Adapt: Why Success Always Starts with Failure

Adapt: Why Success Always Starts with Failure by Tim Harford

Failure and adaptation are the key to success. In biological, species don't make a plan to change. They simply let random differences occur as they adapt to surroundings. Some of these changes end up providing an advantage that becomes replicated. Changes that provide a distinct disadvantage typically fade away. Sometimes these changes come outside the natural environment. English bulldogs are bred to be pleasing to people. In the process, it has become difficult for them to reproduce themselves without human intervention.

Governments and other organizations will often try top-down approaches to dictate the desired outcomes. These approaches may minimize failure, but also minimize breakthrough success. In the case of scientific research, NIH funds "low risk, low reward" research, while HHMI will fund high risk, high reward research. When comparing scientists with similar backgrounds, those with the HHMI tend to produce more significant research than the others. 

Talking telephones were shown in the 1960s Jetsons cartoon. Today, Zoom and other video calls are common place. However, a planning body didn't set out with a plan in 1960 to have talking phones in 60 years. Instead, a number of unrelated innovations ended up coalescing together. The public internet rose out of a network for the defense department and research. Video and audio compression algorithms, microchips, fiber optics and many other components were developed and evolved for different purposes. Eventually video calls could be created by combining a few of these components.

Dictating a desired outcome can often have a deleterious impact. Players may look for a workaround that meets the desired criteria without providing the sought benefits. The fuel economy standards (CAFE) were meant to encourage more fuel efficient vehicles. Instead, they resulted in SUVs and larger vehicles that were classified as "light trucks" and thus adhered to lower standards. A better approach to reduce gasoline use would be to simply make the cost more expensive. This would encourage greater efficiency as well as alternative approaches. GU24 light sockets and energy efficient construction also fall victim to similar mandates. In finance, we often seek regulation to avoid the last disaster, which just enables seeking more loopholes and a potential new disaster. 

The biggest challenge with adapting and letting things come about is with "big problems". Finding a vaccine or a cure for a disease requires a lot of work and effort. Prizes can often be a part of the solution for these big challenges. Allowing internal changes can also help. A skunkworks project may provide a solution, or it may spin people in a different direction. Allowing people with different interests and talents can also help as they look for a new way of doing things. We need to continue to adapt to succeed. 

The Data Detective: Ten Easy Rules to Make Sense of Statistics

On the surface, statistics are concrete facts that describe the world. However, in actuality, they are highly susceptible to manipulation, both intentional and unintentional. Understanding the details is key to making accurate decisions. 

In the UK, one part of the country appeared to have a much greater infant mortality rate. What could be causing that? The mortality rate even differed among similar demographics in the different locations. The "difference" turned out to just be in the way the statistics were reported. The same event would be reported as a "late miscarriage" in one place and a "live birth followed by death" in another. The events were the same, but the different reporting, made one appear to reduce infant mortality. This difference also explains some of the differences in infant mortality across countries. It is not that outcomes are worse, just that they are reported differently. It is common for elaborate charts and analysis to be built on unreliable data. 

Scientific studies, can be very prone to publication bias. An unexpected novel result is likely to get a great deal of press coverage. The "boring" results are less likely to even be published. There is also a strong incentive to publish novel results, rather than try to reproduce previous results. There may have been multiple people trying similar experiments, but only the novel results made it to publication. Then there are issues with the study itself. The significance threshold is arbitrary. A researcher may choose to change the size of the dataset in order to get the results that they are desiring. Psychology and medicine are both very prone to only publishing the "good stuff", leaving us with little ability to know what is truly "good".

On an individual level, we are also susceptible to bias from our pre-existing beliefs. We are more likely to consume media that backs up our beliefs. People that think like us are more likely to be given the benefit of the doubt over those that contradict our viewpoints. The same things happens in research. Results that are differ from what is expected are more likely to be discarded.

Visualizations are a great way to mislead. Different types of numbers can be compared to produce misleading results. Changes in color and scale can change our interpretation of the data. Unrelated data can be shown together to imply relationships were none exists. Graphs and infographics are easily digestible, but not necessarily show the whole picture.

The use of data can impact the data itself. If people know that data will be used for a purpose, their behavior may be changed to account for the data collection. Wrestlers target a specific weight class before they weigh in. Looking at data, it will be rare for a wrestler to be at the bottom of a weight class. Teachers that are graded based on student performance have incentive to manipulate that performance. The student performance is no longer fully objective. Government officials that can control data may manipulate it for their objectives. (This it is important to have non-partisan data organizations.)

Data Detective does a great job of helping to guide us through the pitfalls and benefits of statistics that we encounter in our life. It builds on past work while presenting concrete cases to help us to better understand what is going on in the world around us.

