During recessions, people spend a larger portion of their income.

Seems obvious, right? During a recession, you can’t save as much. Salaries stagnate while prices rise. You’ve got to spend a larger portion of your income just to stay afloat. Sometimes income runs out and people have to dig into their savings – if they have any.

Like the all psychology experiments, the result was obvious. It’s not clear why psychologists wasted money on study when anybody could have predicted the answer in advance.

What are the chances you would have predicted this in advance? click to open

Meditation: What are the chances you would have predicted this in advance?
You're more likely to remember solutions if you give your own answer first.

Dollar

Most people think they would have predicted this result – until they learn that I was lying.

Actually, people spend a larger portion of their income in times of prosperity.

Which makes sense, now that you know it. When times are good, we buy cars and put down money on houses and indulge in excess. We try to keep up with the Joneses. We’re a paycheck-to-paycheck nation. When the money’s rolling in there’s no need to worry about the future. We only save when the times get tough, and, in fact, recessions happen precisely when everybody is being too stingy wit htheir money: that's how the economy gets depressed in the first place.

It should be obvious, now that you know.






Except that I’m lying to you again.











Or am I?

You don’t know. Do people spend a greater portion of their income during a recession? I’m not going to tell you. The answer is no longer obvious.

It was so obvious when you knew it, but now that knowledge has been stripped away. Now that you really actually don’t know, I want you to make a prediction.

Do people spend a larger portion of their income during recessions? click to open

Meditation: Do people spend a larger portion of their income during recessions?
Yes or no? With what probability?
You're more likely to remember solutions if you give your own answer first.

Contrast this answer with your answer above. Notice the difference between this feeling and the feeling you had before. Do people actually spend a larger portion of their income during recessions?

In order to find out you have to actually check. You have to actually ask reality.

When you know, it’s easy to feel like you knew it all along. You didn’t know it all along. Knowing the result alters what you think would have been obvious.

Humans have a strong tendency to believe that the results are obvious after they know them. This is called hindsight bias, and it’s dangerous.

You’ve just felt a tiny unknown. Perhaps it doesn’t disturb you very much: you can look up the answer when you’re done reading this article. But before you do that, I want you to inspect your bewilderment.

Imagine you can’t Google it. Imagine that the question has never been investigated. Imagine that the only way to find out is to perform the study. That’s what an easy question feels like. The answer is not obvious, but you know where to find it.

Now imagine a hard question. Imagine a question where nobody even knowns what the answer will look like, never mind where to find it. Imagine not even knowing if your question is connected to reality.

Imagine standing on the brink of human knowledge and staring out into the wild unknown. Imagine trying to make sense of the chaos, without Google by your side.

If you ever manage to find an answer in that darkness, everyone will say it was obvious. But everything seems obvious in retrospect. When you’re standing out there facing the unknown, there are a thousand paths before you and each leads to a conclusion that everyone will say was obvious. Which path do you choose?

In retrospect, it feels obvious that rats are not spontaneously generated from piles of dirty rags. That the Earth is governed by the same laws as the Heavens. That we can sharpen rocks and attach them to sticks.

These discoveries are only obvious in hindsight. They’re not obvious when you’re out there in the fray struggling to discover them.

Civilization runs on ideas that seem oh-so-obvious in retrospect. A thousand years of stagnant silence can be shattered by a single thought.

Never underestimate the power of an obvious idea.