A sideways look at economics
As a child, I remember flicking through the children’s encyclopӕdia my parents had bought for us. Although it was likely bought as an attempt to give them respite from the endless questions the three of us had, it encouraged us to find the answers for ourselves. Fast forward a couple of decades and I can answer virtually any question in seconds… through my phone, of course. This isn’t just my personal journey of swapping pages for screens, but reflective of the global shift in the consumption and pursuit of answers.
There was an appeal to the encyclopӕdia, we knew we would never read it all and so every time we opened it there was something new to be discovered. Practically every topic we could think of at that age was in there somewhere, explained with context and in detail by experts. Do animals talk to each other? Why do we sleep? Or the question parents dread… where do babies come from? Finding the answers was often a time-consuming journey, regularly leading down a rabbit hole of related topics, each a stepping stone to the next. We would, most of the time, find our answers and along the way we’d have found others, hitchhiking off of our original queries. Our parents, to their disappointment, realised that even though we no longer had a barrage of questions ready for them as they got in from work, we now had a seemingly endless amount of random facts we were excited to share.
With the arrival of the internet and search engines, the speed and efficiency of finding answers improved greatly. Not only can I access magnitudes more information than my old encyclopӕdia could ever hold, or even the entire library of Alexandria for that matter, I can access it instantly. The opportunity cost of not utilising the internet has grown substantially, whether that be for homework, our jobs or elsewhere in life. I no longer need to frantically scour through the yellow pages to find the number of an emergency plumber after my boiler decides my flat would be better served as a paddling pool, as was the case a couple of months ago. Or, when I am writing code, I can find the right functions for what I need and how to use them, without any significant disruption to my flow. Easy access to information and answers has undoubtedly increased our productivity, but it comes with side effects.
Human pursuit for an answer comes in three stages: information, knowledge and wisdom. Information is the most basic level, consisting of facts, observations or data that has been collected. For example, knowing the right finger placement to play a chord on a guitar. Knowledge builds on information by understanding it, making connections between pieces of information and applying it to new situations. Knowledge, using the same example, would be understanding what chords to play together, and how to transition between them to achieve certain rhythms and melodies. Wisdom is the ability to apply that knowledge to make sound decisions. For example, knowing which melodies to play in different situations to create an emotional impact. The arrival of the internet has affected each of these stages.
Information is easier to access than at any point in history. So much so that this convenience has altered our cognitive processes, streamlining the way we seek and process information, and altering the way we think and remember. This is demonstrated by the phenomenon known as the ‘Google effect’ or digital amnesia, which describes how our reliance on the internet affects our ability to remember information. Rather than storing facts, we’re becoming skilled at remembering where and how to find them. This isn’t necessarily negative; it reflects an adaptation to the new resources now available to us and our optimizing for efficiency. In a world where information is virtually limitless and instantly accessible, is there any need for us to remember it?
However, while more efficient, this shift can reinforce certain cognitive biases. For example, confirmation bias, which explains how we are more likely to search for, interpret, favour and recall information that confirms our pre-existing beliefs. This bias is amplified by search engines and social media algorithms that tailor results, and content to what it perceives as our interests and views, potentially narrowing our exposure to different perspectives. Two people typing in the same question are likely to see different results based on their previous interactions with the search engine. Intentionally or not, information is gathered to support existing views rather than to inform them. ‘Facts’, as a result, are becoming relative rather than universal. This fragmentation of truth has been discussed in previous blog posts.
The focus on speed and efficiency means that the most popular answers, and hence the ones algorithms end up promoting, are the simplest ones that cut through complexity. But facts can be misleading without the context that gives them meaning and develops knowledge. An example of the effects of missing context can be seen when learning of the effects of the chemical compound dihydrogen monoxide. This compound can cause severe burns, corrode metal and has been linked to the deaths of hundreds of thousands of people a year. While regularly used in power plants and manufacturing, it is also now being found in agricultural processes and its making its way into the food we eat. Sounds scary until you work out that dihydrogen monoxide is just water… These are all facts, but lacking the full context of these facts tells an incorrect story.
Computers are designed to answer questions of fact. Their growing ability to provide us with fast and simple information leads increasingly to what psychologists refer to as ‘shallow processing’. This term describes the minimal level of mental engagement we use when processing information, focusing on quick, surface details rather than deep, meaningful understanding. As a result, knowledge becomes less of a priority and so we miss out on the insights that come from context.
Finally, that brings us to wisdom. Wisdom comes from being able to take time to think about information, while putting it into a broader context in order to apply it effectively. The internet has allowed us to become accustomed to having instant access to answers to our questions. We regularly reflect this expectation onto policymakers, who are pressured into establishing and expressing publicly a clear position or solution to unfolding issues within hours. Issues to which the true solution (if one even exists) is rarely clear and rarely ready instantaneously. The essence of wisdom, applying knowledge to make informed judgments, becomes compromised when decisions are always expected to be swift, clear and align with the majority sentiment at any given time.
It is undeniable that the democratisation of our access to information has enriched our lives, offering unparalleled convenience and efficiency. Yet, the shift also presents challenges in how we use that information. Wisdom requires more than just rapid response; it requires the space and time for reflection, which is often a luxury in today’s fast paced world. The encyclopӕdia required patience and depth in learning, allowing us to build the context around the answers we were looking for. I’m not advocating for a return to this less efficient style, but for more awareness that the distinction between information, knowledge and wisdom is becoming more blurred as we move away from slower forms of learning. They are distinct and treating them as equals leads us away from the genuine insights we seek.
The Tower of Babel by Pieter Bruegel the Elder, 1563
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