Edward Chancellor

by Edward Chancellor The actor Mark Rylance is currently performing in the title role of an interesting new play at the Bristol Old Vic. Based on an original idea of Rylance’s and scripted by Stephen Brown, Dr. Semmelweiss relates the true story of a physician who, while working at the Vienna General Hospital in the mid-19th century, discovered a simple procedure that dramatically reduced the death rate for patients in his care. Semmelweiss observed that maternity wards overseen by doctors experienced many more deaths than those attended only by midwives. He attributed the difference to the fact that medics went straight from performing autopsies on dead women to delivering babies, whereas midwives were kept out of the dissecting chamber. Semmelweiss concluded that the doctors must be infecting their patients with what he called “cadaveric particles”, and recommended that they wash their hands in chlorinated water before entering the wards. After this recommendation was put into practice, the death rate from childbed fever (puerperal sepsis) collapsed. Despite Semmelweiss’ brilliant discovery, the Viennese medical establishment refused to accept his ideas and the wretched doctor, driven mad by his failure to prevent unnecessary deaths, ends up in a lunatic asylum. His failure owes something to his personality: in the play he is portrayed as excitable, self-absorbed, intolerant, sanctimonious and, at times, cruel in his obsessive...

Now that Covid restrictions are being rolled back, some are declaring victory over the miserable virus. Lockdowns, we are told, worked. Only a fool could argue otherwise. But this misses vital evidence.

by Edward Chancellor 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...