Waldman’s Rational Astrologies, or the Use and Misuse of Conventional Wisdom

Steve Waldman at Interfluidity today has an important post on what he calls “rational astrologies” or when it makes sense to hew to widely accepted belief systems, even when you know following them won’t necessarily produce the best outcomes. You really must read his post in full; I think the first part is terrific but have some quibbles when he tries extending his observation.

Waldman describes how a man, transported back a few hundred years but with significant memory loss, manages to recall when his wife is afflicted with a serious illness that the medical practices of his current era are as likely to do as much harm as good. Waldman describes how it is nevertheless rational for him to follow the recommendations of the healers of his day, even though it will cost him a lot of money, because his wife and colleagues expect it, and he can’t remember specifically which of the practices used are ones to avoid. He then contends that this sort of “buy IBM” behavior operates in many realms, such as hiring (preference for Harvard grads) and investing (continuing reliance on rating agencies).

While Waldman raises important issues (and to be clear, I really do like his post a great deal), I find his definition and assumptions questionable:

Rational astrologies refer to conventional beliefs adherence to which confers important benefits. In order to gain the benefits, an individual must persuade himself that the favored beliefs are in fact true, or else pretend to believe and know himself to be a cynical prevaricator…. In financial terms, behavior in accordance with conventional wisdom comes bundled with extremely valuable put options that are not available when we deviate. If, after an independent evaluation of the evidence, I make a medical decision considered “quack” and it doesn’t work out, I will bear the full cost of the tragedy. The world will blame me. I will blame myself, if I am an ordinarily sensitive human. If I do what authorities suggest, even if the expected outcome is in fact worse than with the “quack” treatment, then it will not be all my fault if things go bad. I will not be blamed by others, or put in jail for negligent homicide…

I see rational astrologies everywhere. I think they are the stuff that social reality is made of, bones of arbitrary belief that masquerade as truth and shape every aspect of our lives and institutions.

While this may be true for many people in the population, this strikes me as an overgeneralization. First, narcissists don’t blame themselves, and the percentage of the US population that is narcissistic is rising. Second, he uses medicine as his leading example because it is a field in which most members of the public defer to experts, and what is considered to be sound practice has changed considerably over time. Even so, there are significant minorities who reject conventional medicine (and other conventions). The most extreme version is cultists who place their faith in other belief or treatment systems ranging from the religious/magical, like laying of hands and voodoo, to alternative medicine, such as homoeopathy, Ayurveda, acupuncture, and Chinese medicine. Notice also that the conventional/alternative medicine split is much more pronounced in America than elsewhere. In the US, most doctors see alternative medicine as quackery, while in Australia, it is called “complimentary medicine” and doctors don’t recoil if you tell them you are, say, using Chinese herbs or seeing a chiropractor.

Now admittedly, in the US, alternative medicine has become more respectable over time. I been dabbling in it for some time, for instance, I was using acupuncture to treat inflammation when it was widely depicted as a sham here; research has now confirmed that it is effective in treating certain types of joint pain. And even 20 years ago, there was a significant community that would use alternative medicine before conventional medicine or take a horses for courses approach. At the same time, there was clear disapproval in the media when Steve Jobs first sought to treat his cancer outside the conventional medical paradigm. So even in the medical arena, the societal pressures to conform are not as great as Waldman suggests.

In other words, there is not a unitary “rational astrology” of medicine as there was, say, 50 years ago (ex some groups like Christian Scientists). The existence of multiple “conventional” belief systems allows many people more independence of action than Waldman depicts.

Similarly, Waldman contends that the “buy IBM” behavior is rational in the hiring market, so that preferring Harvard grads is perfectly sensible even if they are no better than candidates that attended other schools:

People hiring for more prestigious and lucrative positions attract larger pools of applicants, and have greater ability to find Harvard grads not very much less promising than other applicants, and so rationally hire them. People hiring for less remunerative positions attract fewer prestige candidates of acceptable quality, and so must do without the valuable protection a candidate’s nice degree might confer. Candidates with prestige degrees end up disproportionately holding higher paid jobs, for reasons that have nothing to do with what the degree says about them, and everything to do with what the degree offers to the person who hires them.

Erm, Waldman is missing something here. The reason Wall Street, white shoe law firms, and top tier consulting firms strongly prefer fancy school grads is that it is part of their branding. If their staff are working with clients of similar age levels who are making a lot less, there needs to be a way to justify the disparity, and the educational credentials are a biggie. The general counsel of a mid-sized public company may not like the fact the law firm partner he has hired makes a lot more than he does, but he accepts it because he knows he could not have gotten himself into that role. (In addition, one has to wonder whether any out-performance by the graduates of “better” colleges is due to expectancy theory, rather than either the native capabilities of the individuals or the caliber of their schooling).

