Interview with Skeptics Society founder Michael Shermer on skepticism and evidence based management
Michael Shermer is an adjunct professor in economics at Claremont Graduate University, founder of the Sceptics Society, chief editor of Skeptic Magazine and (co)author of many books and articles that take on everything from the existence of Bigfoot to Intelligent Design and why people believe in such phenomena. Recent publications include The Mind of The Market. He is also contributing editor and monthly columnist for Scientific American, and is the host of the Skeptics Distinguished Lecture Series at Caltech. Managementsite.com interviews him about skepticism in general and the emergence of evidence based management in particular.
|The Skeptics Society is inspired by the philosophies of great thinkers, like the 16th Century Dutch philosopher and lens grinder Baruch de Spinoza, who tried to understand human nature throughout his life and the 20Century theoretical physicist Albert Einstein, who said all our science is child play and primitive compared to reality, but it is the most precious thing we have. Skepticism is a method, not a position. Skeptics are not cynical.|
|Michael: I was involved in extreme biking and used legal performance enhancement techniques. No drugs, I might add. Still feeling no improvements after taking herbs, vitamins, minerals, and potions of all kinds, I actually wondered if all the claims which were made on the bottles really could stand scientific scrutiny. That’s the moment I decided to go back to my scientific roots. At the time, I held a Masters in Experimental Psychology and went back to Claremont Graduate University to do my Ph.D. That’s what I actually wanted to do all my life. Become a college professor and improve the world a little by
Richard: On the internet, we can read, see and hear many of your articles, debates and lectures. The ones which stand out for us are: Why people believe weird things and the baloney detection kit. Becoming a skeptic is one thing, founding an organization and a magazine is something else. What do you hope to achieve by promoting skeptical thinking? How will things become better if more people assume a skeptical attitude?
All over the world there are skeptics organizations, like for CSICOP/CSI, Skeptical Investigations, The James Randi Educational Foundation and I even believe there is a chapter in the Netherlands. Here in the United States we have our hands full with school boards wanting to teach intelligent design or creationism instead of Darwinian evolution. We are caught in the middle of a cultural war. People outside the States, like you, always ask us why we spend so much time on these guys. It is a necessity.
Richard: On the 12th of February 2009 it was exactly 200 years ago that Charles Darwin was born. This year we celebrate his live and work. The school of evolutionary economics draws from the work of Charles Darwin on evolutionary biology. In your book Mind the Market you advocate this school. What fascinates you about evolutionary economics and how does it translate to our everyday life?
According to the Austrian school of economics, if you “create” too much money, the indicators in the market go haywire. That’s why we probably should go back to the gold standard. The value of money needs to be backed up. This should prevent us from creating money from thin air. It also makes you wonder if the spectacular economical growth over the last 25 years was maybe based on nothing. Normal growth rates are between 2 to 3% per year, instead of 20%. Makes you wonder.
Richard: Nassim Nicolas Taleb is a literary essayist, epistemologist, researcher, and former practitioner of mathematical finance and calls himself skeptical empiricist. He wrote Fooled by randomness and The Black Swan. Since the crisis in 2008 he is an activist for a Black Swan robust society. On the 7th of April 2009 he wrote an article in the Financial Times, where he states; We’ll see an economic life closer to our biological environment: smaller companies, richer ecology, no leverage. A world in which entrepreneurs, not bankers, take the risks and companies are born and die every day without making the news. Sounds like he also advocates evolutionary economics. Taleb’s contents that statisticians can be pseudo scientists when it comes to financial risks and risks of blowups, masking their incompetence with complicated equations. How does skeptical thinking prevent us from becoming epistemological arrogant?
This comes all down to biology. As for statistics, how can you predict the 100 year flood, if your data set only covers the last 10 years? Be humble and very aware of the limitations of your knowledge. Risk calculations and probabilities is not the same as fact finding. There is always bounded rationality in decision making. Nassim predicted the meltdown of the economy and the black swan emerged. That’s why he has so much fun in challenging people who make claims they can’t backup. He’s very popular right now.
The only remedy I see to avert epistemological arrogance is humility. Be humble before the market. But when the market goes up again, we’ll probably forget all the previous warnings and start over again. The cycle will repeat itself. The market now hit rock bottom. If you buy right now, you’ll make a huge profit. And that will probably happen on occasion. Then we’re back on anecdotal evidence and confirmation bias. We tend to have a short term memory. It’s human nature.
Richard: In Managers Not MBAs, 2004, Professor Henry Mintzberg at McGill University challenges the validity of the perennially popular MBA program: a program that top-tier companies continue to rely on as essential to the creation of successful corporate leaders. As one of the great iconoclasts of management theory, Mintzberg emphasizes the need to reexamine and drastically change our traditional form of management education. As Mintzberg boldly asserts: MBAs do not managers make. What do you think about this assertion?
I would be in breach of contract and this is not the way covers are picked out in publishing. They think that their way is the best way and are not inclined to change. I could test things for them within an hour. Heck, they can test it for themselves a local Barnes and Nobles, but they simply refuse. They have never tested their theory and don’t see any benefit in changing. I think they should. They’ll probably end up selling more books.