After last Wednesday, when it seemed that our reality was splitting at the seams, I was surprised to see financial markets seemed to ignore what was happening in Washington. It racked up a 1% gain. I later learned that financial markets have a history of being rather oblivious to social upheaval.
Similarly, a newsletter I subscribe to about recent academic research was packed with recent discoveries. Not one of the 35 links in that day’s edition pointed to anything remotely relevant to what was happening at that time in Washington, D.C (or various other state capitals in the country). That was less surprising to me than the collective shrugging off of events by financial markets, but it still made an interesting contrast clear to me.
These two corners of the world are not tied to the happenings of today. Markets look forward and lay economic bets on what will be. And apparently it had bet that the events of January 6 wouldn’t have any lasting impact.
Scientific journals look backward and report on what has already happened in the world of academic research. Neither are very focused on today.
But there is another reason why these two corners of the world seemed unfazed by the news headlines of January 6th. Science and the Markets are two examples of things driven by facts and data. Yes, emotion certainly plays a part. Investors have long known that irrational exuberance or fear can drive artificial bubbles or crashes. And the choice of research paths to take is a human one, which means it’s inevitably driven by emotions.
But both these ecosystems try to systematically reduce the role of emotion as much as possible by relying on facts and data. And because facts and data do not reveal their stories immediately but rather over time in the form of trends, they have to take a longer view of the world.
Therefore, these things operate on different timelines from the news. Financial markets use what’s happening now – today – as just one of many inputs into a calculated bet that will be weeks or months in the future.
Science takes a longer view, using the challenges of today to set a research agenda that may be years away from realizing its pay-off. Both finance and science use what’s happening right now as one input to determine what will be in the future, but neither focus exclusively on today.
In contrast, that’s exactly what the news has to do. And it hyperbolizes the now, stripping the ordinary from the extraordinary, separating it, picking it out, and concentrating it for our consumption
The fact is, both markets and science have to operate by Factfulness, to use the term coined by the late Hans Rosling, Swedish physician and well known TED speaker. To run like the rest of the world, over-focused on the amplified volatility of the here and now that fills our news feeds, would be to render them dysfunctional. They couldn’t operate. They would be in a constant state of anxiety.
Increasingly, the engines that drive our world – such as science and financial markets – have to decouple themselves from the froth and frenzy of the immediate. They do so because the rest of the world is following a very different path – one where hyper-emotionality and polarized news outlets whip us back and forth like a rag-doll caught by a Doberman.
This decoupling has accelerated thanks to the role of technology in compressing the timelines of the worldview of most of us. We are instantly alerted to what’s happening now and are then ushered into a highly biased bubble from in which we look at the world. Our world view is not only formed by emotion, it is deliberately designed to manipulate those emotions.
Emotions are our instant response to the world. They run fully hot or cold, with nary a nuance of ration to modulate them. Also, because emotions are our natural early warning systems, we tend to be hyper-aware of them and are immediately drawn to anything that promises to push our emotional buttons. As such, they are a notoriously inaccurate lens from which to look at reality. That is why efforts are made to minimize their impact in the worlds of science and finance.
We should hold other critical systems to the same standards. Take government, for instance. Now, more than ever, we need those that govern us to be clear eyed and dealing with facts. Unfortunately, as we saw last week, they’re running as fast as they can in the opposite direction.