But there is another reason these employers prefer “fancy school” grads: it is easier to pick from a constrained universe. Remember how numerous studies show that more choices make people less happy? Focusing on a smaller number of elite schools makes life much easier for the recruiters. And some of that is for informational reasons. As we wrote in 2007:

There is a simple reason (beyond narcissism) why people like to hire in their own image: They understand and can readily evaluate their backgrounds. That’s why the old-school tie isn’t necessarily a cabal dedicated to self-promotion. Re- cruiters can probe course selections and extracurricular and social activities, and have an informed view of the candidate’s character. An interviewer simply won’t have the same comfort level with a can- didate when he can’t calibrate her accomplishments…

This preference for the familiar also leads companies to adhere to the same hiring rules of thumb, whether or not they are correct. In many industries, one encounters a pat- tern of hiring certain types for specific roles. For example, former members of the armed forces are prized as drug detail men; trading firms take particular interest in candidates who have been successful at blackjack or poker.

Despite firms’ faith in their hiring criteria (and many cases, having the comfort of seeing competitors use broadly similar screens), there is no way to know for sure that your decision rules are correct. Even if you went to the trou- ble of keeping tabs on candidates whom you turned down, you could not determine whether their success or failure elsewhere was a valid indicator of how they would have done with you.

This is a long-winded way of saying that while Waldman is correct to stress the large role that heuristics and conventional thinking play in areas like recruiting and medicine where knowledge is far from perfect, he may be placing undue emphasis on pressures for conformity, as opposed to simple inertia. People don’t question a formula if it appears to be working, and if everyone similarly placed uses the same formula, it will appear to work, as in there will be no evidence that a different approach will produce better outcomes.

The flip side is having been involved in recruiting at Goldman and McKinsey (pretty much everyone was) and later having hired people to work for me at a much less prestigious employer, it was obvious even in the 1980s that plenty of smart, talented people didn’t get to the top schools. It took a bit more effort to do the job market equivalent of value investing. I have to confess I got some perverse pleasure from messing with client’s heads (as in watching how they reacted when they first encountered the Sikh I hired. They’d inevitably go on tilt at the sight of his turban, and then get even more confused since he was clearly likable and technically very competent, plus his British accent got him attributed extra IQ points). Given the insane increase in higher education costs, no doubt even larger numbers of promising students are going to less-fancy colleges.

By virtue of a combination of defective mental wiring and general contraryness, I don’t have much respect for a lot of conventional wisdom. I’ve long been a big believer in the Will Rogers saying, “The problem ain’t what people know. It’s what people know that ain’t so,” and as a result, in the importance in being aware of the limits of your knowledge. So I think he is unduly pessimistic when he writes:

The process by which rational astrologies are chosen is the process by which the world is ruled…Policy is largely a side effect of the risk-averse behavior of political careerists, who rationally parade their adherence to this moment’s conventions as enthusiastically as noblemen deferred to pronouncements of a court astrologer in an earlier time. We can only hope that the our era’s conventions engender better policy as a side-effect than attention to the movement of the stars. (As far as I am concerned, the jury is still out.) But it is not individuals’ independent judgment of the wisdom of these conventions that guides collective behavior. Our behavior, and often our sincere beliefs, are largely formed in reaction to the terrifying accountability that comes with making consequential choices unconventionally. Our rational astrologies are at the core of who we are, as individuals and as societies.

But this is true only when existing institutions and norms remain unchallenged. The idea that an unarmed man preaching non-violence could defeat the British Crown would have been dismissed as impossible in 1930. The Arab Spring uprisings were completely unheralded. Most Americans labor under the delusion that America is a nation of laws even as elite miscreants go unpunished, large investors have found they cannot get contracts enforced, victims of wrongful foreclosures have trouble getting recourse, and ordinary citizens can be executed simply by being designated a suspected terrorist. Belief systems, even ones that are widely held, are more fluid and malleable than Waldman suggests. While that gives some cause for hope, there is no assurance that the most misguided shared beliefs will necessarily be the ones that change.

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  1. Enon

    “research has now confirmed that it is effective in treating certain types of joint pain”

    Citation, please. As far as I know, any apparent effect from acupuncture is placebo only.

    Perhaps you should stick to your area of expertise, economics, and leave medicine to those who can recognize quackery when they see it.

    1. Yves Smith Post author

      To give you an idea of how widely acknowledged the efficacy of acupuncture is, my insurance company has paid for it for at least 15 years. Many of the studies are on osteoarthritis of the knee, since that condition produces a pretty constant level of pain, hence any relief is likely to be due to intervention, as opposed to recovery. Many practitioners (including my 75 year old orthopedist as well as my insurer) see that as generalizable to other chronic orthopedic issues.

      So I don’t see any particular reason to provide you with citations. However, the WHO has a good list if you want a place to start.

      1. Jeff N

        I really like this post.

        And if I ever have kids, I see that I now have to tell them to join college groups like the “john birch student society” to fool future recruiters. :)

      2. Enon

        As we know, state regulators often do silly things, such as licensing homeopathic practitioners, so that insurance companies are obligated to pay for their services as state-recognized medical services providers.

        The IRS even allows deductions for payments to Christian Science practitioners.

