Prophets and losses: the predictive impulse

Richard J. Pech
  • Journal of Business Strategy, January 2014, Emerald
  • DOI: 10.1108/jbs-06-2013-0042

What is it about?

Humans seem driven to eliminate or reduce uncertainty from their lives. We're hungry for information so that we can 'know' more and 'guess' less. Unfortunately our sources of information are all too often unreliable. We place a great deal of faith in institutions, banks, and governments, believing they will guide and protect us. The GFC was partially the result of people asking too few questions and feeling secure in the knowledge that 'experts' were at the helm.

Why is it important?

This article acts as a warning to question everything. If the consequences matter, then it's worth taking a critical perspective, even when everyone else seems to feel secure in their reliance on others. We have evolved to cooperate and conform. These are useful and constructive attributes, but they can also make the irrational and unsustainable seem normal and acceptable. The GFC was a warning that unquestioning reliance on a collective psychology can do great harm.

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