Better understanding of how raw numbers reflect and obscure reality makes the world a saner place, Tim Harford tells Pádraig Belton.
One evening in the Great War, Virginia Woolf's sister, the painter Vanessa Bell, made the great mistake of answering her door.
It was the economist John Maynard Keynes. He'd left a Cézanne outside in the hedge, he explained—could he please have a hand carrying it in?
It shows the “swashbuckling adventurousness” of Britain's most important twentieth-century economist, Tim Harford tells me.
And Keynes was persuasive in other ways too.
In 1918 he’d convinced HM Treasury to entrust him with £20,000 to invest. With it he travelled to Paris and snapped up 27 paintings by Manet, Ingres, and Delacroix at auction for the national collection, while German artillery boomed over the horizon. He had sailed over in a warship with Charles Holmes, director of the National Gallery, wearing a fake moustache to avoid pushing up the prices.
Economists were different then.
Harford is known for riveting storytelling. In his latest book How to Make the World Add Up: Ten Rules for Thinking Differently About Numbers, forgers, erotic dancers and multiple alchemists all figure, bolted onto bravura displays of statistical erudition familiar from his Financial Times column and the Radio 4 programme More or Less.
But Harford’s fleshy fruit always contains tough pips.
In this book these include Brexit, climate change, coronavirus. All are high stakes issues, where tribes lob statistics at each other across the net. But, says Harford, “statistics are not a joke, it's not about winning political arguments. They really are vital in understanding the world”. Decisions of terrifying consequence face us. We desperately need data, and statistics too.
It may seem perplexing that our views on mask-wearing should map onto what we think of the European single market. But humans evolved in tribes, he argues. Considering that, aligning yourself to the opinions of your friends is not so crazy: “My views on climate change are not going to influence the climate, but they will influence what my friends think of me.”
This is why people who've already bonded over opposition to Brexit “continue to have the same bond over Donald Trump or over coronavirus, even though the practical overlap shouldn't be that great”, he observes.
But how do we move from statistics as rhetorical ballast, to statistics that inform? He asks two things of us.
First, that we “be mentally flexible and willing to update our views”. Keynes did this, particularly as an investor. He managed—at first, terribly—the investments of King’s College, Cambridge from 1921 until his death in 1946. His early strategy depended on market timing: if you could repeatedly sell high and buy low, you could acquire a great deal of high table port, and if anyone could time peaks and troughs in the market, surely it was Keynes. A big ‘if’ as it turned out, notes Harford. So Keynes changed his mind, and started taking chunky, long-term investments instead in well-managed companies that seemed to him to have a sustainable competitive advantage.
“What I find appealing about that is simply to acknowledge there are certain things as an investor I don’t know, and to try and control what I do know, and take advantage of it”, Harford tells me.
And second, that we monitor our emotions, and recognise how a particular statistic makes us feel. Tribal loyalty could make us too quick to accept what looks like confirming evidence, or discard, ostrich-like, statistics that might make us change our views.
Checking your emotions is important, he ventures. In investing and elsewhere, the best decisions come when you can combine close personal ‘worm’s eye’ experience with the type of ‘bird’s eye’ knowledge you can get from a spreadsheet or database. Get both of these and you’re doing something right.
“I think the lightbulb went on during the Brexit referendum campaign and the US election”, he recounts. “I need to help people understand their own biases, preconceptions, wishful thinking,”
Harford wants to make us not cynical, but full of wonder and curiosity about the world.
Boffins-turned-communicators like Professor Stephen Hawking and Sir David Attenborough don't just explain complex ideas in short words, he says, they stoke the flame of our curiosity.
What would the ghost of Keynes tell us now? He would have been curious to understand what’s going on, and more than willing to change his mind as circumstances changed, answers Harford.
If we want to make the world add up, we need to ask open-minded questions. And once we start, suggests Harford, we may find it delightfully difficult to stop.
How to Make the World Add Up: Ten Rules for Thinking Differently About Numbers by Tim Harford is published by the Bridge Street Press, £20.00.
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Pádraig Belton writes on a range of topics for the BBC, while completing a doctorate in politics at the University of Oxford. He’s a volunteer driver for St John Ambulance.
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