It Is First To See Through The Economics Of Fallacy.

Ben Li / Wen

According to a survey from the United States, according to the statistics of an insurance company handling the traffic accident claims, up to 90% of the persons who were eventually identified as others were considered to be others' faults, including 30% of the accidents that hit the guardrail and the poles. It seems that life is the norm in life, and the possibility of success in life comes first from correcting mistakes or taking fewer detours.

To correct mistakes, we must first understand mistakes. Where is the root of the mistake? One theory holds that human instincts are linear, and that the correct choice of human behavior is often nonlinear. This is the fundamental reason for making mistakes according to instinctual experience. In a market economy and a commercial society, the logic of the market is often nonlinear. For example, losing money before making money is the iron rule in the early stage of entrepreneurship, but it is counter intuitive and intuitive to the average person. Especially in the Internet age, this new economy with loss making and earning power has brought exponential growth and myriad commercial myths, but people of linear thinking have completely missed this epoch-making opportunity.

The economic truth that has been concealed. Data map

The way of life is wrong, fortunately there is the antidote for economics. It is said that economics is a smart subject, because people are counting on it to gain wisdom through it. For example, in today's highly concerned knowledge payment platform, the most popular courses are economics and finance. Well, this is the right way, just as Mr. Ke Rongzhu, an economics doctor of Massachusetts Institute of Technology, said, "economics is a worldly wisdom."

Among these readings, Thomas Sowell, a famous economist and liberal master of the Chicago School of America, is the only way to think about economics: to see through the truth of economics covered by errors.

Thomas Sowell summed up the common economic fallacies as zero sum falsehood, synthetic fallacy, chess type fallacy, afterwards attributional fallacy and open fallacy, which is of typical significance. Moreover, this not only involves the economic field, but also affects all aspects of human behavior and well-being from the cognitive level.

For example, in the current Sino US trade dispute, our position of "combining interests with profits and fighting all hurts" is the great point of breaking the zero sum fallacy that solves the problem by relying on intuition. Adam Simy's example of a baker has long shown that subjective egoism can be altruistic through the market. The market promotes cooperation and peace, subjectively egoism and objective altruism, instead of simply opposing the egoism and altruism according to the zero sum game thinking. Especially since sixteenth Century, with the establishment and development of the global trade system, the economic prosperity of the world has become more and more closely linked. The progress of social economy has increasingly relied on the division and cooperation of the global market, thus greatly reducing the danger of war and the disaster of violence.

Stephen Pink, a famous American cognitive psychologist, has used a series of scientific methods and data in his masterpiece "good angels in human nature" to show that from ancient times to now, violence in human history is gradually decreasing, the degree of violence is weakened, and the situation of violence between individuals is decreasing. One of the most important reasons is that business is a game that can win. The exchange of products and the exchange of ideas make people more and more involved. Other people's lives are more valuable, and the cost of violence and war is getting higher and higher. In short, business has expanded the scope of "empathy circle" (intercommunication, intermarriage, etc.) and the "interest circle", making war a worthless thing, thus reducing the occurrence of violence.

This kind of non zero sum game thinking of economics tells us that cooperation is better than no cooperation. But why are there many books that are popular in the market, which are traditional culture signs, advocating power and tactics? Therefore, the way to discard mistakes is not only a confrontation with individual intuition and linear thinking, but also a struggle with all kinds of narrow thinking. If you stick to straight thinking, you can't get exponential growth.

Returning to Professor suvir's book, the zero sum fallacy is only one of the five fallacies discussed by the author. If it is unknown to many of the fallacies, it will be a big probability event to fall into various pits. In the book, the author also used quite a few space to explain some fallacies in six aspects, such as city, gender, academic, income, race, and the third world. In the author's words, "these simple and direct facts are obscured by some vague and inconsistent fallacies, which are full of misleading statistical data." In my view, this is actually a reduction of five economic fallacies, and helps readers to get rid of the fallacies of the fallacy by way of cases, and establish the nonlinear thinking of economics in various specific problems and scenarios. For example, the common view that "women earn less than men is gender discrimination" and "the contrast between the prosperity of some countries and the extreme poverty of other countries is unfair" seems to be very reasonable or conforming to morality, and is also the result of inertia thinking such as zero sum fallacy. Therefore, it is also a progressive process of life to solve the habit bias and emotional indignation in the way of economics, and to enhance cognitive ability and judgement.

I have been committed to promoting the spread, popularization, education and scientific research of modern economics in China for 20 years. This book is especially gratifying to me that many years of hard work is of great significance, because economics is not only a reflection of the highly developed ideas, methods and tools of human civilization, but also the most convenient way to get rid of superstitious thinking, obscuration and open the right way of life and the wisdom and wisdom of human beings. All of this starts with "seeing the truth of economics covered by errors".