… is from page 170 of my colleague Richard Wagner’s superb 2017 intellectual biography of Jim Buchanan, James M. Buchanan and Liberal Political Economy (typo corrected):
This [classical] liberal system means there are no sheltered positions in society where a prosperous enterprise can be protected from competition that would erode that wealth. The creator of a successful business cannot call upon political authorities to prevent competition from other enterprises. For a successful enterprise to continue to be successful, it will be necessary for the enterprise continually to attract support in the face of free and open competition. Similarly, within a liberal society an enterprise will not be able to secure subsidies to get started, or to keep going when otherwise it would fail because it couldn’t operate as a going concern without political support.
Within a liberal society, there would be no positions of special privilege that either were established using political power or were maintained in the face of competition using political power.
DBx: The only practical means for us creatures this side of omniscience to know if particular productive operations are, in fact, productive – that is, to know if particular uses of resources and time produce value for society rather than destroy value – is to observe which particular productive operations survive when people as consumers spend their own money and time unobstructed, and when people as income-seekers spend their own money and time unobstructed.
The market order described above by Wagner is an institution that assures, as nearly as we can practically expect any institution to assure, that individuals promote their own welfare (however each individual might reckon his or her welfare) only by helping other people – including helping countless strangers – promote their welfare. You want to earn profit? Excellent! Produce something using a mix of resources that costs less than is the value that I attach – as I reveal by my willingness to pay my own money – for the good or service that you produce and offer for sale. If you do so, net value will be created not only for you, but also for me as well as for those who voluntarily sell to you their labor and the other inputs that you use to produce your goods or services.
But this connection between each of us promoting our own welfare only by helping other people to promote their welfare is severed by special privileges granted by the state. Owners of business enterprises that survive only because of tariffs profit at the expense of their fellow human beings. Ditto for owners of business enterprises the revenues of which are inflated by subsidies. The same, of course, holds true for workers in such firms. A worker whose job exists only because of tariffs or other special privileges granted by the state might appear to economically uninformed observers to be productive, but in reality that worker is a parasite: he or she survives in that specific job only because state coercion compels fellow human beings – usually fellow citizens – to sacrifice for that worker’s benefit. This worker’s gain is less than the costs to others of supporting him or her.
The bottom line is this: those who seek tariffs or subsidies seek to survive as parasites. Those who acquire tariffs or subsides survive as parasites. And those who apologize for tariffs or subsidies apologize for parasites.
It isn’t always, perhaps not even usually, the case that these parasites and those who apologize for them are aware of their parasitical nature and existence. But economics reveals this nature and existence to be reality. Just as tapeworms’ obliviousness to their destructive parasitical actions does nothing to make tapeworms less parasitical, protected or subsidized producers’ obliviousness to their destructive parasitical actions does nothing to make these actions less parasitical. Indeed, ignorance of, and resistance to, the economics that reveals such parasitism only encourages it.
Transcript: Barbara Tversky
The transcript from this week’s MiB: Barbara Tversky, Cognitive Psychologist, is below.
You can stream/download the full conversation, including the podcast extras on Apple iTunes, Overcast, Spotify, Google, Bloomberg, and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.
VOICE-OVER: This is a Masters in Business with Barry Ritholtz on Bloomberg Radio.
This week on the podcast, really I have a super extra special guest. Everybody makes fun of me for saying that each week, but I have an extra special guest. I was fortunate enough to go to a dinner one night that Annie Duke was hosting, and each person at the table was more fascinating and accomplished than the next, from Mike Mauboussin to Josh Wolf, to Danny Kahneman. And at the end of the evening, one of the women at the table pulls me aside to discuss my interview with Michael Lewis, and that turned out to be Barbara Tversky, a experimental psychologist, publisher of hundreds of — of research papers. Oh, and also the spouse of Amos Tversky, and she told me how much she enjoyed my conversation with Mike Lewis, and we started chatting.
And it took me, I don’t know, maybe four seconds to say, “Oh, my God, this woman is fascinating and I have to sit down and have a conversation with her.” But she’s back and forth between Stanford and Columbia, and it took us a while to hone in on a time. And I’m really glad we did.
She wrote this fascinating book on how the brain works, how we perceive things, whether it’s language or spatial perception, and why action shapes thoughts, and how motion impacts cognitive processes. It’s not dry and clinical (ph), it’s really a very fascinating abstract conversation. And we just babbled – at least I babbled for two hours. It really was an intriguing conversation. If you’re at all interested in cognitive psychology, how the brain works, the way language affects thought and vice versa, the way thought affects language, as well as her nine laws of cognition, you’re going to find this to be absolutely fascinating.
So with no further ado, my conversation with Barbara Tversky.
TVERSKY: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
RITHOLTZ: My extra special guest this week is Barbara Tversky. She is a professor of Psychology at Stanford University. She also is a Psychology and Education professor at Teachers College at Columbia University. She has published more than 200 articles on cognition, psychology, memory, all sorts of fascinating topics. Her new book is called “Mind in Motion: How Action Shapes Thought.”
Barbara Tversky, welcome to Bloomberg.
TVERSKY: Thank you. I’m happy to be here.
RITHOLTZ: So let’s talk a little bit about cognition and psychology. How did you find your way to that field?
TVERSKY: I’m a bit of a contrarian, and when I entered the field, the cognition revolution was well in progress. You could open up the mind if you were clever and find ways of revealing how people thought. But thought, at that time, was heavily dominated by language, by propositional thinking that came from philosophy and linguistics. And people thought, at that time, the way we thought about the special world, the visual world was by putting it into propositional format.
RITHOLTZ: Explain what that means. What is propositional format?
TVERSKY: So proposition is — in philosophy, is a minimal statement like the cup is round or the desk is flat. There are minimal statements where you attribute something to something else. And it felt to me like you could never begin to describe faces that way. We’re very bad at describing faces. Emotions are difficult to describe, fairly easy to detect. Spaces that we’re in are hard to describe.
So thinking about reducing that to propositions to these simple minimal statements didn’t make sense to me. It made sense to me that the special world and the visual world had its own logic. And that logic came first evolutionarily because in — babies don’t talk, it takes them a while to talk. And even when they talk, everything sounds like ba, bus, banana, bottle, and they aren’t saying very deep things for a long time.
So they do a very intelligent things. Animals do very intelligent things without speech. So it felt to me that, if anything, the special visual world preceded evolutionarily and in development and had a richness of its own, and that needed to be explored independent of language.
RITHOLTZ: So let’s talk about language for a second because it’s funny, I first wrote this question how did people think before language. And then I kind of said, well, no, that’s the wrong way to think about it. Based on some of the things you wrote in the book, the better way to ask that question is how has language change the way we think?
TVERSKY: That’s a great question, and that’s one that people grapple with. And, you know, people want simple answers. It is probably complicated.
Let me start first with how we speak. And a lot of the way we speak about thinking is as if they were actions and objects. And I think that that kind of thinking, of acting on objects got internalized to think about thoughts as objects. So we raise ideas. We push them forward. We tear them apart. All of those are the ways we talk about thinking, and there was if we were having actual objects and doing it.
So I — I don’t think that’s metaphoric. I think we have no other way of talking about thinking except as if it were actions. So those are things we do with our hands.
With our feet, we go from place to place, and our thoughts go from idea to idea along conceptual paths the way our feet go from place to place along spatial paths. And it now turns out that the same brain structures in humans are coding both of them. They’re both coding our paths in the actual space and our paths in conceptual space.
RITHOLTZ: Explain that a little bit. When you say that we’re coded in — in conceptual space when we go from thought to thought, are you suggesting our thought processes are somewhat predestined? We all have the same approach to solving the same problems, more or less, at least structurally. What do you mean by that?
TVERSKY: Oh, it’s again a great question. It’s really associations just the way you’ll walk from A to B in a different way than I might walk from A to B for different reasons.
RITHOLTZ: But it’s still A to B.
TVERSKY: Right. And some of the problem with thinking is we don’t know where B is.
TVERSKY: Right? We start off with A and we’re trying to solve a problem maybe or we’re just letting our minds wander. No, I think, if anything, we’re going to — if you look at human beings, we’re incredibly diverse and thinking in different ways. And our associations are built from experience from many different experiences, so thoughts go from association to association, and those associations are going to be wildly different.
So I’ll give you a small example. When my husband and I used to walk in streets and cities that …
RITHOLTZ: Your — your husband being Amos Tversky, partner of Dani Kahneman.
TVERSKY: Right, and this is year — right, this is years ago because, unfortunately, he’s — hasn’t been with us for all too long. But we would walk in — in Paris and in New York, places where we were tourists at the time. And when we’d come back, he would say, “Did you see all those prostitutes?”
“And I — I didn’t pick up a single one.”
And, you know, I was looking at other things, the architecture, maybe what people were wearing. I didn’t — I wasn’t seeing that. So …
RITHOLTZ: But you also noticed — and I picked this up from the book — the way the structure of the cities were aligned. You talk about …
RITHOLTZ: … how Japan has a very — it’s very confusing to foreigners, but they break cities into quadrants. And those quadrants are pretty consistent from Japanese city to Japanese city, it becomes very helpful if you know the code. But to anybody who doesn’t, it’s just a perplexing mess.
TVERSKY: Yeah. And — and that again is illustrating different ways of thinking and different ways of designing, but both are designed. And I think one of the points I’m trying to make in the book is that we design the world the way we design our minds.
Supposed Japan and the U.S., New York with its grid system and many other cities with grid systems, even the Romans had grid systems and some Chinese have grid systems. In fact, Japan has grid systems. They just label them differently from the way we do, but that — those designs go across cultures with — with variations. But they have to do with the way we design our minds and …
RITHOLTZ: So — so let me ask you this question since — since we’re talking about visual cognition. How does our sense of spatial understanding and visual cognition affect the way we think?
TVERSKY: And so one way is — is — I think, OK, how to — how to answer that. One way are things that I’ve already said that we think about actions and — and ideas the way we think about actions and objects, and we go from place to place the way we go from idea to idea. That probably affects the structure of language. That’s my hunch, and I didn’t work that out very well.
TVERSKY: You asked surely or how does language bootstrap power thinking. And I think language is an — one of many cognitive tools that we use. We can then use language to reason about other things the way we can use math to reason about other things or — or logic or computer programming. We have a number of these cognitive tools that we have built through culture. They’re culturally evolved. We don’t — we’re not born with them, and they enable leaps of thought.
