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How millions died from one error in judgement, and other logical fallacies.

How millions died from one error in judgement, and other logical fallacies.
By Tom Littler • Issue #67 • View online
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About a month ago I had to come up with $1,500 to pay for supplies for a project. Entrepreneurship is not a path that will reward you with deep pockets, you are very poor until you are rich — or more likely you just remain poor. 
I checked my portfolio and saw only one real option. 180,000 $IBFR tokens. They were worth about $4000. I sold around half, at a price of 2.5c each. 
About a week later the price skyrocketed to 10c. I was annoyed I sold, I could have been sat on $20k. I sold the remainder of my $IBFR for $10k. Not bad, I could pay off my overdraft and have another month or two safety net. At the time of writing, three weeks later, $IBFR is at 50c. My initial 180,000 tokens would be worth $90k. At my current spending that’s financial security for about 3 years. Ouch. 
It was easy to visualise the instant cash in my bank, it was much harder to make a rational decision on potential outcomes if I didn’t sell. 
This is a story about the fallibility of the human mind in seeing the upsides, or downsides of that which has not occurred. In this article we’ll explore how this fallibility affects huge macro factors, from energy policy to innovation. At the end of the day, society is just a collection of humans, the weaknesses that affect individuals are also causal factors for society at large. 
The Suffocation of Engineering
In my last article, on the state of university, I wrote that choosing a career in engineering, apart from perhaps bio-engineering, and software engineering was probably not a great move at the moment. 
One reason for this is we aren’t innovating or delivering in the traditional engineering areas anymore. The Empire state building was built in 15 months in 1931. We’ve been rebuilding the World Trade Centre for over 10 years, and it’s still not completed. The 1.7-mile Golden Gate Bridge was completed in 3.5 years in the 30s at the cost of $530 million in today’s dollars. Presidio Parkway, a 1.6-mile access road to the bridge has just been completed, taking 7 years at a cost of nearly $1bn. 
One driver for the clear slowdown in our ability to deliver value at a fair cost is regulation.  

We’ve all seen the playful photo above. No hard hats, no harnesses, just a bunch of workers enjoying their sandwiches. Some people may even look at this romantically — a simpler time, and a time when we could build stuff quickly and cheaply. Of course, this photo points to something deeper, a complete disregard for the health and safety of workers. A leading skyscraper construction firm even admitted at the end of the 1920s that one worker died for every 33 hours of employed time during the previous decade. One worker every 33 hours. 
In 1970, President Richard Nixon signed into law the Occupational Safety and Health (OSH). This law was intended to ensure “so far as possible every working man and woman in the nation safe and healthful working conditions and to preserve our human resources.” A combination of regulation and financial incentives for companies to avoid harming workers (read suing) worked. In 1913, the Bureau of Labor Statistics documented approximately 61 deaths per 100,000 construction workers, by 1997 it was 4. Non-fatal injuries have followed a similar trend. 
The upside here for policymakers and individuals is clear as day. More stringent rules on regulation, better practices, and thus more bureaucracy are good. How could you vote against initiatives that ensured the safety of workers?
It’s never that simple. With this increased safety, and regulation, there comes a cost, things get built slower, at a higher dollar cost. This might seem like a non-argument, how can you compare human lives to economic growth? Except, there is a relation between these two things — a strong one. One study, published in the Journal of Epidemiology and Community Health, found there were 334,327 excess deaths beyond the expected number in England, Wales and Scotland linked to austerity. While I’m generally very sceptical of studies that draw causality on such a macro level, it does make intuitive sense that if spending on public goods such as the NHS drops, people will die. 
And here lies the fundamental problem, hundreds of thousands are dying because of something that has not occurred. It’s easy for the human brain to comprehend tragedies like Grenfell tower, where hundreds lost their lives, and campaign for greater regulation around building materials. It’s much harder for us to look at the huge increase in building infrastructure, causing the indirect deaths of thousands. We need to be doing both. 
Hospitals, roads, parks, kid playgrounds, and schools, all cost time and money to build. If you believe in economics, you believe there is a limited supply of things, if a local council has a $1bn budget for healthcare infrastructure, they can build a new hospital, a transformation plan to make cities more liveable and healthier, or equip every school with a leisure centre, they can’t do all of them today. But maybe 50 years ago they could. In the last 5 years, the cost of building a hospital in the UK has doubled the $1.1bn. If building costs returned to past levels, you could afford a lot more. 
Before we look at a few potential solutions to these problems, let’s look at another monumental fuck-up that has again been driven by the inability of our brains to see the downsides of that which has not occurred. 
