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Home » Transcript: The Tragic Decline Of Rationality In Society – George Mack

Transcript: The Tragic Decline Of Rationality In Society – George Mack

Read the full transcript of a conversation between Chris Williamson of Modern Wisdom Podcast and entrepreneur George Mack titled “The Tragic Decline Of Rationality In Society”, Dec 18, 2023.

TRANSCRIPT:

The Keynesian Beauty Contest

CHRIS WILLIAMSON: The Keynesian beauty contest. What’s that?

GEORGE MACK: The Keynesian beauty contest is this idea of different levels of human interaction with things. So let’s say you lined up a hundred people, and Chris has to go rank them in order of who’s the most attractive. That’s like level one.

But level two is when you’re also predicting what everybody else in the room will think. And what’s really interesting is what Chris will rank is very different to what he will think everybody else will think. And then level three is another layer when you have to factor in everybody else knowing that everybody else is playing the game.

What’s interesting is when they run these experiments, let’s say they ask people to rate the cutest dog video, what they think is the cutest versus what the group will vote as the cutest, it completely becomes different.

So when people are aware of other people’s perceptions, it completely shapes things. In terms of a practical application for this, there was a period where the Lib Dems were voting higher and higher in the polls, almost up there with Conservative and Labor. So people were saying, “Oh, these guys are great. These guys are great.” But then when it comes to that level two thing, well, what is everybody else going to vote for?

People don’t actually vote for them because they’re factoring in everybody else. So when you’re dealing with thinking systems or other people and predicting what they’re going to do, the behavior becomes a lot more complex as a result.

CHRIS WILLIAMSON: There’s an interesting study that was done on women giving their level of education when they know that other people are going to see the answers versus when they think that it’s going to be kept private. And female intrasexual competition says that women should downplay their successes so that they don’t get sabotaged by potential other females that are trying to derogate them and manipulate them in some way or another.

Get that neutonic in you. Go on. Let’s go. Get it down you. And what it means is that, when women know that other people are going to see their answers, they downplay what it is that they’ve achieved. When they’re keeping it private, they tend to be a little bit more truthful.

The Abilene Paradox

CHRIS WILLIAMSON: But you know the Abilene paradox? Is that familiar with this?

GEORGE MACK: Oh, mate. You’re going to absolutely adore this. Gwynda first introduced me to it. And it’s just again, when you see it, you can’t unsee it.

The Abilene paradox is a situation in which a group makes a decision that is contrary to the desires of the group’s members because each member assumes the others approve of it.

It explains how a number of accurate individuals can become idiots when they get together. Think emperor’s new clothes in a way.

An acquaintance invites you to his wedding despite not wanting you there because he thinks you want to attend. You attend despite not wanting to because you think he wants you there.

At a business meeting, someone suggests an idea he thinks the others will like, perhaps recruiting a trans influencer as the face of the brand. Each member has misgivings about this, but assumes the others will think that they are transphobic if they speak out, so everyone approves the idea despite no one liking it.

Or every member of a family in North Korea who hates communism, but they never mention this to each other because each assumes that the others approve of it.

CHRIS WILLIAMSON: You have this or I’ve had this on social occasions as well where you’ll be at dinner, and it’ll be getting later and later, and nobody’s left yet. And sometimes I’ll be sat there looking at the clock. Am I going to leave? Am I going to leave? And then one person leaves. The high agency exit. There’s a Mexican wave of people exiting. The whole thing exits.

Reflexivity in Human Systems

CHRIS WILLIAMSON: And what’s beautiful about the Keynesian beauty contest is it deals with reflexive systems where people’s perceptions shape reality and reality shapes perceptions.

There’s this great George Soros Financial Times article that he wrote about reflexivity. And Talib said this on Ferris. I didn’t know if you knew this, that Soros wanted to be a philosopher, but basically just had this shadow career of crashing the pound and becoming one of the biggest hedge fund managers in there.

But one of his ideas is this concept of reflectivity, which is like – a statement of “the weather is going to be rainy today.” That’s not reflexive because I’m dealing with a natural phenomenon in the sense that my thinking or my words doesn’t shape reality. So if you said that on TV, it doesn’t change the weather.

But if you go on TV and go, “this is a revolutionary moment,” the statement impacts reality. So you see these feedback loops between perception, reality, thinking, reality.

So when you’re dealing with human beings, the systems are so much more complex, which is why you see these meme stocks pump and down because people are thinking everybody else is thinking the meme stock is going to pump as well.

GEORGE MACK: Everyone is trying to not only work out what they think about a thing, but future project what other people will think about a thing, and then adapting their projection and trajectory of the future to account for that.

CHRIS WILLIAMSON: Yes. And then also thinking that other people are thinking that about the overall thing as well. So that’s how complex things can become.

Robin Dunbar taught me that the main reason in his opinion that human beings’ brains got so big is not so that we could more accurately remember where the food is or use tools or fire or contemplate the higher mysteries.