The New York Times / International Herald Tribune has today (30 July 2010) carried an article entitled entitled ‘Greece and the power of negative thinking‘. Taking as an example the often-stated view that Greece is at the epicentre of the current European economic crisis, the authors, Thierry Malleret and Olivier Oullier, argue that ‘Neuroscience has much to teach us about ‘judgement extremism’ and our economic outlook’.
Overstatement usually pays off
In the view of these authors, ‘judgment extremism’ pays dividends. They note that:
“The neural system used when anticipating rewards is active long before the one in charge of evaluating risks and losses. Most academics and opinion-makers know that the rate of return on postulating extreme outcomes is far greater than that of simply establishing facts: A columnist is much better off predicting a dire outcome than being caught up with the facts that lead to a complex and uncertain one.
“Therefore, an outlandish prediction (albeit, perhaps, inadequately grounded) of a euro zone implosion is likely to be rewarded by editorial success and intellectual kudos; and by the time it may be proven wrong, it might well go unnoticed.”
Joining the dots
Further, Malleret and Oullier suggest, the increasing specialization of expertise means that people often think only within their own ‘silos’, rather than across the spectrum of the situation as a whole – with the outcome that, for instance, they see only the economic and not the political situation:
“… before May 2, when the Greek authorities finally signed an agreement with the European Union and the International Monetary Fund, the markets became convinced that a Greek default was both imminent and inevitable by refusing to consider that the political imperative would trump the economic reality. Put simply, they did not connect the dots between politics and economics.”
Nuance is out?
The suggestion here is that ‘it depends‘ is rarely a response which grabs the headlines or fires the imagination – the immediate rewards for commentators of a dramatic judgement (e.g. that Greece will fail, taking the Euro zone with it) usually outweigh alternative nuanced responses which incorporate more aspects of the situation and probably reflect overall realities more accurately.
But if the big picture lacks nuance, how can we really understand it?
How can careful analysis and insight be rewarded, to accommodate a subtlety which offers potential for resolution of complex scenarios and avoids the possible perils of dramatic silo thinking?