Energy Price Rises are a result of speculation and not increase in price of gas and oil

 

Why intellectual humility matters

We should all nurture the ability to recognise our own cognitive biases and to admit when we’re wrong writes JEMIMA KELLY in The FT


What makes some people believe in conspiracy theories and false news reports more than others? Is it their political or religious perspective? Is it a lack of formal education? Or is it more about their age, gender or socio-economic background? 

A recently published study suggests that more important than any of these factors is another characteristic: the extent to which someone has — or does not have — intellectual humility. 

Intellectual humility can be thought of as a willingness to recognise our own cognitive limitations and biases, to admit when we’re wrong, and to be more interested in understanding the truth of an issue than in being right. Its spirit is captured nicely by the quote often attributed (probably wrongly) to John Maynard Keynes: “When the facts change, I change my mind — what do you do, sir?” 

In their study, Marco Meyer and Mark Alfano — academics who specialise in social epistemology, a field at the intersection of philosophy and psychology — found those who possess this virtue are much better at differentiating between accurate news reports and false ones. They suggest that having intellectual humility was a better predictor of someone’s ability to resist fake news than any of the other factors they looked at. 

In another study published last year, Meyer and Alfano found a strong correlation between “epistemic vice” (the lack of intellectual humility) and belief in false information about Covid-19, with a coefficient of 0.76. The next strongest link was with religiosity, with a moderate coefficient of 0.46. And while they did find a weak correlation between intelligence — measured by exam results, education level, and performance on a cognitive reflection test — and belief in false information, they say there is no link between intelligence and intellectual humility. 

“When you’re intelligent, you can actually be more susceptible to certain kinds of disinformation, because you’re more likely to be able to rationalise your beliefs,” says Meyer, who is based at the University of Hamburg. Intellectual humility is, he suggests “super-important . . . as a counterweight, almost, against intelligence.” 

You might think such a virtue would be almost impossible to measure, but Meyer and Alfano’s work suggests that self-reported intellectual humility — based on asking respondents to rate the extent to which they agree with statements such as “I often have strong opinions about issues I don’t know much about” — is quite effective. And other studies have shown positive correlations between self-reported and peer-reported intellectual humility, with the former generally seen as a more accurate gauge. 

You might also worry that, given the liberal over-representation in academia, the examples used in these studies would skew towards rightwing falsehoods or conspiracies. But the researchers say they were careful to ensure balance. In the case of Covid misinformation, they asked participants about their beliefs in widely disputed areas, such as hand dryers being effective in killing the virus, rather than more contested ones such as the effectiveness of masks and lockdowns, or the origins of the virus. 

Intellectual humility is important not just in preventing the spread of misinformation. Other studies have found that it is associated with so-called “mastery behaviours” such as seeking out challenging work and persisting after failures, and it is also linked to less political “myside bias”. 

However, this quality is not easy to cultivate. A recent study suggests that repeatedly exposing students to their own errors, such as by getting them involved in forecasting tournaments, could be effective. I have argued before that social media platforms such as Twitter should institute a “challenger mode” that exposes us to beliefs we don’t normally come across; another trick might be to implement a practice of “steelmanning”, a term that appears to have been coined by the blogger Chana Messinger. She describes it as “the art of addressing the best form of the other person’s argument, even if it’s not the one they presented” — the opposite of a straw-man, in other words. 

Of course, there are limits to intellectual humility: beyond a certain point it becomes self-indulgent and can render us indecisive. Running a country — writing a column, even — requires a level of conviction, and sometimes that means faking it a bit and hoping for the best. So we should cultivate other virtues too, such as courage and the ability to take action. 

But fostering an environment in which we reward uncertainty and praise those who acknowledge their errors is vital. Saying “I was wrong”, and explaining why, is often much more valuable than insisting “I was right”.