National Energy Policy
36 years ago, on a crisp spring morning in a small city in what would now be considered northern Ukraine, a nuclear reactor experienced a meltdown during a routine safety test. 50 emergency workers and 9 children died of acute radiation. The 600,000 people most severely affected by the blast saw a 3% increase in their chance of developing cancer, causing around 4000 excess deaths.
This disaster, among others such as Fukushima, set in motion a turn of events which led to a widespread sentiment that nuclear power was murder. It was too high a risk to be considered a viable option for national energy policy. Most governments phased out nuclear reactors, despite the fact that Chornobyl employed an antiquated reactor type, and that nuclear is a cheap way to deliver power at a low output of carbon. 
The idea that nuclear power is dangerous, is again a fallacy, a fallacy brought about by how our brains — and therefore our governments, interpret opportunity and cost. When a nuclear disaster happens you know about it. You see the explosion, you see the tragedy unfold before your eyes, the children with cancer, the radiated ground, the abandoned cities. If you ask the average person if nuclear power is safe, they would look at you with a look of confusion, point to Chornobyl, maybe reference nuclear bombs and tell you of course not. 
The numbers paint a different picture. Nuclear power is one of the safest options we have to generate power. Per terawatt hour, fewer people die from Nuclear than from Solar. More people die falling off ladders putting up solar panels than from Nuclear power. 
Unfortunately, I couldn’t find data that accounted for a longer time horizon. I’m no expert, but I imagine nuclear tragedies follow a long tail, with a few events causing the majority of deaths, but even considering 1 Chrenobly a year (4000 deaths) the cost would still be on par with Natural Gas. I’m not sure if this data accounts for the $3trn and countless lives that the last 30 years of American wars, all based on oil and gas security, have cost. 
Let’s look at the energy policies of two different counties. The UK, and our free-thinking cousins over the Channel. 
Since 1980, the UK’s power mix regarding nuclear has remained basically unchanged, accounting for around 10%. This is due to policy decisions to not commission new nuclear plants. Our last new plant was commissioned in 1987. France on the other hand, with their characteristic flaneur, paid little heed to the public sentiment and doubled down on Nuclear. About 40% of their energy over the last 30 years has come from nuclear. 
Let’s do some fag-packet maths between these two policies. 
The UK currently consumes 1,651 TWh of energy per year. This has remained fairly unchanged since 1980. This may seem counterintuitive, as the population has increased by 10 million and we have access to far more ‘stuff’ now, but it’s just because all our manufacturing has been outsourced to China. 
Let’s assume a 1:1 relationship between oil and nuclear, for every unit of nuclear produced, oil falls by 1. This is the general trend in France. 
10% Nuclear in UK v 40% nuclear in France is a 30% / year difference in oil v nuclear energy. 
Overall delta in TWh = 30% * 1650TWh * 40 years = 19,800TWh produced from oil rather than nuclear
Delta in KTWh deaths from oil v nuclear = 36,600–90 = 36,510 extra death per 1000TWh
Overall deaths from choosing oil over nuclear in the UK = 36,510 * 19.8 = 723,000 extra deaths. Three-quarters of a million deaths. The total number of reported deaths from covid in the UK is 210,000.
I hope you understand the magnitude of this impact. The choice by the UK government to phase out nuclear is equivalent to 3 Coronvirus epidemics. No one is talking about this, why? Because these deaths aren’t in your face, they aren’t obvious. These deaths are the result of small increases in cancer chances due to harmful particulates in the environment, or from the deaths of workers in countries where our oil is extracted. We don’t see them, so our brains assume they don’t exist. 
And it’s not just this direct cost to lives. Our attitude to energy policy has also been a monumental fuck up from a security point of view. Across Europe, this winter thousands will die due to increased fuel costs, due to Russia turning off the taps. If we’d taken a balanced approach to energy security, prioritising nuclear delivered on a nation-state level, the situation wouldn’t be anywhere near this bad. 
Not utilising nuclear has costs hundreds of thousands of lives worldwide. Millions more if we factor in the inevitable upcoming climate crisis. It may seem evil we’ve chosen this path, but it’s not, it’s just a quirk of the irrationality of our human minds.
What Can We Do?
Before diving into any recommendation, I have to preface that I am a complete amateur. I write for my own clarity, and it just happens that some people find what I write interesting. Guiding society to a path where individuals and governments see the world, and enact policy, that favours longtermism, and a more holistic approach to address the upsides and downsides of that which has not yet occurred is incredibly complex. People far smarter than I have worked on this problem. 