We now have computers that do help us think and help us design, and so we — we’ve developed a number of these cognitive tools that help us structure our thinking and will leapfrog our thinking. We can use them to think farther. So I don’t need to compute square roots anymore. I — I have them in my calculator. I can use that to leapfrog and go to other levels of understanding.
RITHOLTZ: So — so last question on this topic, what is cognitive collage? I — I love that phrase.
TVERSKY: OK, thank you. So we did some work on how people understand the environments that they walk through every day. And there are a number of distortions that people have that indicate that people are constructing their images of environment. So the grid pattern, we tend to line things up in — in — in parallel and perpendicular lines and ignore — ignore diagonals and ignore five-sided things like the Boston Commons. People often act as if it were four-side kind of quadrilateral, not a pentagon, and it’s not really a Pentagon. So we distort.
So some of the distortions are really quite remarkable. The most remarkable is probably that people think that distances to a landmark are smaller than distances from a landmark.
RITHOLTZ: Explain that because that …
RITHOLTZ: … sounds so obviously incorrect.
TVERSKY: Exactly. So a number of studies have been done where people on college campuses pick landmarks. They have those students pick the landmarks, and then another group of students is asked about distances, and you get those asymmetric distances. So the example I use is that people think that Jacques’ house is closer to the Eiffel Tower than Eiffel Tower to Jacques’ house.
And one explanation for that might be that the Eiffel Tower defines a neighborhood. Columbus Circle is a neighborhood. The Village is a neighborhood. We tend to form neighborhoods around these landmarks, and we say — if someone says, “Where do you live?” You can say, “I live near Columbus Circle,” and that tells people the environment.
And so the neighborhood is quite expanded. It includes Jacques’ house, but Jacques’ house only includes itself.
TVERSKY: So you get that asymmetry, and these are — these are — this is research I didn’t do, I pointed to it, but it’s very related to research that my husband had done earlier showing that people — this is going way back on history — people think that North Korea is more like Communist China than Communist China like North Korea, or the son is more like the father than the father like the son.
So we have these landmarks or prototypes, and they draw similar things into them. Eleanor Rosch said earlier, had done work showing that people think magenta is more like red than red like magenta. So that …
RITHOLTZ: That makes sense, I could see that.
TVERSKY: Yeah, they are defining categories really, and these peripheral instances don’t. So those are special ideas, right? The distance whether it’s distance in color or distance in political leanings or distances in some kind of psychological or physical similarity — the son to the father — those are all spatial concepts.
But — and — and we can show them in space, too, but they were affecting our thinking. We’re spatializing those concepts of North Korea, red and magenta, and Communist China and — and thinking about other things in relation to them, but in relation to spatial distance. So everywhere I look, I can find spatial distortions that are reflected in conceptual ones.
In-group, out-group would be one. We tend to think that — that if we’re in one political leaning that everybody in another political — they’re all alike. My group is highly differentiated, but — it’s because it’s close to me and I can see the differences. I don’t see the differences of those others, so we tend to think of them as all alike, but our group is differentiated.
RITHOLTZ: That’s quite fascinating. One of my favorite parts about the book was the nine laws of cognition. And I have to ask you, how did you develop nine rules and — and how long have you been working on these?
TVERSKY: You know, I started writing the book and I realized that certain of the things that I was saying, again many of them about space, had generality to sinking in general or behavior in general, and I wanted to point to those and encapsulate them in a way. Then it became laws.
And I have a good friend who comes from medical science, very hard-nosed researcher. After the book was written, I couldn’t change anything, she said, “I’m confused by that,” because she was thinking of physics laws …
TVERSKY: … which are laws, and — and you can compute them and get the answers that will, in fact, hold. So these are not like that. They’re generalizations, and I think that fits with the way social sciences see laws as kind of generalizations.
RITHOLTZ: OK. Let’s go over some of these generalizations. We’ll start with rule number one. There are no benefits without cost, meaning creativity versus learning. How did they offset each other?
TVERSKY: Interesting, and I mean, it’s a nice example. So I think again the mind is quite simple. We want simple straight answers. Things are always this and things are always that. And we categorize because the number of things in the world is huge. If we had to think about each chair individually or each cup individually, it would be overwhelming. So we categorize things as chairs and tables, and dogs and cats, and that enables us to know how to recognize them and how to behave toward them.
Now, we can miscategorize, and that happens often tragically in certain situations, but we forget that we need those categories on some level because we have to behave very quickly, and we have to respond very quickly as someone throwing something asked me to hurt me, as someone throwing something at me so I can catch it, and our behavior is going to be very different.
RITHOLTZ: So when you say costs versus benefits, sometimes the tradeoff is speed versus accuracy …
RITHOLTZ: … or making a defensive decision because it’s a matter of existential survival versus …
RITHOLTZ: … hey, I may not be accurate here, but better safe than sorry. Is that what you mean by …
TVERSKY: Yeah, right.
RITHOLTZ: … the cost of these decisions?
TVERSKY: Right. I mean, it’s a cost benefit, and I think economists understand that …
TVERSKY: … that everything has a tradeoff. I’m not sure that psychologists understand that that well, so then they’ll say if people miscategorize, somebody had a toy gun, not a real gun, that this is — we shouldn’t be categorizing at all. And I want to say we have to.
RITHOLTZ: We do. It’s the …
RITHOLTZ: … it seems to be the way we think …
RITHOLTZ: … occasionally with tragic consequence.
TVERSKY: Exactly, right in missteps. So on creativity and learning, we have to learn routines to get through the day. And otherwise, if everything is a new problem, it’s going to take too long how do we get a key in a door …
TVERSKY: … and how do we make toast in the morning, so we have to get into those routines. But once we have those routines, it’s hard to change them. So creativity requires thinking in new ways.
RITHOLTZ: Meaning outside of the routine.
TVERSKY: Exactly, and thinking of a new way to build a teacup or a new way to design a chair. These are what designers have or new way to design a school. Maybe the old way of designing schools isn’t as good as it could be.
Libraries have changed enormously now that, in a little while, there’ll be no paper books. I mean, I’m happily …
RITHOLTZ: Well, so far they’re hanging on.
TVERSKY: They are hanging on, and I’m glad to see because I’m a fan. So in order to design, we have to get rid of those old ways and think anew. And we just finished an experiment asking people to think of new ways to use old things. And the good answers come about the ninth answer.
RITHOLTZ: Meaning it takes that long before they …
TVERSKY: To come — to get …
RITHOLTZ: … overcome their natural …
RITHOLTZ: … tendency towards routine.
RITHOLTZ: Quite interesting.
TVERSKY: And what’s, I think, interesting also is the way we got people to generate new ideas for these old things, how do you use an umbrella in creative ways. Well, it can be sticks to hold kebab, but that was the ninth idea.
TVERSKY: Right, and it’s clever and cute. But the way we got people to think creatively was to ask them to think about different roles of people. So how would a doctor use this? How would a gardener use it?
So we asked people to put themselves in mindsets of other professions, and professions of something we know a lot about. We’ve — since we were three, people asked us what you want to be when you grow up. And we interact with people with different roles. So we know a lot about what those roles do and that help people generate new uses.
RITHOLTZ: So there’s a television show that focuses on improv called “Whose Line Is It Anyway?” And as you were speaking, I can only think of the segment they do with props where they give each group a different set of props. And it’s amazingly creative, and it seems some people really have a skillset for applying these in unexpected ways.
TVERSKY: Yeah, an improv is exactly the right example for that, for that kind of creativity. I have a former graduate student who talks about art making. She’s an artist , an excellent one, as improvisational. And you have to keep your mind open to new ideas. And I think you’re right, you can develop really good skills for doing it.
RITHOLTZ: Let’s go to the — the — another rule, number three, the mind can override perception. Really cognitive dissonance in — is the way I was looking at that. If you’re perceiving something and you’re not going to believe it, how is it that we ignore what’s in front of our very eyes if we’re not happy with what we’re seeing?
TVERSKY: Well, I don’t know if it’s not happy, it doesn’t fit our hypothesis.
RITHOLTZ: So that’s really more confirmation bias than anything or …
RITHOLTZ: … disconfirmation bias.
RITHOLTZ: We don’t want to see that with disconfirms or existing beliefs.
TVERSKY: Exactly. And one of the early studies that was done on that was by Jerry Bruner, an old friend, and Molly Potter, and they showed out of focus photographs of odd things like a fire hydrant in an odd angle. And they gradually brought them into focus and asked people to keep guessing what they were and compared them to a group that saw them in focus. So these odd angles, like an odd angle of a fire hydrant, people came up with wild hypotheses, and when it was in full focus couldn’t identify it.
RITHOLTZ: Because they already anchored to that previous …
TVERSKY: Exactly, exactly.
RITHOLTZ: And then let me go to my favorite question, my favorite rule, the mind fills in misinformation. I have a pet theory that we are walking around with a model of the universe in our head. That’s just wildly wrong and that we …
… it’s mostly misinformation. I’m curious what your thoughts are on the mind fills in misinformation. Is it just little patches behind our vision that’s filled in or is our world view — is our model of the universe completely wrong?
TVERSKY: Well, I don’t know that I would say it’s one of the other (inaudible). There’s something in between, but sure we’re filling in all the time.
There are some lovely experiments on our world view now where you show a photograph and then another photograph where something has changed like even an engine is often a jet plane and show them in rapid succession. And people think they’ve seen the whole scene, but they can’t identify what’s changed.
TVERSKY: And those are — you can find them online, they’re wild, so you don’t know what’s changed, but you know you’ve seen a jet plane, people going up and that cargo being loaded. The background, you get this feeling that you see a rich scene …
TVERSKY: … but it’s because we’re refreshing all the time.
RITHOLTZ: Internally refreshing it.
RITHOLTZ: We’re — and we’re …
TVERSKY: Well, externally. I think …
RITHOLTZ: So we’re filling in the gaps. So if in the series of photos, in one of them, the engine is missing from the plane but it should be there, do we visually fill that in — in our minds?
TVERSKY: I think we just don’t even notice that it’s missing. We see airplane, we’re coding it on that level …
TVERSKY: … and adding those details. So this is an example from Scott McCloud who wrote a brilliant book on comics. And he says, you know, someone sitting at the desk, you can’t see their legs because the desk is covering it up but, you know, they have legs. So we’re filling in in that way. We fill in on language. We fill in all the time.
