Range: Why Generalists Triumph In A Specialized World Summary (7/10)

Range: Why Generalists Triumph in a Specialized World by David Epstein argues that instead of aiming to hyper specialize, more people should be trying to gain multi-disciplinary experience. Instead of planning and implementing, they should be testing and learning. Specialization is necessary, but only after a sufficient test period.

In the past, people had to rely on their own experience to understand the world. But modern people are more scientific, more inclined to use abstract ideas and schemas to inform their understanding and are less reliant on their personal experiences. Premodern people missed the forest for the trees, while modern people miss the trees for the forest.

Flynn (they named the “Flynn effect” after him) conducted a study at one of the America’s top state universities to understand the correlation between GPA and critical thinking skills. He found that there was zero correlation.

Epstein, before being a journalist, was in grad school ad studied how changes in plant life might impact the subterranean permafrost. Years, later as an investigative journalist, he realized that he had committed statistical malpractice in one section of the thesis that earned him a master’s degree from Columbia University. Like many grad students, he only had to hit a button on the computer to do statistical analysis, he did not have to think deeply about how statistical analysis worked.

The point being — it is possible to hyperspecialize without having a true understanding of what you are doing. But the deeper point is that this is not a one-off event.

The economy is made up of people who are hyper specialists. In the crash of 2008, insurance regulators regulated insurance, bank regulated banks, securities, securities regulators regulated securities, and consumer regulators regulated consumers, but no one looks across these markets. Because everyone specializes, no one is trained to identify systemic issues.

Fermi problems force you to think broadly, without detailed prior knowledge. The problem with formal education is that people are not trained to solve Fermi problems at all.

The Inside View

Kahneman had a personal experience about the dangers of this tendency when he assembled a team to write a high school curriculum on the science of decision making. After a year of weekly meetings, he asked each person in the team how long they thought the project would take. The lowest estimate was one and a half years, and the highest estimate was two and a half years.

When Kahneman asked a team member, Seymour, who has considerable experience with designing curriculums how this one compared with other projects he had worked on, he thought for a while. Before this question, he thought it would take two years longer. Seymour said he hadn’t thought of comparing this project with the other he had worked on, but that about 40 percent of the teams he’d seen never finished at all, and not a single one he could think of took less than seven years.

Seymour realized that Kahneman’s group would never work on a project that might take six more years on a curriculum that might fail. After debating the new opinion for a few minutes, the group went ahead and trusted its average “about two years” estimate. They forged ahead and completed the project 8 years later. At which point, Kahneman was not even in the country or on the team anymore, and the agency that asked for the curriculum was no longer interested.

We are inclined to take the inside view, rather than considering the outside view. That is why entrepreneurs with a “me too” idea often do not consider the true likelihood that they will succeed or how long it will take them to build their business by comparing themselves to others. They will trust their own judgements that are based on unique surface features of their own business. The outside view is a very counter intuitive way of looking at things.

In a unique 2012 experiment, a business strategy professor, Lovallo and a few other researchers recruited Investors from large private equity firms who consider many projects in many different areas. The researchers theorized that if anyone would take the outside view it would be these guys.

The investors were told to assess a project they were working on with a detailed description of the steps to success and to return the project’s return on investment. They were then asked to write down their estimated ROI of similar projects to theirs which they knew about. In the end, the investors predicted that the return on their own project would be around 50 percent higher than the outside projects. They were asked to think more. They revised their estimates and were shocked at what they had done.

This phenomenon applies to many areas, from gambling on horse races to predicting who will win the election. The more internal details you learn about a scenario, the more likely you think it will be.

A Problem Well Put

Specializing Early

Malamud, an economist from Northwestern University, analyzed data for thousands of former students and found that college graduates in England and Wales were far more likely to leap out of their career fields than their later-specializing Scottish peers. Despite starting out behind in income because they had fewer specific skills, the Scots quickly caught up.

Quitters Never Win

Young and Foolish

Sunk Costs

Van Gogh and Grit

His interests constantly wavered. He first wanted to be an artist, devoted all his energy to one style and medium, then would abandon it soon thereafter.

“I have been obsessed with a certain idea or project for a short time but later lost interest” is Van Gogh in a nutshell, at least up until the final few years of his life when he settled on his unique style and creatively erupted.

Van Gosh was an example of match quality optimization. He tested options with maniacal intensity and got the maximum information signal about his fit as quickly as possible, and then moved to something else and repeated, until he had zigzagged his way to a place no one else had ever been, and where he alone excelled. His grit, his sticking to one thing was not very impressive, but it didn’t matter in the end.

The End of History Illusion

The “end of history illusion” refers to a common pattern in people that was discovered by psychologist Dan Gilbert. Each person, no matter what their age, tends to think that they will not change much in the future even though they acknowledge that they have a changed a lot in the past.

As we age, we tend to become more agreeable, conscientious, less neurotic, and more emotionally stable. But we tend to become lower in openness.

Plan-and-Implement versus Test-and-learn

Breadth is Tricky to Grow

Fooled by Expertise

He laid out many scenarios that could unfold, ranging from best case to worst case. Even the best case scenario forecasted half a billion deaths by starvation. And then Ehrlich challenged the world to come up with a more optimistic vision.

Economist Julian Simon took up the challenge.

The late 1960’s was the prime of the “green revolution.”

Instead of being the problem, population growth was going to be the solution since more good ideas and technological breakthroughs would emerge.

In October 1990, Simon found a check for $576 dollars in his mailbox. The price of every one of the metals declined. Ehrlich was wrong. Although malnourishment is still a global issue, it is not as big an issue as it once was. In the 1960s, 50 out of 100,000 global citizens died each year from famine. Today that number is 0.5.

Even though Ehrlich’s predictions were embarrassingly bad, he doubled down on them in another book. He argued that the timeline had been a little off but now the population bomb really detonated. Despite a long string of bad predictions, Ehrlich amassed a huge following and received prestigious rewards.

But in the end, despite both of their successes in their respective domains, both were mistaken. When economists later examined metal prices for every ten-year window from 1900 to 2008, during which time the population of the world quadrupled, they discovered that Ehrlich would have won the bet 62 percent of the time. The catch was that commodity prices are a bad proxy for population effects, especially over a single decade.

The variable that both men thought would vindicate their worldviews had little to do with them. Commodity prices went up and down with macroeconomic cycles. A recession during the bet brought the prices down. The two men might as well have flipped a coin, yet both declared victory.

Both defended their ideas more strongly and continued to miss the value of the other’s ideas. Ehrlich was wrong about population and the imminent apocalypse but was correct on aspects of environmental degradation.

Simon was right about the influence of human genius on food and energy supply but was wrong when it came to the environment. The improvements in air and water quality did come, but not from technological initiative and markets, but from regulations that people like Ehrlich pushed for.

Intellectual sparring partners ideally would hone each other’s arguments so that they are both sharper. But the opposite happened with Ehrlich and Simon. Each man became more dogmatic as they amassed more information to support their own view, and the inadequacies of their models became starker. Some thinkers fall in love with their ideas, even in the face of contrary facts, and their predictions become worse as they amass more information about the world.

Confirmation Bias

Psychology professor Dan Kahan has showed that the more scientifically literate adults are more likely to become dogmatic about polarizing topics in science. Kahan thinks it is because they become better at finding evidence to confirm their feelings.


But interventional cardiologists only see a tiny part of a complicated system. Stents are always implemented even when it is proven not to be necessary for many patients.

The Flu

The 2008 Crash

Originally published at https://unearnedwisdom.com.

I write about the best quality ideas that I have discovered

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