The African Enterprise (Journalism, Information Cascades, Crowding out)
Hello Friends,
Greetings from Abuja.
I had one of those weeks where sitting down a bit too much on a project just gets it tired and insistent on slipping off for some time. It's just like how Elizabeth Gilbert described Ideas in Big Magic: They are a disembodied, energetic life-form that seeks the most available human collaborator – just like lightning, they seek the swiftest and most efficient conduit to Earth.
An interesting idea I pondered is the Predictions that characterize most of our decisions and actions. Everything we do is based on a prediction that something goes this or that way. But what we think about predictions usually swings from Jackie Mason's “Predictions are preposterous” to Jeff Hawkin's “Predictions … are the primary function of the neocortex and the foundation of intelligence.”
So, why so much shilly-shallying on something as principal to everything? You carry the umbrella out on a rainy day, drive slowly around a playground, and close your windows at night based on predictions. And one of the most common misconceptions around them is that they have to be right all the time. Yet, we have zero ideas what constitutes those little bets we place every day.
As Steven Sloman and Philip Fernbach wrote in The Knowledge Illusion, Making predictions seems simple enough, but it requires familiarity with a lot of mechanisms. Those mechanisms invariably then play into our decision-making both professionally, personally, even casually. As I have spent the bulk of time thinking not writing, I will have more on it for next week’s e-mail.
Meanwhile, Here's what I have to share:
Shared Meaning for Effective Communication: A central rule of effective communication is that at the very core of every successful conversation lies the free flow of relevant information.
Every conversational interaction we have follows a pattern. It starts when we make the agreement to start sharing, it goes up to the expression of each opinion, then to try to have the other person see ours, then exasperation if the other person does not, then outright barking. At this point, information flow stops. Then more exasperation seeps in because the other person does ‘just doesn’t get it’ - which is true because they're not getting any information anymore.
With two heads in conversation comes two ideas, opinions, meanings, and experiences. Understanding requires synergy between them, and the birthplace of synergy is the pool of shared meaning. So, what is shared meaning? and why is it important to build and maintain bridges during the course of every interaction?
Coolest things I learned this week:
The first rough drafts of history
Journalism is the first rough draft of history - Philip L. Graham
At a time when news stories and journalism are riddled with clickbait, propaganda, and sensationalism; nothing puts a better perspective on how to approach them like the words of Philip Graham, co-owner of The Washington Post.
First drafts usually are a complete mess with a lot of things wrong, a huge amount of errors, and about 50% will likely either be revised or cut altogether. If that is what Journalism is, then why form such strong opinions from the news. Journalists record moments, events, facts, photographs as they occur. or shortly after they do. These records can then be revised, analyzed, and discussed.
Basing entire opinions on Journalism, which Oscar Wilde refers to as giving us the opinions of the uneducated, would be like releasing the rough first draft of a book, or the first take of a movie.
What do you know that they don't?
Every time you make a trade, place a bet, or consider a prediction; there's another, probably equally smart and well-trained person on the other side.
If you think someone wins, there's someone else who believes they don't. If you think Bitcoin is going to transform finance and banking and will continue to tick up in value, there's someone also very smart who believes they're nothing but ‘a contagion-driven asset with no economic anchor whose only information is the price’ hence it won't be doing many transformations.
Everyone, and no one, could be right. But for whatever side you're on, are you sure you know something that they don't? Are you sure they don't know something that you don't? If your side of the bargain is so good, why are they willing to bet against you?
This form of self-scrutiny is not to induce trepidation, but to inspire confidence in the decision you make.
Information Cascades
An information Cascade occurs when a person makes a decision based solely on the decisions of other people. Mostly, these decisions are made at the expense of personal knowledge and available information. For example, accepting something because someone else did or did not. Your preferences are dependent on the preferences of everyone else.
The interesting thing about information cascades is that you usually are oblivious to them being such a crucial factor in your decision-making.
They swing like a pendulum from herd behaviour where you believe such a large number of people can't be wrong; and the presumptuous belief that you are smarter than the other person. So if they choose yes, you just go the other way.
Crowding out
According to the phenomenon of Crowding out, government spending on research diverts the energy of researchers into its priorities, which might not coincide with industries or the consumers.
It is an answer to the debate over who the biggest contributors to innovation are. The government or the private sector. Usually, new inventions and discoveries emerge when ideas are molded, transformed, and brought to life by people whether acting as individuals, firms, markets, and public servants.
But in this process, which sector is the main actor?
In How Innovation works, Matt Ridley answers, using the crowding-out phenomenon, that trying to pretend that government is the main actor in this process, let alone one with directed intentionality, is an essentially creationist approach to an essentially evolutionary phenomenon.
That’s it for this week.
If you have any thoughts or questions, hit reply and we can have a chat. And if you enjoyed it, share with friends.
Till next week,
Kelvin
Love your work Kelvin, this was a great read as always!