Missing information, we’re guessing, and usually it’s right because we’ve learned those …
TVERSKY: … contingencies in the world. I think almost everybody has, at some point, experienced an argument with someone that they’re close to and say misinterprets what they’re saying emotionally, and that can lead to the disastrous escalation of an argument. I mean, you were angry? No, I wasn’t angry, I was sad. And we get to those sorts of impasses.
RITHOLTZ: So the — the most — I have to share something with you because I had an experience with filling in that was just astonishing, and it stayed with me. Many, many years ago, I would occasionally ride a motorcycle. And when the time came to get the motorcycle license, the state requires you go through this training program, most of which, if you’re an experienced rider, you don’t need, but they fill it in with a lot of safety things.
And the one thing that stayed with me — probably why I don’t ride motorcycles anymore — is they wanted to explain to you how limited your field of vision is.
TVERSKY: Yeah, right.
RITHOLTZ: Now when you looking straight ahead, you have about a three percent range of vision and everything around you is more or less a reasonable guess, your brain constructing a model. But that means if something enters that field and you know you’re not aware of it, it’s a danger. And the way they show this to you was they put us in a room, regular square, rectangular room, and you stand on one wall, and then a person stands directly opposite you about 20 feet away.
And then in your peripheral vision — on your same wall in the corners — someone holds a reasonable size playing card, and they walk along the wall towards the person opposite you. And you have to say — you have to guess when you can identify the card is either red or black, and then when you can identify the actual suit and number of the card. And it’s not like a regular four-inch deck of playing cards, they are like big magician cards like eight-inch deck or 10-inch.
And I was — I assume that I would be able to identify it pretty rapidly, maybe 30 degrees from 45 degrees. And I was shocked to — to learn that it’s almost dead-on, maybe that instead of straight across from you, maybe it’s 120 degrees before you can identify just the color. You couldn’t even say is this a club or a spade, you can (inaudible) the card is black, and then a little closer before you can identify. And they’re practically dead opposite you when you’re staring straight ahead before you could identify the card.
It was shocking at how little a cutie you have outside of straight ahead of you. Your peripheral vision is you can see images, you can see rough shapes, but there’s no specificity at all.
TVERSKY: It’s a beautiful demonstration, and we should all have it, right.
RITHOLTZ: Shocking, just absolutely shocking.
TVERSKY: Right, right.
RITHOLTZ: So we discussed cognitive collage earlier, and I’m fascinated by that concept the way we put together our models of the world, how much of that is based on what we visually perceive in reality and how much of it is based on what we’re creating to fill in the holes?
TVERSKY: It’s going to vary. And what I liked about the collage metaphor is it’s multimedia. If you go back and look at the castle in Bronk (ph), they put newspaper clippings in and paintings in, and all kinds of things in it. And again people think or many researchers thought that our views of our environment are more or less vertical. And I think our research and the research of many other people show it’s filled with small biases that aren’t coherent.
You try to put them together different perspectives on the world, different landmarks. You try to put them together, you don’t get anything that would work on a Euclidean space.
TVERSKY: And in addition, it’s multimodal. So if I’m wandering around New York or another city, there are some things I know from language that I need to go four blocks this way and turn. Some things I know from recognizing the world, some from my recollections of maps that I’ve seen, so I’m gathering information from many different places to decide is the entrance to the Bloomberg building going to be on Lexington or going to be on 59th, and how do I find it? And so I’m making those decisions that way, balancing that information, gathering from many sources. It’s not a coherent system.
And I do think that’s a model for all kinds of judgment. And the context is going to determine what information is salient and what information isn’t, what I’m bringing up now, what I’m bringing up in other cases. So I do feel that this cognitive collage idea is really a model for the way we make judgments in many situations.
If you think about what’s in the brain, there aren’t calculations in the brain. There aren’t maps in the brain, there aren’t photographs of people. It’s all neurons, and we use these terms like language and spatial representations, and images of faces and so forth. It’s a way of talking. And, in fact, there are places in the brain that are dedicated to recognizing faces or scenes. And even rudimentary concepts of number, there are places that are activated. But in the end, it’s neurons, and these are ways of talking. And again the idea that we gather information from all over the cortex to make a judgment, whatever seems relevant, seems to me a model not just for space, but for all judgment.
RITHOLTZ: So you reference the comparison of people using either verbal or visual thinking, but maybe this is the American schooling system. I tend to think about the way different people approach the world in either verbal or mathematical thinking, or at least maybe that’s what we do with kids coming out of school. Oh, he’s a numbers person or she’s a language person. How did you come up with the dichotomy between verbal and visual? And are there any parallels for academia where there’s a tendency for the math and science people to go this way, and the literature and language people to go that way?
TVERSKY: Right. So people think of themselves as visual thinkers or as verbal thinkers or computational thinkers, or I think kinesthetically. And …
RITHOLTZ: Meaning, in terms of motion and …
TVERSKY: How (inaudible) right, dancers or — right, it might be (inaudible). So those are again ways of talking. They don’t have a lot of evidence behind them. Even spatial thinking turns out — or visual turns out to be quite complicated, it’s many different features.
Verbal, too, we know people that are — can produce words but can’t think straight and vice-versa who are hard to — to come up with words but think very logically. So verbal abilities are quite different and special abilities are quite different.
The bad news is you can be good at both and bad at both.
TVERSKY: It’s not that one compensates for another. To some extent, they clearly compensate. So I — I recently had the wonderful opportunity of — because of a talk I needed to give of delving into Leonardo who’s, by all accounts, one of the most brilliant thinkers of all times. He thought visually, spatially, and he thought through sketching. And he use sketches as a way of understanding dynamic processes that — not just static ones because sketches are static. And, in fact, he used the way he drew as a way of understanding the way vortices happen in water, so the way he drew them. And he use many different perspectives.
So he was very much a kind of visual thinker, but he was able to get to enormous obstructions through the visual/spatial thinking. And there wasn’t much math then.
RITHOLTZ: Quite interesting. One of the things you talk about in the book is our hands expressing our …
RITHOLTZ: … thinking, New Yorkers notorious with their hands — big hand. But what is the significance of gestures to cognition? How important is it? You can typically understand what someone is saying on the radio regardless of what their hands are doing.
RITHOLTZ: That said it’s helpful to try and express certain ideas with your hands as — as you speak. Why is that?
TVERSKY: Yeah, I know it’s lovely. And I think what you’re saying that we couldn’t get information just through hearing, we can get it just through reading, so human beings are enormously adept at learning from different media and where they don’t get filled in. But you couldn’t — face-to-face conversation does involve gesture, and we did a number of experiments showing that the way people gesture when they’re explaining something changes the thought of other people.
TVERSKY: Yeah, so …
RITHOLTZ: So — so depending on what you’re doing with your hand …
RITHOLTZ: … you’re very much — it’s not necessarily for the speaker, it’s for the listener.
TVERSKY: Both. So for the speaker, so think of cyclical thinking going from a seed to a flower back to a seed. If we ask people just to represent it, they tend to represent lines, not cycles.
TVERSKY: But if we gesture in a circle, they’ll put down circles when we ask them to put something on paper. We have some other examples of that, but I think the most striking ones are gestures for yourself.
So we put people in a room, they’re alone, not talking to anybody. They’re reading a complicated description of space, locating say eight landmarks in a larger space. It’s new to them and they’re going to be tested, so they have to learn it.
And if you watch them starting, they’re looking at the screen and their hands are making a map, they’re drawing lines for the paths and points with emphasis on the table for landmarks. And when they do that, they’re more likely to be correct on the exam. And if we tell them to sit on their hands when they’re reading, they do worse.
RITHOLTZ: Really? So the process of emoting or — or maybe that’s the wrong word of — of cognitively expressing what they’re learning through their hands, helps them learn, helps them retain that.
TVERSKY: So if you think about the language is arbitrary, and it’s very hard to understand the spatial description, what I can do with my hands is model the environment, and that’s what I do. I turn the words into a model with my hands. The — my hands are representing the information in the description.
RITHOLTZ: And when you say words are arbitrary, you specifically make a point in the book that most words are completely arbitrary with a handful of onomatopoetic exceptions.
TVERSKY: Right, right.
RITHOLTZ: And — and that’s true from, you know, a cup, there’s a different word for it in every language and …
RITHOLTZ: … none of which sound like the word “cup” …
RITHOLTZ: … or — or what — what this physical object …
RITHOLTZ: … if it makes a sound what it would be.
TVERSKY: Right. And — and so we find — with environments, we also find that teaching people how a car break works, they model it with their hands. So what’s — again extra interesting about that is the hands are representing the information.
Language also represents the information, and the sketch will represent the information. So with many different ways of representing them …
RITHOLTZ: So one is abstract, one is physical and one is attached to us actually part of our body.
TVERSKY: Right. And what I tried to argue was that this kind of spatial thinking is more direct. I’m — I’m expressing it through a diagram or expressing it through my hands. It’s a direct representation of the knowledge. So even if I’m explaining — if I’m talking to you about a situation where people are arguing or whatever, I use on the one hand, on the other.
I’ve created a diagram. I’ve put all those things that go with this hand on one space and the things that go with it on another — in another space. If I talk about people, you know, rising in a corporate world, I’m going to use my hand to go up. So I’m illustrating all those ways of thinking with my hands, and it helps you understand, and it helps me express.
RITHOLTZ: Quite interesting. Let’s talk a little bit about the project that Michael Lewis did, the book he wrote called “The Undoing Project.” And he very specifically said without you, there would be no book “Undoing Project.”
First question — and the book is about Dani Kahneman and his partner, Amos Tversky, who is your husband. They worked for many years together in Israel, and then came here to the United States. I get the sense from the book that, in the beginning, you were a little reluctant to participate. Is that a misinterpretation or were you ready to jump in with both feet right from the beginning?
TVERSKY: No, I wasn’t reluctant. Dani Kahneman and Michael had struck up a friendship.
RITHOLTZ: They live very close to each other in Berkeley, right?
TVERSKY: In Berkeley, at the time. Dani no longer has a home there. And the way Michael tells the story of how they met, Michael did go to business school, but he went too early to have learned Kahneman and Tversky, and he came to it quite late. And he came to it indirectly. He’d written “Moneyball,” an amazing book. And Dick Thaler, and I think Cass Sunstein …
RITHOLTZ: That’s right.
TVERSKY: … wrote a review on “New Republic.” And they said the book is great and all that, but Michael needs to know about Kahneman and Tversky to understand why coaches …
RITHOLTZ: Billy Beane …
TVERSKY: … scouts …
TVERSKY: … yeah, were misled, and Billy Beane.
