I’ve known a lot of people from a broad array of backgrounds. They range from people living on the street to people with millions of dollars. (I’ve had no experience with the super rich.) And something I hear a lot from the people who have done fairly well economically is that they succeeded, so anyone could do it. Note: I am not just talking about the millionaires. I hear this kind of comment from people just scraping by in the lower middle class. Anyone who has overcome adversity can make the same claim. But this is a demonstration of something very dangerous: the skewed sample fallacy.
Let me make it personal for a moment. Although I had the great advantage of having parents who were interested in the life of the mind, I also suffered badly from dyslexia. As a result, I had a very hard time learning to read and write. And this was at a time when people didn’t think much about dyslexia. Normally, I would have just been written off as simply stupid, if it hadn’t been for my prodigious gift for math. So it would be easy for me to dismiss the failures as others, “I could barely read into my teens yet I became a writer!” Blah, blah, blah! Shut that man up!
Sample Size: One
This is what I mean by the skewed sample fallacy. And in this case, the sample size is one: me (or you). In my case, my lack of literary skills eventually made me embarrassed. And this led to my becoming fascinated with the language. But that was just me. I think a more natural response is to avoid it. And if not that, embracing it wouldn’t assure success. (Note: I’m only a good writer relative to my environment; every day I learn something that makes me embarrassed about something I wrote yesterday.)
On a personal level, the skewed sample fallacy is fine. It’s great that people feel good about themselves. It’s on the social level that it is pernicious. This is because it is society’s winners who set the rules. And every one of them thinks that their wealth and power are due to their own wonderfulness. As the football coach Barry Switzer said, “Some people are born on third base and go through life thinking they hit a triple.”
But even if they were born with every disadvantage and managed to make it to the top of our economic pecking order, nothing changes. In fact, I generally find such people the biggest abusers of the skewed sample fallacy. They do, at least, have strong evidence that bad circumstances can be overcome.
Social Policy Based on Skewed Sample Fallacy
Everywhere I look in society, I see evidence that our social policies are based on millions of individuals’ one little skewed sample fallacy. Look at Bill Gates. To him, all poor children need are good schools. After all, some desperately poor children have been put into special educational programs and become great successes. But is that how we are to set policy?
Certainly many conservatives think this very thing. After the 2012 election, Avik Roy made the ridiculous argument that we liberals had equality of opportunity all wrong. Basically, he claimed, equality of opportunity means not having any laws against the poor. So as long as there is no law stopping a malnourished child who misses the first five years of school is legally allowed, they still have an equal opportunity to make good as Donald Trump’s kids.
What I’d like to see is society’s “winners” understand that they don’t define the world. Policy based on their own experiences is rarely good policy. They usually have advantages that they don’t see. And so they need to see that just because they rose and others did not is not an indication that they are better and others are worse. And I make that plea first and most forcefully to myself.
Try to understand probability, gambling, and risk-assessment by speaking only to state lottery winners.
Terrific analogy! Really well done.
In gambling, there’s another fun one. A while back the biggest sports gambling (“fantasy”) sites were caught colluding. In fantasy sports gambling, you pick a list of players, and bet money that they will statistically outperform other players. If your list of players outdoes everybody else’s list of players, you win big.
The catch is that you have a “budget” in fantasy sports; your $10 bet gets you, say, 100 points to allot to 10 different players. And the players whom everyone wants to pick “cost” most to “draft” onto your list. Babe Ruth and Micheal Jordan cost 50 points each. So if you pick both, you can’t fill out your other eight spots on the list. To win, you don’t want Ruth and Jordan; you want the cheapest guys with the best numbers.
So if you work at one of these sites, and you see where the betting is leaning, you know which players are undervalued. You can make your own bet and, do it enough times, eventually you’ll win the big money. While the millions of suckers keep “drafting” Ruth and Jordan.
These employees are banned from betting on their own gambling sites. But they can gamble on other sites! And one guy made $350K doing exactly that. Happily, these companies are undergoing a shitstorm of lawsuits right now; hopefully, they won’t be around much longer.
But my point is, did the guy who made $350K think he was cheating?
Hell no! He thought he was being SMART. He strove hard to get the resume he needed to work at that job. And that job gave him good information. And he used it. That every penny he won came from suckers without the access to data he had? Not his problem.
And he’s just a small-timer. The Mitt Romney / Bain Capital folks make gazillions doing the exact same thing. Puerto Rico is currently being starved to death by hedge funds playing the same inside game.
