Social Investment vs Search for the Truth

The most important finance and investing article you will read today is not in the WSJ or FT or the NYT Business section, Its not in Forbes or Fortune or IBD or any other traditional business press.

Its in the Arts section of the NYT, and its about your cognitive deficit when it comes to rationality and the reasoning: Reason Seen More as Weapon Than Path to Truth.

The “argumentative theory of reasoning” posits that “Truth” is irrelevant, and the social functions of debate are what matters:

For centuries thinkers have assumed that the uniquely human capacity for reasoning has existed to let people reach beyond mere perception and reflex in the search for truth. Rationality allowed a solitary thinker to blaze a path to philosophical, moral and scientific enlightenment.

Now some researchers are suggesting that reason evolved for a completely different purpose: to win arguments. Rationality, by this yardstick (and irrationality too, but we’ll get to that) is nothing more or less than a servant of the hard-wired compulsion to triumph in the debating arena. According to this view, bias, lack of logic and other supposed flaws that pollute the stream of reason are instead social adaptations that enable one group to persuade (and defeat) another. Certitude works, however sharply it may depart from the truth . . .

“Reasoning doesn’t have this function of helping us to get better beliefs and make better decisions,” said Hugo Mercier, who is a co-author of the journal article, with Dan Sperber. “It was a purely social phenomenon. It evolved to help us convince others and to be careful when others try to convince us.” Truth and accuracy were beside the point.

Think about this the next time you are engaing in any sort of a investment debate. Are you seeking the Truth, or confirming your own biases, social or otherwise . . . ?


Reason Seen More as Weapon Than Path to Truth
NYT, June 14, 2011

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