So Michael, at that time and now, is living in Berkeley. One of his closest friends is Dacher Keltner who was a graduate student in Social Psychology at Stanford and TA’d actually for my husband. As Michael tells the story over beer, Michael asked Dacher about this work, and Dacher said, “Sure, Dani lives up the hill. I’ll introduce you.”
So Dani was willing in his generous way to talk about the work, explain it to Michael because Michael realized he needed to know about it. If he were interested in statistics, he needed to know about how people misuse them. So I think Dani said, “If you walk with me, we’ll talk,” because Dani walked. And they gradually, I think, struck up a friendship. And I think Michael tells it that he got the idea of writing a book about their friendship, about Dani and his friendship.
And Dani it came to me, and he said, “Michael wants to write a book. And if he doesn’t do it, somebody else will,” and Michael likes us. And he named another person who was waiting in line and said, “That person doesn’t like us.”
So I said, “Dani, whatever I trust him completely.”
RITHOLTZ: That’s very funny.
TVERSKY: Whatever you think, I’ll go along with. So the side part on that story is, I think for a year or two, Michael taught a course in Finance Journalism at the Berkeley School of Journalism. One point he opened it up to these school students. Our oldest son, Oren, was a student at Haas, at that point, and took Michael’s course, and they hit it off.
RITHOLTZ: And he obviously figured out who Oren was?
TVERSKY: He didn’t figure it out at all.
RITHOLTZ: Oh, really?
TVERSKY: He didn’t figure it out at all. And I don’t know exactly …
RITHOLTZ: Oren’s last name is …
RITHOLTZ: He never put that together?
TVERSKY: He didn’t put it together. And I don’t remember if that was before or after “Moneyball,” but he didn’t put it together. And the upshot was that it was Oren who introduced me to Michael …
RITHOLTZ: Oh, really?
TVERSKY: … which was sweet, over email, which — I mean, I think Michael asked Oren. Michael, he ended up talking a great deal with my three children and ended up being quite fond of them which, of course, warm’s a mother’s heart.
RITHOLTZ: So how did you and Michael collaborate when he was doing the research part of the book?
TVERSKY: I don’t know if it’s collaboration. Michael sat in my office at Stanford going through Amos’ papers. He really does his research beautifully, complete concentration. And he would ask me questions, and I would answer them. If something was in Hebrew, I tried to translate it for him.
He asked me questions by email, and I answered them at great lengths, and that was, I think, an easy way for us to communicate. At one point, you know, I came to Israel a young bride with — in the middle of graduate school with no Hebrew whatsoever. I …
RITHOLTZ: Where did you go to Israel from, from the U.S.?
TVERSKY: From the U.S., from graduate school.
RITHOLTZ: What — what year was that in …
TVERSKY: It was October ’66.
RITHOLTZ: So right before the …
TVERSKY: The six-day war and …
TVERSKY: Right, and Amos was drafted on the 22nd of May 22, and the war broke out 10 days later and …
RITHOLTZ: That’d be frightening.
TVERSKY: … and by then I had learned enough Hebrew that I could understand what the Chief of Staff Chuck Robbins (ph) said on the 10 o’clock news, so that’s a longer story. I can tell it. And, in fact, Michael asked about that, and I told him in great detail. I said, “Turn on your novelist eyes. What’s it like to be an American coming to Israel?”
So I wrote …
RITHOLTZ: In the 60’s?
TVERSKY: Yeah, I wrote him at great length what that was like. And later, I found letters, I think, my brother sent him. I found letters that I written my parents. Everything that I remember was correct, which is astounding.
RITHOLTZ: You write about memory, which we know is …
RITHOLTZ: … not only fallible, but every time we recall an event, we are reconstructing the event …
RITHOLTZ: … on memories are — are essentially replaced by a series of bad carbon copy.
RITHOLTZ: So it’s nice that when you — when something is that vivid and you remember it accurately, maybe it’s because it was so vivid that it stayed.
TVERSKY: It could be or that I retold it. I mean, then we start getting distorted the minute you use language …
TVERSKY: … because they don’t happen in language. I mean, they might happen in part, but they get distorted from the get-go, from your perception and so forth.
I think I helped Michael in that way answering his emails. I gave him a long list of people he might want to speak with both in the U.S. and people who knew Amos well and people like Ken Arrow. He was a close friend and stayed a close friend of mine for many years after Amos died. Ken had stayed a close friend. So — and Kenneth was one of the early Nobel Prize winners in Economics, and he quickly bought into the work. It was clear to him that the work was right from the get-go in contrast to many other economists.
So I sent him to a whole set of people that I thought he might give him a picture of Amos because he knew Dani well, but he didn’t know Amos. I sent him to many people — friends of ours in Israel. He went to Israel three, four times and met all of them. I mean, Michael’s research — he met my sister-in-law, my niece and talked with them. He was extraordinary in the depths that …
RITHOLTZ: Incredibly thorough, right?
TVERSKY: Amazing. And he got Amos in many ways. I mean, there are errors in the book but some people were disturbed by the portrait of Amos as only being interested in his work because he really was helpful on every way, both personally to people and in the departments in which he participated …
TVERSKY: … in the university as super good citizens so — that he was single-minded about his work isn’t quite right.
RITHOLTZ: That’s hard to depict when you’re going back 25 years later I would imagine.
TVERSKY: When you didn’t know the guy …
TVERSKY: … you know, all of us are complicated and we are different with different people and different situations.
TVERSKY: And he probably caricatured Dani, and then you’re capturing them at a particular point of time and were always changing. I mean, the book is a great story. And what impressed me, too, and Michael learned the work. And he kept telling me, “I feel like a B student studying A plus work,” but he really learned it. And I think his portrayal of both of the history that Neil (ph) and Lou Goldberg and other people who does a similar work before their work, Robin Doz (ph), people who were influences on them or in the same ecology and getting the work right, I thought he did a masterful job of explaining the work to lay people.
RITHOLTZ: So he might have gotten some of the nuances about Amos wrong. Did he find anything from speaking to friends, colleagues, relatives that surprised you? Did — did anything show up in the book that you said, huh, I don’t really know about that?
TVERSKY: No, I don’t think so. It’s not that Amos missed didn’t have secrets, although a few for me. But no, I don’t — I don’t think there was anything there that I didn’t know.
RITHOLTZ: So you wrote or said, I don’t remember where I pulled this quote from about Dani and Amos, their relationship was more intense than a marriage. So that had to be a difficult thing to balance with your own marriage. What was that like living for that?
TVERSKY: I’m not sure if I said more intense than a — a marriage, but it was certainly intense like a marriage. They really loved each other and they formed a close friendship. And the way they worked together was gleeful and joyful until it wasn’t.
RITHOLTZ: When you say gleeful and joyful, there are stories — parts of the Undoing Project — where the two of them are locked in a classroom by themselves and all people in the hallway here is just peels …
RITHOLTZ: … of laughter. For hours, they’re back and forth debating stuff and just laughing their butts off. Was it work or was it fun?
TVERSKY: I had the advantage of understanding Hebrew and English and the conversations would go back and forth and be mixed.
RITHOLTZ: Between English and Hebrew?
TVERSKY: Yeah. And, you know, they’d come out for tea or — I mean, a lot of the conversations were in my house and they’d come out for tea or they’d come out to tell me something that they were dying to tell me. And when Dani would leave and Amos would leave with me, I would hear a recap of the discussion, and the conversations and the stories, the questions they were asking students. So I had a front row seat to everything that was going on. It didn’t interfere with my marriage.
RITHOLTZ: So this wasn’t an imposition, this was …
RITHOLTZ: … just your husband in a professional relationship that worked for him and worked for everybody involved.
TVERSKY: And — and gave me a great deal of intellectual pleasure, a personal pleasure. Dani would often visit us, stay in our house when we were at Stanford and he was at Vancouver. Amos tended to work late at night and come — wake late in the morning, so I’d have breakfast with Dani. Dani is great company, and that was a pleasure so I …
RITHOLTZ: He’s in New York now. You’re in New York after a year. Do you guys still see each other occasionally?
TVERSKY: Sure, sure. I mean, I like to say we — we live down the street from each other because we both live on the corner of Broadway, but 100 blocks apart. No, he’s been a really loyal friend, and I appreciate that.
RITHOLTZ: Can you stick around a little bit? I have a bunch of more questions for you.
TVERSKY: Oh, sure.
RITHOLTZ: We have been speaking with Barbara Tversky, Professor at Stanford and Columbia, and author of “Mind in Motion: How Action Shapes Thoughts.”
If you enjoy this conversation, be sure and check out the podcast extras where we keep the tape rolling and continue discussing all things cognitive and psychology-related. You can find that at Apple iTunes, Google podcast, Stitcher, Spotify, Overcast, wherever you’re finer podcasts are found.
Be sure to check out my weekly column on bloomberg.com. Follow me on Twitter @ritholtz. Sign up for my daily reads at ritholtz.com. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.
RITHOLTZ: Welcome to the podcast, Barbara. Thank you so much for doing this. You — you and I can speak of Mike for as long as we’re talking on Mike because these are really, really fascinating subjects. And I didn’t realize the person who sent me down the behavioral finance rabbit hole, Thomas Gilovich was a student of Amos’ and Lee Ross back in the day.
RITHOLTZ: Now tell us a little bit about Lee Ross, what was his relationship with Amos, how did — how did he have anything to do with Stanford and — and you and Amos.
TVERSKY: So Lee Ross, who’s a dear friend, was at Stanford working with Dick Nisbett, and they were working on essentially biases. They’re social psychologists, and they were working on biases in the way that we interpret other people’s behavior and our own behavior. In those years, cognition was really active in social psychology, thinking about an individual.
So one of the things they came up with is called the “fundamental attribution error.” And that’s — that we attribute our own behavior to the circumstances around us and other people’s behavior to enduring personality traits.
RITHOLTZ: So — so when I do something right — when I do something right it’s because I’m so skillful, but when they do something wrong, it’s — they’re not that smart, they’re not — they’re not good people that’s why they messed up.
TVERSKY: Something like that or when — when — if I get angry, it’s something that you did and …
RITHOLTZ: It’s a situation. It’s not my fault …
TVERSKY: Yeah, exactly.
RITHOLTZ: … the circumstances may be, yes.
TVERSKY: Right. You — you provoked me. And — and if you’re behaving that way it’s because you’re an aggressive person or an angry person or a shy person. So we have …
RITHOLTZ: All three?
