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Short Term Gain…
Why do people who live in places known to be at risk for wildfire, keep building houses there? Why are we so ill-prepared for rare events such as hurricanes and earthquakes? When it comes to day-to-day living, we are pretty good at being prepared. But when it comes to those hairy-scary-and-rare events that cause societal meltdown, not so much! Robert Meyer, co-author of The Ostrich Paradox shares a few vital insights into this phenomenon.
Do You “Prep”?
Intrinsically we are an optimistic species, and rarely think that those kind of things will happen to us. Unless you are the prepping type, we also suffer from several other biases including myopism, amnesia, inertia, simplification and herding. And according to Robert, all of these psychological states make us ill-equipped to handle serious events when they occur, because they prevent us from preparing for them in the first place. Robert helps us to identify these habits within ourselves, and then circumnavigate them to better secure our future.
More Than Just Buying Candles…
People used to think tornadoes were acts of God and so could not (and would not) prepare for them. But in this day and age, with so many more potentially life-threatening events possible, we need to be preparing in some way. The universe is chaotic and anything is possible. It is up to us to make sure we have gas in the car and a supply of food and water for when the lights go out. And coloring and legos for the kids…
Interview Notes From The Show:
– Hey, welcome back to the Urban Monk. Good to be here in studio in Southern California. Interesting subject we’re talking about today, “The Ostrich Paradox”. It’s all about understanding why we act the way we do. Why we know about certain risks that may be coming our way, and we don’t do things about them. And so, there’s certain biases that are there. My guest today is the co-author of the book, “The Ostrich Paradox”, Robert Meyer. And we’re here to talk about why we do the things we do. So hey, welcome.
– Hey, thanks a lot.
– Yeah, so you’re over at Wharton. I know you’re on sabbatical now, but you look at these types of things, I’m assuming obviously, in the business climate. You’re looking for the black swans. You’re looking for the things that come out of nowhere that suddenly become really kinda big challenges for businesses. Was that the impetus originally, was kind of the business climate looking at this?
– Yeah, to some degree. It is, I think, I’ve always had an interest in kind of why bad things happen to people, and why they keep happening over and over again. The actual thing that really motivated it, a few years ago I was in coastal Mississippi, and I’m walking along the street there and I see this sort of empty lot, and sitting out in the middle of the lot kind of inland a bit is an old ATM machine, and it’s just sitting out there by itself. So, I kind of walked up there and figured out why is an ATM machine just sitting out in the middle of a lot? And then I found out later that this used to be a whole shopping center that was taken out by Hurricane Katrina in 2005. And then I kind of was curious as to a little bit about this shopping center. And it turned out that the shopping center had been built on exactly the same spot as an apartment complex had been built back in the 1950s, 1960s, which it had been destroyed from Hurricane Camille in 1969, in which 23 people died. And so, I called the owner of the property and I said, “Did you know that this is the same plot “of land gets wiped out every 30 years or so? “And what are you gonna do with this land?” And he says, “Well, because of new codes, “we can’t put up a new shopping center, “so we’re gonna put up a new condo complex.” So basically, you get kind of this cycle back and forth again. And I thought, “Wow, there’s gotta be a book there. “There’s gotta be a way of kind of understanding “why we find ourselves in these situations “over and over again, where we have these “foreseeable risks, yet we kind of fall prey to them.”
– So, we under prepare generally, and we all kinda tend to do so. You hear about the people that are buying bunkers and storing up sand and ammo and all this, and gettin’ ready for the final days. But your average person is under prepared for most calamity, you would argue.
– Yeah, absolutely, and I think the reason is that we have this whole set of, the way we kinda like to think is that our brains are just not really fundamentally wired to think about things that are really rare. What we’re really good at is learning about tasks and decisions that we make every day. Things that we’re constantly getting positive feedback on. That for example, if we’re learning to play tennis, every time we miss a ball we get feedback right away, say, “Hey, don’t do that.” And pretty soon we get to be fairly decent tennis players. But when it comes to really rare events like financial meltdowns, or plane crashes, or terrorist attacks, or really rare things, we just don’t have any experience with those, and our brains just really aren’t wired very well to tell us how to take good protective action with respect to those.
