Tim Harford on Trial, Error and the God Complex

Below are the notes I took from a TEDtalk given by Tim Harford.  It's his commentary on economics and why failure stimulates success.  I found it incredibly interesting and you can watch his video at the link below.

http://www.ted.com/talks/tim_harford.html

• The God Complex - No matter how complicated the problem, you have an absolutely overwhelming belief that you are infallibly right in your solution.
• This method is so tempting because of the complexity of the world.  We retreat and tend to oversimplify data through graphs and analysis and decide that "we get it" when we don't.
• Trial and Error - Variation and Selection.  A systematic way of determining what's working and what's not.  This is far more common in successful institutions than we care to recognize.
• The most saying figure about the American Economy: 10% of American businesses disappear every year.  A huge failure rate.  Far higher than the failure rate of Americans.  10% of Americans don't disappear every year. This leads us to conclude that American businesses fail faster than Americans, and therefore American business are evolving faster than Americans.
• This incredible performance of Western Economies didn't come from placing some incredibly smart person in charge, it's come through trial and error.
• You say this sounds obvious?  [Enter commentary about education and politics]
• When ideas in public opinion begin being taken through a process of trial and error instead of treated with the God Complex from the people in power, testing them out, abandoning the ones that fail and building on the ones that work, then I [Tim Harford] will admit that it's obvious that Trial and Error works.

My interpretation of his conclusion:

When it feels so much better to stand and say that "I'm a God, I understand everything, I don't want my opinions challenged or my conclusions tested," if we can understand that uncertainty, fallibility and being challenged hurt but such vulnerabilities allow for good mistakes - then we won't have to fear failure and will in turn evolve to a greater potential.