Alchemy - Rory Sutherland

Rory Sutherland is always a treat to listen to on podcasts - such a creative mind. His book ‘Alchemy’ does not disappoint either: A very entertaining and thought provoking read essentially about the shortcomings of the rationalist mindset and the underappreciation of the creative approach.

Here are my notes about the book from 2023:

Psycho-Logic and Reasoning

This book argues that reasoning is often overrated and that we should rather solve problems in the psycho-logical way.

Psycho-logic

What is logic? Logic is the science of rational thinking, the science of deduction. One theorem can be logically deduced by another. Humans are inherently bad at classical logic. Why? Because the logical conclusion is only rarely the most useful evolutionarily speaking. Maybe it is not rational to be pathologically afraid of heights or the deep sea or public speaking, but it makes sure you survive longer than that fellow who has no (irrational) fears.

Moreover it can pay of to be illogical. A human which acts perfectly logical is also perfectly predictable. “If you are wholly predictable, people learn to hack you.”

Psycho-logic makes use of those inbuilt irrationalities and acknowledges the fact that you can change problems in several ways and seldomly is the logical solution the best solution. You can make the train physically faster or you can make the train feel faster.

Mathematics, Schmathematics

Sutherland talks also a lot about mathematics and the fact that bad mathematics is used a lot to fool people who are not very skilled in mathematics. People in their minds equal mathematicss with rationality. Pseudo logical derivations are hard to disprove for the average human, especially when they are not trained in mathematics.

He also points out some interesting differences between laws in math and in the real world:

In maths, 10 x 1 is always the same as 1 x 10, but in real life, it rarely is.

You can trick ten people once, but it’s much harder to trick one person ten times. (…) If you were only allowed to eat one food, you might choose the potato. Barring a few vitamins and trace minerals, it contains all the essential amino acids you need to build proteins, repair cells and fight diseases – eating just five a day would support you for weeks. However, if you were told you could only eat ten foods for the rest of your life, you would not choose ten different types of potato. In fact, you may not choose potatoes at all – you would probably choose something more varied.

In the spirit of the above quote, he points out that there is a major difference between hiring ten times one person and hiring ten people at once. If the HR-Person only gets to pick one person, she will have her own performance-meeting in mind and choose in some ways the most boring person of the bunch. Why? Because nobody gets fired because she hired a well qualified academic with no former hiccups, however she would have had to explain herself if she took a shot with some newcomer or silly person. Contrast this with the situation of hiring 10 at once. Now the HR-Lady could assemble a complementary group, with some risky hires. Of ten people hired, if three don’t make it is still a success-quote of 70%, which is a reasonable show in the performance-meeting next quarter.

Complementary talent is far more valuable than conformist talent.

Further, Sutherland points out that often what gets measured in numbers is optimized for. However, this is not always all that counts.

In making decisions, we should at times be wary of paying too much attention to numerical metrics. When buying a house, numbers (such as number of rooms, floor space or journey time to work) are easy to compare, and tend to monopolise our attention. Architectural quality does not have a numerical score, and tends to sink lower in our priorities as a result, but there is no reason to assume that something is more important just because it is numerically expressible.

The following quote should be the first someone tells you at the math-university lectures:

‘There are two key steps that a mathematician uses. He uses intuition to guess the right problem and the right solution and then logic to prove it.’ We have conflated the second part of this process with the first.

Biology

biologists call ‘costly signalling theory’, the fact that the meaning and significance attached to a something is in direct proportion to the expense with which it is communicated.

And if you think about it, a flower is simply a weed with an advertising budget.

might sexual selection provide the ’early stage funding’ for nature’s best experiments? For example, might the sexual signalling advantages of displaying an increasing amount of plumage on a bird’s sides have made it possible for them to fly?

Remember that without distinctiveness, mutualism of the kind found in bees and flowers cannot work, because an improvement in a flower’s product quality would not result in a corresponding increase in the bees’ loyalty. Without identity and the resulting differentiation, a breed of flower would give away extra nectar for no gain, as the next time, the bees would simply visit the less-generous-but-identical-looking flower next to it.

The Soviets soon found that, without a maker’s name attached to a product, no one had any incentive to make a quality product, which pushed quantity upwards and quality downwards. The easiest way to produce a million rivets every month was to produce a million bad rivets, which soon led to ships falling apart.

Placebo

It seems likely that a significant part of what you’re doing when you spend two hours on self-grooming is self-administering a confidence placebo to produce emotions that you can’t generate through a conscious act of will.

‘It says here that you should under no circumstances take this medicine for more than four consecutive nights,’ she said nervously. Immediately I felt the placebo effect doubling its power. The fact that it should not be taken in large amounts is proof of its potency.

Other Quotes

‘The heart has reasons of which reason knows nothing,’ as Pascal put it.

When a hare is being chased, it zigzags in a random pattern in an attempt to shake off the pursuer. This technique will be more reliable if it is genuinely random and not conscious, as it is better for the hare to have no foreknowledge of where it is going to jump next: if it knew where it was going to jump next, its posture might reveal clues to its pursuer.

My friend and mentor Jeremy Bullmore recalls a heated debate in the 1960s at the ad agency J. Walter Thompson about the reasons why people bought electric drills. ‘Well obviously you need to make a hole in something, to put up some shelves or something, and so you go out and buy a drill to perform the job,’ someone said, sensibly. Llewelyn Thomas, the copywriter son of the poet Dylan, was having none of this. ‘I don’t think it works like that at all. You see an electric drill in a shop and decide you want it. Then you take it home and wander around your house looking for excuses to drill holes in things.’ This discussion perfectly captures the divide between those who believe in rational explanation and those who believe in unconscious motivation; between logic and psycho-logic.