Lex Fridman: belief

Transcript context

…Yeah, more arguing over beers. And in this case, there’s several people who say it was all about Frank Knight. What did he say? What did he mean when he said it? Is he right? And so Knight, he would say one thing and then say another. If you read him, it’s very hard to follow what he’s actually saying because he’s full of qualifications and ironies. It blends. And so he would throw out these pieces and then the students would clutch at them, and then they would come back together and try to assemble this worldview. And then Frank Knight fell into this terrible depression, and to cheer him up, they planned a big party and they went back through all of his previous writings and they assembled them into a book that was published. This is the Ethics of Competition, and you can read the introduction written in part by Milton Friedman. So not only were they talking about Knight and what he said, but then they started pouring over his work. One of them described it as a general equilibrium system where you had to know all the parts and then all of a sudden it all fit together in a whole. So if we step back, what they were doing was getting inside the mind of a great thinker and understanding the ways it all fit together and then testing their ideas against Knight’s. And what’s fascinating is, one of the first papers that Friedman publishes in statistics is a rebuttal of Frank Knight. He publishes a rebuttal of Frank Knight’s ideas about risk and uncertainty. And Frank Knight, he took a black swan argument. He said, “Risk, you can calculate. Uncertainty, you can’t existentially philosophically. You can’t get your hands around it. It is the Black Swan.” And Friedman publishes this statistical paper and he says, “I can put uncertainty on a graph.” And so there’s that Freudian killing of the father element when he comes back and he will in some ways turn his back on Knight’s approach and Knight’s pessimism even while it’s a foundation of his thinking. Fascinating. Is there something you could say about the thinking process that Milton Friedman followed, how he developed his ideas? You mentioned there’s a strong collaborative component, but there’s another story I saw about that I think his son recalled about the argument number system that you mentioned, which, by the way, if you can explain that as a tangent of a tangent, that’s really awesome. I think it’s number one if the other person is right. Number two means you were right and I was wrong. And the number system evolved in some ways to be quick and efficient, but in other ways they also were really clear about it. So something like there’s three reasons behind it. First is, if you use a number, it reminds the listener that it’s really hard to say the words, “I was wrong.” So you’re calling on their sympathy by using the number, reminding them that you’re doing a hard thing. And then it’s also reminding them that you’re in this family with this code, and so you’re signaling your membership and your closeness and your love, really. It’s supposed to be an easy way to disagree without breaking the relationship.…

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