        The WHO citation list I found online is very disappointing, full of poorly controlled small sample size studies and lots and lots of citations to a journal called ‘Chinese Acupuncture and Moxibustion’. As the wiki article a previous commentator referred me to notes, “Some scientists have criticized these endorsements as being unduly credulous and not including objections to or criticisms of the research used to support acupuncture’s effectiveness.”

        Acupuncture does help with some pain relief but so does sham acupuncture!

        “The lack of any advantage of real over sham acupuncture means that it does not matter where the needles are placed. This is completely consistent with the hypothesis that any perceived benefits from acupuncture are non-specific effects from the process of getting the treatment, and not due to any alleged specific effects of acupuncture. In other words, there is no evidence that acupuncture is manipulating chi or anything else, that the meridians have any basis in reality, or that the specific process of acupuncture makes any difference.”

        Nor is having your skin pierced with needles entirely without risk:

        Global acupuncture infections ‘under-diagnosed’

        I started reading this blog to learn more about how most economists engage in magical thinking and how their models are disconnected from reality.

        Likewise, almost all ‘alternative’ medicines are based on prescientific concepts and magical thinking. It’s disappointing you don’t recognize that, but we all have our blind spots.

          1. psychohistorian

            So then you and Enon must think me totally bonkers when I rail on about the global inherited rich and the class based, inheritance maintained social structure of “Western Countries” in my comments.

            Don’t let your closed minds get you down, open them and look around. Its a big world out there. Western medicine has its blinders that you seem to be defending here.

        1. Yves Smith Post author

          Sorry, you appear remarkably unaware of the standards for insurance coverage. Insurers routinely deny claims based both on the treatment being inappropriate (ineffective) for the condition as well as the treatment protocol being out of line with what is “ordinary and customary” in terms of cost per treatment and/or number of treatments. For instance it is remarkably difficult to get reimbursement for psychotherapy (and they are licensed too, lest you forget) beyond a limited number of treatments. And that is with psychotherapy being Medicaid reimbursable, which requires private insurers to at least meet Medicaid levels.

          And in the overwhelming majority of states, your “state regulated” point is utter nonsense. The insurer says no, you have a multi-level INTERNAL appeal process. The overwhelming majority of patients have no right to external appeal (as in state intervention).

          There are no regs anywhere requiring reimbursement of acupuncture. Nothing even close.

          I happen to work closely with doctors and therapists who treat professional sports teams and Olympic-level athletes. They are very efficacy oriented and they are actively experimenting with cutting edge therapies to see what works and what gives them advantage. They have strong incentives to get athletes back in service quickly, provided that what they are doing to get them back on the field does not lead to longer-term risks. The group I work with finds acupuncture useful in rehab and has considerable experience that supports their finding. So you are pretty off base in your view that anyone who uses acuptuncture is some sort of dupe. I can tell you that I am not a placebo responder (lots of treatments, including opiate based pain killers, don’t do much if anything for me) and I do get some relief from acupuncture.

          Moreover, you ALSO seem unaware of the fact that the money to do the sort of research that even approaches a “scientific” standard is pretty much only in the drug arena (well, there is some on medical devices, but the FDA standards for devices are far more accommodative, so the study sizes and other requirements are considerably less taxing), and then almost entirely on drugs under patent. For instance, there is medical evidence that so called autoimmune diseases are actually produced by a pathogen called mycoplasma. This isn’t an “alternative medicine” thesis, it was developed by a MD on the national rheumatology board who was also a medical professor. He has considerable experimental evidence as well as successful treatments in his own practice and those of doctors using his protocol. But his treatment uses tetracycline, an old, off patent antibiotic that produces little if any side effects. There is no money to do research on treatments involving old, cheap drugs, and by contrast, Big Pharma has patented drugs that are threatened by this line of research. So what treatments do you think are being used? And why isn’t this protocol at least getting a serious look? Follow the money. And the very same issues apply to acupuncture and other alternative treatments.

          1. Enon

            Follow the money; the fact is that there is a lot of money in alternative medicine these days, not just allopathic drugs. The National Center for Complementary and Alternative Medicine alone has spent $1.2 billion on research in the last dozen years.

            I find it quite illuminating that you are so perceptive and incisive about confirmation bias, motivated reasoning and magical thinking among economists, pundits and bureaucrats, but blind to these same failings when it comes to your physicians.

            You remind me of a friend who is very intuitive and insightful about people and their motivations, but continues to insist that astrology works.

            Keep up the good work exposing the machinations of our capitalistic world; we’ll just have to agree to disagree about acupuncture.

          2. Nathanael

            Enon, I’m sorry you’re a closed-minded idiot. Acupuncture does work for joint pain, it’s been tested in controlled studies.

            Acupressure works pretty much just as well, but is harder to do.

            The various treatments based on Dr. Janet Travell’s trigger point theory work even better, and appear to have a stronger scientific basis. (Yves, you might want to check them out.)

    2. dSquib

      It may have some effectiveness beyond placebo.


      Depends what one means by “acupuncture”. I would guess Yves does not believe “stimulating these (acupuncture) points can correct imbalances in the flow of qi through channels known as meridians”. I’d guess the author of that article doesn’t either.

