“Formerly all the world was mad” - Nietzsche

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In the early 1700s Leibniz argued that this must be the best of all possible worlds: that there could be no possible way to improve it, because God would not have created any world that was anything less than perfect. Therefore if you thought you saw a way the world could be improved you were mistaken: God had also seen that idea and discarded it, and God was much smarter than you. [1]

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Most people read this, rightly think that it’s bonkers, and then move on.

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But surely the next step should be to ask if Leibniz, who was so much smarter than me, could believe something so ridiculous, then what equivalently ridiculous things do I believe today?

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I don’t know anyone who agrees with Leibniz but I do know a lot of people with eerily similar views about finance and the efficient market hypothesis, who’d say something like ‘well if you think you’ve spotted a good trade you’re pretty much guaranteed to be mistaken, because the market has already seen and discarded that trade and the market is much smarter than you’.

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That’s probably true if your trade is ‘go long Apple’, and your insight is ‘Apple make really good phones’ - the market really will have priced that in!

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But I’ve seen smart people take this to depressing extremes; particularly with startups, or other ambitious new projects, where a common response isn’t ‘where does this insight come from?’, or ‘how much traction do you have?’ but ‘if this were such a great idea why has nobody done it yet?’.

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That’s fine as a starting point, but too often it’s the end of the discussion. [2] The truly insidious harm of Leibniz’s idea was that it was unfalsifiable: you couldn’t prove that God hadn’t seen your idea for improving the world and discarded it: you could never prove that there wasn’t some really complex unintended side effect that you weren’t taking into account but that God had noticed. The same is true here: you can’t prove that there weren’t thousands of smart people who considered the idea, spotted a fatal flaw that you’ve missed, and moved on or, even, hundreds of shadowy competitors who’d actually got as far as trying the idea, failed, and left no trace. [3]

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The similarity to Leibniz’s idea is striking: and the similarity in the harm the idea causes is striking too. Both ideas take smart people, who have the potential to do things to make the world better, and persuade them that it’s futile before they even start. Worse, they do so in a way that makes those smart people feel smart! ‘Ah you see I could try to solve that problem that seems obviously bad, but actually I have a very clever theory as to why that would be impossible. It’s even got an impressive-sounding name - the efficient market hypothesis/the best of all possible worlds theory.’

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Noticing this should therefore make you paranoid in a very useful way. I’ve tried to get into the habit of asking myself which of the beliefs and habits that I have, which of the institutions to which I belong, which of the unquestioned assumptions that I don’t even think about are going to make me look really silly in 10 years? What about 100? 500?

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Rees-Mogg Amnesia

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Once I started thinking about this idea I started seeing it everywhere; it’s hard to read about people training as scribes years after the printing press became mainstream and not to wonder why more trainees in diagnostic radiology aren’t thinking harder about how good image classifiers are going to be in 5 to 10 years when they qualify as consultants. I suspect the same underlying effect makes it easier to spot Leibniz’s mistake than the modern equivalents, and makes it easier to spot the scribe's mistake than the radiologist’s.

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To help myself spot examples of this effect I decided to give it a name. It reminded me a lot of Gell-Mann Amnesia, so I started calling it Rees-Mogg Amnesia. [4] For those unfamiliar with Gell-Mann Amnesia, here's Michael Crichton’s description of it.

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‍"Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray's case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward—reversing cause and effect. I call these the "wet streets cause rain" stories. Paper's full of them.

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In any case, you read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read. You turn the page, and forget what you know."

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And here’s my attempt to summarise Rees-Mogg Amnesia in the same way:

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Briefly stated, the Rees-Mogg Amnesia effect is as follows. You open a history book and read about some period. You read about the people living then, and see all kinds of silly things they believe, or ridiculous things they do. Often the beliefs and behaviours are so laughable or so harmful that they’re taking years off the lives of the people involved, or making them much harder or less enjoyable than they need to be. History’s full of them.

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In any case, you read with exasperation or amusement the bonkers things these people did or believed, and then close the book and get on with your life, without once asking if you believe and do similarly bonkers things. You just carry on as if your time was somehow perfectly rational, unlike every other period in human history. You just close the book and forget what you know.

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On Not Going too Far

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It’s really easy to take this too far.

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Noticing Rees-Mogg Amnesia is really good for expanding the range of potential hypotheses you’ll consider: it makes you question more of your own beliefs and makes you more able to consider beliefs that might turn out to be true. But you still have to do the work to verify each individual belief.

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In 1940 the Soviets killed 22,000 Poles in what came to be known as the Katyn massacre. In a disgraceful display of moral cowardice the UK and US governments found out the truth, but continued to publicly blame the massacre on the Nazis. They even successfully pressured the Polish government to drop its request for an investigation by the Red Cross, in order to prevent the atrocities committed by their allies from coming to light.

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Once you read that, it’s reasonable to open up the range of potential beliefs you’ll consider to include ‘liberal Western governments will outright lie about war crimes when it’s in their interests to do so’. But going too far would mean uncritically believing all kinds of ridiculous conspiracy theories; events like Katyn are rare and it takes work to tell them apart from baseless lies.

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In some ways being willing to entertain odd and sometimes taboo beliefs is like financial leverage. If you have good judgement it will help you get even closer to truth and to find unusual and productive beliefs and behaviours. If you have bad judgement it will lead you into all kinds of weird conspiracy theories and towards harmful beliefs and behaviours.

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While noticing Rees-Mogg Amnesia is a useful trick that helps open up hypothesis space, developing the good judgement to tell the good beliefs from the bad is a much more difficult problem.

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Footnotes

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1 - Leibniz tries to squirm away slightly from his own bad argument, allowing some room for people to make tiny local improvements to the world, but he rules out any major progress. There’s a good section in chapter 9 of The Beginning of Infinity where David Deutsch covers this in much more detail.

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2 - For a nuanced take on how paranoid to be about whether your trade/idea is any good I recommend this excellent guide  to adverse selection by Ricki Heicklen, which is also referenced in this, also excellent, episode of Patrick McKenzie’s new podcast.

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3 - Which seems surprisingly common for companies and projects at the early stages. Surprising numbers of very successful people have failed startups or projects that don’t appear on their LinkedIns, websites or official bios but which they’re happy to talk about in person.

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4 - William Rees-Mogg (for UK readers yes, the father of Jacob Rees-Mogg) wrote, along with James Dale-Davidson (Rees-Mogg-Dale-Davidson Amnesia didn’t have the same ring) a book called The Sovereign Individual, published in 1997, which makes some strikingly accurate predictions about the future of the internet and the nation state. One of the core themes in the book is spotting mistaken historical thinking and then looking forward to ask where modern thinking might be similarly flawed. They don’t explicitly give a name to this style of thinking (as far as I can remember - I last read the book four years ago), but it resonated with me and I thought Rees-Mogg Amnesia was a good name. Also I find the more unusual the name the easier it is to spot and label instances of the effect in the real world (cf the Baader-Meinhof effect).