TVERSKY: … in part.
RITHOLTZ: So — so the — that’s kind of interesting, and it just goes back to the filter. I view all these things through is finance and investing and trading. And the greatest thing to do is to speak to traders who are either making money or losing money. And when they’re making money, it’s because they’re brilliant.
Hey, I had this trade figured out. I knew where to jump into it. I understood the value of this company. And when the trade goes south, it’s never, oh, I had it wrong; it’s, well, the Federal Reserve did this and who knew about this attack in Iran, and it’s always externalities why they lose money, but it’s their skills why they make money.
TVERSKY: Yeah. And you wonder why we’re built that way because it does interfere with learning what’s happening in the world and how to interpret it that it does feel very strongly that we’re built that way.
RITHOLTZ: So — so if that’s the case, is there an evolutionary benefit to that sort of self-confidence and ignoring things that — that perhaps might even be your fault. Why would that — why would that be hardwired into us?
TVERSKY: You know, you couldn’t write an evolutionary story …
TVERSKY: … for that. I don’t know how you’d know if it was correct or not.
RITHOLTZ: But it makes a great narrative.
TVERSKY: It makes a great story, right. And I mean, evolutionary psychology has taken hold of it in psychology sometimes in an annoying way because, in some sense, all of us were doing it anyway. But it — it — there is very little way that you can check those deep psychological hypotheses. You couldn’t check other sorts of hypotheses about structure of eye or a structure by raising fruit flies for many generations.
TVERSKY: But it’s those deep psychological ones. The connection between any gene and behavior and add to that epigenetics on our bionome (ph) in — in our stomach and so …
RITHOLTZ: Epigenetics has become a huge field recently, hasn’t it?
RITHOLTZ: That — that our experiences somehow impact our — our genetics. Am I oversimplifying it or …
TVERSKY: Well, again I’m not an expert on this. I went to a symposium on it and quizzed the biologist mercilessly on the mechanisms. And yes, they seem to — they seem to believe and this is — some of this is animal work where you can check it that — that actually it is affecting the genome — the — the germ cells that are being passed onto the next generation. And so if you starve the grandfather of the grandchild who never knew — that never knew the grandfather has different eating behavior than if the grandfather wasn’t starved.
So a lot of that is looking at negative things at maternal deprivation, starvation and so forth, so I asked, does it work for positive things? If you enrich an environment, does that get passed to the grandchildren? And he said that it looks like it might, it does. And then I asked, are these big effects? And they said no, they’re small effects.
RITHOLTZ: Right. So …
TVERSKY: In the larger picture, they’re small effects, but they’re detectable.
RITHOLTZ: So since you mentioned rats, I have to ask this question. How do animals — how do the way animals think differ from human thinking or are there many parallels to animals and humans have a lot of similar thought processes?
TVERSKY: So again, we’re — we’re getting out of my own research …
TVERSKY: … research that I reviewed. But if you look, primates can’t count the way we can count, but then there are many civilizations still around in the world that don’t have number words and can’t count.
RITHOLTZ: That numbers are a cultural phenomenon not …
RITHOLTZ: … in hardwired.
TVERSKY: Yes, yes. But one-to-one correspondences, things that you have in tallies are old. And we have an estimation system as well as an accurate system. There are kind of two mass systems in the brain and they’re — they’re somewhat integrated and somewhat independent. But making estimates, are there 83 things or 90 things, primates could make those estimates …
TVERSKY: … quite well without counting. Right.
RITHOLTZ: That’s interesting.
TVERSKY: No, it’s fascinating. And …
RITHOLTZ: One of the things you mentioned earlier that I was kind of intrigued with — I want to — I want to just do a slight variation of, so you mentioned some people are good with language and other people are good with thinking processes, and not everybody has both. But one of the things I was kind of fascinated with about language, and creativity and thinking, so I write a lot and I speak a lot, but I found that my writing is much more intellectually sharp and at a higher grade level than my speaking.
And I was kind of surprised, so when I worked on my first book over a decade ago, I thought, oh, this will be easy, I’ll dictate a bunch of stuff, and it’ll take me a couple of weekends and I’ll have 100,000 words. And I am shocked as I’m rereading my spoken word. This is terrible. Why …
… why are the things that I laboriously pound out on a keyboard so much more articulate and intelligent than what I say. And eventually, it wasn’t a big leap to think, well, you have a part of the brain for speech and a different part of the brain for creativity and writing. And hey, maybe that speech part ain’t as well-developed as your writing part. Is that an oversimplification or is that a fair way to look at it?
TVERSKY: No, I think it’s probably — I don’t think they are separate parts of the brain for speaking and writing. What happens when you write is you put something on a page and you would edit.
RITHOLTZ: Yeah, but my first drafts of writing are much more articulate than my first drafts of speaking. And the best speaking things I do are when I write them out in advance and come up with a structural language that I want.
TVERSKY: OK. So then you’re — you’re putting on your — your writing hat and supposed you’re speaking as more spontaneous …
TVERSKY: … and the writing hat you’re deliberately thinking about what — what am I going to — what are the thoughts I want to express and how is the best way to express them, so (inaudible) particularly adapted that.
I had a — I have a colleague at Stanford named Al Bandura who writes many books, and they’re all good. And you ask him a question and it comes out in paragraphs and pages.
RITHOLTZ: Full answers.
RITHOLTZ: Like first draft, I have a friend …
RITHOLTZ: … like that.
RITHOLTZ: It’s just fully formed, coherent, organized, and I wish I could do that. I could do that …
RITHOLTZ: … on — on pen and paper, I can’t do that verbally.
TVERSKY: Right. No, it’s astounding. And I think that he’s practiced so much. So if you think about musicians that write music or play music, they can do it very rapidly they have the schemas. They can generate it very quickly, it’s highly practiced like any sport would be highly practiced. So perhaps you’re writing, you’re thinking at this meta level how am I going to organize my thoughts. I’ve got an outline for organizing them, I’m just drawing the outline. And — and you’re thinking that through and filling it through.
This interview is different from spontaneous conversation …
TVERSKY: … because again I’m crafting and thinking ahead and — and crafting in that way.
RITHOLTZ: So my cognitive dissonance is I’m going to stick with the two different brain sessions because I like that idea.
RITHOLTZ: But also the — the way various aphasiacs and people who had brain damage lose the ability to speak but they can sing or they could — they could write, but they can’t read …
RITHOLTZ: … that’s what led me to think I wonder if it’s to the — it’s a speed center and a writing center, you’re telling me there is no difference.
TVERSKY: I don’t know. I — I sort of doubt it because I think each involves many areas. Aphasia …
RITHOLTZ: That make sense.
TVERSKY: … yeah, aphasia is brain damage and it’s usually not pointed, it’s not — it’s a cluster of neurons problem.
TVERSKY: And — and — and there it is losing certain kinds of words and not others, right?
RITHOLTZ: So — so …
TVERSKY: But it is a general — right.
RITHOLTZ: So — so the other thing I wanted to ask, art comes up in the book …
RITHOLTZ: … in several places. I’m curious as to why you use art as an example. And then there’s one specific example I have to bring up to you because I was intrigued by it. What’s the relationship between art and thinking and between the concept of spatial motion and how we express ourselves artistically?
TVERSKY: Yeah. So right, so art I’d come to naturally. I drew a lot as a kid. My mother is an artist, and I have cousins that are — so art is very much in my life. Writing, too, for that matter. But I happen to have — I got interested in design. So I first got interested in how do we put the world in our mind, how do we get space in our mind. And then I got more and more interested in these spaces that we create to improve our own cognition.
So diagrams would be one. Even the alphabet would be a one.
TVERSKY: Developing the alphabet, which is — was invented apparently only once but …
RITHOLTZ: Wait, what? Invented only once? What do you mean?
TVERSKY: The — the — the sound — sound to symbol correspondence was developed once and spread.
RITHOLTZ: And then just variations based on that.
TVERSKY: And otherwise, alphabets were representing meaning the way Chinese does.
RITHOLTZ: So it went from symbology to phonetics?
TVERSKY: Well, it’s — whether it’s representing meanings directly the way Chinese does or whether it’s representing the sound of language of speaking, and that’s the — what the Phoenician alphabet that’s spread everywhere and got varied, and was apparently only invented once.
RITHOLTZ: That’s interesting.
TVERSKY: And then spread. It is fascinating.
RITHOLTZ: So– so let me have you disabuse me of another thing I probably have wrong. Have — have you seen the trick in the Federal Express logo?
TVERSKY: The arrow?
RITHOLTZ: So the way that was first explained to me is the reason we don’t perceive the arrow in the FedEx and just pull up a FedEx — any picture of FedEx and you’ll see between the E and the X there — there’s an arrow. That’s the part of your brain that recognizes language, is a different part of the brain that recognizes symbols. And when you’re reading the letters, your brain isn’t primed for seeing a symbol like an arrow.
TVERSKY: So that’s fascinating and it — it would be — arrows are fascinating anyway and they’ve gotten me fascinated, and somebody needs to do that work.
The — the lateral/occipital/parietal juncture, that area of the brain that is recognizing objects and recognizes fruits and vegetables and so forth, there are many different sub-areas that’s like a mosaic. There is only one area in all of those areas that recognizes left/right asymmetries. Otherwise, your face may reverse …
RITHOLTZ: More or less the same.
TVERSKY: … we’ll face this in a good example …
RITHOLTZ: But it’s mostly the same.
TVERSKY: … the special — there is a special area for faces, but most things, it doesn’t matter if it’s a left/right. Turning it upside down matters, but left/right doesn’t matter.
There’s one area of the brain that is prime to recognize left/right operations, so we can tell a small B from a small D and differentiate. So that area is used for waiting no matter what language you read.
Now what that area would do with arrows, I’d be absolutely fascinated to know.
RITHOLTZ: All right. So maybe the way I heard it might be right. I’m not going to immediately assume it’s wrong.
TVERSKY: Exactly. And the problem there is the arrow is embedded …
TVERSKY: … in the letter so …
TVERSKY: … the embedding is going to interfere with the perception anyway. I’m not …
RITHOLTZ: It’s like a relief. Are you looking at the — the white or the black background and that’s …
TVERSKY: Yeah, exactly, the negative space.
RITHOLTZ: … so there could be another — another way.
TVERSKY: The negative space.