      I wouldn’t bother with it I don’t think, as I think there are better treatments out there, and I dislike the idea of benefiting fraudsters.

      Doctors, physicians, healer, witch doctors and barber surgeons and the like have tried a large and wide array of treatments throughout history, some of which were deadly, most of which didn’t work beyond placebo, some of which did, albeit for reasons beyond the understanding of its practitioners. This needn’t be seen as a concession to nonsense such as homeopathy or the rest of “alternative” medicine.

      1. reslez

        You can treat a mosquito bite by applying heat: this temporarily relieves the itch. That doesn’t mean I want “traditional practitioners” (poorly?) trained in hoodoo to administer this treatment on the basis of 4000 year old unsubstantiated myth. If the treatment works, let it be verified by peer review to rule out the placebo effect, and have it administered by medical professionals in a sterile environment. Without the hoodoo about chi and meridians. Unfortunately for acupuncture, it has a lot of baggage.

        Acupuncture has been the subject of many studies. It’s not that much better than placebo. That doesn’t mean acupuncture doesn’t work. Placebos can and do relieve pain — that’s the whole point of the placebo effect. Human cognitive bias in action.

        1. Nathanael

          Acupuncture is better than placebo, though this is probably because it’s hitting what Dr. Travell calls “trigger points”.

  2. philipo

    This seems to be a very long-winded way of saying that when people make important decisions they cover their asses.

  3. Middle Seaman

    It seems to me that Waldman’s post deals with what we typically call “mainstream” or the “path of least resistance.” The difference between Waldman’s view and your view appears to me to be marginal.

    In large groups as dealt with here, there will always be exceptions; some will say several standard deviations out. Western medicine doesn’t solve all problems, but its knowledge and practice are way better than alternative medicine. When hiring one can take the Harvard path or make an intelligent choice if one exists. This is basically a simple utility function which differs with organizations.

    Same difference.

    1. Yves Smith Post author

      Obviously, I don’t see the differences as marginal. Differences in degree are differences in kind. I think his observation is very useful, I just think he pushed it a bit too far.

      Waldman posits the existence of a mainstream that has such a dominant influence that deviating from it has psychic and external costs, hence the pressure to conform is strong. I don’t see the mainstream anywhere near that powerful in the areas he discusses. I see American positions on these issues as much more fragmented than he does. I have some knowledge of the medical scene, and my sense is the receptivity to and use of alternative medicine (as well as experimental treatments) is much larger than he recognizes. Moreover, thanks to the Internet, we have much less deference to doctors. That’s an attitudinal change that leads to much more willingness to question the authority of doctors (and remember, adherence to convention is tightly bound to deference to authority).

      Similarly, Waldman suggests that hewing to convention (which would also mean not just hiring only Ivy grads, but only white men, to the extent you can keep the discrimination police at bay) would be the rational course. Yet McKinsey, which was one of those elite recruiters, hired Indians starting in the mid 1970s, when Goldman was openly loath to in client-facing positions for years later (I recount the details in the linked article). If cultural norms were so well established (and in the 1970s and 1980s, before media fragmentation, norms were far more widely shared than now), why would you expect two of the firms that were the most eager recruiters of Harvard MBAs to differ on what sort of person would be go over well with clients?

      1. jake chase

        All this Harvard, Goldman, McKinsey stuff is so much self serving self aggrandizing nonsense. Haven’t these clueless narcissists done enough damage to stop making you so proud of having been one of them? Every time I meet one of these ultra smooth bullshit artists I want to punch him, and the most recent occasion was a dinner last saturday when a fatuous McKinsey alumnae banker ernestly proclaimed that Dodd Frank was preventing her mega bank from earning a fair return on equity. On equity? These fucking banks haven’t had any equity since 2008. Every one of them ought to be in liquidation, and every executive behind bars.

        1. Warren Celli

          We exist under a system of Forced Complicity Crimeunism, where the Xtrevilist few determine the societal direction of investment (globally) in criminal immoral enterprises, and at the same time they own and control the crumb supply of all individuals and the culture shaping media. No complicity, no crumbs, or far fewer crumbs, its that simple. Calling it “conformity” serves to soften the reality and make the complicity more palatable.

          You are both (Yves & Middle Seaman) right. The mainstream is being INTENTIONALLY fragmented while at the same time people conditioned to go along still play the game. But the game changer is that their crumbs are now replaced instead with their destruction (debt trapping deflation and a new life in tent cities). The inertia of the past pressure to be complicit is now being used as a driving force for destruction. Profit is out, destruction is in, the herd thinning intensifies. Its subjugationflation get used to it.

          Hiring Harvard or “fancy school” tool individuals (pre lionized and revered by the culture shaping machine) is simply a complicitous act that maintains the status quo and insures better crumb supply connections for the folks doing the hiring. But that was ‘then’ and this is ‘now’. Along comes fragmentation or what might better be called intentionally created divisiveness. Hiring unconventionally — Indians, etc. — is an indication or example of it and the transition and the struggle between the newer Pernicious Greed for Destruction Xtrevilism pitted against the old fashioned Vanilla Greed for Profit Evilism.

