Some of the things that I find most interesting in life: politics and economics, science and religion, business and investing, all seem to share one thing in common: controversy and massive disagreement.

I find it really fascinating how each of these areas have huge groups of people with such radically opposing viewpoints. For example:

In politics; Democrats think Republicans are idiots and vice-versa.

In economics; Keynesians, Austrians, and Monetarists each think that the other two schools of thought don’t understand “real” economics.

In religion; literally billions of people believe in the world’s five major religions. Many of them think that the other four major religions are completely misled, and in many cases believe that this will lead to eternal damnation for everyone outside of “their” religion. Even more interesting is that even within each of the major religions, there are hundreds, if not thousands, of different sects with their own specific belief systems, and these groups often have more animosity and contempt for the beliefs of others within their broad religion that don’t share their specific group’s beliefs than they do of people in completely different religions.

I could go on and on, but I think you probably get my point. So it begs the question of how and why do people come to these radically different opinions on things that are very important to them, especially in an age where information on each of these topics is so readily available?

Another interesting thing I’ve noticed is that often times I’ll see that the more completely convinced a person is that their views on any of these topics is correct, the more uneducated they tend to be in the area they have the most certainty about. People that are completely convinced that their take on whatever economic policy happens to be in the news during a given news cycle, can’t even tell you the difference between monetary policy and fiscal policy. People who are Democrats or Republicans, will flip-flop their positions on basic policy depending on who controls Congress at any given time. People who are 100% certain that their religious beliefs are the only true beliefs, have never read a single book that is charitable to another religion, and can’t even explain how their own religion has progressed and changed historically with any kind of accuracy.

I find it all rather amazing.

The other thing that I’ve consistently found is that the most well-educated people I know also have the most humility about what they actually know. Anyone who has actually studied any of these topics in-depth, knows that they are incredibly complex, and that they aren’t even close to knowing everything there is to know about a given topic. Many of the most well educated people I know are autodidacts as well, but that is another story.

Bertrand Russell has a famous quote that sums this all up: “The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt.” 

There is a name for this phenomenon called the “Dunning-Kruger Effect.”

There are a lot of interesting aspects to it, but the one I’m most interested in is that I believe it is just one more reason, among many others, that freedom is inherently good, while coercion is inherently evil. It is one of the reasons that Hayek’s description of the importance of “The Use of Knowledge in Society” is such a breakthrough insight. It is why the “Non-Aggression Principle” is so foundational to progress. It is why the “Golden Rule” is so foundational to all of the world’s religions.

Combining ignorance and self-confidence with coercion leads to really destructive outcomes. And since we know that we’re all ignorant to different degrees about everything in life, one would think we would be a little more humble and a little less willing to use coercion to impose our beliefs on other people. Unfortunately, these are lessons that the Church and the State have struggled to comprehend historically, and this had lead to immense human suffering throughout history.

People have an incredibly difficult time determining between cause and effect, understanding tradeoffs and the seen versus the unseen, understanding even the basics about human action. But somehow society still seems to have this ridiculous belief that if we just use a little more coercion, (usually government coercion, but sometimes religious coercion as well) we could somehow fix these problems and improve society. It is an incredibly naïve belief, but extremely widespread.

This seems to be one of many problems with government and government employees. Their jobs only exist as a result of coercion, and therefore there is no feedback mechanism that can pop the cognitive bubble that they find themselves in. My personal experience has been that these people are often completely sure that the public has no idea how difficult and important their jobs are and it leads to arrogance, stagnation, and horrific customer service. Since they have a monopoly on force, they tend to be completely delusional about their own importance and competence. They toss around terms like “market failure” to justify every intervention without even considering that maybe it’s not market failure that is the problem, but rather the fact that markets and society disagree with what they think the correct outcome should be.

There is lots more that could be said about this topic, but what brought it to my mind today was this YouTube video describing the Dunning-Kruger effect that I thought was interesting. It’s pretty basic stuff to anyone that has studied Austrian Economics, but I think the population as a whole has a very poor understanding of it. This video does a good job of explaining the Dunning-Kruger effect in a way that makes it more accessible to everyone. Unfortunately, it includes a few references to things like Covid-19 and the education system that I believe are misguided, but the overall points are made pretty well.

If more people understood the Dunning-Kruger effect, perhaps we’d approach controversial topics with a little more civility and a lot more humility. It’s almost like we have a learning problem here…;)