• Login
  • Register
The Daily Sceptic
No Result
View All Result
  • Articles
  • About
  • Archive
    • ARCHIVE
    • NEWS ROUND-UPS
  • Podcasts
  • Newsletter
  • Premium
  • Donate
  • Log In
The Daily Sceptic
No Result
View All Result

Applied Wisdom for Sceptics

by Edward Chancellor
2 December 2021 6:18 PM

by Edward Chancellor

What Wisdom Is and Its Connection to Aging

Alexander Ineichen, a Swiss financial analyst, has published a collection of epigrams and aphorism which together constitute what he calls Applied Wisdom: 700 Witticisms to Save Your Ass(ets). This book is intended for investors, but trying to understand the course of the pandemic presents similar challenges to mastering the financial markets – in both cases, there is a great deal of uncertainty, faulty modelling and forecasting, vested interests and a prevailing crowd psychology to contend with. Successful investors are nature’s contrarians and nonfinancial sceptics can learn much from Ineichen’s collected witticisms.

The Problem of Forecasting

The modern epidemiologist, equipped with complex mathematical models, has much in common with the contemporary economist. Both economists and epidemiologists attempt to forecast an immensely complex system, namely human society, equipped with models and data inputs that are not up to the task. Both face institutional pressures and incentives that produce a conformity of outlook. And when their forecasts turn out to be inaccurate, they suffer no ill consequences. As a result, they often fail to learn from their mistakes.

Ineichen says that markets are governed by Gump’s Law, (derived from a line in the movie Forrest Gump), which states that life is a box of chocolates because you don’t know what you’re going to get. When you next encounter someone who confidently predicts the course of the pandemic, some of the following responses might be apposite:

“Forecasting is not a respectable human activity, and not worthwhile beyond the shortest of periods.” – Peter Drucker

“The herd instinct among forecasters makes sheep look like independent thinkers.” – Edgar Fielder

“Anyone who causes harm by forecasting should be treated as either a fool or a liar. Some forecasters cause more damage to society than criminals.” – Nassim Nicholas Taleb

“Many of us smile at old-fashioned fortune-tellers. But when the soothsayers work with computer algorithms rather than tarot cards, we take their predictions seriously and are prepared to pay for them.” – Gerd Gigerenzer

Crowd Psychology

Financial markets are moved by greed and fear. Society during pandemics is moved by hope and fear. Fear is the dominant emotion. Both fear and greed encourage a crowd mentality. The sceptic stands aloof from the crowd and tries to think for himself. The first step is to master fear: 

“If you can control fear, it makes you more alert, like a deer coming across a lawn.” – Mike Tyson 

The crowd is emotional, its nature is unquestioning, irrational and intolerant. Bad ideas spread contagiously: 

“Man, like animals, has a natural tendency to imitation… the opinions and beliefs of crowds are specially propagated by contagion, but never by reasoning.” – Gustav Le Bon

“The majority is always in the wrong. Whenever you find yourself on the side of the majority, it is time to reform (or pause and reflect).” – Mark Twain

“When problems are difficult, the wisdom of crowds tends to fail, and small groups make better decisions.” – Mark Buchanan, physicist

“The fact that an opinion is widely held is no evidence whatever that it is not utterly absurd.” – Bertrand Russell.

Distrust of Experts

Sceptics have neither an unquestioning faith nor blind distrust of expert knowledge. However, they are wary: 

“A knowledgeable fool is a greater fool than an ignorant fool.” – Moliere

They also distrust complex models:

“Essentially, all models are wrong, but some are useful.” – George Box

“Beware of geeks bearing formulas.” – Warren Buffett

As Ineichen says, experts are adept at finding relationships that aren’t there, something known as ‘illusory correlation’. There’s even a word, dysrationalia, to describe smart people doing dumb things. Ineichen cites one of the rules of market strategist Bob Farrell that “when all experts and forecasts agree, something else is going to happen”.

