Hamlet and the secrets of decision-making; Simple guidelines exist for better decision-making but don’t expect a formula

September 6, 2013 7:13 pm

Hamlet and the secrets of decision-making

By Julian Baggini

Simple guidelines exist for better decision-making but don’t expect a formula

Eyes Wide Open: How to Make Smart Decisions in a Confusing World, by Noreena Hertz, William Collins, RRP£14.99/$26.99, 352 pages

Touching a Nerve: The Self as Brain, by Patricia S Churchland, WW Norton, RRP£17.99/$27.95, 304 pages

The Hamlet Doctrine: Knowing Too Much, Doing Nothing, by Simon Critchley and Jamieson Webster, Verso, RRP£14.99, 288 pages

I Don’t Know: In Praise of Admitting Ignorance (Except When You Shouldn’t), by Leah Hager Cohen, Riverhead Books, RRP$17.95, 128 pages

Decisions, decisions. It has become a truism that we increasingly face far too many of them. There are plenty of books offering to help you through this morass but, such is the choice, they only seem to make the headache worse.Here’s a rule of thumb to thin out the candidates: the more confidently a book claims to help you make better choices, the less it is likely to do so. Noreena Hertz’sEyes Wide Open is a case in point. Reading it, I did, indeed, often find myself wide-eyed, startled by its bold, simplistic claims.

There is a need for a synthesis of the many insights gathered by recent research into cognitive biases and the other often hidden processes that shape our decisions. Unfortunately for Hertz, the distinguished psychologist Daniel Kahneman has already written it. His Thinking, Fast and Slow (2011) is sober, measured, rigorous and practical, all things Eyes Wide Open is not. Hertz made her name as an economist, gaining a global following with books and articles that addressed subjects such as corporate greed, weak financial regulation and developing-world debt. This propelled her on to the international speaking circuit, which perhaps explains this surprising departure into the management genre.

Here Hertz ends up sounding like a physician who is not just unable to heal herself but intent on ingesting all the toxins she warns others about. “Time and again we find ourselves giving people information they really don’t need,” she chides, in a book crammed with dubious factoids and statistics the reader will never remember. She warns that PowerPoint presentations “disregard complexity”, only to close each chapter with bite-sized bullet points, and the book with 10 take-home messages, most of which are of three words or fewer.

One of Hertz’s “ten steps” is “overcome your maths anxiety”, in which she describes various ways in which we are misled by statistics. She could have drawn examples from her own book. For instance, to prove how easily we are swayed by peer pressure, she points to research showing teenagers are twice as likely to take up an option of changing the rating they give a song if they are shown the marks others have given. But a doubling from 11.6 per cent to 21.9 per cent means that, even at the most impressionable age of all, nine out of 10 were not swayed by peer pressure.

Hertz needs to heed a truth described by the neurophilosopher Patricia Churchland in Touching a Nerve. “There is no algorithm – no exact recipe to follow – for good decision-making. There are just very general bits of wisdom.” These are unexciting, unsexy and vague, such as: “Be reasonable, do your best, think it through, but don’t dither.” This kind of sensible moderation has its roots in the philosophy of Aristotle, which “while not dazzling, seems profound”. On this view, there are certainly things we can learn from empirical psychology about decision-making but the best way to improve our own is simply to nurture habits of thoughtfulness and self-awareness. It may come as a surprise to those who know Churchland by reputation alone to find her offering such homely wisdom. She and her husband Paul are widely caricatured as the worst exponents of scientific reductionism, allegedly eliminating all talk of the mind and reducing all human life to the brain. Critics delight in repeating Paul’s anecdote of the time Patricia returned from work to tell him: “don’t speak to me, my serotonin levels have hit bottom, my brain is awash in glucocorticoids, my blood vessels are full of adrenalin, and if it weren’t for my endogenous opiates I’d have driven the car into a tree on the way home.”

Anyone who has read Churchland’s work with any care would soon realise that this is knowing self-parody. But Churchland is used to such treatment from thinkers who just don’t like neuroscience plumbing the mysteries of human consciousness, like the unnamed philosopher she describes standing up at a conference she attended and shouting: “I hate the brain; I hate the brain!”