The Nehru-Gandhis and the Congress Presidency

Saeed Naqvi in The Dawn

THE media is riveted to the news that the Congress party will elect a new president in October, one who will not be from the Nehru-Gandhi family. So what will that do for the party or even for the country? Usually, insightful friends see in the jostling a pantomime sponsored by corporate chiefs whose names the Gandhis have dared to call out. The ‘rebellion’ within the Congress led by some who never won a Lok Sabha election, is an element in the script. When business captains met in Gujarat ahead of the 2014 elections to name Narendra Modi as their prime ministerial candidate, the move had a main purpose: to ensure the removal of the Gandhis from the opposition frame. The Gandhis on their part never wanted to be in politics. Now, they have an interest: to keep certain party men from capturing the party.

So, elect a new president by all means. However, a truer groundbreaking quest would be to perhaps figure out what really does India’s oldest party plan to do that would make it worthy of being the only party with a pan-India base. Statistics can be a misleading ploy but who can’t deny the hard facts the strangely stacked numbers reveal? The BJP won all of 37 per cent votes nationwide in the last general elections. The Congress got only slightly more than 19pc votes that translated to fewer than 10pc of the Lok Sabha’s seats for the first time.

But statistics are like a babbling toddler. You have to patiently understand the babble to divide the angst or the joy as the case may be. The cold facts are that the Congress was routed in 1977 and removed from power with a tally of 34pc votes, just 3pc fewer than the BJP’s current numbers. And with 34pc, the Congress was routed. However, and this is crucial, what the BJP hasn’t succeeded in doing is to have an imprint with a vote share spread in almost every Indian state. The Congress holds the position despite being in power only in Rajasthan today. Spare a thought for the needed change, if only the Congress puts its act together, not necessarily as the Lone Ranger of Hollywood movies but more like the Samurais of Kurosawa, rallying the entire opposition, resolutely and selflessly. The BJP rubs in the point that the Congress has only two seats in Uttar Pradesh, true. But the BJP had two seats in parliament once, and that was not long ago as Indian politics goes.

Focus is key. The torture the other day of a physically frail Sonia Gandhi being summoned by the government’s revenue sleuths to their offices was despicable. The BJP thrives on being mean with critics and opposition parties. When BJP’s senior leader L.K. Advani was grilled, however, over charges of dubiously transacted election funds wealth, which implied money laundering, the Congress ensured that all questions were asked at Advani’s residence. It was not his privilege, just a courtesy to a senior opposition leader. 

However, what was disconcerting other than Sonia trudging to the revenue officers thrice in a row was to see the party ‘in action’ over the matter. Every senior leader was dying to court arrest. They who never came out when mobs killed innocent Indians, or when wrong Indians were sent to jail. Protest the leader’s perverse grilling by all means. But spare a thought also for the time the same leaders were missing from view when a woman was gang-raped in Gujarat of 2002 and her rapists were set free with a nod from the highest court. Masses would have joined the Congress had it protested then as it did Ms Gandhi’s personal trauma. Who was advising the Gandhis to squander the precious chance to redeem their pledge for a national movement when citizens were being assaulted by the state? Is the new president going to lead the charge?

Whatever has happened to the second freedom movement, anyway? Had the leaders spoken out of turn? Was the thought too unwieldy for their brand of slothful politics? In that case it’s so ironical.

Gandhi critics cite the party’s recent habit of perpetually losing elections. They seem less concerned that where the party did win the states with allies, it found its satraps deserting the party to join or help the BJP in toppling the Congress and its allies. Karnataka, Madhya Pradesh and more recently Maharashtra come to mind as states the BJP did not win but rules. Is changing the party president the answer?

It could be crucial, therefore, that while ushering in a new party chief, Congress leaders also define what they meant when they called for a second independence movement. Focus on that instead of undermining the critical importance of the Gandhis, not necessarily as leaders but as a uniting force at this critical juncture of politics ahead of the 2024 polls.

Let’s be clear. The family was thrust into politics by a string of dark events, beginning with Indira Gandhi’s assassination. It’s a lie that her son coveted the job as her successor. There’s no evidence to support the claim. The minions may have created the pressure rightly or wrongly that he alone could save India from the instability triggered by Indira Gandhi’s policies, chiefly towards Punjab, and then by her gruesome death. However, Sonia Gandhi is on record as threatening to leave her husband if he became prime minister. She feared, presciently as it turned out, that he too would be killed. Now that Rahul is setting out on a ‘Unite the nation march’ next month — after having refused the party president’s job yet again — he could be preparing India for the resumption of mass politics that had gone missing from the Congress worldview. He is taking a very necessary risk at a very violent moment in Indian history. Is this ambition?