– It’s interesting, you figure there’s a certain type of person that’s kinda happy-go-lucky, faith-based almost person that just assumes everything’s gonna work out in the end. And so, for me, I live in earthquake country. I’m sitting in earthquake country right now as we speak. And I got a go-bag at home, but it just occurred to me that I don’t have one at the office, right? And I’m four miles from the house, and if the earthquake happens here, then, oops, right? Is that part of that?
– Yes, absolutely, and think about it. It kind of in some sense, if you’re thinking about kind of short term, what you’re doing makes total sense, because what are the odds on a given day that you’re gonna need your earthquake bag? Probably not, and so what happen is we tend to, kind of the rarity of it kind of teaches us the wrong thing. So, every day you bring your earthquake bag in work or whatever, or if you have a earthquake bag there, pretty soon you figure out, “Hey, I’m never using this thing, so why do I have it?” And of course, what happens is when the earthquake finally does hit, that’s the day that you kinda wish you had it.
– [Pedram] Right.
– And generally, people are just pretty optimistic. Normally, that’s a good thing, you wanna be positive about life. But in some sense, every now and then, this kind of sense of optimism, thinking that things are gonna work out, really comes back and bites you.
– You know it’s funny, I’m a martial artist and I was going into some competitive fighting back in day, and I was asking my teachers, “What if he throws a hook? “What if he throws a right, what if he throws a left?” And the kung fu teacher looks at me and says, “Stop anticipating and just be ready.” And so what does it mean to be ready in all of these circumstances? So like, having a go-bag for riots, and disasters, and all those types of things. Usually is about the same thing. You need food, water, those types of things. What’s predictable and what’s less predictable, and how do you prepare for that?
– Yeah well, the things that are really totally unpredictable, there’s really very limited you can do. So for example, for the very rare terrorist attack that just couldn’t be seen, I think in those situations, you would say, “Look, we just can’t really prepare for that.” But what a lot of our book focuses on, there’s an awful lot of things that are fairly predictable, where people kind of are told beforehand, “Hey look, this might actually happen.” But basically, people ignore the advice. In the book, we tell the great story about Larry Silverstein, who is a big real estate mogul in New York, and he bought the World Trade Center one month before it was destroyed by terrorist attacks back in 2001. And what’s interesting about that was that there was all these insurance companies, all these people buying into those buildings, even though it was sort of well known within the intelligence community, this is a major target for a terrorist attack. And Larry was just somebody who was just an incredible optimist, he kept thinking of the positive things. A really kind of unknown, lesser known postscript to that story was afterwards he had what turned out to be a big investor in the Bernard Madoff Scandal. And that was another thing where people had been telling you were getting returns which were impossible to get, but from Larry’s perspective, “Hey, only good things happen to me. “Only good things happen to me.” And I think in those cases, just a little bit of caution probably would have gone a long way.
– Yeah, no kidding, no kidding. My recollection of that is, I think AIG was the one holding the bag, like his insurance ended up holding the bag on the Trade Center or something.
– Yeah, several insurance companies, and there was a big lawsuit over the fact, and he was claiming that there was two attacks when they were actually were, and they were claiming there was one. And I think both sides ended up losing a whole lot. The money he got wasn’t enough to cover the losses. And the insurance companies were out, of course, were out a huge amount because, you know you would think insurance companies, if anybody, would really know what the risks would be, and they just grossly underestimated it.
– Yeah, no kidding. Lately, there’s been a lot of talk around the insurance industry around climate change and this buzz around the risks that climate change poses to the world at large, like rising sea levels, and water and all that. Is that something that has, are they better at this now? Are they better at looking at some of these unforeseens, and saying, “Look, you what what? “We didn’t expect planes to hit buildings and here we are.”