Learning From Mistakes

The sceptic should constantly test his ideas and adapt to changing circumstances. There’s nothing wrong with being wrong, only with staying wrong: 

“Error is the price we pay for progress.” – Alfred North Whitehead

“Human reason can neither predict nor deliberately shape its own future. Its advances consist in finding out where it has been wrong.” – F.A. Hayek

The Illusion of Control

As Ineichen writes, risk management is not a science, otherwise Nobel laureates would be good at it. Sceptics tend to reject centralised attempts to manage risk, believing that they’re likely to do more harm than good: 

“No matter how much information we gather, no matter how carefully we analyse it, a strategy of predict, plan and control will in general fail.” – Paul Ormerod

Furthermore, as the economist Thomas Sowell says, government actions which produce benefits at first sight often have less positive “ripple effects” that are unobserved.

Bamboozled 

Sceptics find themselves examining, and often trying to refute, a bewildering number of dubious narratives. Some modern politicians follow the advice of W.C. Fields: “If you can’t dazzle them brilliance, baffle them with bullshit.”

It’s hard work countering their narrative: 

“The amount of energy needed to refute bullshit is an order of magnitude bigger than than to produce it.” – Alberto Brandolini

At times, the sceptic’s task seems hopeless: 

“If we’ve been bamboozled long enough we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It’s simply too painful to acknowledge, even to ourselves, that we’ve been taken. Once you give a charlatan power over you, you almost never get it back.” – Carl Sagan

God’s Work

Scepticism may be unpopular with the crowd but it’s a force for public good.

“Those who can make you believe absurdities, can make you commit atrocities.” – Voltaire

“Without freedom of thought, there can be no such thing as wisdom, and no such thing as public liberty.” – John Trenchard and Thomas Gordon

“It is not disbelief that is dangerous to our society: it is belief.” – George Bernard Shaw

Besides:

“The greatest challenge facing mankind is the challenge of distinguishing reality from fantasy, truth from propaganda.” – Michael Crichton

Wit and Humour

Wit, says Ineichen, is a form of wisdom. Sceptics must try to retain their good humour, even at bleak times: “A sense of humour is a sense of proportion.” – Khalil Ghibran

Ridicule and cynicism are tools in the search for truth: “The final test of truth is ridicule. Very few dogmas have ever faced it and survived.” – H.L. Mencken

Modesty

Most people are overly confident: “Nothing is so firmly believed, as that what we least know.” – Montaigne

Ineichen recommends modesty, citing Socrates: “The only true knowledge is knowing that you know nothing.”

Sceptics should avoid dogmaticism: 

“Doubt is the beginning, not the end of wisdom.” – George Iles

But it’s not a good idea to exhaust one’s energy opposing the mob: “You cannot fight the water, you’ve got to learn how to live with it.” – Sailing proverb

Chin up

Sceptics should never despair: “Pessimism never won any battles.” – Dwight Eisenhower

After all, they have Stein’s Law is on their side: “If something cannot go on forever, it will stop.” – Herb Stein

Remember that “scepticism is the first step towards truth” (Denis Diderot). But only the first step.

Edward Chancellor is a financial journalist.

Donate

We depend on your donations to keep this site going. Please give what you can.

Donate Today

Comment on this Article

You’ll need to set up an account to comment if you don’t already have one. We ask for a minimum donation of £5 if you'd like to make a comment or post in our Forums.

Sign Up
Previous Post

Kenyan Nurses and the Crisis of NHS Nurse Staffing

Next Post

The Wisdom of Forecasters (and their Critics)

NEWSLETTER

View today’s newsletter

To receive our latest news in the form of a daily email, enter your details here:

DONATE

PODCAST

The Sceptic | Episode 40: Rob Bates on Stopping Britain Becoming Majority-Minority, Tilak Doshi on Trump vs Green Blob and Mario Trabucco on Osborne’s Elgin Marbles Betrayal

by Richard Eldred
13 June 2025
1

LISTED ARTICLES

  • Most Read
  • Most Commented
  • Editor’s Picks

Green Council Branded “Absolutely Insane” After Painting Green Spots on Road to “Calm Traffic”

14 June 2025
by Will Jones

News Round-Up

15 June 2025
by Will Jones

Pro-Palestine Protesters March Through London Waving Iranian Flags

14 June 2025
by Will Jones

The War in Ukraine Has Shattered the West’s Digital-Age Delusions

15 June 2025
by David Betz and Michael Rainsborough

Did the Mainstream Media Cover Up an Eco-Terror Attack in a French School?