Hence the title of her new book, one of the most measured, reasonable and clear introductions to the current state of brain research and its implications for who and what we are. Churchland never overstates her case or jumps to rash conclusions. She may be scathing about those who insist that there are many things neuroscience will never be able to cast light on, since “it is preposterous to infer that something is unknowable simply because it is not known”. But almost uniquely among neuro-enthusiasts writing for a general readership, she freely acknowledges that: “For none of the higher functions – including retrieval of autobiographical memories, problem-solving, decision-making, why we sleep and dream – do we have anything close to a complete and satisfying neural explanation.” She also dismisses the kinds of “startling claims” we have become used to hearing – that free choice and the self are illusions, love just a chemical reaction – as “more sensational than they are good science”.

She is particularly sharp on the question of free will. Those who deny we have any seem to subscribe to the peculiar view that “because there is a neural substrate for our deliberations and choices, we cannot have free will”, as though “if you have free will, then your decisions are not caused by anything at all”. For Churchland, it’s all much simpler. “If you are intending your actions, knowing what you are doing, and are of sound mind, and if the decision is not coerced (no gun is pointing at your head), then you are exhibiting free will.” All that this requires is a degree of self-control, and any claim that there is no difference between a brain with self-control and one that lacks it is “flatly at odds with the facts”. Boring facts are of less concern to philosopher Simon Critchley and psychoanalyst Jamieson Webster, the husband-and-wife team behind a new book about literature’s most famous study of the agonies of decision-making. Their title, The Hamlet Doctrine, borrows from the idea put forward by Nietzsche in The Birth of Tragedy (1872) that “knowledge kills action; action requires the veil of illusion”. Nietzsche dismisses as “cheap wisdom” the received idea that Hamlet’s problem is that he “reflects too much and, as it were, from an excess of possibilities does not get around to action”. The problem is not reflection or doubt but knowledge: the certainty that we cannot change the “eternal essence” of things and so there is no point trying.

Critchley and Webster rather over-egg the familiar idea that if we were to stare reality in the face we would sink into a quietistic nihilism. When they sum up Nietzsche’s point as “We know that action will accomplish precisely nothing”, they actually go much further than he did. At the same time, they are clearly active, busy people themselves, yet we are not told if it is anything other than self-deception that enables them to overcome their professed pessimism.

But the larger problem with the book is that to enter into its spirit, you have to be prepared to go with the psychoanalytic flow, which isn’t always easy. There is no discernible central argument or clear conclusion, only a series of related observations and often speculative suggestions. There is much theory-heavy jargon, such as the repeated “splitting”, “dividing” and “doubling” of “the subject”. Claims such as “The only proof of love may be the ease with which it can be betrayed” appear to be simply false, while others are as clear as mud, such as the sentence: “The sovereign is the person who is exhibited by the decision on the state of exception.” It’s perhaps because I’ve read novelist and essayist Leah Hager Cohen’s I Don’t Know that I’m so willing to admit that Critchley and Webster sometimes lost me. Whereas Hertz almost throws away the idea that we need to be “more accepting of uncertainty and the limits of what we can know”, Cohen takes the same basic thought and carefully explores what this really means.

Dealing with ignorance is critical for decision-making because nearly all important choices are made on the basis of imperfect knowledge, and that is anxiety-provoking. Yet just as there is a discomfort in the feeling of ignorance, so there is a pleasure in “the feeling of knowing”. That’s why we are often apt to be overconfident, too willing to trust intuitions and the testimony of others.

Cohen’s elegant, slim essay displays the low-key, sensible wisdom that Churchland so commends. And in the end, it really does seem that the best platform from which to make good choices is the earthy ground. An inability to choose well is more than anything a result of adopting the wrong perspective: the point of view of the cosmos from which all human activity seems futile, the neurological scale at which reasons and purposes become invisible, or the airport management book’s reduction of imprecise judgment to simplistic tools and rules. The most basic piece of wisdom about making good choices may simply be to remember that the facts are indispensable, decisions are inescapable, and we can never be infallible.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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