Do any of those people think they have an unfair advantage? No. They’re being SMART. God, it makes me nauseous.
Also, on a lighter note, why is “strove” past tense of “strive”? It should be “strived.” English makes no sense.
There is a major movement afoot to modify how low level driving offenses are being handled by the court system. Which is probably the exact opposite of what you are talking about but the powers that be did hear what people like the DOJ said and have started to work on changing things to make life better for those on the margins.
The question is-what should policy makers be basing their policy on? If I, Jane Q Public Servant, have a problem with holding people accountable for their not getting insurance and using a car to get to work-because this is true, they do need to work but at the same time if they get into an accident without insurance that person who they hit is not screwed. Oh but you can just get uninsured motorist insurance. Wait, isn’t that imposing a cost on someone who didn’t do anything wrong? Why should I care? They can afford it. But it is still unfairly imposing a cost. And what if they can’t afford it-they had to give up something they needed elsewhere in the personal budget.
So I can use my personal experience as a judge, use a study, or just make some kind of change and hope for the best. (By the way, policy makers discuss this sort of thing all the time.)
It is a conundrum wrapped inside barbed wire.
I agree with all you said, except the part about it being the opposite of what I was talking about. It actually has nothing directly to do with what I wrote about. I see that I marked it as “Political” but it really should have gone under “Social.” More and more I find my thoughts going toward sociology. There’s been an evolution: from policy to the system itself to the nature of humans. I’m still interested in all of those things. But I’m becoming highly pessimistic just how far we can go given our biology. I know: we are better than we used to be. But that’s really only in the short term. It’s unclear that we are better than we were during pre-neolithic times.
On a more practical level, I’m amazed in my day job just how much work we have to do to stop other companies from doing totally unethical things to harm us. I just don’t get that. I understand trying to out-compete and produce a better product and all that. But these things are akin to driving a truck up to your competitor’s front door and dropping a ton a manure so your customers can’t easily get in and definitely don’t want to. Now that is part of systemic analysis of our economics, which goes far past capitalism itself.
On a policy level, something can be done about that. In my example, the manure dumping would be illegal. Eventually, there will be laws against doing the same thing on the internet. So there are different levels to think about this on. It’s important to have people who think about each of the levels. I’ve been more interested in the systemic level because our system incentivizes the manure drop. But it is deeper than that. I know that we will never solve these problems with policy; it’s like cleaning a square foot of space in the middle of a dump — the trash will continue to encroach. But I’m not convinced getting rid of the dump itself helps much either, because the dump is inside all of us.
When you brought up what Gates was doing it was something that made me think “Gates is trying to effect change in public policy through his foundation. But basing it on his experience.”
So it is a mix of the two. Like many things.
When I talk about Gates, I am almost always talking about education “reform.” His approach to it is akin to addressing AIDS by saying, “Making stronger copyright in Africa will help people with AIDS!” Twenty years later, no one with AIDS would have been helped, but he would be richer. Let’s “reform” education by destroying teacher unions and testing kids more. Let’s make being a teacher such an awful job that no one except idealistic 22 year olds want to do it — and then burn out after 5 years. I don’t think that Gates is unaware that there are other ways to approach educational problems. It’s just that the ones that make him richer and keep his taxes down just “feel right” to him.
As I say all the time: we are not rational. This is why we shouldn’t allow people to get as rich and powerful as Bill Gates.
This in a way is similar to something I’ve noticed in movies, books, TV, etc.
A frequent theme is “Follow your dreams. Follow at all costs. Never give up on them. Never let life get in the way. You have true talent, so take any chance, and go for it.”
Of course, successful writers, actors, directors, producers, etc. have done just that, so, to them, that is a good message. But it doesn’t take into account the very real possibility of failure.
Yeah, I’m pretty sick of that plot line myself. But optimism sells. And the corollary is people love mocking those who try and fail. Bad singers and actors and writers are staples of entertainment to make fun of.
It’s one reason I love the movie “Adaptation.” It’s about failing at life while growing emotionally. To me that’s genuinely inspiring.
Also, we cheer when someone does this and succeeds. When they fail, we mock them. I’m pretty sure I wrote about seeing an episode of American Idol when a young woman thought God told her to go try out. She was awful. It was humiliating. And it included one of their “reporters” following her as she tried to escape to her car asking her questions like, “Did you really think you could sing?!” It was horrible. So (1) people are supposed to take a chance; and (2) they are supposed to know that they will succeed. In other words, it’s a self-contradiction. We are a horrible people.