          The root cause here is the large group small group alliances. The very few wealthy sociopathic Xtrevilists, through use of the Noble Lie, have seceded globally from their national “we the people” alliances and formed more powerful wealth and control dense “we the stockholders” corporate alliances that now control the global culture and its nation states. You can argue the ‘effects’ till the cows come home but at some point you will have to deal with the ‘cause’ and the parasitic Xtrevilist self anointed elite banker will have to be ‘punched’ — go get em Jake Chase!

          Deception is the strongest political force on the planet.

          1. jake chase

            What makes you think profit is out? Profit has simply migrated to the looters controlling the corporations. It is extracted through absurd self justifying compensation grabs, lunatic stock option giveaways, etc. It is justified by a cadre of schlock intellectuals for sale to the highest bidder, to the only bidder. The academic, media, consulting complex provides the easiest avenue to middle class status, and its mantra is go along to get along. Somebody said it is difficult to get a person to understand something when his salary depends upon not understanding it. Propagana and security (police, intelligence, etc.)are America’s only remaining growth industries. Ultimately, it will have a farm sector, a propaganda sector, a finance sector, a security sector and reservations herding together those unable to secure a place in any of the others.

          2. Warren Celli

            Jake Chase said; “What makes you think profit is out?”

            Profit is out in the sense that it has taken a back seat to the now primary driving force — the herd thinning — and the societal restructuring; the move to a two tier society of ruler and ruled with the ruled put into a perpetual conflict with each other. The expensive to maintain and unsustainable high resource consuming middle class is now being replaced with a far less costly and easier to sustain robotic tech-tronic law enforcement class (its the Onotron kids!). There has always been an overseer class to implement control for the ruling class. It now transitions to a self sustaining robotic class. There will be no reservations ”herding together those unable to secure a place in any of the others” occupations. They will simply be eliminated. Its happening as we speak.

            There is not enough attention being paid to the Noble Lie here. Think population decimating Henry Kissinger gone underground. These are not nice people, they are diseased sociopaths.

            The Xtrevilist few used us all to gain power in an unsustainable global resource pump and dump scheme over the past fifty plus years. The go along to get along crowd, those who engaged in the Forced Complicity Crimeunism and allowed the consolidation of global power and co-option of nation states and their governments, were handsomely rewarded in the pump phase with that unsustainable crumb supply. They were, and now are, the dwindling middle class. Now we are in the dump phase. The Xtrevilists have incrementally pulled the trigger on a controllable motion gun with a controllable to target bullet. If you keep that Noble Lie at the forefront of your thinking then the bullsh!t and feigned stupidity of the Bernank crowd begins to make a lot more sense.

            The go along to get along crowd — the old fashioned Greed for Profit Evilism folks, including the academic, media, consulting complex and everyone else who aided and abetted the rise of Xtrevilism — are not all in on the current deception, and so they, with their past mind set as inertia still focus on ‘profit’ as the driving force in their lives, and again, yes, some still profit, but the brunt of the profit and control now goes to the Xtrevilist perpetrators.

            The Vanilla Greed for Profit crowd is now like a hopeful and hung over drunk with a lottery ticket sitting on a curb waiting for the numbers to be called. They believe that we are in just another pump and dump cycle that will turn the corner any day now. Sad. They, along with every one else that they have been extracting keep the host alive ‘profit’ from in the past years, are now the current target of destroy the host Xtrevilism. Its subugationflation, eliminationflation, and deceptionflation, all rolled into one and emanating from the Noble Lie.

            Deception is the strongest political force on the planet.

    2. Nathanael

      I would like to point out that I’ve seen grossly antiscientific behavior from “modern Western medicine”.

      What actually works consistently, and better than the alternatives, is *science*. Now, science isn’t what a lot of people think it is — science is what they do on Mythbusters, basically. Science has shown that most back surgery is pointless or even counterproductive (yet “western Medicine” continues to do counterproductive back surgeries).

      Scientists are happy to study “alternative medicine” techniques; “western Medicine” practicioners frequently aren’t willing to.

  4. Joe

    Probably the first thing you should do is make the distinction between natural laws and normative laws. Normative laws being the conventions of particular cultures.

    What sprung immediately to my mind reading this post is the position that “Socialism” has in the US. This can be explained by the US’s long standing conflict in the Cold War, which lead to socialism’s demonisation. Many people in the US are unable to rationally discuss socialism, to weigh up it’s positive and negative aspects. In the US socialism is mostly placed in an historical-political framework as something which is just another relic of history, a dead end in historical development, like monarchies, or feudalism. Unfortunately, this conventional wisdom, this normative understanding of what can not be right, has made it difficult for governments in the US to direct social development, in other words to lead their people. This, in the face of the increasing evidence supplied by scientists that our current way of life is having a negative effect on the natural world– for example, we need to do something about global warming, water scarcity, etc. Not to mention normative conventions related to things like social justice, such as equality or the right to work.

