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A famous economist explains the smartest way to tackle life’s “wild problems”

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Russ Roberts is trained to solve problems. But he’s found some sort of problem he can’t solve — at least not with the tools he’s trained with.


Patrick Beaudouin | Hoover Setting

Roberts is one of the most recognizable names in economics, thanks to his popular podcast “EconTalk.” He is currently president of Shalem College in Jerusalem and a research fellow at Stanford University’s Hoover Institution. This means that he often thinks in numbers and systems and solves problems with cold logic. But when a friend asked for advice on whether or not to have children, Roberts realized that people often struggle with what he calls “wild problems” — the big, life-changing decisions we all have to make, where there isn’t one right answer. and where the results are unpredictable.

So how do you solve it? That issues? That’s what he wanted to learn, and it’s the subject of his new book, Wild troublewhich takes lessons from Charles Darwin, Bill Belichick and basically everyone in between.

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You have learned to solve problems with economic logic. But as you write in the book, “I’ve come to believe that when the time comes… in life’s big decisions, those principles can lead us astray.” How did you come to realize that?

Economics is about trade-offs. We don’t have enough money to have everything we want. We don’t have enough time to enjoy everything we want. And so the essence of the economic view of human behavior is that we try to be as happy as possible, facing that reality of finite money and finite time.

That’s really helpful in a lot of areas. But I’d suggest it’s not that helpful in this area, partly because the pleasure and pain we’re going to experience from our choices is really hard to anticipate, and because we care about more than just the daily pleasures and pains that result from our choices. Thinking like an economist is thinking like a maximizer. What I argue in the book is that optimization in the context of major life decisions is probably not possible.

Unfortunately. If you had come out with a book that said, “The tools of economics can solve your life’s problems,” I think people would have said, “Oh, good. Tell me about that.” Because they want to outsource the problem somehow.

There are so many apps and algorithms that help us do all kinds of things. And I love them. Google Maps is fantastic at telling you how to get somewhere as quickly as possible. But it doesn’t tell you if that’s where you need to go.

You have to embrace a different mindset. First, there is often no right answer. I think we often think, I need to find the best romantic partner. I need to find the best headphones. I gotta find the best, best, best. You can’t find the best partner in life. It’s a multidimensional problem – a matrix. It’s not a single number, like a seven out of ten. It’s a seven on this, a three on that, and a nine on this, and so on and so forth. So how do I add them all up? There’s no rule for that.

So what should you do then? You must recognize that in many of these cases, these decisions define who we are. They create an overarching sense of ourselves that we want to respect. So the self-esteem and dignity that come from making good choices that bring you to who you can be, not just who you are – those are very important. They go way beyond the everyday pleasure and pain.

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In the book you share a simple but surprising decision technique. Can you explain the coin flip?

Piet Hein says in a poem: You have to flip a coin if you are trying to make a big yes/no decision: to marry or not to marry, to move or not to move, to accept or reject the job. Toss a coin – and when it’s in the air, you’ll find yourself, subconsciously, intuitively, hoping that it will somehow come up. I want to take the job. So the coin flip is not about making the decision. It is to activate your feeling – your instinct.

Image Credit: Patrick Beaudouin | Hoover Setting

In other words, we know the answer, but don’t listen to it. That reminds me of an old philosopher: He wrote that when someone asks for advice, they choose who to ask based on what they know that person will say. They are looking for confirmation of something they can’t just motivate themselves for to do

Instead, they should ask what Adam Smith called an impartial spectator: someone who cares enough to take you seriously, but has no interest in the outcome of the decision. Then you can get some insight.

What you often worry about in that situation is the fear of regret – making a decision that you will regret later. But regret is a strange emotion in a world of uncertainty. If you can’t anticipate how your decisions will turn out, the whole idea of ​​a mistake is not well defined. I don’t know if it’s humanly possible, but I argue that if we were less concerned about mistakes sometimes by knowing that we can reverse our decisions – then we would be taking more risks.

Speaking of taking more risks, let’s talk about how New England Patriots coach Bill Belichick solves a wild problem — which in his case is: Which players is he pulling out of college?

He likes to take a pick with a high draft and then exchange it for several picks with a lower draft. And why would he do that? He is well aware that, as smart as he is, he cannot anticipate [which player would be the best to draft]† So he brings in some, hoping some come out.

It’s kind of an obvious idea, but I think we struggle with that in our real life. We’re very concerned – you know, this holiday must be perfect† Maybe you’d better take a few little vacations, learn what you like, and then be a better voter later on.

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It makes me think: when you’re trying to decide whether something is good, you put a lot of responsibility on the thing itself. It’s like, “This better be good!” But really, it’s always up to us to make the decision work. That’s what Belichick does: instead of expecting a player to be good, he puts the responsibility on himself to identify and mold the best player.

if we can trust that we are the ones who can make something work, then we can broaden our options, select one and make it work. What do you think?

That’s fantastic. If you say, “I’m going on vacation to Paris, and boy, I better be amazed by the Mona Lisa,” you’re in for a shock. It’s a small, small picture. So as a result, your whole attitude towards Paris will be wrong. What you should think about instead is: How could this end? What could I investigate? What will I discover? Then you will discover how to make lemonade out of lemons, how to cope with a crisis and get out of it.

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