27 years in China will make you humble

 

A post-dollar world is coming

 The currency may look strong but its weaknesses are mounting writes Ruchir Sharma in The FT

This month, as the dollar surged to levels last seen nearly 20 years ago, analysts invoked the old Tina (there is no alternative) argument to predict more gains ahead for the mighty greenback. 

What happened two decades ago suggests the dollar is closer to peaking than rallying further. Even as US stocks fell in the dotcom bust, the dollar continued rising, before entering a decline that started in 2002 and lasted six years. A similar turning point may be near. And this time, the US currency’s decline could last even longer. 

Adjusted for inflation or not, the value of the dollar against other major currencies is now 20 per cent above its long-term trend, and above the peak reached in 2001. Since the 1970s, the typical upswing in a dollar cycle has lasted about seven years; the current upswing is in its 11th year. Moreover, fundamental imbalances bode ill for the dollar. 

When a current account deficit runs persistently above 5 per cent of gross domestic product, it is a reliable signal of financial trouble to come. That is most true in developed countries, where these episodes are rare, and concentrated in crisis-prone nations such as Spain, Portugal and Ireland. The US current account deficit is now close to that 5 per cent threshold, which it has broken only once since 1960. That was during the dollar’s downswing after 2001. 

Nations see their currencies weaken when the rest of the world no longer trusts that they can pay their bills. The US currently owes the world a net $18tn, or 73 per cent of US GDP, far beyond the 50 per cent threshold that has often foretold past currency crises. 

Finally, investors tend to move away from the dollar when the US economy is slowing relative to the rest of the world. In recent years, the US has been growing significantly faster than the median rate for other developed economies, but it is poised to grow slower than its peers in coming years. 

If the dollar is close to entering a downswing, the question is whether that period lasts long enough, and goes deep enough, to threaten its status as the world’s most trusted currency. 

Since the 15th century, the last five global empires have issued the world’s reserve currency — the one most often used by other countries — for 94 years on average. The dollar has held reserve status for more than 100 years, so its reign is already older than most. 

The dollar has been bolstered by the weaknesses of its rivals. The euro has been repeatedly undermined by financial crises, while the renminbi is heavily managed by an authoritarian regime. Nonetheless, alternatives are gaining ground. 

Beyond the Big Four currencies — of the US, Europe, Japan and the UK — lies the category of “other currencies” that includes the Canadian and Australian dollar, the Swiss franc and the renminbi. They now account for 10 per cent of global reserves, up from 2 per cent in 2001. 

Their gains, which accelerated during the pandemic, have come mainly at the expense of the US dollar. The dollar share of foreign exchange reserves is currently at 59 per cent — the lowest since 1995. Digital currencies may look battered now, but they remain a long-run alternative as well. 

Meanwhile, the impact of US sanctions on Russia is demonstrating how much influence the US wields over a dollar-driven world, inspiring many countries to speed up their search for options. It’s possible that the next step is not towards a single reserve currency, but to currency blocs. 

South-east Asia’s largest economies are increasingly settling payments to one another directly, avoiding the dollar. Malaysia and Singapore are among the countries making similar arrangements with China, which is also extending offers of renminbi support to nations in financial distress. Central banks from Asia to the Middle East are setting up bilateral currency swap lines, also with the intention of reducing dependence on the dollar. 

Today, as in the dotcom era, the dollar appears to be benefiting from its safe-haven status, with most of the world’s markets selling off. But investors are not rushing to buy US assets. They are reducing their risk everywhere and holding the resulting cash in dollars. 

This is not a vote of confidence in the US economy, and it is worth recalling that bullish analysts offered the same reason for buying tech stocks at their recent peak valuations: there is no alternative. That ended badly. Tina is never a viable investment strategy, especially not when the fundamentals are deteriorating. So don’t be fooled by the strong dollar. The post-dollar world is coming.

