Easy come, easy go

When I went to university and studied physics and maths, one of the things that we were taught that, unlike in areas like medicine, law, or history, where students need to memorize a lot of facts, the goal in physics is to remember how to get the information you need to solve a problem, rather than the actual information. The reason for that difference is that in science and maths, once something has been solved it is solved forever and people move on to other topics. You never apply the same solution to a different problem but as Richard Feynman once said: Similar problems have similar solutions. So, knowing where to look up data and ways to solve a problem is much more important than knowing the actual data.

Back in the day, when I was a student, knowing where to find the data meant knowing how to use library cards and which textbook to use if you want to look up the way a certain problem is solved. Today, looking up data has become much easier. You just google it.

Today, I still have a hard time memorising data and individual pieces of information. But I am really good at googling the answer, and finding academic literature that has dealt with a problem, or other forms of reliable analysis.

What my style of work means is that I spend less mental capacity memorising things and more solving problems. The cost I am willing to pay is that unlike Jacob Rees-Mogg or Boris Johnson, I can’t quote entire passages of Homer’s Iliad. The advantage I have is that unlike those two guys…ah well, this is an econ blog, not a politics blog.

Esther Kang has recently shown how people use their working memory capacity to deal with information and problems. She examined how in a world where there is too much information, people learn about the quality of products and services. She found that the way information is accessed changes how much of it we remember and how we deal with it.

Easy access to information increases recall of how to access the information but reduces recall of the content

Source: Kang (2022)

If information is easy to access (e.g. it can be found using Google), people spend less time memorising the information and focus more on how to retrieve it. This means if they are asked later about a product or service, they can remember fewer properties but more easily remember how to get that information (e.g. the search term that provides the result). Easy come easy go, as far as the actual data and information are concerned.

If information is harder to get (e.g. one has to send an email to the company asking for the information), people better remember the actual information but have a harder time recalling how to get it.

The difference between the two scenarios gets bigger, the better the working memory capacity of a person is. This is surprising because one would think if a person has better short-term memory, they would be better at recalling both the information and how to get it. But people with better short-term memory tend to economise their capabilities and focus them on what provides the most effective solution to their needs.

All of that is not to say that one style is better than another. In my view, it depends on the problem at hand and the situation. I don’t want my GP to start googling my symptoms in the hope of finding out what illness I have. I want my GP to know the most important illnesses that cause my symptoms and then diagnose me. Meanwhile, I don’t want an engineer to start building a bridge by recalling all the measurements of Brunel’s Royal Albert Bridge for railways crossing the river Tamar. That is not going to help her build a bridge over the river Thames fit for modern car traffic. But I want her to be able to find out about the engineering techniques that can be used to build a road bridge over the Thames.

And to bring it back to politics, economics, and finance: I want people dealing with markets to be able to find techniques that can solve the ever-changing problems of the economy and financial markets, rather than being able to quote the share price of all the stocks in the FTSE 100. In other words, I want engineers and scientists to run the economy and invest my money, rather than lawyers and historians. Just my preference. Yours may differ and that is fine.