RITHOLTZ: So let me bring that back to art …
RITHOLTZ: … because we — we started talking about that. You referenced the linear — how — how linear things are when we’re moving through space, the way language words after another appear. You — you use a whole bunch of examples and you talk about the space within art and painting and how it had a — a form of linear progression until Mark Rothko and Jackson Pollock come along where they just explode that concept.
And the — the reason that stood out to me is — so my wife used — she’s now retired, but she taught fashion illustration and design. I’ve been dragged to every museum in the world. And initially, a lot of some modern art just didn’t resonate with me.
Stella, I would look at it, oh, just nonsense. Always was fascinated by Jackson Pollock, but I didn’t care much for Mark Rothko until, I don’t know, 15, 20 years ago, and I can’t explain what happened. But suddenly, maybe having just seen enough time, suddenly, this is really fascinating stuff. There’s — there’s — it’s not only abstract, but there’s all sorts of different things going on whether it’s the — the space, the border, the color choices. Suddenly, I went from not caring anything about Rothko to really, this is one of the most fascinating modern painters there are.
And the fact that you used it — him as an example, I’m not a big fan of the Black Period, the later stuff he did when it’s all black and gray and white. But hold that aside, the example of that having no linear narrative and no structural — here’s where your eye is going to naturally lead by the figures, I thought that was fascinating as an example early in the book.
TVERSKY: Thank you. I am not an art critic, I’m an appreciator like you, right? I’m an appreciator …
RITHOLTZ: Neither am I, I barely know what they were talking about.
TVERSKY: So it gets back to the learning versus creativity. And when you are learning you want things very straightforward and structured. When you’re being creative, you want to go in many different directions. And what I think both Rothko and Pollock do, and it took me a while to appreciate them as well, is there was ambiguity built into the paintings. And every time you look, something different — you see something different.
TVERSKY: And as you’re looking at configures and reconfigures, and what Rothko especially does is you get the adapters of the eye — the color — adapting so colors change in them. Because of the way you’re looking, you can get afterimages that are very …
TVERSKY: … interesting. With Rothko, you look at a blank wall. But those adapters in your eye to the different colors keep changing. And that means that what you’re seeing changes because it’s not what’s there, it’s — you’re in your eye.
And — and Leonardo, by the way, knew that that it wasn’t in the thing out there, it was in your mind through your eye. So I think, to me, that’s what’s intriguing about Rothko. You commune with it and different structures appeared. It stops being flat and gets him to depth.
RITHOLTZ: Oh, it’s definitely dimensional if you — with …
TVERSKY: Yeah, it go — right, — it goes …
RITHOLTZ: … and maybe that’s the switch that flipped onto me. Suddenly, it wasn’t just an orange or a purple square, it’s like …
RITHOLTZ: … oh, this really has a dimensionality to it.
TVERSKY: And a depth. And I watched people going. I mean, there are those galleries in the — in the Tate and in — well, in the east wing of the National Gallery where there are lots of Rothkos, and I watch people just going through and looking.
RITHOLTZ: Very quickly, they like to go through.
TVERSKY: And you’ll have to sit there and …
TVERSKY: … and commune. And then it’s — it — it becomes spiritual. So — and that got me — it wasn’t that, but earlier on I started looking at design and looking at architects how they design. We’ve looked at experienced architects and drawing while they were designing.
And their early sketches are ambiguous, and it allows them to make discoveries in their own sketches. So they drove for one reason. And when they look at their sketch, they see new things. They see patterns. They see implications like this is a building, the traffic will not be right or the light will fall poorly. So they see new things in their sketches, and it’s the ambiguity that allows it.
And then one of my graduate students start — we studied them drawing and studied that process. And one of my graduate students started studying artists from drawing is their major practice. And for them, the drawing is a conversation between the eye and the hand and the page. There are no words. And if they try to talk about it, they can’t. It interferes with the whole process. So this is a different way of thinking than language. It’s thinking with the objects that I’m creating with a body that’s creating them, and with the thing that’s perceiving them.
And I’m sure something similar goes on in creating music. And even imagining your words, if you’re thinking about speaking or thinking about how the words are going to sound if you’re — if you’re practicing it. So I wanted to call attention to that way of thinking. It’s not going through language, it’s an important way of thinking. It’s the way I find my way in the world, and it contributes to many other kinds. It’s the way I understand other people when I’m watching their bodies and their faces as they’re responding.
So I — I wanted to call attention to those ways of thinking with the body, and the world, and the things that we create and the world is an important way of thinking that complements language, that’s different from language. I mean, I love language so …
RITHOLTZ: It’s — it’s obvious you do. So I know I don’t have you all day, I only have you for a little bit of time. Let me jump to my favorite questions that we ask all our guests, and let’s see if we can learn a little bit more about Barbara Tversky.
So what are you — what are you listening to, watching or downloading? Are you — are you watching anything on Netflix or …
TVERSKY: Interestingly, movies affect me too much.
RITHOLTZ: Too much.
TVERSKY: Yeah, so I’m very picky about what I see.
RITHOLTZ: So what — what have you seen that you’ve liked recently?
TVERSKY: Synonyms. Synonyms, it’s an Israeli film about — and because I lived in Israel, it specially resonates. It’s about — but it has universal appeal. It’s about a man who was traumatized by being in the army, by what he had to do, and went to Paris and decides he needs a new identity.
RITHOLTZ: Quite, quite interesting.
TVERSKY: It’s a fascinating movie.
RITHOLTZ: I’m going to add that to my Netflix queue. What’s the most important thing people don’t know about Barbara Tversky?
TVERSKY: Oh, I don’t — I’m pretty much out there. I — I think you probably don’t know that I — or maybe I hinted I have three wonderful children, and they have produced eight wonderful grandchildren who are all lively individuals with personalities and who adore each other.
RITHOLTZ: Who are some of your early mentors?
TVERSKY: That’s interesting. I don’t think I had much in the way of human beings, it was more books that were influential. And when I was a teenager, the “Existentialism,” particularly Camus …
TVERSKY: … were influential. Later, philosophers like Russell, Klein, Wittgenstein especially — like Wittgenstein were all influential. Eventually, when I got into psychology, the early cognitive people like Chomsky, Miller, Bruner, Broadbent, Kuhn who talked about scientific revolutions, but they were really intellectual revolutions. They were about the human mind.
So those – but more than that, the colleagues. I mean, I always — even as an undergraduate — hung out with the graduate students and — and learned an enormous amount from them. They were intelligent and that stayed with me. I’m fortunate to have had amazing colleagues who were also friends, including the one that I lived with for 30 years and our overlapping friendship group so.
RITHOLTZ: So in — in your work, what other psychologists affects the way you approached the world of psychology?
TVERSKY: I think that like you, I’m a generalist. And at — I mean, I had Amos in the house and that whole circle, and Dani and other colleagues at Hebrew University when I was early on, they moved to Stanford. Stanford’s way of hiring people is wallpaper. You want the whole field covered, but you don’t want overlap.
TVERSKY: And — and I’ve seen …
RITHOLTZ: That’s funny.
TVERSKY: … other departments build little nuclei of everybody’s working on speech perception. And then there’s a nucleus someplace else working on other, and you don’t communicate. So what was really wonderful to me at Stanford was having wonderful people in developmental and socially and brain, in — and people in cognitive doing different things from me. And I learned a great deal from that. I love that.
And now I have people from the arts and people from technology, people from many arts — music, drama, painting and who are — dance who are influencing me. And everything goes through the human mind. I mean, you’ve said that.
RITHOLTZ: Well, you see it in your book. You talk about everything from — you reference dance and moving through space as well as art and music. It’s — it’s clear that all those different folks are influencing you.
Let’s talk about books. What are some of your favorite books? What are you reading these days? What do you like to recommend?
TVERSKY: So I — I went from reading fiction voraciously to reading postmodern fiction to reading non-fiction, so a long history and a lot of foreign fiction that I love and still love because it brings you to other worlds. But I’m reading — so “Sapiens,” which I recommend to everybody; Dani’s books, “Thinking Fast and Slow” is wonderful, anything Jared Diamond or Sapolsky as you recommended is good.
RITHOLTZ: “Why Zebras Don’t (sic) Get Ulcers.”
TVERSKY: And Hans Rosling’s “Factfulness” …
TVERSKY: … I found very uplifting, and — and — and it gives you a right — the right perspective on long things.
RITHOLTZ: You mentioned Jared Diamond, “Guns, Germs and Steel,” that — that book?
TVERSKY: Right, right, it would be one of them and — and that again is — is a broad way of thinking that makes sense to me. I loved “Misbehaving,” Dick Thaler’s book …
TVERSKY: … was just a lot of fun. So those are probably …
RITHOLTZ: That’s a great list. That’ll keep someone busy for a full semester to say the least.
Tell us about a time you failed and what you learned from the experience.
TVERSKY: So that was a hard question for me. I — I don’t try things that are really out of reach. But if you think about being an — an experimental psychologist, which I have been, every experiment is a risk. You build it and you build it on previous work on your previous experience. And many of them fail. I mean, I think the failure rate is lower than the failure rate for startups, so …
TVERSKY: … the failure rate is about 25 percent.
RITHOLTZ: Meaning that you just don’t reach any conclusion by the experiment.
TVERSKY: And if something happens that you didn’t expect and you might be disappointed in, but for me, that’s the adventure and the fun, and you learn something from that.
Now, learning from failure is problematic.
RITHOLTZ: Why is that?
TVERSKY: Because it’s just one experience, and it’s so easy in hindsight to explain why you failed. I mean, you saw that with people in stock picks all the time.
RITHOLTZ: Sure. Annie Duke calls this resulting, where the poker players, they learn the lesson — the wrong lesson from the result as opposed from the process.
TVERSKY: Exactly. So it’s only one — one sample and you’re interpreting it in — in hindsight. So failure has become popular now. Everybody is talking about failing is good and you learn from failure, but you don’t necessarily learn the right thing from failure because …
RITHOLTZ: So we’re failing at failing.
Is that the way we do it?
TVERSKY: That’s one way.
RITHOLTZ: It’s getting a little …
TVERSKY: One way.
RITHOLTZ: … a little — a little fractal there.
TVERSKY: But I think not letting failures get you down is probably a good lesson.
RITHOLTZ: OK, that — that’s — that’s good. What do you do for fun? What do you do when you’re not dirtying (ph) on the grand kids and — and doing research?
TVERSKY: Oh, research is fun. I’m one of the few people that loves writing because it’s making things — it’s sculpting.
