. Most of it is still gainfully employed, and enjoying the benefit of low interest rates. Most of it has a looooong way to fall before it hits the living standards of the 1950s, and even back then, they could afford to smile.

The problem, as I see it, is that a return to the affluence of the 1950s (relative to the rest of the world back then) would leave 75% of us unemployed today ... and that we have no mechanism for taking care of the unemployed. The problem isn't the upper class that Herbert is complaining about, but that the economic contraction is creating a rapidly expanding new underclass: People who don't have what it takes to compete for the jobs that will be left in tomorrow's economy.

The best that this underclass can hope for, seems to be to compete on equal terms with unskilled workers in China. Except they can't even hope for that, since the cost of merely staying alive in the US, is so much higher than it is in China. Put a big enough underclass of this type into any society, and let its desperation start spreading upwards, and you have a recipe for disaster.

Karl Marx saw this problem. His recipe for solving it was a disaster in its own right, but the economic force that he described, is still very real: Unless we do something to contain them, the upper classes are going to grab more and more and more, until almost everybody else is left in poverty.

As long as we had the Soviet Union as a credible alternative, we did what was necessary to contain those upper classes. Now that utopian socialism is dead, the American economic and social system is heading full speed down the same old drain as before. When I was reading Tolstoy, what I kept seeing in my inner eye was the Russian nobility laying the noose of history around its own neck.

Fascism is also dead, for the time being. That leaves only two of the alternatives standing, that naive political idealists clung to at the end of the 1800s: Anarchism (represented today by the "Tea Party Movement") and Religious Fundamentalism. None of these are going to solve the basic economic or social problem. The only thing we can hope for is a Resurgence of Reason. A New Age of Enlightenment.

It's not going to happen on its own. Is it too late to hope that somebody who understands the true nature of things, will get out and talk to the people in a way that makes them understand the danger, and the power they have to avoid it if they act together?



:-J

Bubbles and busts: An airplane analogy

This morning's reading of Rob Alderman's blog made me think of another analogy of the economy.

Your airplane analogy is good, but I think it can be taken further. The primary problem isn’t turbulence, but that the plane has developed an undersized engine (agricultural and industrial sector) and an oversized passenger compartment (private consumption). A plane like that is only capable of flying slowly, and even slower if it needs to climb.

Every time the stall speed warning has gone off (the economy has slowed down), the Fed has done what every good pilot would have done. It has put the plane into a dive, by adding more money to the system. This makes the plane (economy) go faster, at the expense of altitude. As long as we were sure we were high up, higher than anybody else, this didn’t seem to matter. We stayed focused at airspeed (GNP), not altimeter (national debt).

Today, we’re painfully aware that China’s engines are getting stronger and stronger, while ours are due for a major overhaul. That has caused a lot of simple-minded people to go bananas over the way the altimeter is spinning backwards … to the point where they’re willing to pull the stick backwards and jerk the whole thing into a tailspin. If they do, it will be the end of America as we know it.

Every time we’ve piled up more debt, we’ve given power to our creditors: Power that we’ll no longer have to solve our own problems the way they should have been solved in the first place.

Right now, with the stall-speed warnings blaring all around us, I support trying to jump-start the economy once more by putting the plane into yet another dive. This is something we can’t afford to NOT do.

However, the only thing that can get the aircraft back in airworthy condition in the long run is to drop dead weight overboard, focus all remaining engine power on actual propulsion, and put all available manpower and talent to work improving the system.

The idea that freer markets and even lower taxes will solve this spontaneously, is ridiculous. If left to their own devices, most passengers will continue to spend their energy on useless luxury items or personal “profit”. In today’s speculation-driven economy that means buying some more or less useless asset in the hope that someone else will pay more for it another time (=asset price inflation).

We need leadership. We need to stop doing things that don’t work.

When I say dead weight, I mean things that don't solve real problems. Like putting drug offenders in jail, when on the one hand it doesnt't really restrict the supply of drugs, and on the other hand contributes to destabilizing neighbouring countries, and ends up stuffing the pockets of hardned criminals with hundreds of billions of our hard-earned dollars.

:-j

Structure of Excuses By PAUL KRUGMAN

Structure of Excuses

By PAUL KRUGMAN

Thanks a lot to Paul Krugman for drawing his flawless logic just one notch too far in this article in the NYTIMES online. There's nothing that engages me more as a pupil, than when I see my teacher making a mistake.

How can I use words like "flawless logic" and "mistake" about the same article?

The way I see it, logic has some serious limitations. Unless we're very careful, we tend to end up with statements that are only true because of the definitions we put into our premises. Basically, "1+1=2" is true because "2" is defined as "1+1". I get the same feeling when I see Paul Krugman's statement that (emphasis added by me):

I’ve been looking at what self-proclaimed experts were saying about unemployment during the Great Depression; it was almost identical to what Very Serious People are saying now. Unemployment cannot be brought down rapidly, declared one 1935 analysis, because the work force is “unadaptable and untrained. It cannot respond to the opportunities which industry may offer.” A few years later, a large defense buildup finally provided a fiscal stimulus adequate to the economy’s needs — and suddenly industry was eager to employ those “unadaptable and untrained” workers.

The problem here isn't the logic. It's the way the closed loop of reasoning includes only the premises that point in the desired direction.

I'm not arguing that employment is important. It's critically important for the well-being and coherence of our societies.