– Yeah, climate change is a real tough one, because the problem with it is it’s out there, but for a lot of people, trying to get people to take action on it is very, very difficult, because most of the consequences are gonna be beyond our lifetime. And we have enough problems for most people just trying to put food on the plate for dinner, and paying your bills and whatnot. And someone’s coming along and saying, “Hey, you know, we oughta raise your taxes “to help deal with a problem that’s gonna deal “with future generations.” That’s just a very, very difficult sale. And ultimately, you have to kind of for those sorts of risks, in order to get people to be willing to kind of take the steps necessary to adapt to it, you’re going to have to ultimately sort of appeal to people’s fundamental sense of morality. That, you know, hey, you’re not the only one here there’s gonna be people coming after you, and you really have a responsibility to care about people other than yourself. Sometimes, that works for some people but unfortunately not for everybody.
– Yeah, it kinda goes back to Maslow’s hierarchy of needs. Like if you’re worrying about sweating your next bill or meal, then forget about it. Hey, real quick I’m gonna take a quick pause, and can you move my screen just center to the video just so you’re kinda looking at me at the center of the screen, as well.
– [Robert] Oh okay, sure, yeah.
– Yeah, perfect, so not so much that way but move me like the window straight to the middle if you can. Yeah, just a little more line of sight, perfect, perfect.
– Okay, great, okay.
– Yeah, Lenzo, cool. You know what’s funny is my wife and I bicker about this all the time, is every time we trade off cars, I get her car and it’s out of gas. It’s like, “Aw, damn it.” It’s become this like stunt now where it’s just like, “Great, now I’m gonna go gas her car.” But my point is, you should have your car at about half full at all times, ’cause God forbid there’s an earthquake and you can’t get gas anymore, you’re stuck. We get into this kinda myopic verses over-controlling vibe slash conversation all the time. So to your point, this is kind of myopic thinking, is like, “Come on, what’s the big deal? “What are the chances the earthquake’s gonna hit today?”
– Yeah, yeah, and that’s a lot of what our book is about. Why did that happen? You sound like you’re like the perfect person we would like to have. We wish everybody was like you, always thinking about having half a tank a gas in the car just in case something goes wrong. And I think a lot of things we talk about in our book are kind of very simple things that people could do. And often, just not doing things, not exposing themselves to risk when you don’t have to. And I think one of the reasons that people often, even when they know there’s a risk out there, they often don’t learn from past mistakes. And one of the reasons for that is we often kind of remember these things that have happened in the past, but what we forget is what it was like to go through it. So for example, the people that were way back in the early 90s, the last big quake in Southern California. The people that are still around that remember that, everybody remembers that old quake. But people probably don’t remember what it was really like to go through that quake. What it was like to go for a few days without electricity. What was it like to deal with the traffic hassles and so forth. So it’s a consequence, if you don’t kind of remember the pain, it’s really kind of hard to justify taking protective actions. And you figure I’ll worry about gas later and so forth.
– Yeah, yeah, I mean, we see that now with people just talking about what’s happening in the political discourse, and saying, “Remember the Holocaust.” There are things that are echoing on multiple levels right now, and unless you remember the pain, it’s really hard to be kind of forward thinking on that. Let me make a quick adjustment again. If you just look into the camera instead of at me. Yeah, yeah, perfect. We wanna see your eyes. So, we talk about psychological biases. You’re mentioning a number of psychological biases in the book. And I think it’s fascinating because we don’t really think about this culturally or interpersonally. I think this is gonna be really helpful to my audience to really see these biases, and see where they’re kind of pulling them on their own in their lives. So, if we could get into each of them, short description of each of the biases, we can tease it out from there.
