We Need Better Experts- and a Better Public

Experts are often wrong. Non-experts are even more often wrong.

These two statements are both true and important but it is hard to keep both of them in mind at the same time. Experts and members of the public both misunderstand this, and each ‘side’ can err by being either too humble or too arrogant:

ExpertFailureModes

COVID has provided many examples of all 4 failures. The expert institutions that were supposed to handle this best, the WHO and CDC, kept being arrogantly wrong thoughout the first quarter of 2020- saying that there was no human-to-human transmission, that travel bans were unnecessary, that masks don’t work, and in the case of CDC producing a botched test kit while preventing the use of alternative tests. Throughout this time, much of the public, and even experts outside the institutions, humbly deferred.

At the same time, many people who had figured out what was really happening were too humble to speak out, or too scared, or simply didn’t think of it. In the second quarter of 2020, expert institutions gradually figured things out, but much of the public still arrogantly dismisses their advice.

There are a few reasons this isn’t easy to get right.

Generalizability- Sure, in early 2020 on COVID you would have been better off listening to the Bay Area technologists I follow on Twitter than to the WHO and CDC- but is that generally the best way to get health advice? How many people are capable of listening to both groups and evaluating their specific arguments to figure out who is right?

Bias- experts really are biased, but it isn’t always obvious in which directions this matters, and members of the public have their own biases. For instance, are the public health agencies overstating the risk of COVID in order to get more funding and power, or understating it so as not to embarrass the governments that fund them? Both sounds plausible in the abstract, and you could say either in order to justify your own biases. In this case I do think they understated risks due to political pressure, but its also possible they simply weren’t as smart as we, or they, thought they were.

Expert, compared to who?- For quasi-experts, its important to keep in mind what your audience knows and where their information will come from if not from you. Many economists get annoyed and don’t answer when regular people ask them about the stock market- “I’m not an expert, that’s not what economics is really about”- but I think this is a bad response. We’re not true experts, but we should know much more than the average person, and be glad for the opportunity to share the basics (save through your 401(k) and put it in low-fee diversified index funds) and point them to the true experts. On the other hand, if you think your quasi-expertise means you can beat the market day-trading you’re likely to have a bad time.

How can members of the public know who are the real relevant experts? This is often far from obvious. Should I trust epidemiologists at the CDC more or less than those at universities? When evaluating potential treatments should I most trust virologists, epidemiologists, medical doctors, or someone else? If I want to know how COVID will affect the economy should I ask epidmiologists, economists, or someone else? If economists, who or which subfield? For forecasting COVID cases, is the relevant expertise domain knowledge like epidemiology or is it general forecasting ability?

Getting experts to be less biased and to have the appropriate level of confidence in their abilities and predictions is vital. So is getting members of the public to know who the relevant experts are, and how much to defer to their judgement in various situations- yet none of this is explicitly taught.

A parting thought, paraphrasing Garett Jones‘ twist on an old William Buckley quip- “I’d rather be governed by the first 2,000 names in the Boston phone book than by the faculty of Harvard, but I’d rather be governed by the faculty of MIT than either”

Related reading:

Inadequate Equilibria, Eliezer Yudkowsy is all about this issue: “the single most obvious notion that correct contrarians grasp, and that people who have vastly overestimated their own competence don’t realize: It takes far less work to identify the correct expert in a pre-existing dispute between experts, than to make an original contribution to any field that is remotely healthy.”

“inside a civilization that is often tremendously broken on a systemic level, finding a contrarian expert seeming to shine against an untrustworthy background is nowhere remotely near as difficult as becoming that expert yourself. It’s the difference between picking which of four runners is most likely to win a fifty-kilometer race, and winning a fifty-kilometer race yourself. Distinguishing a correct contrarian isn’t easy in absolute terms. You are still trying to be better than the mainstream in deciding who to trust. For many people, yes, an attempt to identify contrarian experts ends with them trusting faith healers over traditional medicine. But it’s still in the range of things that amateurs can do with a reasonable effort, if they’ve picked up on unusually good epistemology from one source or another.”

Myth of the Rational Voter, Brian Caplan: Argues that the public is rationally ignorant of issues (like public policy and politics) where more knowledge would not personally benefit them. But also shows that experts have systematically different political views than the general public, and showcases a statistical method to “correct” for this and show  what economists would think on various policy issues if their income level and general political views matched that of a typical person.

What Time Travel tells us about Doing Good

If you were transported back in time a few years with all of your current knowledge, what would you do?

You probably have a lot of ideas about things you could do differently in your personal life. But, say your goal is to make the world a better place. How could you best use your knowledge from the future to accomplish this?

