Pragmatic Capitalism

Practical Views on Money, Finance & Life

Beguiled by Narrative

By Robert Seawright, Above the Market


The photograph above, taken at the Brooklyn waterfront on the afternoon of September 11, 2001 by German photographer Thomas Hoepker, is now one of the iconic images of that horrible day. In fact, the Observer New Review (London) republished it in 2011 as the 9/11 photograph. In Hoepker’s words, he saw “an almost idyllic scene near a restaurant — flowers, cypress trees, a group of young people sitting in the bright sunshine of this splendid late summer day while the dark, thick plume of smoke was rising in the background.” By his reckoning, even though he had paused but for a moment and didn’t speak to anyone in the picture, Hoepker was concerned that the people in the photo “were not stirred” by the events at the World Trade Center — they “didn’t seem to care.” Hoepker published many images from that day, but he withheld this picture for over four years because, in his view, it “did not reflect at all what had transpired on that day.”

In 2006, the image was finally published in David Friend’s book, Watching the World ChangeFrank Rich wrote a 9.11 fifth anniversary column in The New York Times, framed by the photo, which he called “shocking.” Rich claimed that the five New Yorkers were “relaxing” and were already “mov[ing] on” from the attacks. Rich described those in the photo as being on “what seems to be a lunch or bike-riding break, enjoying the radiant late-summer sun and chatting away as cascades of smoke engulf Lower Manhattan in the background.” Indeed, Rich’s explanatory narrative is hardly complimentary.

Mr. Hoepker’s photo is prescient as well as important — a snapshot of history soon to come. What he caught was this: Traumatic as the attack on America was, 9/11 would recede quickly for many. This is a country that likes to move on, and fast. The young people in Mr. Hoepker’s photo aren’t necessarily callous. They’re just American.

It was a plausible — if utterly speculative — interpretation based upon the photograph alone. More importantly, it framed Rich’s desired narrative perfectly. But even though a picture may well be worth a thousand words (1,506 in this case, to be exact), those words aren’t necessarily all that accurate.

Daniel Plotz quickly came forward with an alternative interpretation that disputed Rich, calling Rich’s reading of the image a “cheap shot.” In Plotz’s view the five had not ignored or moved beyond 9.11 but had “turned toward each other for solace and for debate.” To his credit, Plotz emphasized that he didn’t “really know” what the pictured people were doing and feeling and called upon them to contact him so as to set the record straight. Two did, and they repudiated Rich’s narrative in the strongest of terms.

The first to respond was Walter Sipser, a Brooklyn artist and the man on the far right in the shot. “A snapshot can make mourners attending a funeral look like they’re having a party,” he wrote. “Had Hoepker walked fifty feet over to introduce himself he would have discovered a bunch of New Yorkers in the middle of an animated discussion about what had just happened.”

Chris Schiavo, a professional photographer, Sipser’s then-girlfriend and second from the right above, also responded. She criticized both Rich and Hoepker for their “cynical expression of an assumed reality.” As a “third-generation native New Yorker, who knows and loves every square inch of this city,” whose “mother even worked for Minoru Yamasaki, the World Trade Center architect,” she stated that “it was genetically impossible for [her] to be unaffected by this event.”

So much for the accuracy of Rich’s story.

We love stories, true or not, almost from the cradle. Stories are crucial to how we make sense of reality. They help us to explain, understand and interpret the world around us. They also give us a frame of reference we can use to remember the concepts we take them to represent. Whether measured by my grandchildren begging for one (or “just” one more), the book industry, data visualization, television, journalism (which reports “stories”),the movies, the parables of Jesus, video games, or even country music (“every song tells a story”), story is perhaps the overarching human experience. It’s how we think and respond. We always want to know what happens next.

Stories are culture’s way of teaching us what is important. They are what allow us to imagine what might happen next – and beyond – so as to prepare for it. We are hardwiredto respond to story. A good story doesn’t feel like a story – it feels exactly like real life, but most decidedly is not like real life. It is simplified and otherwise altered. We prefer rhetorical grace and an emotional charge to the work of hard thought. Because we are inveterate simplifiers, we prefer clean and clear narrative to messy reality. A famous book by Karl Popper, The Poverty of Historicism, pretty well demolished the popular notion that history was a narrative, that it had a shape, a progression, and followed laws of development. But we believe that it does (or devoutly wish to believe that it does) anyway.

Still, because it feels so true (“It can’t be wrong when it feels so right”), it isn’t hyperbole to say you’ve been lost in a story. Story turns us into willing students, eager to learn the story’s message. It’s how we sift through the raw data of our lives to ascertain what matters. Our brains are designed to analyze the environment, pick out the important parts, and use those bits to extrapolate linearly and simplistically about and into the future.

Ultimately, the key to a good story isn’t just what happens or to whom it happens. AsRoger Ebert so eloquently put it, broadened ever so slightly, a story “is not about what it’s about; it’s about how it’s about it.” Stories are about how the protagonist changes and how we react to those changes and ourselves change. We can “see” the world as it isn’t.(yet) and as it might become.

The best stories are simple, easily communicated, easily grasped and easily remembered. Perhaps most significantly, we inherently prefer narrative to data — often to the detriment of our understanding. To do math, neither maturity nor knowledge of human nature and experience are required. All that is required is the ability to perceive patterns, logical rules and linkages. But because of the enormous sets of random variables involved in real life, patterns, logical rules and linkages alone do not solve any actual puzzles. Correlation does not imply causation. Information may be cheap but meaning is both expensive and elusive.

As Nassim Taleb explains in The Black Swan, the narrative fallacy addresses our limited ability to look at sequences of facts without weaving an (often erroneous)explanation into them or, equivalently, forcing a logical link, an arrow of relationship upon them. Explanations bind facts together. They make them all the more easily remembered; they help them make more sense. Where this propensity often goes wrong is when it increases our impression of understanding.

