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Risk

A mate of mine in the medical profession lobed this in my inbox. I believe Jobs also tried acupuncture, herbal remedies, psychics and colonic irrigation – all of them profoundly unsuccessful and basically bullshit.

In reading about Steve Jobs’ death, I was disappointed to learn that after his carcinoid tumor (a rare type of malignant tumor) of the pancreas was diagnosed, he waited nine months before having it removed because he believed that a strict change in diet would cure the problem. This raises the issue of risk analysis, a hard and sometimes controversial topic that, blessedly, doesn’t seem to be a Republican or a Democratic issue. Nonetheless, while this topic is difficult to understand in depth, it is, in my view, well worth spending some time contemplating. For, as most of you undoubtedly know, risk assessment is at the heart of economics, banking, horseracing, investments, medicine, agriculture, baseball and public policy to name just a few.

There is a wonderful book entitled: “Against the Gods, the Remarkable Story of Risk” by Peter Bernstein. At a minimum, have it on your bookshelf and peruse it periodically. One interesting point is that there is an amazing asymmetry as to how we make decisions with regard to gains and losses (pages 272 forward). When decisions involve the possibility of considerable gains, we are consistently risk-adverse (i.e., we will opt for a sure gain versus an even greater gain with the possibility of no gain). In contrast, when the choice involves losses, we are risk seekers, not risk-adverse (i.e., we would rather take an 80% chance of losing $4000 and a 20% chance of breaking even than accepting a 100% chance of losing $3000).

On the surface this may seem like an interesting conundrum but one which has little relevance to our day-to-day lives. In general, I think this is correct. But not always. The term “conventional wisdom” has acquired, in many cases justifiably, a patina of being pejorative. Ordinarily, one would think that conventional wisdom was for the most part based on experience (also known as “data”). Given the increasing focus within health care and policy making to have decision-making be driven by data (“evidence-based”), it seems reasonable to be supportive of this concept while keeping in mind that close calls can be skewed one way or another by how the statistics are formulated or interpreted.

But analysis of a large amount of conventional thinking seems to me to reveal that in most cases the conventional wisdom is entirely correct and in a few notable cases conventional wisdom falls far short (that is, most of the time it’s not a close call as to whether the perceived understanding is credible upon close inspection). As a notable example, we all know that eating a meal diverts blood supply to the intestines and thus vigorous exercise such as swimming immediately after a meal will divert blood supply away from leg muscles and cramps will occur such that a large number of children will drown if they go swimming soon after eating lunch. How do we know this? Our mothers told us so. The confirmatory data supporting this hypothesis are the many dead children who must be removed from pools in the early afternoon each summer. It is because of a number of instances of such ludicrous and loose thinking that for more than 50 years we have frequently succumbed to the notion that most established dogma should and can be subjected to criticism and thus often be dismissed immediately. My suggestion is that when you are inclined to do this, do so because you have acquired believable and reproducible data from reliable sources that support your opinion and reliably debunks conventional wisdom. Absent reliable data, think twice when you are inclined to summarily reject conventional wisdom. Remember the adage “everyone is entitled to his own opinion, but not his own facts”.

My plea therefore, is that we try to train ourselves and our children as well as our friends, when appropriate, to be aware of the need to make ourselves make important decisions based on reliable data rather than whim or opinion not well grounded.

This brings us back to Mr. Jobs. My speculation, based on what I have read thus far, is that he viewed much of his phenomenal success as being a result of his amazing ability to confront and overturn conventional wisdom. I suspect he assumed his extraordinary talent in this one facet of life translated into a belief that he was equally talented in other arenas where he had little training or experience (I have been astounded through the years at what poor health care decisions truly rich people make–I guess it’s called “regression to the mean”). So, when Mr. Jobs made the decision that he could cure the carcinoid cancer that he knew he had (biopsy confirmed) with diet, he did so with not one scintilla of believable data. To my knowledge there has never been a case of carcinoid tumor cured by diet. Of course, we have to keep in mind that a prompt operation might not have been curative. Unfortunately, for him as well as for us, we’ll never know.

PS Why Smart People Do Stupid Things

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