15 June 2025
by Steven Tucker

The War in Ukraine Has Shattered the West’s Digital-Age Delusions

34

The Two-Stroke Engine of Brian Wilson

66

Pro-Palestine Protesters March Through London Waving Iranian Flags

28

Sir Keir Set to Launch Full National Inquiry Into Grooming Gangs in Latest U-turn, Following Months of Mounting Pressure

18

UK Civil Servants Revolt Over “Israel’s Genocide”

27

The War in Ukraine Has Shattered the West’s Digital-Age Delusions

15 June 2025
by David Betz and Michael Rainsborough

Did the Mainstream Media Cover Up an Eco-Terror Attack in a French School?

15 June 2025
by Steven Tucker

Oxford is Now More or Less a Quango

14 June 2025
by Darren Gee

The Two-Stroke Engine of Brian Wilson

14 June 2025
by James Alexander

As a Civil Servant, I Can Tell You Dissent From DEI Dogma is Not Allowed

13 June 2025
by Anonymous Civil Servant

POSTS BY DATE

December 2021
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
2728293031  
« Nov   Jan »

SOCIAL LINKS

Free Speech Union

NEWSLETTER

View today’s newsletter

To receive our latest news in the form of a daily email, enter your details here:

POSTS BY DATE

December 2021
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
2728293031  
« Nov   Jan »

DONATE

LISTED ARTICLES

  • Most Read
  • Most Commented
  • Editor’s Picks

Green Council Branded “Absolutely Insane” After Painting Green Spots on Road to “Calm Traffic”

14 June 2025
by Will Jones

News Round-Up

15 June 2025
by Will Jones

Pro-Palestine Protesters March Through London Waving Iranian Flags

14 June 2025
by Will Jones

The War in Ukraine Has Shattered the West’s Digital-Age Delusions

15 June 2025
by David Betz and Michael Rainsborough

Did the Mainstream Media Cover Up an Eco-Terror Attack in a French School?

15 June 2025
by Steven Tucker

The War in Ukraine Has Shattered the West’s Digital-Age Delusions

34

The Two-Stroke Engine of Brian Wilson

66

Pro-Palestine Protesters March Through London Waving Iranian Flags

28

Sir Keir Set to Launch Full National Inquiry Into Grooming Gangs in Latest U-turn, Following Months of Mounting Pressure

18

UK Civil Servants Revolt Over “Israel’s Genocide”

27

The War in Ukraine Has Shattered the West’s Digital-Age Delusions

15 June 2025
by David Betz and Michael Rainsborough

Did the Mainstream Media Cover Up an Eco-Terror Attack in a French School?

15 June 2025
by Steven Tucker

Oxford is Now More or Less a Quango

14 June 2025
by Darren Gee

The Two-Stroke Engine of Brian Wilson

14 June 2025
by James Alexander

As a Civil Servant, I Can Tell You Dissent From DEI Dogma is Not Allowed

13 June 2025
by Anonymous Civil Servant

SOCIAL LINKS

Free Speech Union
  • Home
  • About us
  • Donate
  • Privacy Policy

Facebook

  • X

Instagram

RSS

Subscribe to our newsletter

© Skeptics Ltd.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Articles
  • About
  • Archive
    • ARCHIVE
    • NEWS ROUND-UPS
  • Podcasts
  • Newsletter
  • Premium
  • Donate
  • Log In

© Skeptics Ltd.