Having said that here are a few observations 
We should take more risks as a society, especially around technology
As a society, we are generally quite risk-averse when adopting new technologies. There’s no better example of this than Nuclear Power. It was a technology that could have vastly improved our current world. We didn’t need to completely stop commissioning new plants, we could have taken a much more measured approach, not letting the technology while still proceeding with some caution. Not taking this risk, was the biggest risk. 
We now have access to a tonne of technology that could help us build more quickly and safely, from drones, to automated vehicles. Our government should be doing everything they can to push through this technology, creating controlled sandbox environments to pilot new technologies, outside of the normal regulatory frameworks. 
Healthcare is another big one here. I had to go to the hospital last week. The experience was fine, but nothing about it has changed for 20 years, apart from that I signed in on an iPad. Why am I being triaged by a nurse? Surely this can be done via an AI assisted chatbot now. Why doesn’t the hospital have all my medical data? Surely this should be mine, stored on a blockchain that I can give to anyone. Why is a technician manually scanning my moles? Why am I not just standing in a room with high definition cameras, with specific AI identifying if any are dangerous? We can do this for comets in distant galaxies, surely we can do it for dark spots on our skin… 
The general thread that ties all of these points together is our inability to see the upside of that which does not exist. I know a non-tech solution that works, why would I expose myself to tech-solution that does the same job? We’re not willing to take these risks, which in turn becomes the biggest risk as it stifles our ability to improve the quality of life for humans. 
Government Incentives 
It seems quite obvious to me that government incentives are all wrong. Voting, for the most part, seems to be a popularity contest, with leaders enacting policies that are in vogue with the crowd. The UK has just issued a $40bn scheme to help individuals and businesses pay their energy bills. I’m not going to comment on whether this is the correct thing to do, but this policy was clearly enacted to improve public perception of the Tory government. It’s effectively a subsidy on Oil & Gas. Oil & Gas has been historically been subsidised heavily by the UK government. OECD data claims that from 2016 to 2020 companies received £9.9 billion in tax reliefs for new exploration and production.
The second-order effects of such subsidies are obvious, Oil & Gas’s true financial cost is shielded from the end customers, which means renewables need their own subsidies in order to compete. What is favourable for the consumer in the short term is not always good for the long-term needs of society. I’m not entirely sure how you create incentives for government to think further than their next election, perhaps an easier approach would just be to limit government’s power… 
Limiting Government Roles
Government has three roles in most modern societies. To regulate, to tax, and to invest cash where it sees fit. I believe that everyone should have access to basic needs — a good education, healthcare, food and shelter. Socialists would argue that you need a large central government to deliver this. The problems here are obvious and outlined at length in this article. Government has done a poor job of delivering critical services at a reasonable cost. 
Could we live in a world where the government still held the responsibility to regulate and tax, without being capital allocators? I’ll probably write about this more in the future but a really compelling option here is Universal Basic Income. Let’s take education as a use case. Imagine the government was no longer in charge of devising a centralised system of education, and instead, every child was given the current budget of $6500 / year. Metrics of success for schools might be given, that included elements such as student happiness, employability after school and more. Private companies would then compete to provide the best value for money education possible, experimenting with new technologies, business models and more. Rather than schools being postcode monopolies, as they are now, schools would compete fiercely and would be wildly differentiated, some niching down to focus on the needs of children with specific interests or needs, rather than the cookie-cutter approach we have today. 
All of these suggestions might seem a bit out of our control, things to be implemented by those who hold power. On an individual level though, I think we could all benefit from understanding the quirks of our brain. The writing of Daniel Kahnemann, Nicholar Tversky, Karl Popper & Nassim Taleb are all good places to start, if only to shine a load on the fallibility of the mind. As a species we’ll never be rational, long-sighted beings, and thank god or life would be very dull, but we can, when it comes to big decisions, occasionally, be a little less wrong. 
A few books I’ve read since last time
The Dispossessed - by Ursula K. Le Guin. Great fiction / sci-fi story. Gives some funny / fascinating insights into how an alien might view our society, great story also.
Conspiracy: A True Story of Power, Sex, and a Billionaire’s Secret Plot to Destroy a Media Empire - Ryan Holiday. I really wanted enjoy this as the story of how Peter Thiel took down Gawker for outing him as gay is a fascinating one. This book is just so poorly written I couldn’t get through it. Every other passage is either some attempt at bad self-help or baseless musing on how certain people may have felt about things at certain times.
Reality Is Not What It Seems: The Journey to Quantum Gravity by Rovelli, Carlo. Perhaps one of the best physics books I’ve ever read. Takes the reader through Newtonian, Einsteinian, Quantum theory and finally Quantum Gravity in easy, understandable leaps. Will change how you think about reality.
Did you enjoy this issue?
Tom Littler

Tech, life, entrepeneurship

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