    1. Susan the other

      I agree with your description of the mindset against socialism and social solutions. It has always seemed irrational to me that our entire nation could be so blindered with propaganda (which itself has caused a multitude of social problems) that social solutions to social problems is simply considered un-american. It is an attitude that is clearly nuts.

      1. jake chase

        This hasn’t always been so. Things were much different in the 1930s, the last time capitalism failed, but this time the failure has been more selective, the propaganda machine has television behind it (not to mention the consolidation of newspapers), and socialism has been tied successfully to Russia and eastern Europe, which failed even more spectacularly before capitalism did. Today’s problem really isn’t what people think. Most of them don’t think at all and few of those who do think have any solid information to think about. Medicine provides a spectacular example of what makes thinking of dubious value. Suppose you know that most doctors are hacks, that a good deal of medical research is fake, that most drugs have been inadequately tested before being foisted on a public desperate for cures. You also know your PSA is 18. Is accupuncture going to save you? Is Mary Baker Eddy going to save you? Is swallowing the pills hawked on TV by Joe Theisman going to save you? Do you really care one way or the other? Life is hard enough without worrying about ‘solving’ social problems that will keep getting worse regardless of what you do, who you vote for, whether or not you drive a shitty little car that runs on electricity, shlep your own bags to and from the supermarket, practice contraception, pray regularly, etc.

        Incidentally, the problem with socialism is it gives the same smooth bastards even more power with less accountability and no meaningful standards for decision. Is it better to have one czar named Obama than 2,000 superrich bastards running things as best they can to suit themselves? At least with 2,000 rich bastards you don’t have to worry about being personally objectionable to the one guy whose opinion means anything. I know that isn’t much but it is at least something to think about. Socialism doesn’t necessarily mean the decisions authority makes are any better. It just means there is no escaping them.

        1. Susan the other

          It depends on what those 2000 guys do. If they are smart they will act like Henry Ford. If they are not they will be useless. I think there’s sufficient democracy in a system that includes some socialist solutions. It’s not so black and white.

          1. jake chase

            Since 1914 America has become increasingly socialistic while claiming to remain a bastion of individualism and free enterprise. First came the Fed and the Income Tax, then WW I, then the New Deal Regulatory State, then the National Security State. The net result has been an imperial government, socialism benefiting the corporate rich, draconian regulation of private life, free enterprise for the poor. The daydream of the Progressives, that regulation could be expertised for the benefit of industrialization’s victims, was turned on its head as the corporations soon learned to dominate the regulatory state and every Federal agency became a captive of those its mission was to regulate. What the working class got out of all this was easy credit, which has worked out just as any sensible person might have expected. Today we enjoy the National Security Usury State, maintained by flag waving and propaganda. Instead of insisting upon freedom, the people demand security and jobs. Today’s daydream is a payoff for showing up and being nice to everyone around. The ideal job is talking nonsense into a microphone while grinning at a camera.

          2. Joe

            This is exactly what I mean– large nebulous concerns about the fate of an entire nation are due to “Socialism.” That’s what less passioned people call demonisation.

            One of the syndromes of the US demise is that now that things are getting economically tougher, once strong local communities are starting to fall apart. This is due to a particular sort of individualism.

          3. psychohistorian

            You are right Susan the other.

            Lets say for this comment that those 2000 guys = my global inherited rich.

            These guys have been in charge for centuries. These are not the wannabeee banker puppets. Can we take a serious look at where this sort of social organization is getting us?

            Yves is saying in this posting that the mean and median in our world may no longer be representative of our best. I agree and think the sort of blindness it has created and continues does humanity a disservice.

    1. Yves Smith Post author

      That is a separate and VERY important issue. One of my buddies, who worked for the NIH, described medicine as a medieval art. For instance, despite the fact that a Nobel Prize was awarded for the discovery that ulcers were caused by bacteria, nearly 1/3 of the doctors still treat ulcers as if they were caused by diet and stress.

      1. Nell

        And to complicate matters further – chronic stress levels can interact with the presence of helicobacter pylori to form ulcers. That is not all people with helicobacter pylori get ulcers but people with this bacterial infection are more likely to get ulcers if they also suffer from chronic stress.

        “A study done immediately after the great Hanshin Earthquake 1995 in Kobe, Japan, found that the recurrence rate of peptic ulcers in patients infected with H. pylori was much higher than that in patients in whom H. pylori had been eradicated [12]. Basically, and Yamamoto et al. [13] and Matsushima et al. [14] reported results suggesting the influence of H. pylori infection on the development of stress-induced gastric mucosal injury using animal experiments and human [13] and [14].” http://www.sciencedirect.com/science/article/pii/S0891584905000602

        1. Susan the other

          not to mention how much extra unnecessary stress is caused when you know you are sick and your lazy doctor impatiently tells you that it’s probably your own stress which is causing your illness and that it is all in your head and so he/she isn’t going to do any labwork for now… around and around in circles

        2. Nathanael

          Controlled studies show that stress basically suppresses all immune system function; and we even know that this operates through the medium of cortisol release; so this isn’t suprising

      2. Warren Celli

        Oh come on. Doctors can’t be bad if Nobel Prize winning Obama supports them with a (beat the drums of gratuitious promotion for all invloved here);

        “Presidential Proclamation — National Prostate Cancer Awareness Month, 2012



        Prostate cancer is among the most common cancers for men living in the United States, and despite the progress we have made in controlling it, the disease continues to take a devastating toll on thousands of lives every year. During National Prostate Cancer Awareness Month, we remember those we have lost to prostate cancer, and we renew our commitment to preventing, detecting, and treating this terrible illness.”