– Right, okay, so a lot of the book is sort of focused on why is it that we make mistakes, and what are things that we can do a little bit better? And I think that our viewpoint is to start off by thinking about why is it that this happens. And if we can kind of understand our own psychologies a little bit better, we can anticipate the different reasons why we make mistakes. One of which you had just mentioned. We’ve kind of articulated six different major biases that people have. One of which is one that you just mentioned, this idea of myopia. It’s very difficult to kind of look very far into the future. We’re very much concerned about what happens today, and tomorrow, we’ll deal with it. And this has all sorts of manifestations. A lot of times, for example, when it comes to like earthquake-proofing your house. What ends up happening is people think, “Well, is this something I can put off until tomorrow?” And probably the odds of having an earthquake tomorrow or today are probably pretty slim, and so you keep putting it off until tomorrow. Well, of course, what happens in the next day, the same situation and you never actually do it. It’s very difficult to kind of think really long run and trade that off against the short run. Another one’s related to that, is amnesia, which you would call sort of forgetfulness. Stuff happens in the past, like for example, financial meltdowns, I think people have already forgotten what happened in 2008-2009, that all of a sudden, real estate values collapsed and so forth. And at that time, you hear people saying, “Oh, we’re never gonna let this happen again. “We’re never gonna let banks go crazy. “We’re never gonna make foolish real estate investments.” And all of a sudden, a couple of years passes by, and we’re back at it again. And we just sort of forget the pain that was associated with it. Another one, the third one, is optimism, which we also talked a little bit about that. We just tend to be inherently happy people, and we tend to kind of overly underestimate the risks that we’re sort of faced with. Or another one is we tend to think that these things are gonna happen, but they’re not gonna happen to us. They’re gonna happen to somebody else. That if you’re in an earthquake area, then you kind of look at the fact that you face earthquake risks. What you’re thinking about is to say, “Gosh, I really hope there’s not an earthquake, “’cause if it happens, my neighbors could “really get their house destroyed.” Without really thinking about, “Well, maybe it’s my house that gets it, not theirs.” And then we have another one which is herding, which is this tendency when often when we’re faced with high risks, so forth, we just don’t know what to do. We don’t know whether or not what the right action to take and so forth. So, what we tend to do, is we go ahead and we look at other people. What are my neighbors doing? What are other people doing? And it turns out that in that situation, of course, they do not have better instincts what to do than we do. And so we end up kind of the blind leading the blind. And then the two others that we have are what we call inertia, and that is a tendency to when we’re unsure what to do, we just kind of keep doing the same thing. And often, that’s the case of just being, of not doing anything in the face of risks. If we’re currently don’t have an earthquake kit, and we’re trying to make a decision about whether or not to get one, well immediately we think, “Well, what should go into that earthquake kit? “How big should it be? “How much money should we spend on it?” And then we think about that for a while, and we go, “Well, let’s not do anything.” Okay, that basically it’s too hard a problem to solve. And then the last one is this idea of simplification that when the world is really complicated when it comes to the really rare risks, and often, we only look at, do a couple of things. Where this comes up a lot is actually in energy conservation, where often people think that they’re doing a good job in energy conservation if they manage to turn the lights off in the bedroom at night. And even though really what you need to be doing is a whole bunch of different things, as long as people think that they’ve kind of done one, they kind of check the box they’re taking care of it. And our feeling is that if people can kind of get a sense of these are the different reasons why it happens, then you sort of become your own therapist, and you would say, “Okay, for whatever the situation is, “to what degree am I likely to fall prey “to these different things, and given that’s the case, “what might I do to kind of offset that?”
– The question then becomes how much is too much? How much is an abundance of caution, and where are we being reasonable? So is there some sort of matrix that you guys put forth, which is like, “Okay, well listen, “I probably have very little tornado risk, “but earthquake’s a thing over here.” And so how do you triage all these risks?
– One of the guiding themes of the book is to say, “Look, if it’s anything that’s gonna require people “to kind of change their psychology, “to suddenly become forward looking, “then it’s not gonna work, okay.” So what we have to do is think about solutions that don’t require people to go through a lot of effort. So, for example, one of the things we think about would be, let’s say earthquake kits. Well, this is a thing as long as it’s the case that every household has to go out, it has to make the effort to go out and buy an earthquake kit. And they have to think about what goes into it. And they have to spend the money to get it. It ain’t gonna happen, okay. For a gazillion reasons, they don’t think earthquakes are gonna happen to them, it’s a pain in the ass to do it, I’m gonna have to be thinking long run. So what you do is you think about, okay, people aren’t going to do it. How is it that we can kind of turn the tables a little bit? And one idea, for example, would be the community distributes to everybody in the community an earthquake kit. Okay, so that you get it by default. And if you don’t want an earthquake kit, then what you can do is say, “Hey look, I’ve thought about this “and give me my money back. “Give me a tax refund or something.” And that kind of turns the tables because now all of a sudden, the effort part is now becoming how to get my money back on it. And so, the simple thing to do is just accept the earthquake kit, and making safety be the norm, rather than safety being the thing you have to work hard to get. So, a lot of the book is sort of thinking about going through these different biases and thinking about what are simple things that we can do to change the way the world is structured so that people become safe without them knowing it, without really trying too hard.