RITHOLTZ: Sculpting, that’s such a good turn of a phrase.
RITHOLTZ: The Librarian of Congress, Daniel Boorstin used to say, “I write to figure out what I think,” but you’ve reduced that to one word, sculpting.
TVERSKY: Yeah. He — I’m a fan of Daniel Boorstin, too.
RITHOLTZ: “Explorers,” “Discoverers,” yeah.
TVERSKY: Exactly, oh, great books, yeah, really uplifting.
RITHOLTZ: And just so well researched and so beautifully written.
TVERSKY: Yeah, and he gets the essences …
TVERSKY: … of these things in an exciting way, no …
RITHOLTZ: Not small books, those are — that’s a summary. Each of those books is like …
RITHOLTZ: … there’s your July and August.
TVERSKY: Yeah, that was our — and they’re — they’re great. New York is full of fun. I mean, the most fun is good conversation with friends, and I happen to have good friends who are good conversationalists, but I love music. I developed a late passion for opera.
RITHOLTZ: For opera.
TVERSKY: And that took many years, and now it’s over the top and — and the stories are often, you know, the men are bastards and the women are saints, and the women die. But …
RITHOLTZ: The end, that’s every opera …
TVERSKY: Yeah, exactly.
RITHOLTZ: … there has been.
TVERSKY: Yeah, La Boheme and — right. But I’ve learned to love opera. Just by going, I’d — I am no expert, but you learn by experiencing.
TVERSKY: It’s again a different way of learning than book learning. And I think that’s the way you pointed out, you learn from opera. You just look.
RITHOLTZ: Just watch and …
RITHOLTZ: … there’s stuff to pick up. So you’re in New York a couple of months a year and California?
TVERSKY: Well, I’m — now I’m actually emerita at Stanford, so I’m there for summers and many breaks, but I’m still teaching at Columbia, so I’m more here, right. And yeah …
RITHOLTZ: And hence, I — I understand there’s an opera or two here.
TVERSKY: Pardon me?
RITHOLTZ: I understand there’s a couple of operas here throughout the year.
TVERSKY: Yeah, well, the next one, I think …
RITHOLTZ: So you’re in Lincoln Center all the time.
TVERSKY: The next one on my list is Wozzeck, which is a very hard opera. It’s Berg.
TVERSKY: It’s human tragedy at its worse. But William Kentridge is doing the production in a sense. And he, in my mind, is the most inventive and interesting artist to live by a long shot.
RITHOLTZ: Wow, that’s quite interesting. So what are you optimistic about in the world of psychology today and what are you a little pessimistic about?
TVERSKY: Well, I’m optimistic, in general, by the arts and sciences. And — and they both have young people who are doing really innovative and creative things in my own field. I — I happen to be a past president of the Association of Psychological Sciences. I gave out a lot of prices last year, including two young investigators. And they know math and they know big data, and they know the brain and they know behavior, and they’re doing mind-blowing things. And you can’t help but be in awe of these young people so …
RITHOLTZ: Reasons to be optimistic about the future.
TVERSKY: And about the — the arts. Politics, global warming, I’m worried about the same things, you know, a reckless leader of a major country doing impulsive things that …
RITHOLTZ: That would never happen.
You know, of course, the adults are going to take charge. No one would behave recklessly like that’s …
TVERSKY: Of course not.
RITHOLTZ: You have to be optimistic that we’ll get past all that sort of stuff.
TVERSKY: Well, global warming is more of a worry, but — so I’m worried about the things that normal people are worried about, but …
RITHOLTZ: So I recently — I agree with you on those, I recently read something. So there are reasons to be frightened about global warming, but there are also reasons to be optimistic that will transitions to sustainable energy and will find some technological solution that will reduce the negative effects.
And then I read this column with a person. They — they look at all these surveys of people. And my optimistic viewpoint on technology, what happens if it’s wrong? And lots and lots of people seem to believe, oh, yeah, we’ll — we’ll see these guys. We’ll find some way to reflect this on temporarily and lower. There seems to be a belief amongst a lot of people that, yeah, yeah, we’ll — we’ll come up with a magic bullet, it’ll be fine. And that’s not usually how things work. There usually aren’t magic bullets.
And when somebody explain that like lots of people think this, I’m like, gee, maybe it really is much worse than a — I know it’s bad, but I’m trying to be optimistic. And that kind was like a reality check that maybe it’s going to be harder to fix this than we think.
TVERSKY: Yeah. And what — what — if you look for optimistic things, and I think we share that looking for it, I don’t know that there was going to be a magic single solution. It’s more going to be many. But what is impressive is despite the government’s policy, which is not pro-green, many companies have discovered that they’re better off. It’s economically in their interest. And — and so that that’s happening, and you look at younger people.
And — and, you know, I once left the water running while I was brushing my teeth, and one of my four-year-old grandchildren said, “Safta, turn off the water.”
RITHOLTZ: Stop wasting — stop wasting water.
RITHOLTZ: So coal is a perfect example of exactly what you’re talking about. Coal has been — in 2019, coal just plummeted …
RITHOLTZ: … in — in usage. But we have made natural gas — not as good as solar but much better than coal — it’s become so inexpensive that coal-fired electrical plants are rapidly going away. It’s so much cheaper to switch to natural gas …
RITHOLTZ: … that the economic incentives are doing a lot of good on their own, just the cost of the material. You don’t have to have scrubbers with natural gas. You don’t have to have all these complicated carbon recapturing systems.
Now, mining for natural gas releases methane and other thing. Natural gas has a lot of its own problems, but on any comparison basis, it’s just so much better than coal. Hopefully, we see more of that moving in the right direction organically, but we’ll see.
TVERSKY: And — and solar and — and wind and sea, and people are moving. The — the real question is can we go fast enough because the warming has already happened, the glaciers are melting, the coral reefs are dying, and that’s our fish population. So …
RITHOLTZ: You could see the Great Barrier Reef dying from space. There are …
RITHOLTZ: … satellite images that are showing it bleaching for miles at a time.
RITHOLTZ: I’m trying to — Douglas Adams wrote a book. Maybe it was — he’s no longer with us, so it had to be like 20, 25 years ago — called “Last Chance to See,” and it’s all these environments and species that this was before eco-tourism was a big thing. And he said, “Hey, if you want to see these, you better go see these now because they’re not going to be here in 50 years.”
TVERSKY: Right. No, it’s fine.
RITHOLTZ: And the Great Barrier Reef is literally, you know, they’re much more sensitive to one degree increase in sea temperature than, you know, even in giant populations of fish. So that’s a really interesting book if you want to be depressed.
So my last two questions, let me ask you this, what sort of advice would you give to a recent college graduate who is interested in a career in experimental psychology?
TVERSKY: If it’s experimental psychology, you have to learn brain and data, right. It’s — it’s hard now and much harder in some ways than when I was coming in. It’s harder to get grant money and you need grants, and so it’s hard.
I would tell people to be strategic, I wasn’t.
RITHOLTZ: But it worked out?
TVERSKY: I was very lucky.
RITHOLTZ: That is a theme on this show. Lots of people say how fortunate they were and how — how lucky they were by their circumstances, and you just can’t count on that happening always.
TVERSKY: Yeah, right. And I think some of it was the meanderings that I did seemed, at first, like meandering. This is the research track that I took. But eventually then I saw this isn’t meandering, this is deliberate. And then I was able to craft what I was doing along the bigger vision that I had, but it took a while to get that.
And if I look at Picasso, the artist, Rothko, if you look at early Rothko, it’s very different from late Rothko.
RITHOLTZ: It was representational, it wasn’t even abstract.
TVERSKY: Right. And I think that certainly you do a certain amount of meandering, and that’s probably a good thing of exploring and exploring widely before you — to help you get a vision and also to give you the tools that you need to do something bigger. And — and …
RITHOLTZ: So you build up the technical skills and then you get to leave off from that.
TVERSKY: And conceptual skills and — and you’ve tried many different things. It took a while before Picasso got his vision, and then he ended up having many visions because he was especially fertile in that way.
RITHOLTZ: And our final question, what do you know about the world of psychology today that you wish you knew 30 or 40 years ago when you were a young student?
TVERSKY: Well, it was something I’m glad I didn’t know, it’s political.
TVERSKY: And I thought …
RITHOLTZ: Meaning like tenure at universities or what get published or — or …
TVERSKY: A little bit everywhere. So I thought I was …
RITHOLTZ: Even grant money?
TVERSKY: Sure. I thought I was going into a field that wasn’t — that was just intellectual and, you know, I’m (inaudible) on that way of really enjoying ideas, and playing with ideas, and contributing to them and wanting to be around people who are thinking. And I thought academics was going to be the purest place.
On that, when I was studying, there weren’t that many opportunities for women, and I was self-supporting my last two years in college, so I — I knew there was no — I — I had nobody to fall back on. I had to make a living.
But sure, it’s even who you cite in your articles and — and — and so forth, so I thought if this is a level playing field, all that matters is good ideas. But there’s …
RITHOLTZ: Not quite a meritocracy.
TVERSKY: Not — right. And meritocracy has come to be a bad word, but …
TVERSKY: In some cases, yeah.
TVERSKY: But I thought all that would matter was the ideas, but which ideas get picked up on and who they get attributed to one, here being a woman was a bit of a disadvantage. And again, I was oblivious and I’m glad I was oblivious, but there — those political things are really social dynamics and …
TVERSKY: … they’re — they’re about human beings. And in the end, even if its intellectual and ideas about science, it’s still human beings that are making the market.
RITHOLTZ: Quite fascinating. Barbara, thank you for being so generous with your time. We’ve been talking for about two hours.
RITHOLTZ: And I could go for another two hours, but I know you have places to go and — and people to see.
We have been speaking with Barbara Tversky, Professor of Psychology at Columbia and Stanford, and author of the book, “Mind in Motion: How Actions Shape Thoughts.”
Iif you enjoyed this conversation, well, be sure to look up an inch or down an inch on Apple iTunes, and you can see any of the 300 prior such conversations we’ve had. You can find that on iTunes, Google podcast, Stitcher, Spotify, Overcast, wherever finer podcasts are sold.
We love your comments, feedback and suggestions. Write to us at firstname.lastname@example.org. Give us a review on Apple iTunes.
I would be remiss if I did not thank the crack staff that helps put these conversations together each week. Paris Wald is my Producer. Mark Siniscalchi is my Audio Engineer.
I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.