The first idea that comes to my mind is to think of the biggest disasters of the past few years and how they might be stopped or mitigated. But most of these would be near-impossible for one person prevent even knowing that they would happen. How could I, as a grad student in the US, have prevented the Syrian Civil War? Or prevented various countries from sliding toward illiberalism or dictatorship? Credibly warned people about earthquakes or tsunamis? About the best you could realistically hope for is tipping off authorities about a terrorist attack, and even there you would to remember more about the exact times, places, or perpetrators than most people do and find a way to communicate this credibly (“Hi, 9-1-1? I’m a time traveller and I have some information that you’ll really want to…. hello?”).

The second idea that comes to mind is to accelerate progress by bringing back knowledge of future inventions and discoveries. But again, the problem here is that most people don’t have enough detailed knowledge in their heads to make a difference. CRISPR sounds cool but not only could I not reinvent it myself, I probably couldn’t explain it well enough to speed real biologists along the path to discovery. Even in my own field of economics its hard to think of any real breakthroughs I could bring back.

So, would anything really work? The only thing I’m confident in is the Biff Tannen strategy of turning knowledge into money, and money into influence. Biff’s book of future sports scores would be a great way to cash in. But even barring that, a basic memory of the most successful teams to bet on, companies to invest in (e.g. early Facebook), and out-of-the-blue alternatives like BitCoin would be helpful. A few successful investments give you a bigger capital base for the next ones. Then, you can use the money to try to do good in the world, for instance by giving it to effective charities.

What is the lesson from all this? First, that Dustin Moskovitz is a time traveller. It also makes me wonder about my current strategy of trying to improve the world mainly through research, rather than “earning to give“. The most general lesson, though: we usually think that decision-making is hard because we lack information about the future, and we spend lots of time trying to guess at what the future might look like. But this concern could be overrated. Even having a pretty good idea of what the future looks like doesn’t necessarily mean making decisions or having a big impact will be easy.

What Do Markets Predict About Obama’s Second Term?

While I saw this a Coke vs Pepsi election with no real differences between candidates, it seems that markets do expect some difference. If you believe the Efficient Markets Hypothesis (which I mostly do), then markets will reflect the best guess that can be made about the future by taking all publicly available information into account.

According to prediction markets, there was a 70-80% chance that Obama would win as of Tuesday afternoon; by Wednesday morning after the election this was 100%. So we can try to attribute any change from Tuesday to Wednesday as representing the effect of a ~25% increase in the probability of an Obama presidency. Multiply the effect by 4 to get the total difference between an Obama presidency and a Romney one. (If you believe the prediction markets. I am still kicking myself for not funding accounts in time to arbitrage between them)

The most obvious reaction has been that the US stock market declined about 1.5% from close on Tuesday to opening on Wednesday. This means people think stocks will be about 1.5*4=6% less valuable during an Obama presidency. It is unclear to what extent this should be interpreted as the economy generally doing 6% worse, as opposed to stocks alone being a worse investment as taxes on capital gains and dividends increase / fail to decrease.

Treasury bond yields decreased slightly, meaning that markets think the government is less likely to default under Obama, or alternative assets will perform worse, or both. I’m not used to calculating the TIPS spread, but it looks like nominal 5 year treasury yields decreased by 4 points more than real yields, meaning a 0.04 percentage point decrease in inflation expectations (meaning overall inflation would have been 0.16% higher under Romney? Perhaps people expected him to appoint Mankiw as Fed chair). On the other hand, gold prices increased ~0.5%. No big differences here.

The biggest difference, and in my opinion the best news, seems to be on foreign policy. Intrade has a prediction market on whether Israel or the US will make an overt airstrike on Iran by the end of next year. This declined from 49% to 37% as the election news came in, suggesting the chance of this happening would have been 4*12+49=97% had Romney won. The chance that China will take overt military action against Taiwan also declined from 10% to 3% on Intrade. These markets are thin enough that I don’t claim they are definitely right, but it is still good to see the chance of war declining.

Comparing the changes in these various markets gives a clear demonstration of what economists have often said– the US President has very little influence over the economy, but quite a bit of influence on foreign policy.

Two months to the Ceremony: Its not too late to earn that Peace Prize

As far as I can tell, no one has actually accepted the Nobel Peace Prize while they were prosecuting a war, much less two.  Lê Ðức Thọ was offered one while involved in the invasion of / civil war with South Vietnam, but refused to accept the award.

I see three logical possibilities for this year’s prize.   Obama could accept the award while dodging accusations of hypocrisy.  Or he could pull a Lê Ðức Thọ/ Jean-Paul Sartre and refuse it.

But the most intriguing possibility is that Obama could earn his award, and end the wars in Iraq and Afghanistan in time for the ceremony on Dec 10.  While he’s at it, he could sign a pact with the other nuclear powers to destroy all of the world’s weapons.  And veto any renewal of the PATRIOT ACT.

Don’t say it’s politically impossible, Obama has the power to everything except the arms treaty unilaterally, with approval from no one.  But if anyone out there believes he will really end the wars soon, all I ask is that you put your money where your mouth is.  If the wars will be over in two months, you could make a fortune shorting the stock of every publicly traded U.S. defense contractor.  Let me know how that goes!