The stark truth about management and power

 Stefan Stern in The FT

 

“If you want power to be used for good, more good people need to have power.” 

This quotation is usually attributed to Jeffrey Pfeffer, professor of organisational behaviour at Stanford University’s graduate school of business. Pfeffer himself is more modest about its origins. He cites it at the beginning of his new book — more on this later — but describes it simply as “a quote attributed to me”. 

This slightly sheepish opening sums up an intriguing paradox about the man. He tells stark truths about management and power and what it takes to get to the top, which some may find unsettling. But, fundamentally, his purpose is compassionate. The challenge embedded in his famous aphorism is this: it is little use criticising the excesses of terrible leaders but then being too squeamish to engage with and win power yourself. 

When I call Pfeffer at his Californian home he sounds a bit distracted, for reasons that become noisily apparent. “I need to move my car,” he says. “My garage is about to be . . . I’m having some construction work done . . . I’ll be back in a minute.” 

He is true to his word, and proceeds to offer a tutorial on the realities of power, revealing why his course on the subject at Stanford, where he has taught for more than 40 years, is so popular with students. 

“Exercising power and being a leader is not about winning a popularity contest,” he says. “It was Gary Loveman [former chief executive of the Caesars casino business] who said: ‘If you want to be liked, get a dog. A dog will love you unconditionally.’ 

“A lot of leaders are not necessarily nice people,” he adds. “Many of the things that leaders have to do are not necessarily nice . . . There is very little overlap — I mean, almost none — between companies on the ‘best places to work’ list and companies led by leaders who are on the ‘most admired leaders’ list,” Pfeffer says. 

His new book, published this summer, is called 7 Rules of Power: Surprising — but True — Advice on How to Get Things Done and Advance Your Career. His seven rules are: 

Get out of your own way — that is, speak with confidence and do not undersell yourself. 

Break the rules — do the unexpected. 

Show up in powerful fashion — with conscious body language and actual language. 

Create a powerful brand. 

Network relentlessly. 

Use your power — do not be afraid to wield power once you have it. 

And, finally, remember that “success excuses (almost) everything” — the powerful attract and retain support. 

These rules are not simply plausible-sounding assertions but are in fact based on deep research and decades of social science experiment and observation. These are “the realities on the ground”, as Pfeffer says. 

While clearly not a fan of former US president Donald Trump, Pfeffer notes that he was a skilful follower of these rules. “He was seven for seven,” he says. He describes the winning Trumpian mentality in these terms: “You tell me what I need to do to win, and I’ll do it. I will say anything, I will do anything. The question is: are you willing to do what it takes?” 

This may sound Hobbesian and bleak. But note, too, that Pfeffer’s last book was called Dying for a Paycheck, and was a strong attack on the worst forms of modern management and the harm it can do both to employee health and company performance. An earlier book was called “The Human Equation: building profits by putting people first”. There is a touching passage in the book’s acknowledgements about the author’s late wife, Kathleen, who died last year and to whom the book is dedicated. 

Our call is once again interrupted by an off-stage crash. “Pardon the background noise — they must be doing something serious here — they should be, for what I’m paying them . . . ” 

In this latest work, Pfeffer writes: “One reason why people fail to achieve their objectives or lose out in competitions for high-status positions is their unwillingness to do what is required to prevail.” 

This is his reality check for aspiring leaders and those who want to get on in the organisation. You have to take responsibility and put yourself in a position where professional advance is possible and likely. “Happy talk”, or “leadership BS” (the title of another of his books), will not get you there. 

“I don’t think anybody is going to say that Elon Musk is sweet,” Pfeffer says, “or that Jeff Bezos is sweet, or Steve Jobs was nice, or Jack Welch was going to be picked by anybody to be stranded on a desert island with. Many leaders are narcissists,” he adds, “although their ‘autobiographies’ say that they are lovely human beings . . . ” 

Pfeffer looks power in the eye and does not flinch. He tells it like it is. Can we handle the truth? If we want power to be used for good, more good people need to have power.

BJP is not democratic: Subramanian Swamy