– I have to say there’s a certain degree of underlying angst that went away for me psychologically when I learned how to make fire by friction. I did a couple wilderness survival courses and man, it felt cool and it just kind of filled the tank with this je ne se qua attitude, where it’s like, “Yo, I can handle myself.” I think a lot of that psychological duress, especially at this day and age, man, you just turn on the TV and like people are blowing themselves up and the world is falling apart. The narrative on the news is so crazy, you know, it’s like, earthquake smearthquake, there could be a riot, there could be this, there could be that. So I think there’s a lot of kind of illogical fear that also permeates. So how does one look at what the low-hanging fruit here would be?
– Yeah, well, that’s hard, the education thing is again a tough one. You sound like somebody who basically, who does fill their tank up with gas and is going out and wondering, “What would happen if I ever got stuck in the woods “and the world’s completely collapesed.” And you’re gonna be a survivor. Unfortunately, most people aren’t that way. And so, for example, one of the things that unfortunately a lot of cases what we have to do is sort of set rules for people that they have to follow them even if they don’t know too much about it. So, for example, one of the stories, one of the real tragic stories we talk about in the book is what happens when you have fires or attacks in very crowded rooms? And often, it’s sort of a misnomer that one of the things that happens is when fire suddenly erupts in a room that immediately everybody rushes for the door. And that’s where kind of deaths arrive because there’s panic and whatnot. But actually, what happens is something very different. What happens is when a fire starts up in a room and smoke begins to fill the air, people actually don’t move very quickly, they stop and they look to what everybody else is doing. ‘Cause people have a very deep instinctive notion of there’s safety in numbers, I don’t wanna go running off when there’s a threat out there. So what they do is they hesitate, and they kind of wait there for a minute to see what everybody else is doing. Of course, until it gets sort of too late. And so, as a consequence, how do you deal with that? Well, it’s such a rare event. You’re not going to train people to deal with running away from fires and so forth. So, what you would need to do in that situation would be to say that’s why you have to have protocols for as soon as something happens, you have to immediately, like if you’re a building, you have to have sufficient exits such that people who are lost in the building can get out even if they don’t know anything about the building. Effectively, you have to kind of design a world which is idiot-proof, or if you wanna call it that, but certainly, ignorance-proof, where if they don’t know anything about the phenomena, they don’t know how to make fire, they’re still taken care of.
– Yeah, and you know, that’s the challenges. We have given a lot of our safety, our security, our protection, and we’ve outsourced a lot of this stuff. It’s like, well, you know, if there’s an earthquake, FEMA will come take care of me. And you ask Hurricane Katrina victims, I think the FEMA thing was a bit of a sore subject. So this paternalistic model of someone else taking care of you, at a certain point, you are left to be disappointed. And on the front end, I mean, look, FEMA couldn’t get there for days during Katrina. I mean, it was a mess.
– Yeah, yeah, and that one is a real tough one, because in some sense you have to strive to strike the right balance of personal responsibility. If you go to old timers and you look, what happened in the early part of the 20th century when you had these horrible calamities. Well, there was no Red Cross, there was no FEMA. People were left to their own to take care of it. And there certainly are certain cultures around the US where people are really good at kind of coming together and taking care of their own. I had a friend of mine moved to Salt Lake City from the Northeast, and all his neighbors were Mormons. And it was apparently some big storm came through, and a big tree kind of fell down on his property. He woke up early in the morning to hear the sound of buzz saws. And he had like five neighbors already at his property cutting the thing up and taking care of it. And coming from New York, this was just such an alien concept. And so, I think we would love it if we were in a situation where we each assumed responsibility, we kind of each solved it for ourselves. And you know, there is a risk when all of a sudden you say, “Now, I don’t have to worry about making decisions myself “because the government’s gonna come in “and take care of it.” So, on the one hand, we kind of wanna provide an environment where people, for these very rare events, that people don’t need to become experts and so forth. But at the same time, there’s always a risk if we go that far, then you’re actually only making the matters worse because then people will throw up their hands and say, “Take care of me.” Hopefully, we don’t get that far.
