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The Illusion of Knowledge

There is a statistic that says over 80% of individuals consider themselves to be above-average drivers. It turns out over 80% of people also consider themselves to be above average in looks, intelligence, athleticism, and height. The list goes on and on. In short, most believe they are above average in just about everything, even regarding knowledge. In their book, The Knowledge Illusion, authors Steven Sloman and Philip Fernbach do a wonderful job of pointing out just how little each of us knows. The gap between assumed understanding and actual knowledge is called the illusion of explanatory depth. This illusion (that just about all of us have) means that we have a habit of overestimating how much we know about a multitude of things.

The authors point out that we overestimate how much we know about how things work, may it be about bicycles, wristwatches, toilets, and even zippers (yes, zippers!). We overestimate how much we know about a political candidate and his or her position on an important issue. The world is infinitely complex, yet we view things in ultra-simplistic terms without realizing it. That is, we forget the whole story due to its complexity. We would rather view the world in bite-sized snippets that are easier for us to understand. 

For example, when it comes to social and scientific progress in the 20th century, we often say Martin Luther King, Jr. was responsible for the civil rights movement and Albert Einstein for the theory of relativity. Step back and take a minute to ponder that viewpoint. Neither man worked alone. They both stood on the shoulders of activists and scholars before them and colleagues who helped them along the way. They serve as a form of shorthand for us to remember the detailed events surrounding what each contributed to society. Speaking of details, let’s discuss some of the key takeaways that should allow us all to understand and overcome our limitations and harness our strengths.

The Illusion of Explanatory Depth Causes Us All to Think We Know More Than We Do

Taking the example of the bicycle, most adults know how to ride a bike. When you ask the average adult if he or she can ride a bike and he or she says yes, there is often a leap to explain how a bike works, even if it has been shown that the majority of adults cannot explain how a bike works. 

A study was conducted at the University of Liverpool by a psychology professor named Rebecca Lawson that supports the above. Professor Lawson tested the knowledge of her students by asking them to complete a drawing of an incomplete bicycle. The drawing lacked a chain, pedals, sections of the frame, and several other parts. When the students completed the drawings, not one had produced an accurate depiction of a bicycle. Some were downright comical, containing two sets of pedals or lacking vital parts of the frame.

The inability to articulate what seems like a straightforward activity came as a complete shock to most students when they realized that their knowledge of how a bicycle works was quite limited. This phenomenon holds true across most areas. Other examples given were to explain:

  • How a wristwatch works
  • How a zipper works
  • How a toilet works
  • Opposition or support of a political policy and explain the effects of that policy

In all the above examples, the individuals in these studies had challenges proving coherent reasoning. This brings us to another key takeaway.

Our Success as a Species is the Result of Collective Intelligence and the Ability to Collaborate

The old way of thinking, say pre-1980s, was that our brains were like computers. Conventional wisdom said that our brains were just big repositories of information. As we know now, this is simply not true. A groundbreaking cognitive scientist Thomas Landauer figured it would be informative to understand the human brain’s capacity in computational terms. He carried out multiple calculations and kept getting the same answer—approximately one gigabyte. One gigabyte is about a thousand megabytes, which is a fraction of what a modern flash drive can hold.

So, if the human brain did not evolve to function primarily as a repository of information, what did it evolve to do? The answer is that it evolved to act and to collaborate. To a large degree, our intelligence and knowledge base depends on the people and things that surround us. We rarely recognize this and continually overestimate our individual abilities. All of humankind’s greatest accomplishments, from flying machines to smartphones and space exploration, have relied on massive collaboration.

We Need to Redefine What Being Smart Means and Reassess Education

As pointed out earlier, individual geniuses are not responsible for all progress and development in the world. We must embrace this fact and create a new definition of intelligence and what the process of educating someone should look like. Rather than measuring one’s raw cognitive abilities through an IQ test, would it not be better to assess one’s ability to contribute to the larger group.

Humans have evolved to collaborate and work together, not to work in a vacuum. So, rather than memorizing facts, the ability to constructively engage in collaborative endeavors is arguably more important. Being aware of one’s ignorance is also an important part of education. Once one is aware of how little one knows, one can seek input and help from the broader community. Communal knowledge is something we should all keep in mind because, as the authors point out, “we never think alone.”

Don’t let your Illusion of Knowledge Short-Circuit Your Financial Success

In the field of wealth management, we experience friends, clients, and prospective clients sharing with us about their theories of what is going to happen next. Often, these ideas, opinions, or guesses are presented as facts. As Mark Twain said, “it ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” Whether the outcome of the next election, the movement of a currency, or describing the way a wristwatch works, it’s best to avoid painting things with such certainty. It’s wiser to instead look at them in probabilistic terms. An unbiased, objective advocate on your side for quality of life and financial decisions should lead to a higher quality of life and better long-term decision making. After all, knowledge is a community effort and the collective wisdom of a team usually exceeds that of a single individual.