The Gullible Century

April 2007

Wynn Quon

On April 1st, 1976 British astronomer Sir Patrick Moore told BBC Radio 2 listeners that at 9:47 AM they could experience a once-in-a-lifetime astronomical event. The planet Pluto would pass behind Jupiter, a temporary alignment that would act to reduce Earth's own gravity. Furthermore if they jumped upwards at that exact time they would experience “a strange floating sensation”. At the appointed time there was indeed an extraordinary event – BBC 2 received hundreds of phone calls from excited “floating” listeners.

April Fools’ pranks can be harmless fun, yet increasingly in today’s information society, the consequences of naivete and muddleheadedness are far from harmless. While 20th century social and economic debate centered on the Haves and the Have-nots, the great debate of the 21st century will shift to the Knows and the Know-nots. The bad news is that seven years into the new century, gullibility has the upper hand.

It didn’t help that the millenium began with the biggest technological hoax in history, the Y2K “crisis”. A genuine but relatively minor computer bug was inflated to apocalyptic proportions. Planes were going to plummet from the skies, the power grid would collapse and hospitals would shut down. But when the clock ticked past midnight on January 1, 2000, there were plenty of sheepish faces. The sad part was it all could have been easily avoided. Not one of the Y2K doomsayers had a list of specific, known software problems that would have resulted in a plane crash, a power outage, or a hospital shutdown. Yet few challenged them on this crucial point.

The Y2K debacle was swiftly followed by another foolish episode: the dot-com bubble. Despite a well-documented history of speculative disasters extending back to Tulipmania in the 17th century, investors conned themselves into believing that stock prices were independent of rational valuation. Lured by the prospect of easy money and cheered on by analysts like Henry Blodget and Mary Meeker, investors swallowed the bait. The NASDAQ was a magic elevator, ever-rising, with no top floor. One of its cars, Yahoo! , took investors up to the glorious height of US$495. In rarefied air it carried an enchanted P/E ratio of 1700. Then someone cut the cable and there was rapid descent.

In the past, it took a decade or more for the memory of a bad financial accident to fade before a new canard began. But in this, the gullible century, we can’t even wait that long to repeat the same old mistakes. It’s a morbid scene. Those who were mauled in the stock market and those who watched others lose fortunes have lined up for more punishment. Three years after the tech meltdown, real-estate mania began in earnest. Since then, thousands of middle-class families have signed half-a-million dollar mortgages. Subprime borrowers are in way over their heads. Such monumental blindness to risk has inflated the most dangerous bubble of them all, one that is in slow-motion collapse even as we speak.

It is no coincidence that the ranks of the gullible have grown in parallel with the emergence of the Internet. The old saying is that lies gets halfway around the world before the truth has gotten its boots on. Today that’s an understatement. Figments, delusions and fantasies travel by e-mail, chat-room, and blog, while good sense barely gets a backroad. Hundreds of websites warned of Y2K disaster while skeptics could barely muster an opposing handful. The amount of e-noise during the dot-com boom could be measured in petabytes. At this very moment, e-mail spam is clogging up the Net, costing businesses an estimated $10 billion a year in lost productivity. 9/11 conspiracies are turning genuine political debate into farce. There are more websites devoted to astrology than to astronomy.

What’s to be done? The short-term solution is for skeptics and critical thinkers to take a stronger activist role on the Web. While the Internet has cursed us with an ocean of delusion, there are bright islands of hope. Open websites like allow for spirited debate that can deepen participants’ understanding of issues of the day. debunks medical fantasies and The Skeptics Dictionary at tackles the plague of pseudoscience. Google can get you to An Outline of Intellectual Rubbish, Bertrand Russell’s ageless, light-hearted look at the origins of human folly. Wikipedia gives us an article listing dozens of cognitive biases that sabotage our attempts to make sense of the world.

Off the Web, it’s gratifying to see more books like the recent Nibbling on Einstein’s Brain by Diane Swanson, a 100-page book on scientific reasoning that reaches young and old audiences alike.

But all this will be for naught unless the population at large is taught critical thinking skills. This would seem like a tall order. It need not be. Critical thinking, like any skill can be learned through practice. It is distinct from being merely well-read. (It was the highly-educated editors of the Utne Reader who published the embarrassing Y2K Citizen’s Action Guide and the equally literate James Glassman who authored the book Dow 36,000.) Critical thinking starts with a willingness to question, requires a grasp of logic, thrives on a love of facts. The challenge is that our school systems are still mired in 20th century teaching modes. It’s time for educators to emphasize how to think rather than what to think, to seek out the rigours of doubt rather than the foolish comfort of delusionary certainties.

Wynn Quon is chief investment analyst at Legado Associates (e-mail)