        More here…


        And the medical profession, on cue, and in unison, holds free prostate cancer screenings across the land (sample)…

        “Free Prostate Cancer Screenings at Saint Joseph’s

        The Prostate Cancer Center at Saint Joseph’s is committed to screening as a method to continually increase prostate cancer survival. We follow the American Urological Association (AUA) Guidelines for Prostate Cancer Screening which recommends a baseline prostate-specific antigen blood test (PSA) along with a digital rectal exam (DRE) beginning at age 40. Following the initial screening, annual screenings should be done to track changes in the PSA level (and the prostate itself) which can be an indication of a problem. Please check our Web site often for information about free community screening events. All screenings for prostate cancer at Saint Joseph’s are done by appointment only and are for men between the age of 40 and 75 who have never been diagnosed with prostate cancer.”

        Look at those friendly smiling faces.

        More here…


        Now I ask you, after considering the above, does not this feel good, do good, public safety promotion have the look and feel of a free brake inspection promotion? The rationales are the same, “prostate screenings and brake inspections increase survival rates”. God bless public safety!

        And… will you be upsold the complete physical examination while being prostate probed, just like when you go in for the free brake inspection you get upsold the twenty one point safety check and leave with new windshield wipers and an expensive tune up.

        Hey Obummer — How about a proclamation for National Brake Safety Awareness?

        Or how about a Cash for Rotten Teeth program for dentists like the cash for clunkers program (also with a health and safety rationale driving the scam. Again… God bless public safety!), Or cash for refrigerators, or cash for…

        Yes “rational astrologies” , conventional brainwashing, drive the big Scamerican machine, and it always comes back to who controls the alliance(s) and how fair is the distribution of the gain from those alliances.

        Deception is the strongest political force on the planet.

        1. psychohistorian

          Don’t get me started about bicycle saddles and how they wedge into the V of the pelvic bones to place that road feeling as close as possible to the prostate.

      3. Foppe

        IIRC 90% of the people whose stomach contains H. Pylori do not get ulcers; what is needed to explain the occurrence — and recurrence — of ulcers is the fact that repetitive stress decreases immune activity (since the body stops investing in that system when it thinks itself in acute stress), which results in damage to the stomach lining not being repaired in time. (Those bacteria constantly cause small problems in everyone, but non-socially-stressed ‘sufferers” immune systems are capable of repairing that damage as it occurs, whereas it is only in people who experience stress frequently — and here we’re talking dozens of times a day or more, as tends to happen in the modern workplace — that this does not occur in a timely fashion.)

  5. MGK

    While I like the concept of “rational astrologies” I think we need to acknowledge that there are two distinct classes.

    In the first case, we have a belief that may or may not be true, but most people behave as if it were. Conventional wisdom is a subset of this. Certain fields like medicine take a dim view of these positions in that for medicine, until something has been proven, beyond doubt by the standards of their field, it is regarded as false. By the current standards of medicine, parachutes have never been “proven” to prevent bodily injury when falling from great heights because no conclusive studies (which by definition must be prospective, placebo controlled, double blind studies performed in multiple geographic locations with multiple populations before conclusions can be drawn) have been systematically undertaken; injury due to falls will be merely dismissed as anecdotal and/or case reports of limited significance.

    In the second case, we have the plain wrong astrologies, that are nevertheless followed out of ignorance, convention, or laziness.

    In the case of the former, following along is common because no one can really say one way or another what is the best course. Whether the market goes up or down, not buying IBM will be seen as just stupid.

    1. Enon

      As we can directly observe parachutes preventing bodily harm, studies of the type you describe would be superfluous.

      In the future, we may have imaging techniques or computer simulations so powerful that researchers will be able to directly observe or predict the actions of medicines. Until that happens, studies that are “prospective, placebo controlled, double blind . . . [and] . . . performed in multiple geographic locations with multiple populations” will continue to be the gold standard for testing hypotheses that cannot be tested by direct observation or modeling.

      It is a fallacy to think that there is only one ‘scientific method’ that applies in all cases.

      1. MGK

        You missed the point of my comment. Any field or profession is going to have a standard approach for evaluation. My point about medicine is not that medicine doesn’t accept parachutes as functional, but rather that by its standards of evaluating evidence, the is no credible, reliable, robust medical evidence that parachutes actually do what they claim to do. The fact that it’s superfluous is irrelevant. There are cancer patients who undergo coffee enemas and claim cures and would argue that they constitute direct observation so clinical trials are superfluous as well.

