moneyFYI
Financial Freedom Is Merely Organized Common Sense
What Is Power Today?
Information is power. Old idea.
Historically information has been amazingly helpful, but today, information is more like data. For this way of thinking, data is a point – something without context. Something that is just there. There is no clear idea it is meaningful, useful, or even correct. I hesitate to use true, because that is fast becoming a meaningless concept.
In 1973, Frederick Hayek pointed out, “civilization rests on the fact that we all benefit from knowledge which we do not possess.” I can drive a car without knowledge of fuel injection. I can use the internet knowing near nothing about it.
I can know about current events by watching TV or reading the newspaper.
Or can I?
What if I cannot trust my observed information.
There is a missing link
To be useful information must have a way to connect to knowledge. Data can becomes information by verification and contextualization, and information can become knowledge. The knowledge level includes the information that is not contradictory and knowledge seeks holes in the idea.
That form of thinking is missing and it is what makes modern information at least useless. Dangerous is the more likely result.
There are two dangers
The information may be innocently wrong or it may be purposely wrong. Using information without the connection to knowledge makes it near useless, but many no longer see that. They treat information as knowledge.
We may begin to believe that because there is so much easy to get information we are somehow knowledgeable. A little knowledge is dangerous. A lot of information is worse.
We must learn to notice the quality of our information. We must use critical thinking skills to vet it. We must assign meaning.
Assigning meaning is the first step towards knowledge
Example: Steven Pinker recently pointed out the number of people in the world living in abject poverty falls by 137,000 per day. 50 million a year. And that has been happening for the last 25 years. 1.2 billion have moved to better circumstances. Critical thinking says nice, but I trust God everyone else brings evidence.
Lots of sources to check with. You might want to understand the nature of the poverty definition first. It should be about quality of life not some income sector. Most western countries assume that anyone in the bottom quintile by income is poor. There is a difference between poor in Toronto and poor in the Sudan.
Assigning meaning once you think it correct. If poverty is the source of crime, then crime must be falling. Easy enough to check.
Does inequality of income matter? Maybe, but there is a hard task ahead to prove it.
Can you trust all information.
Clearly not. Even respected medical journals are not so useful as you would think. Brian Haynes at McMaster University studied them a decade ago. His observation. “Less than 1% of the diagnosis, prognosis and treatments espoused by the articles were scientifically valid and clinically applicable” I think I could learn that much reading comic books.
The danger is you might believe all 100. No great problem if you are just acquiring ideas and not applying them. Application would be unsound. Ninety-nine wrong to one right. What if some of the 99 are harmful?
How many medical treatments have since been deemed wrong. Cancer – several, MS – at least one, vaccinations causing autism. Can you believe the denials? Who knows.
You might be better believing nothing.
Attributed to Mark Twain, so it isn’t new.
What gets us into trouble is not what we don’t know. It’s what we know for sure that just ain’t so.
What is true and useful? It may be hard to decide on the basis of what purports to be information. You will be forced to consider knowledge and that is much harder.
Do the work when it matters, ignore information when it doesn’t.
Information is not knowledge, and even less so wisdom. Think about how much information directs your investing activity and financial planning. How much of it is real?
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario.
In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. don@moneyfyi.com 866-285-7772
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