Frank Rich — I’m looking at you.

Five years after the towers came down, Frank Rich had a story to tell. It was a story of a “divided and dispirited” America that had lost touch with the horror of 9.11, of a forgetful nation desperate to move on, a divided nation insufficiently stirred. It was also the story of a callow, fear-mongering President with a selfish and secret partisan agenda far removed from committed sacrifice for the common good. It was a story of a once-great country that had moved on but not ahead. And he thought he had found the perfect picture to illustrate that story.

As a journalist, Rich had an obligation to check the facts of his story. By all appearances, he did not. Perhaps he thought it was “too good to check.” If so, he was dreadfully and blatantly wrong. Perhaps he tried and was unsuccessful or that Hoepker’s description was enough to go on. If so, he didn’t try hard enough and also had an obligation to be forthright about what he knew and what was mere speculation. That he did not was an egregious error, an error that would make him look silly when the truth came out, as it so often does.

Many of our foibles (narrative and otherwise) are the result of our laziness. Sometimes the laziness is overt. Other times it is simply a function of the various shortcuts we take, sometimes reasonably, to make life more manageable. Rich took a variety of shortcuts in writing his story, shortcuts that perverted the truth of what the Hoepker photograph actually portrayed. His facts were wrong, plain and simple.

We like to think that we are like judges, that we carefully gather and evaluate facts and data before coming to an objective and well-founded conclusion. Instead, we cut straight to the chase. We are much more like lawyers, grasping for any scrap of purported evidence we can exploit to support our preconceived notions and allegiances. Doing so is a common cognitive shortcut such that “truthiness” — “truth that comes from the gut” per the comedian Stephen Colbert — seems more useful than actual, verifiable fact. Whatreally matters is that which “seems like truth – the truth we want to exist.” That’s because “the facts can change, but my opinion will never change, no matter what the facts are.”

The concept even “became a lexical prize jewel” for Rich himself (see here, for example), allowing him (of course) to criticize his political opponents for offering only “a thick fog of truthiness” such that they presented “a bogus alternative reality so relentless it can overwhelm any haphazard journalistic stabs at puncturing it.” Rich has expounded on the idea a number of times in print and even on The Oprah Winfrey Show. Of course, he always directs the analysis outward rather than inward. Oh the delicious irony.

This concept of “truthiness” captures how, as cognitive psychologist Eryn Newman puts it, “smart, sophisticated people” can go astray on matters of fact. Newman’s research has shown that the less effort it takes to process a factual claim, the more accurate it seems. In one classic study, for example, people were more likely to think a statement was true when it was written in high color contrast as opposed to low contrast. Easy-to-pronounce ticker symbols (such as KAR) perform better in the markets than their difficult-to-pronounce counterparts (such as RDO) — even after just one day of trading. And, astonishingly, claims attributed to people with easy-to-pronounce names were deemed more credible than those attributed to people with difficult-to-pronounce names. Assummarized by Slate recently: “When we fluidly and frictionlessly absorb a piece of information, one that perhaps snaps neatly onto our existing belief structures, we are filled with a sense of comfort, familiarity, and trust. The information strikes us as credible, and we are more likely to affirm it — whether or not we should.”

Due to our affinity for like-minded people, we seek out the people like us to provide echo chambers for our own claims, claims that perpetuate themselves every time we hear them reverberated back to us. We are neuro-chemically confirmation bias addicts. As such, we tend to reach our conclusions first. Only thereafter do we gather purported facts and, even then, see those facts in such a way as to support our pre-conceived conclusions. When it fits with our desired narrative, so much the better. Writing op-eds forThe New York Times provided Rich with a heady and exclusive echo chamber, but an echo chamber nonetheless. Keeping one’s analysis and interpretation of the facts of a story reasonably objective — since analysis and interpretation are required for data to be actionable — is really, really hard in the best of circumstances, even when one has gotten the facts close to right.

Megan McArdle summed things up nicely earlier this week.

We like studies and facts that confirm what we already believe, especially when what we believe is that we are nicer, smarter and more rational than other people. We especially like to hear that when we are engaged in some sort of bruising contest with those wicked troglodytes — say, for political and cultural control of the country we both inhabit. When we are presented with what seems to be evidence for these propositions, we don’t tend to investigate it too closely. The temptation is common to all political persuasions, and it requires a constant mustering of will to resist it.

Frank Rich — I’m looking at you.

Once we have bought-in to a particular narrative, it becomes increasingly more difficult to falsify, even (especially!) when presented with contradicting fact. Take the example of parents who choose not to vaccinate their children and the pediatricians who try to convince them otherwise. When presented with unequivocal information that autism diagnosis and vaccinations were not linked, the strategy backfired and parent became more set in their ignorance. In other words, the disconfirming facts offered actually (in effect) turned up the volume inside the echo chamber such that the truth could not be heard.

The more we repeat and reiterate our explanatory narratives, the harder it is to recognize evidence that ought to cause us to re-evaluate our prior conclusions. By making it a careful habit skeptically to re-think our prior interpretations and conclusions, we at leastgive ourselves a fighting chance to correct the mistakes that we will inevitably make. As with everything in science, each conclusion we draw must be tentative and subject to revision when the facts so demand. As John Maynard Keynes famously stated, “When the facts change, I change my mind. What do you do, sir?” Indeed, what do you do?


Note: This post is a much-expanded version of one that appeared here.

Robert Seawright

Robert Seawright

Robert P. Seawright is the Chief Investment & Information Officer for Madison Avenue Securities, a broker-dealer and investment advisory firm headquartered in San Diego, California. Its focus is the capital markets and personal finance from a data-driven perspective.
Robert Seawright

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