– Well yeah, you don’t wanna be a helpless person in a mob. That’s a very tough position to be in, and it’s, you know, get in line, kid. And so, one of the things I learned early on, and I’m just thinking of practices that can help people have a little bit better of a positioning in this, is like back country backpacking. You know, you go back in the back country for five, six, seven days, you lose your food, you’re hungry, right? You tear a boot, you’re walking barefooted. And it really kind of trains some of that into you to be like, “Yo, you gotta take care of yourself.” Our forefathers, the people that landed here and started kind of pioneer adventuring into America. Your horse goes down, you’re walking. And there’s no doctor for 50 miles. So, you watch your step, right?
– Yeah, yeah.
– So you have a few of these at-risk audits that you have in the book. You have these behavioral risk audit, which is in there, which is part of how one could look at what is going on in their life. So, how am I supposed to assess myself? If someone’s listening to this, where do they audit themselves to know, like, “Look this is probably the five things “I need to do now?”
– Yeah, so what we try to do is we say that the first thing to start off with is to think about, what are the kinds of risks that we face? And they don’t necessarily have to be, as you said, maybe in California it might be earthquake risk. But I think the feeling would be that it could be really any kind of a risk that you face in life. It could be money management risk. It could be personal drug addiction risk. It could be kind of anything. And so to say it’s sort of out there, and so what you would start off by doing is saying, “Okay, what are the kinds of biases that I have naturally “that might impede this, or make it difficult “for me to make a good decision?” So, for example, when it comes to financial planning, for example, let’s say a risk is that I might retire and I got no money, okay, or something like that. So, what are things that I could do? And you start off by rather than immediately going through and saying, “Okay, I need to save more money,” which is a solution. You would start off by saying, “What are the reasons “that I’m having difficulty planning for that future? “What are the things that going on inside my brain?” And so, it’s things like, you would start off, myopia. I have a tendency not to think very far into the future. And then I would go through and say, “Well, how is that going to be manifested here?” Well, maybe if I don’t do that, one of the consequences is going to be, I’m gonna spend all my money today and not have anything left over. So, one of the remedies might be, given that I know I tend to be myopic, maybe there’s a little step that I could take in terms of developing a one-year financial plan just to kind of nudge that a little bit, to get that to be a little bit better. Or another one would be one of the biases we have is simplification, that is a tendency when we’re thinking about our financial problems to only focus on one or two bits of information, and not really become too knowledgeable. And so what this would say is, “Okay, well maybe you ought to make an effort “to just know a little bit more than you currently do “about alternative financial investments.” And so, the idea is to sort of when you go through the checklist of all the different sorts of reasons that we tend to be, we might be prone to making mistakes, thinking about what the consequence of that would be if we fall prey to it. And then what are little types of easy to do nudges that we can do to kind of help us along? And the key thing to that is that it’s a framework that you can apply to pretty much any risk that you happen to be faced with as a human being.
– Life is full of risks. That comes inherently with life. The universe is chaotic, life is an ordered system, but chaos is knockin’ on the door at all moments. And so, what seems to be an orderly life right now is surrounded by a universe of entropy and chaos. So, knowing that that’s there, and knowing that that is always behind you at some point looming, must create some sort of operating system to help you kind of look forward to this. It’s really interesting that we don’t have this. I was kind of shocked, just kind of reading your book and looking at all these biases, to realize how many of the people I know in my life just really have no risk aversion strategy, and just have no plans for this. And then when the tornado hits, they’re like, “Woe is me, what bad luck.” And so, we know that tornadoes happen.