        My point is that I was agreeing with the author that we are always largely existing within a collection of rational astrologies. We like to think that we have it all figured out (and understand what we don’t know as well), relative to our primitive ancestors, but I expect that 100 years from now, your great grandchildren will look back on the 20th and early 21st century and wonder how we could be so stupid to apply the types of snake oils and poisons that pass for standard medical care today.

        The ability to make testable prediction is the most powerful tool we possess to move forward technologically. At any given time there are limits to what we can and can’t do. Rational astrology provides a mechanism to function wihtin that degree of uncertainty that still exists.

  6. brazza

    Yves: if I had to wager, I’d say that if you found yourself in the situation described in the opening paragraph of the article, you would NOT take the conventional decision. Therefore, it is understandable that your assessment (given your intellectual integrity and proclivity for rational analysis) would lead you to feel the article is unduly pessimistic. I hope you are right because without dissent from “rational astrology” it seems to me that the speed of advancement is significantly reduced.

  7. JTFaraday

    I think it’s interesting as well, but for me when it starts to talk about hiring Harvard grads into established organizations like McKinsey or welfare state organizations like Golden Sacks it kind of falls off the wagon.

    If you have an established organization with a brand and established purposes, then it makes no sense to hire the “best and brightest.” You don’t really need to pay the premium for the creative talent (or the credential that attests to it) in order to make the organization function as intended because you already know what you’re going to tell them to do. So, just hire someone to execute and pay them adequately.

    Meanwhile, it makes more sense for the collective macroeconomy to open up the free market frontier to the best and brightest to make use of their gifts.

    Cut ’em loose.

    1. reslez

      This is all about justifying injustice that favors the elite. They know the alleged superiority of these grads is a myth, yet they still need to perpetuate the system. Therefore they concoct a theory in which acting on myth is “rational”. By definition it cannot be — it may be reasonable, but never rational. Similarly, failing to correct their irrational system is “conventional wisdom”. (This can only be true if “conventional” means “not”.)

  8. Tim

    I’d like to make clear that insticts are the predominant driver of such non-critical thought processes and behaviors, and if it were a matter of life and death to disavow the rational astrology you would see the correct decision in a heart beat, because physical survival is an overiding instict.

  9. Rob

    i think the gist of the article ,is right on.the details and the examples used might not stand up to every scrutiny,but what does?that is the point.every idea has aspects that are dissimilar.
    What is a Harvard graduate?he/she is just a person who went to Harvard…nothing more.harvard does not denote the quality of the individual,and certainly not the action and knowledge of every moment in time for that individual……you might WANT a person trained at Harvard who was taught by the pioneer of a brain surgical technique,do be working on your brain…..but one of the last people you want screwing with your economy is Larry summers……..but even the subject of medicine is so subjective….depending on YOUR outcome and experience you might have a different view of the same thing…..medicine may be science related,but it is also art.and the better practitioner is an artist,not a man of science….rigidity has its drawbacks in human relations.after all doctors kill more people than drunk drivers and guns put together every year….
    And the line of the body physical and the body spiritual is very blurry…
    A scientific fact is that heat burns skin,a fact is that people can walk on hot. Coals and not get burned…what is the middle?…who cares…health isn’t a clear argument of rational astrologies.I like the comparison to political and philosophical ideas better.they are truly different depending on opinion.there is no truth,there is just what people say…just what people do/ did…..I like the comment on the difference between nature’s laws and normative ones…..
    Nature’s laws are what man must obey,our truisms are there for the hell of it….and subject to opinion.
    Our economy must conform to the nature of man,but the details and practices are what we can change….there is no need to do things we have done for the last 100 years….abolish the federal reserve,and let the people and their treasury control the money supply.not a herd of money grubbing elitists,who pretend they know what is important in overseeing our money supply and never really have to deal with the carnage they have wrought.

    1. psychohistorian

      Agreed and thank you!

      These are the sort of discussions we need to have and thanks to Yves, we are.

    2. JTFaraday

      “Nature’s laws.” Nature’s laws are still racist and misogynist. Ask any of our budding evolutionary psychologists.


  10. All in the stars

    Central Bank policy models assume static agents with “desirable” and “undesirable” characteristics. They then seek using a biased set of tools to return the economy to some “desired” status quo ante equilibrium using a biased set of tools that favours their “desirable” agents.

    That this sort of selective policy should not have wide ranging economic, social, political and cultural effects when repeated through several cycles and generations is what would be suprising….

  11. c.

    This strikes me as fun as applied to social items such as music or movie file sharing, use of windows versus Linux, securing your computer, sharing certain items on Facebook.

    The “everyone does X” and therefore it is OK attitude is prevalent. And he is correct, the perceived risk is on the outlier and rarely viewed as an indication that our system or our norms should change.

    But on the backside of that, you use Windows, everyone does and yet when your computer crashes from a virus it is “poor you” when really you had your warnings and the knowledge of how insecure it is as an OS is readily available. Yes, a fun model to play with and very applicable to social and computer related choices.

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