“All models are wrong, but some are useful.” – George Box
There are some ideas which are true. “2+2=4” is an idea that is hard to doubt. There are also ideas which are false. “The moon is made of cheese” is wrong, no matter how you look at it. But most ideas are somewhat in-between—neither clearly true or clearly false, they may be true in some settings and false in others.
Consider the idea, “dogs are bigger than cats.” As a universal rule this statement is false. There are certainly some big cats and tiny dogs. As a statistical average, it is definitely true. Dogs tend to be bigger than cats.
The usefulness of this idea will depend, in part, based on the actual average difference between dogs and cats and how much cats and dogs vary. If dogs were bigger than cats in 99% of cases, this would be a pretty useful idea. If the relationship was only true 55% of the time, not so much.
Thinking about ideas this way, we can state that some ideas are overrated. They’re frequently brought out and believed in, but they’re far less reliable than most people give them credit. They may not be total lies, but they probably aren’t very useful as a whole.
Ideas I Think are Overrated
Here’s some ideas I think are overrated. Overrated in this sense is contrarian-by-definition. If most people think an idea is lousy, it’s probably not overrated. Instead, I’ll stick to ideas that I think are less useful than most people believe they are.
- Generational differences. Aside from technological fluency and cultural acceptance to more liberal social norms, I pretty much disagree with any characterization of broad differences between Millennials, Baby Boomers, Gen X’s, etc. Pundits ignore the biggest difference between generations is simply age. The new generation will grow up, and when it has, it will start complaining about the next generation’s youthful failures.
- Natural = good. There’s some truth here—fat-tail risks associated with newer compounds. But much of the perceived benefits of “natural” foods, medicines or manufacturing processes is illusory. Doubly overrated when the words “toxins” or “chemicals” are invoked.
- Fall from childhood perfection. Whether it’s art, language learning, education, socializing, mindfulness or spontaneity, children are supposedly perfect creatures and adults are the corrupted state. While there’s certainly some flexibility children possess that adults don’t, I tend to think these are because adults have too many abilities, rather than the loss of childhood ones.
- Different languages result in totally different thought patterns. “French is more romantic”, “German is more utilitarian”, “Eskimos have 6000 words for snow”. The strong version of the Sapir-Whorf hypothesis is probably false. Having learned multiple languages to the level where I can think in them, I’m further inclined to believe a lot of thinking isn’t really done in any language at all, as are most of our memories and experiences.
- Human cultures are different deep down. There are differences between the average Chinese and French persons’ beliefs and attitudes. But once you strip away the superficialities of cuisine, language and environment and people are far more alike than different.
- Going viral. Successful businesses and websites that took off after a chance hit tended to have good fundamentals which would have meant eventual success regardless. Viral traffic tends to be low quality and hard to respond to. The idea that successful things online succeeded because of chance, explosive growth is definitely overrated.
- “X causes cancer”. Beyond the few obvious and powerful carcinogens (smoking, asbestos, radiation), most of the new studies suggesting something causes cancer probably only do so to a very small degree. Perhaps a statistically significant one, but probably not worth changing your behavior over.
- Any investing scheme that tries to beat the market. An index fund is probably the best investment vehicle for 99.9% of people. Trying to beat the market consistently is something most professionals can’t do, let alone part-timers.
- Bayes’ Rule. The world is divided into two types of people. Those who have never heard of Bayes’ Rule, and those who believe it is the secret of the universe. For the latter group, it doesn’t “solve” the problem of rationality, and the absence of known prior and conditional probabilities means it has fairly limited practical use.
- Paying rent is throwing your money away. Sometimes owning is better than renting. But it’s plainly false that rent is wasting money while paying a mortgage isn’t simply because mortgage payments are finite. The time-value of money proves a perpetual outlay of future payments is only worth a finite amount today, plus renting offers liquidity and avoids diversification risks associated with owning.
Those are just my picks, feel free to disagree in the comments. I’m also curious to hear your picks for overrated ideas—ideas which aren’t entirely false, but explain less than is popularly believed.
This post has also got me thinking about the opposite, underrated ideas. Which ideas offer a lot more explanatory power than people generally believe? My first round picks would be evolution, rationality as a simplifying model for human behavior and compound growth.