– Right, right, and that’s sort of one of the driving themes of the book is this idea that it’s not kind of our fault particularly that we’re not good at preparing for these things, this is just the way our brains are wired. We’re the function of millions of years of evolution, where for millions and millions of years, in fact, strategies in our brains are oriented to get us from one day to the next, to get us to the next plate of food. And so, we’re really, really good at that very short term thinking elements of survival. But on the other hand, what we’re really bad at is dealing with the very rare event, the things that maybe in previous millennia, we didn’t need to deal with because our lives were pretty short, and we lived very controlled environments. But today, I think we’re exposed to an array of risks, that in previous generations or previous millennia, would have been fairly alien. And now, all of a sudden, we’re having to develop skills at protecting ourselves against, and we just don’t have the cognitive hardware to be able to do it. So therefore, we need some sort of crutches or frameworks to augment what our brains are unable to do.
– It’s fascinating, I’m thinking about, okay, so you start as hunter-gatherers, and you’re lucky if you find a buffalo, happy days, we got meat this month. You know, whatever it is. And then as we shifted into an agrarian society, and then started looking at rainfall, and famine, and harvest issues, and all that. We invented the silo. We started to do certain things to kind of look forward into that. And every farmer knows you’re only as good as the last couple of seasons, and you better start having some sort of risk aversion strategies. But now, less than 1% of our population is tied to the land. And the agrarian labor force is now moved into whatever the hell we’re doing. How much of these kind of abstractions away from the natural world do you feel have kind of pulled us into a necessity to build these types of things? We’ve just forgotten, we’re not connected to it anymore.
– Yeah, that’s a good question. I think it’s also a question about whether or not we used to be good at it and we’re less good at it now. I think that historically what happened is people just would, getting back to a topic we were talking about earlier, had a fundamentally different way of thinking about risk and disasters. That historically, if you went back to the ancient Roman times and the people that suffered in Pompeii, for example. It was not like, for them there was historically this belief that disasters were acts of God. And that these are things that we can’t do anything about, and so therefore, people, in an odd way, were at peace with these things because this was God doing it to them, and there was nothing they could do to prevent it. And so in some sense, that allowed them to get day by day. Now, that wasn’t necessarily good, because these disasters would happen and whole communities would be wiped out and so forth. And I think that the feeling that today with the rise of industrialization and rationalism, the feeling is, hey, we ought to be able to do better than that. We shouldn’t just say these bad things happen because God happen. We have the scientific knowledge to prevent it. And so, that’s what sort of one of the paradoxes that, we use the word paradox in our book. And one of the paradoxes is we’ve got incredibly good at scientific knowledge now about these risks. These really shouldn’t be happening anymore. The science of seismology has gotten really good. And we know what earthquakes are for the particular house that you’re living in. What are the probability that over a 50 or 100 year period there’s probably gonna have a quake or hurricanes? We forecast with incredible accuracy. And then we have these great engineering skills, we know how to build really safe houses. See, you would think with all of that, we shouldn’t be having any problems. In finance, for example, we understand how markets work. But nevertheless, if anything, it seems to be getting worse rather than getting better. So, sort of trying to reconcile that. And I think the problem is that this science of protection, this science of forecasting events has gotten really good, but it’s preceded without any attention to the fact that at the end of the day, it’s people that are gonna have to be making these decisions. It’s gonna be people who are gonna have to make the decision where to live. And we haven’t made much progress in helping people kind of use all this knowledge that we have.
– It’s funny, we have these canyons in LA, you know, Malibu Canyon, and all these places where every few years, a fire comes through, wipes out a bunch of houses, and lo and behold, next couple of years, people build houses right back up there again. And then it’s their terrible luck when the next fire rolls in. It’s really funny the amnesia bias is alive and well in certain communities. I wonder, you know, NASA is out there lookin’ at rocks comin’ our way to try to avoid the next dinosaur extinction. And who knows if we can laser beam it out of the sky or whatever. But there’s a lot of movement there. I’m curious as to whether maybe like Communist China, you can’t really call them communist anymore, but if the Chinese, with their kind of top-down kind of governance system would be better at some of these policies than us with our kind of free thinking independent myopic population. Who could be better at actually making this happen?
