A lense onto human irrationality and what you can reasonably do about it.
Having spent quite a bit of time reading up on the situation regarding the COVID-19 disease outbreak I’ve realized it’s a good lens with which to view the follies of human misjudgment. It’s also a lesson on (ir)rationality.
Over the past days and weeks, in conversations and online I’ve come across various kinds of arguments and ways of reasoning in regards to what to do, or what not to do.
There tend to be two camps.
The first camp of people assumes that any preparation or worry is silly and motivated by irrational fears. They’ll point to past viral outbreaks and pandemics (SARS, H1N1) and urge that nothing “really bad” happened, or at least that “the world didn’t end”. Therefore, we don’t have to do anything now. And if you are doing something more than just washing your hands, you’re silly.
The second camp is more on the hysterical end of the spectrum. They’re constantly checking the news or Twitter, have been hoarding food, buying face masks and haven’t left their homes since the 2nd of February. They’re either overestimating the immediate risks or just overestimating their own ability to prepare and survive by themselves. It’s either driven by undue fear, or by an almost fetishistic longing for widespread societal collapse (the lone wolf mentality).
Both of these ways of reasoning strike me as misguided. It shows a misunderstanding, or perhaps misappreciation of how to asses risks properly. As with much else, the truth is somewhere in between. Although I’m currently leaning more towards the second camp than the first.
There are of course many people much smarter and better educated than me on the topic of risk management so I don’t feel confident in espousing too strong of an opinion here. But I’ve come to understand two things that I think people don’t appreciate well enough: 1) exponential functions and 2) how to think about very large but rare incidents or catastrophes.
The first explains why we don’t prepare enough and are completely blindsided by the outbreak when it actually starts to pick up speed. Read the text in this picture and consider how bad your intuition is at grappling with exponential growth.
The second explains why we should probably put more resources to mitigate or prepare for unlikely but impactful events like pandemics that could upend our normal lives or society. As I wrote in last week’s newsletter, the cost of insuring against these risks is rather low compared to the costs of being wrong. Most people’s homes never burn down, but it’s still sensible to buy home insurance.
What this all means is that being concerned and taking action now (or yesterday) can likely be an “overreaction”, especially from a social point of view, but may nevertheless be the rational thing to do.
“But I’m young and healthy, and the fatality rate is < 1%”. Maybe you’re not convinced by my arguments above, in that case, ask yourself: Would you play Russian Roulette with a 100 chamber gun?
“The greatest shortcoming of the human race is our inability to understand the exponential function”
- Albert Bartlett