Dan Gardner is an acclaimed Canadian journalist, best-selling author, and international speaker.
In 2008, Gardner published Risk: The Science and Politics of Fear, which was praised as “a cheery corrective to modern paranoia” by The Economist. Risk has been published in 11 countries and eight languages. In 2011, Gardner published Future Babble, which examines the dismal record of expert forecasts. The Wall Street Journal called Future Babble “delicious…a trove of detailed research.”
In September, 2015, Gardner and co-author Philip Tetlock published Superforecasting: The Art and Science of Prediction, which Wall Street Journal columnist Jason Zweig called “the most important book on decision-making since Daniel Kahneman’s Thinking Fast and Slow,” and The Economist declared “a gift to anyone who has to think about what the future might bring. In other words, to everyone.”
Superforecasting is a New York Times and Washington Post bestseller. It was longlisted for the Financial Times/McKinsey Best Business Book of 2015 Award and will be published in 18 countries and 16 languages.
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They still are. Is that because wise men deliver results? Hardly. Their forecasts routinely failed in the era of goats’ guts and tea leaves and they keep on failing today, in the era of pundits with PhDs. Research proves the point. So does experience: Out of 54 leading economists consulted by an American business magazine, 54 said there would be no recession in 2008.
The most comprehensive experiment on expert forecasting ever conducted revealed something even more startling: The more famous an expert is, the more likely it is that his predictions will be wrong.
So why do we keep taking these would-be prophets seriously? The media are partly to blame for not holding experts to account when their predictions fail. But more fundamentally, the answer lies in psychology and the brain’s profound aversion to uncertainty: We believe because we want to believe.
But we don’t have to be suckers for soothsayers. If we understand the psychology that compels us to believe, we can learn to distinguish between reasonable forecasts and the tales of confident experts. And that can help us make good decisions that leave us better prepared for the future. No matter what happens.
Unfortunately, research shows people routinely get risk wrong. We worry about things we shouldn’t. We don’t worry about things we should. And we swing from complacency to panic, and back again. The result is one bad decision after another — with costs measured in lost dollars, health, and peace of mind.
Why does this happen? How can we do better? The author of the international acclaimed bestseller Risk delves into cognitive and social psychology to explain where our perceptions of risk come from and why they so often don’t match reality. Understanding how we form perceptions, and how they can go wrong, is the indispensable first step to making better decisions about risk.
But he didn’t. Instead, Soros said, “I think that my conceptual framework, which basically emphasizes the important of misconceptions, makes me extremely critical of my own decisions. I know that I am bound to be wrong, and therefore am more likely to correct my own mistakes.”
To use the terminology of Philip Tetlock, a renowned psychologist at the University of California’s Haas School of Business, George Soros is a classic “fox.”
Tetlock distinguishes between two types of thinkers — “hedgehogs” and “foxes.”
Hedgehogs insist on simplicity and certainty. They see problems through a single analytical lens. And they are very confident. They know the answer.
Foxes are much more comfortable with complexity and uncertainty. They’ll use lots of analytical lenses to look at problems, and ask other people what they see. They are not nearly so confident as hedgehogs. They may know the answer, but they’re never sure.
In the most comprehensive experiment of its kind, Tetlock assembled almost 300 people in the business of providing advice on politics and economics — political scientists, economists, journalists — and had them make predictions about everything from inflation rates to wars. In all, Tetlock collected an astonishing 27,450 judgments about the future.
The results were dismal. The average expert did no better at forecasting than a dart-throwing chimpanzee. But some experts were even worse — while others did significantly better than the average.
What made the difference? Not education or experience. Not profession or politics. No, what counted was whether they were foxes or hedgehogs: The foxes came out on top every time.
Styles of thinking are not innate. They can be learned. Gardner explains how.
