Tuesday, May 8, 2018

Analytics Hubris

The word Hubris is ancient Greek and it is used when humans claim godlike powers, in our case, the power to foresee, to predict and control the future. Hubris is often followed by Nemesis which punishes the men that have stepped too far.

Economic/Business growth happens on the verge of hubris. Risky behavior (hubris) is materialized in wealth if the venture is successful or bankruptcy and pain if it fails. For this reason and to keep the human spirit alive and vibrant some amount of hubris is required.

When modeling any real world process, as we strip complexity to make it computationally tractable, it is important to never loose sight of the abstractions and the assumptions we have made.

We rely on the abstractions to get results BUT the abstractions are not the real thing.
As more and more of our work happens virtually and data analytics tools spread through the ranks of less experienced engineers we will see more of this phenomenon. What I call Analytics Hubris.

Earlier statesmen and senior scientists were familiar with this behavior. Younger men in their craze to climb the ladder mistake aptitude with a tool for wisdom.

I found this excerpt from the book Signals: The Breakdown of the Social Contract and the Rise of Geopolitics  which warns on the limitations of analytics/modelling (econometrics in this case) and the deeper knowledge you need to have in order to make decisions have systemic impact.