Market Talk – January 28, 2020
Global firms are stopping staff travel to China and urging their workers inside the country to stay out of the office as coronavirus has continued to spread from the central city of Wuhan to the rest of China and beyond. HSBC has banned all staff from traveling to Hong Kong for two weeks and to mainland China until further notice. Standard Chartered is also restricting travel to China and Hong Kong and asked their staff to work from home for 14 days after their return. Wall Street bank Goldman Sachs has told staff who have visited mainland China to work from home for the next fortnight. The virus has spooked stock markets over the past week amid the growing threat to the global economy. Airlines, hotel groups, and luxury goods firms have been among the worst hit.
Senior diplomat Taranjit Singh Sandhu will be the next Indian Ambassador to the United States. Mr. Sandhu, a 1988 batch officer of the Indian Foreign Service, is the current Indian envoy to Sri Lanka and will succeed Harsh Vardhan Shringla, who will take charge as the Foreign Secretary on Wednesday.
Qatar initially declined India’s request to delink the price of its imported gas from that of oil under long-term deals. India requested this negotiation in order to make supplies cheaper for price-sensitive customers after a sharp fall in spot prices of the cleaner fuel. “The current formula of benchmarking gas prices with crude oil is not correct,” India’s Oil Minister Dharmendra Pradhan, said after meeting industry officials including Qatar’s energy minister, Saad Sherida al-Kaabi, and Indian state-owned oil company officials. Kaabi said Qatar would not renegotiate pricing under the existing contracts and was ready to supply more gas to meet India’s growing demand for gas. Indian officials at the meeting said the negotiations had only started and will go on for some time. Qatar is the world’s largest supplier of liquefied natural gas (LNG) and wants to boost its production of LNG to 126 mtpa by 2027 and India is leading buyer of Qatari LNG.
The major Asian stock markets had a negative day today:
- Shanghai closed
- Kospi decreased from 69.41 points or -3.09% to 2,176.72
- ASX 200 decreased 96.00 points or -1.35% to 6,994.50
- NIKKEI 225 decreased 127.80 points or -0.55% to 23,215.71
- Hang Seng closed
- SENSEX decreased 188.26 points or -0.46% to 40,966.86
The major Asian currency markets had a mixed day today:
- AUDUSD decreased 0.0003 or 0.04% to 0.6758
- NZDUSD decreased 0.0009 or 0.14% to 0.6537
- USDJPY increased 0.1970 or 0.18% to 109.1460
- USDCNY decreased 0.01278 or -0.18% to 6.96762
- Gold decreased 13.7 USD/t oz. or -0.87% to 1,571.11
- Silver decreased 0.6227 USD/t. oz or -3.44%% to 17.4834
Some economic news from last night:
Corporate Services Price Index (CSPI) (YoY) remain the same at 2.1%
NAB Business Confidence (Dec) decreased from 0 to -2
NAB Business Survey (Dec) decreased from 4 to 3
Some economic news from today:
BoJ Core CPI (YoY) increased from 0.2% to 0.3%
Consumer Confidence (Jan) increased from 100.5 to 104.2
Car Sales (YoY) increased from -9.90% to -1.40%
EU’s chief Brexit negotiator said that the EU will never compromise the single market for anyone (referring to the UK Brexit talks). He mentioned the single market was the biggest strength the EU had.
The UK ministers attended the last EU meeting prior to Brexit on Friday. Foreign Office Minister Chris Pincher said the UK was “looking forward to the next chapter” in its relations with the EU.
US President Trump highlighted a proposed peace plan, with the creation of a Palestinian state with the capital securing a portion of Jerusalem. Trump called the deal a win-win for both sides. Israeli PM Netanyahu called the plan a “realistic path” for peace.
The Turkish Foreign Minister Mevlüt Çavuşoğlu wrote a letter to the EU urging them to consider expanding the EU to include Turkey and to be fair when assessing new member states, highlighting their own application.
A US military plane has crashed in Afghanistan, with two bodies being found amongst the wreckage. The cause of the crash is currently unknown. However, according to Iranian media (via Jerusalem Post) the CIA agent responsible for killing General Soleimani was on board.
The major Europe stock markets had a green day today:
- CAC 40 increased 62.80 points or 1.07% to 5,925.82
- FTSE 100 increased 68.64 points, or 0.93% to 7,480.69
- DAX 30 increased 118.92 points or 0.90% to 13,323.69
The major Europe currency markets had a mixed day today:
- EURUSD increased 0.00002 or 0.00% to 1.10202
- GBPUSD decreased 0.00366 or -0.28% to 1.30224
- USDCHF increased 0.0030 or 0.31% to 0.9729
Some economic news from Europe today:
Trade Balance (Dec) decreased from 3.950B to 1.964B
Spanish Unemployment Rate (Q4) decreased from 13.92% to 13.78%
CBI Distributive Trades Survey (Jan) remain the same at 0
The Congressional Budget Office (CBO) forecast a 2.2% growth rate for the US economy in 2020, which is in line with other agencies’ growth forecasts. The CBO believes the federal deficit will stand at $1.3 trillion annually from 2021 until 2030, which is a figure that alarms many analysts. Furthermore, the agency expects inflation to increase at a notable rate until 2023 when it is expected to settle.
The Trump administration expressed dismay over the UK’s decision to allow Huawei access to 5G networks. “There is no safe option for untrusted vendors to control any part of a 5G network,” a senior White House staff member told officials this Tuesday. The US has reiterated concerns over intellectual security, worrying that Huawei may provide Beijing with a backdoor to sensitive information.
The second case of coronavirus was reported in Canada, this time affecting British Columbia. In a joint statement, provincial Health Officer Dr. Bonnie Henry and Health Minister Adrian Dix said, “All necessary precautions are being taken to prevent the spread of infection.”
The Public Health Agency of Canada denounced rumors that the coronavirus began at the National Microbiology Lab in Winnipeg. According to rumors, two Chinese spies were removed from the center last year and brought a strain of the virus back to China with them to be used in chemical warfare. The chief of media relations for Health Canada and the Public Health Agency of Canada, Eric Morrissette, called the rumors “misinformation” that have “no factual basis.”
US Market Closings:
- Dow advanced 187.05 points or 0.66% to 28,722.85
- S&P 500 advanced 32.61 points or 1.01% to 3,276.24
- Nasdaq advanced 130.37 points or 1.43 points to 9,269.68
- Russell 2000 advanced 14.18 points or 0.86% to 1,658.31
Canada Market Closings:
- TSX Composite advanced 58.36 points or 0.33% to 17,500.88
- TSX 60 advanced 3.95 points or 0.38% to 1,045.14
Brazil Market Closing:
- Bovespa advanced 1,997.14 points or 1.74% to 116,478.98
Oil prices moved up slightly today after a string of down days. Still, questions regarding the coronavirus and its potential impact to Chinese businesses are in question.
The UAE’s nuclear power plant’s first reactor is ready to start operations, Emirates Nuclear Energy Corporation (Enec) said on Tuesday. Nawah Energy Company, an operator and subsidiary of Enec, which is responsible for developing and managing nuclear energy in the UAE, said tests by an independent body concluded that unit 1 of Barakah in the Abu Dhabi desert is ready to generate energy. The UAE is the 33rd country in the world and the first in the Arab world to have an advanced peaceful nuclear energy program.
The oil markets had a green day today:
- Crude Oil increased 0.59 USD/BBL or 1.11% to 53.7446
- Brent increased 0.44 USD/BBL or 0.74% to 59.6409
- Natural gas increased 0.0227 USD/MMBtu or 1.20% to 1.9090
- Gasoline increased 0.0286USD/GAL or 1.92% to 1.5168
- Heating oil increased 0.04 USD/GAL or 2.38% to 1.7146
- Top commodity gainers: Heating Oil (2.38%), Sugar (2.18%),Oat (2.07%), and Gasoline (1.92%)
- Top commodity losers: Palm Oil (-7.35%), Silver (-3.49%), Rubber (-2.14%), and Cocoa(-1.50%)
The above data was collected around 16.40 EST on Tuesday.
Japan -0.03%(+1bp), US 2’s 1.46% (+1bps), US 10’s 1.65%(+5bps); US 30’s 2.09%(+4bps), Bunds -0.38% (+4bp), France -0.09% (+4bp), Italy 1.04% (-0bp), Turkey 10.02% (-14bp), Greece 1.20% (-48bp), Portugal 0.32% (+5bp) Spain 0.32% (+3bp) and UK Gilts 0.55% (+4bp).
- UK 10-Year Treasury Gilt Auction decreased from 0.794% to 0.500%
- US 52-Week Bill Auction decreased from 1.550% to 1.490%
- US 7-Year Note Auction decreased from 1.835% to 1.570%
People are more consequentialist than they assume
This confused me:
Most liberals have what I would characterize as a deontological opposition to discrimination. That is, they think that discriminating against or maligning someone on the basis of membership in a protected class — women, trans people, black people, and other racially oppressed communities, etc. — violates a rule that should be inviolable.
In this view, such discrimination (be it legal, or expressed through hate speech, etc.) is not just wrong because it has bad effects, or because it harms members of the groups in question; it’s wrong because we have a duty to treat humans as equals, and it is never acceptable to violate that duty, even when doing so seems politically expedient.
I’ve argued that liberals are basically consequentialists (more specifically utilitarians.) This Vox article claims that liberal views on discrimination are deontological. But the argument makes no sense to me. If you deleted the term “protected” from the first paragraph, then it would make perfect sense. But as written it looks like the author is claiming that the principle of non-discrimination only applies to groups where discrimination can and does major harm, and does not apply to groups where discrimination is not a big problem. That’s probably a correct description of “liberal” (progressive) views on discrimination, but it’s a consequential argument.
I suspect this ambiguity reflects that fact that progressives are conflicted on this issue. Deontological arguments seem more inspiring. Think about the phrase “it’s a matter of principle”. At the same time, progressives cannot easily escape their basically consequentialist moral intuitions.
This inconsistency is probably sensed (if only at an intuitive level) by the general public, which makes it hard for progressives to have electoral success on “identity politics” issues. The public correctly senses that many progressive arguments are a bit phony.
PS. On the right, white nationalists exhibit a similar inconsistency, wavering between deontological and consequentialist arguments. They often try to justify their opposition to low income minorities on consequentialist grounds, but their sympathy for unsuccessful white groups (such as hillbillies) and distrust of successful minorities (Asians, Jews, etc.) is the “tell” that something else is at stake.)
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