Philip Fernbach is an Associate Professor of Marketing and Co-Director of the Center for Research on Consumer Financial Decision Making at the University of Colorado, Boulder, Leeds School of Business. He’s published widely in the top journals in cognitive science, consumer research and marketing, and received the ACR Early Career Award for Contributions to Consumer Research. He’s co-author with Steve Sloman of The Knowledge Illusion: Why We Never Think Alone, which was chosen as a New York Times Editor’s Pick. He’s also written for NYTimes, Harvard Business Review, and his research has been featured in the Wall Street Journal, The Washinton Post, National Public Radio, and the BBC. He received his Ph.D. in cognitive science from the Department of Cognitive, Linguistic and Psychological Sciences at Brown and his undergraduate degree in Philosophy from Williams College. He teaches data analytics and behavioral science to undergraduate and Masters students.

The human mind is both genius and pathetic, brilliant and idiotic. People are capable of the most remarkable feats, achievements that defy the gods. We went from discovering the atomic nucleus in 1911 to megaton nuclear weapons in just over forty years. We have mastered fire, created democratic institutions, stood on the moon, and developed genetically modified tomatoes. And yet we are equally capable of the most remarkable demonstrations of hubris and foolhardiness. Each of us is error-prone, sometimes irrational, and often ignorant. It is incredible that humans are capable of building thermonuclear bombs. It is equally incredible that humans do in fact build thermonuclear bombs (and blow them up even when they don’t fully understand how they work). It is incredible that we have developed governance systems and economies that provide the comforts of modern life even though most of us have only a vague sense of how those systems work. And yet human society works amazingly well, at least when we’re not irradiating native populations.

How is it that people can simultaneously bowl us over with their ingenuity and disappoint us with their ignorance? How have we mastered so much despite how limited our understanding often is? These are the questions we will try to answer in this book.

– The Knowledge Illusion: Why We Never Think Alone
Steven Sloman & Philip Fernbach

PHILIP FERNBACH

Throughout my work, I've learned a kind of intellectual humility, which is a constant sort of questioning of: how well do I understand things? And I think that's really important. If we all live like that – not saying I do this all the time, I'm certainly guilty of hubris and overconfidence - but if we as a society were more questioning and open-minded, I think that we could solve some of these really challenging problems. I believe that this kind of polarization and extremism and counter-scientific thinking is very potentially dangerous, and we're not close to solving it and improving our discourse. We all want to, people do not want to fight. People want positive discourse. They want to get along, but we're failing, and so I think that if we practiced a little more humility, I think that we would hopefully be in a better position to do that."

*

I admit to being just a dyed-in-the-wool kind of techno-optimist. I don't know why that is, but I'm just very hopeful and optimistic about the future. And I know people are scared of like superintelligence taking over and everything. I just don't think that we're close to anything like that yet. It's not impossible, and it's something that I think we should take very seriously, but I really see AI as being this incredibly powerful, wonderful thing that is going to unlock incredible huge amounts of economic value. Maybe an optimist bordering on idealistic, but I kind of believe in this idea of abundance. And the idea of abundance is we sort of have this zero-sum perspective about economic activity, where if some people have a lot of wealth, other people can't.

But if you look at the size of the world economy – and you can actually go on Wikipedia and look at estimations of this going back to something like 2000 BC – the size of the economy in terms of economic activity is an exponential function, and it's like a perfect exponential function.

What exponential function means, as opposed to a linear function, it grows in a percentage basis, not an absolute way over time, which means that to double from one to two is going to take a certain amount of time, but then the same amount of time, not to go from two to three, but to go much higher.

The problem is not actually the generation of economic activity. It's allocation of that activity. And I really believe we're on the cusp of that. And AI is one big reason because if you can get rid of a lot of labor, of drudgery, and jobs that people don't want to do, and you can run a factory with a bunch of robots where people don't have to intervene that makes food or makes products or extracts resources...you can unlock a huge amount of economic activity. So, that has the potential, I think, to usher in an era of great abundance.

*

I think the environment is such a challenging problem. Two of the major reasons for that are that it's a commons problem. Basically, there's a greater good, and we all have to sacrifice a little bit individually to achieve that greater good. People tend to be self interested, so those kinds of problems are really challenging because, I'm sitting here going, 'Should I cut back on my consumption? Or should I stop flying?'

That's a cost to me in order to accrue a benefit to the group. And some people are willing to do that, but a lot of people aren't. The other real challenge with climate is that the effects of climate are diffuse. They occur slowly and over time. They're becoming more observable now, but they haven't been particularly observable to people. It's like, 'Oh, the world temperature's gonna go up by a certain number of degrees over the next 50 to a hundred years.' And a lot of people look at that and they go, 'Okay, but I've got to pay my car bill this week.' So it's hard for people to feel it viscerally as a real threat, I think. And both of those things combined are a real challenge. And then you layer in other things like incentives of oil companies or other kinds of legacy industries which actually are incentivized in the opposite direction. And then that ends up entering into the political process in various ways.

*

So the interesting thing there, which is the extent to which when a founder or an entrepreneur is overconfident, the extent to which that overconfidence is sort of put on so that they can encourage investment versus what they end up really believing.

And I think there's often a fine line there. It's often hard to discern. The entrepreneurship angle is a one that we actually get into in the book, and I want to raise another point with respect to that, which is overconfidence can be bad, but over confidence also has upsides. And so entrepreneurs are famously overconfident. And, if you look at startups, almost all of them fail, and they fail because it's really hard to start a new business and develop a new idea. And it's an extreme challenge. Any idea that you come up with, there's a good chance that other people are working on it. You have to make the finances work, you have to deal with interpersonal challenges. I mean, starting a business is really hard. They mostly fail. Any successful entrepreneur, in the back of their head, they know that, and yet when they pursue it, they sort of have to feel like I'm going make it. I'm going to be the one who makes it. And if we didn't have that, if you didn't have some level of overconfidence, if you thought about everything that could go wrong, and you weren't just sort of laser-focused on what's going to go, right, you might never try. We need innovators out there who are willing to try and fail.

And so there are upsides to this kind of overconfidence. Maybe not necessarily to every individual because it can lead to really bad outcomes for individuals sometimes, but as a society, having a vibrant entrepreneurial society is really important, and that sort of relies on people being overconfident a lot of the time.

This interview was conducted by Mia Funk with the participation of collaborating universities and students. Associate Interviews Producer on this podcast was Mira Patla. Digital Media Coordinators are Jacob A. Preisler and Megan Hegenbarth. 

Mia Funk is an artist, interviewer and founder of The Creative Process & One Planet Podcast (Conversations about Climate Change & Environmental Solutions).