– That’s cool that you said that. Because actually, if you want a country that’s like really good at hurricane protection, go to Cuba. ‘Cause there, they’re hit by hurricanes all the time, but they’re kind of considered a model for protection. Mainly because they don’t leave it to people to kind of make their own decisions. Like if a hurricane’s coming through, government comes through and basically says, “You’re outta here,” and that type of thing. And so, we’re, hopefully for the better, we’re a society which says, “Now look, you can make your own decisions “about how to leave.” But unfortunately, I think that we do have kind of this sense of responsibility to say, “On the one hand, it’s great to give people the options, “but if we know going in that they’re going “to make mistakes, don’t we have kind of a responsibility “to try to do something to correct those mistakes?” One of the stories that I used to start off the book is this terrible tragedy which happened in, which received a lot of media attention, in Hurricane Sandy when it hit New Jersey a few years ago. Where a mother was at home with her two children, her husband was in Staten Island, her husband was over in Brooklyn, and the lights go out. And what she decides to do is, and everyone would say, in the middle of a storm, stay at home, safest place to be. But for some reason, she gets the kids in a van, and she panics because the lights go out. And she’s just thinking, “I’m all alone, I’m home, “I gotta get out of here.” So, she puts them into a minivan and takes them down by a road which is right near the ocean. And the road gets swamped, and so she gets the kids out of the car, and a big ocean wave takes the two kids out of her arms and kills both of them. And she manages to survive. And afterwards, you kind of look at that event, and say, “How could that have possibly have happened?” When there was plenty of warnings that were ahead and so forth. And I think the problem is that she doesn’t have the cognitive hardware to deal with that rare situation. And all of a sudden, emotion and panic take it over. So, I do think that it’s great be, whereas probably in Cuba or in China, that would have never happened, because she would have been under strict orders to stay where you are and don’t leave. But here, we give those people those opportunities but we kind of can’t help but think, or I can’t help but think that given that we know she’s gonna be making these mistakes, maybe we shouldn’t be doing, trying to something to make sure that they don’t happen again.
– It’s a tough one, that’s a tough, tough line in a country that’s founded on individual liberties, and being able to maintain those liberties at all costs. People’s ancestors fought for those liberties. It gets really murky, and people fight and argue on both sides of that. But you know at the end of the day, those two kids are gone.
– [robert] Yeah.
– It’s just such a challenging place to be, kind of making top-down edicts like that.
– [Robert] Right, right.
– Well, it’s a challenge of our times, right? We are in interesting times and we don’t know what’s coming next. We’re out of time, I love this subject. The book is called “The Ostrich Paradox”. Robert Meyer is the co-author and Howard, you do it, how do you pronounce–
– [Robert] Kunreuther.
– Kunreuther, yeah.
– [Robert] Yeah, Kunreuther.
– Is your co-author there. I think that having strategies towards risk, having strategies that allow us to be further at ease knowing we’ve done what we can, just gives us a little bit more edge against chaos. And look, I can have a go-bag for an earthquake right here, and the big one comes and the roof falls on my head and it’s over anyways. But if I am able to roll out of here, I’d probably want some food, and water, and a flashlight. It’s probably worth thinking that through.
– Hey, thank you so much for being on the show. My audience, I’m excited to bring all sorts of varied content to you. Let me know what you think about this subject. For me, my takeaway on this is, don’t anticipate, be ready. Put yourself in a position where you look at your risks, look at the biases that they’re talking about in this book, and look at where you can make some changes, and just have some preparedness. For me, I keep a half tank of gas. We have water, we have food in the house. There’s a lot of things that we do just because I read about this stuff. But think about what that looks like for you, for your immediate family, the days that you live, the life that you live, and see how that can maybe bring a little bit more comfort and negotiate a better relationship with risk and chaos in your life. Let me know what you think. This is Dr. Pedram Shojai, The Urban Monk. Check out theurbanmonk.com and I will see you next time.