I'm not arguing against the stimulus spending either. Without it, the situation would have been catastrophic.

What I'm trying to say is that Paul Krugman is talking completely beside the point when he's trying to teach Republicans about stimulus spending. They know all about it. They just don't want the money to go through the Federal Government. They want the stimulus to come in the form of tax reductions, and not on the Democrats' watch.

The reason we are in a ditch right now, is that the Republicans put the economy on an artificial and completely unsustainable stimulus in the Bush years. This created the structural problems that Krugman was wise enough to write about in his follow-up notes: Too many jobs in sectors where they don't produce enough long-term benefit.

The last thing we need now is more of the same kind of stimulus. We don't need more oversize houses, particularly not in Floria. We don't need more financial wizardry. We don't need more luxury products. There are a lot of builders, electricians, real estate agents and bankers who need to get retrained and put to useful work, like digging up potatoes or building factories that produce things that people need, like cheap, reliable energy that doesn't subsidize terrorist-sponsoring regimes.

One of today's problems is that we've started to confuse "speculation" and "investment" with each other. We've actually come to the point where people no longer see "speculation" as parasitical behaviour, and where "investment" has become synonymous with buying something in the hope that someone will pay more for it tomorrow. No wonder why people have stopped "investing": We already have massive deflation in certain sectors of the economy. That means that other people are likely to pay less for your assets tomorrow, not more. And who cares about investments in the old-fashioned sense of the word any more?

We all need to care.

Yes: We could solve the unemployment problem immediately by starting another World War. What I'm trying to say is that there must be cheaper ways of solving the problem. Like creating new rules that discourage private waste and speculation (i.e. higher taxes), while encouraging real investments and ensuring an adequate level of spending on the things we need to spend money on.

About the long overdue death of an economic theory

Four Deformations of the Apocalypse

By DAVID STOCKMAN

Published: July 31, 2010

This article hit the top of the "most popular" list in the New York Times Online this morning, and it's easy to see why: Finally a compact and easy-to-understand overview of what's gone wrong with the American economy.

Stockman points out four ideas that have worked together, in a kind of synergy, to undermine our position. Together, they have created a false impression of prosperity that has enticed us to go further and further down the garden path into economic la-la land.

Sixty years ago, the people who lived in our house had to start laundry day by harnessing the horse and hitching it up to the wagon. Then they'd have to drive their laundry down to the river, stoke up the wood-fired boiler on the beach, do their laundry by hand, rinse it in the river, drive home, unhitch the horse and feed it, and then hang up the laundry to dry. That's the kind of effort it took to create modern, civilized society.

One of our problems today is that other people are still willing to work just as hard, for similar rewards. For a while, they've been content to be our servants, supplying us with almost everything we've wanted while we ran through our capital. It's going to be really interesting to see what happens in a generation or two, when they've saved some of what we've squandered, and invested enough of it in improved local infrastructure and education.


:-J

Afghanistan

View Is Bleaker Than Official Portrayal of War in Afghanistan

This article in the NYTIMES online by C. J. Chivers, Carlotta Gall, Andrew W. Lehren, Mark Mazzetti, Jane Perlez, and Eric Schmitt, with contributions from Jacob Harris and Alan McLean takes as its starting point the recent publication, through Wikileaks, of thousands of classified documents about the ongoing military operations in Afghanistan.

The article is unpleasant reading. It details, in example after example, how difficult it is to stabilize a country that doesn't seem to have any interest in stabilizing itself.


My reflections:

1) This is not about Afghanistan, but about every single nation in the world that is falling apart because it can't feed its population at a living standard they're willing to accept. While Islam is certainly adding flavour to the problem, the underlying problem is that people are fighting for control over resources. Afghanistan is too hot and too dry, and its population is too hungry. We either have to feed them or fight them.

2) The conflict is being shaped not so much by Islam, but by a lethal triangle of Western inventions. The first corner of the triangle is dirt cheap, mass-produced high-tech weaponry and explosives. The second is dirt cheap transportation. The third is dirt cheap communications. It's the combination of all three that enables modern insurgents to do things today that only national armies could do in the past.

Add to that, if you like, that our modern, industrial agriculture has pushed food prices so low down, that there's no way that Afghanistan can make a decent living from growing food for the world market.

3) The driving force behind the current conflict isn't so much Islam, as the money that the Afghans can manage to suck out of Western nations, in exchange for heroin. Until we learn to take care of our own heroin addicts, the Afghans are going to keep doing it for us.

4) Armies in a war are a little like businesses in a market place: If all else is equal, victory will go to the party with the lowest operating costs. In Afghanistan, our operating costs per shot fired are simply enormous, compared with what the enemy has to pay.

That much being said, all other things are of course not equal. Our weapons are more sophisticated, and we have more of them. The insurgents, on the other hand, can hide in the civilian population, and is free to torture and murder anyone they suspect of collaborating with us.

- o 0 o -

I'm left with a strong impression that the war in Afghanistan can't be won, because I can't imagine how anyone can manage to stabilize a place like that. Their education level is low. They have no fisheries. There's very little industry. It's too hot and too dry, and the soils probably way too saline for their agriculture to have any hope of competing with ours. There's no reliable civilian infrastructure. And yet, as long as there's a western market for expensive heroin, the place is a bubbling cauldron of money. This place is going to continue to mean TROUBLE.

:-J