# Complexity and the Phoney

This post discusses how we tend to fool ourselves when dealing with complex systems that produce random outcomes.

Being a web developer, I wanted to “get into this SEO thing” a couple of times, each time finding myself in a tarpit of blogs that were giving off a really bad vibe. Try searching for “SEO” and you’ll know what I mean.

Google is a complex, black-box system which is – to make matters worse – constantly changing. You give it a certain input and you will get an uncertain output. Every once in a while the output will be what you expected, which is when you can write a blog post about it: Look! I’ve found something.

If you don’t keep track rigorously, you can easily fool yourself into believing that the outcomes are less random than they actually are and that your ability to control and/or forecast them is greater than it actually is. What’s worse, since you’ve experienced it first-hand and most people don’t think of their memory as a lying witness, it’s almost impossible to reason yourself out of this. Listen to Daniel Kahneman talking about the subject.

I mention this to make the point that the phoney doesn’t need to be a liar. In fact, I believe almost none of them are. Since we humans are actually quite good at spotting liars, phonies who believe in what they are saying have an advantage over their lying competition.

While you can lie about everything, this kind of incidental phony only shows up where they can successfully fool themselves. That’s where outcomes are most random, which is usually in the vicinity of complex systems. This leads us to the following truism:

Complex systems are the natural habitat of the phoney.

It’s important to note that “Phonies are generally SEO bloggers” is not the same as saying “SEO bloggers are generally phonies”. These statements contain no information about the relative size of these groups1.

With this in mind, we can look at various complex systems and see if we can identify the phonies surrounding them.

1. The body is a complex system, probably the most complex we know of. Until a couple of centuries ago the health profession was full of phonies and you don’t have to go very far, even today (“alternative medicine”), to see that they are still around.

2. Nutrition and exercise are aspects of the body and if you’ve ever tried to educate yourself about these topics you’ve probably met them. I’ve tried and here is everything my research has yielded: Don’t eat excess sugar and salt. I don’t think there’s much more to know about the topic, at least for now2.

3. Regarding mental health, there is an illustrating case in Germany of a trained post man who posed as a psychiatrist for two years without raising suspicion.

4. Stock markets are complex systems and given that low-cost index portfolios outperform almost all actively managed funds over an extended period of time, one has to wonder what the expertise of these fund managers is.

5. Lastly, software is complex but functional, reactive approaches for building single page web apps using whatever.js are truly Simpler™, Easier to Reason About™, especially when coupled with an Agile™ management strategy. You get the point.

It’s fun pointing out frauds (even when it’s yourself), but in a way we’re victims of our story-telling minds and its inability to deal with uncertainty.

Dealing with uncertainty is incredibly hard, but there is a straight forward best-practice that is almost never done (we can speculate why): Making explicit predictions and keeping record.

You see where this is going: Futarchy has these two mechanism built-in. Even when you’re not too hard on yourself, it is a good tool for dealing with uncertainty and therefore guarding against the phoney, even or especially when that is yourself.

1. You could have 100% of phonies in the SEO blogger category, but have them make up no more than 1% of all SEO bloggers, if that category was adequately large. ↩︎

2. You thought so as well until you’ve met Dr. <catchy name> who recommends <practice far removed from mainstream thinking> which lead to <beneficial outcome easily explained by chance>, but is being repressed by <cooperation that has bigger problems to worry about>. ↩︎

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