The Undercover Economist Strikes Back

The Undercover Economist Strikes is a humorous primer on basic macroeconomics. Chapters began with quotes - humorous quotes form Hitchhiker's Guide to the Galaxy lead off a couple of the early chapters. Most of the book is in a conversational "question and answer" format. The "pupil" asks a question which the "economist" answers, leading to additional follow up questions. The answers tend to light-hearted anecdotes that provide an exaggerated understanding of an economic condition. Chapters discuss an early macroeconic modeling system that used hydraulics to solve economic differential equations to model a country's economy. (Enterprising economics even hooked the export pipe of one model one model to the import of another to model the impacts policies would have on other countries.) We also have money supply explained using the failure, success, and failure of a capitol hill babysitting co-op. Printing money can be good, unless it leads to hyper inflation, in which case it is very bad. People can be irrational, and be much more concerned with a drop in their salary, even though a small increase in times of high inflation tends to be worse. In classical economic models, prices rise and fall based on supply and demand. However, in the real world, there are many factors which cause the prices to be sticky. This can often lead to negative economic outcomes. (It is difficult to cut wages. Thus, unemployment tends to worsen when the economy is bad - even though many people would be willing to work for a smaller amount of money.)
By using humor, the author is able to provide explanations to both sides of controversial economic policies such as stimulus and inequality remedies without being dogmatic.

The Logic of Life: The Rational Economics of an Irrational World

The Logic of Life is an economics book in the vein of Freakonomics. It provides logical explanations of seemingly illogical behaviors by people. In many cases, psychological studies tease out logical behavior from seemingly illogical outcomes.
One example was the discussion of racism. "Bigoted racism" would be expected to weed itself out of the business world. If businesses that turn down the best candidates merely because of external characters, would suffer and falter. (A simple example could be seen in basketball where all white teams became at a significant disadvantage compared to integrated teams.) However, "rational racism" is much more difficult to remove because it does provide some "stereotypical" advantage. On average members of certain groups will do better, therefore companies are more likely to hire those in the group. Those in the "out group" still suffer, but companies that practice it are still successful, thus making it more difficult to remove. These groups can also self-reinforce their standing. A Catalan who studies computer science rather than Catalan may be shunned by his community for attempted to do something outside the community. This leads to fewer people being willing to study and succeed and thus an overall reputation of community being inferior. Once the group is deemed inferior, a logical company would prefer the stereotypically better group, and thus perpetuate the inferiority.
Similarly, devolution of areas to isolated ghettos can be explained by a logical behavior. A perfectly integrated community may be functioning well. Each resident likes to have a certain number of similar people nearby, and that balance is properly met. However, if one resident moves out and is replaced by a "different" person, that could upset the balance. Now one person feels they are too different, and move out, this starts the chain reaction which results in the community dominated by a single group.
There are a number of additional examples in other areas of logical explanations for something that seems illogical on the surface. Groups can do strange things when they are composed of individuals doing "logical" things.

Messy: The Power of Disorder to Transform Our Lives

Unexpected "shocks" to the normal way of doing things can often help spark the creativity needed to accomplish something truly amazing. Messy opens with the story of a jazz pianist that was going to walk away from a performance due to the poor condition of the piano. However, as a special favor to the promoter, the pianist performed and produced one of the top performances of all time. The condition of the piano forced the pianist to improvise and go out of the "comfort zone" and produce something great.
Attempts to be fully objective often produce bias in how the "objective" criteria are created. External factors have a habit of rearing their ugly head. APGAR scores for new borns lead to more c sections. Diversity produces benefits when there are true differences. Cities that section every thing off in neat areas not only produce great amounts of traffic, they eliminate many chances of spontaneity that can lead lead to positive growth. Providing too much protection from failure reduces the chances of small problems, but increases the odds that a problem will be catastrophic. (The book gives the example of the Air France jet that crashed over the ocean. The pilots were accustomed to auto-pilot, and had difficulty responding to abnormal conditions. Standardization and protection can lead to us keeping the "same old bad".
Startups help to inject new messiness into the system. Amazon did stupid stuff early on. They would even go out and buy toys at retail, losing money on the transaction to get it to the customer. That messiness allowed them to succeed.
People adapt to meet criteria, even if that hurts the big picture. (For example medical appointments in 2 days mean none available in advance. Surgeon ratings on outcomes lead to more unnecessary surgery. Actually results show little difference in surgeon compared to entry condition of patients.) Being able to rely on some messiness can help the big picture to be better - even if there are parts that are not so great.

Fifty Inventions That Shaped the Modern Economy

What are fifty inventions that helped shape the modern economy? This book doesn't attempt to find the 50 most important inventions, but 50 that have had impact. Some of the things are classical physical inventions like the plough and plastic. Others like management consulting and Seller Feedback are modern, abstract innovations that are important to our economy. There are also cautionary tales. Attempts were made to ban leaded gasoline in the 1920s. However, lobbying get it going for another half decade before it was eliminated. What other things in our current society are still being forced upon us by the regulatory framework and inertia. (Cars seem to come to mind.)
The book does a good job provided self-contained stories of individual innovations together with the glue that holds it together. Paper money is in interesting innovation, but the story of how it came about makes it come alive. The Smart Phone has quickly become an integral part of our lives. However, it is an amalgam of technologies produced primarily via government sponsored research. Compilers allow code to be more easily programmed, bringing programming to the masses and allowing higher and higher level programming. The barcode had been "invented" multiple times. The technology was the easy part. Getting producers and retailers to agree on to use it in a standard way was the challenge.
While a number of different innovations could have been included here. The author does a good job justifying the ones included and providing an informative and entertaining work.