Seven weeks ago, I wrote about the appalling article in the Australian talking about house prices, which contained this line:
Australian property prices are not in danger of crashing despite record low interest rates spurring sustained price growth in the key Sydney and Melbourne markets, with a gradual slowdown more likely as additional supply enters the market over the next 12 months.
with the reason for this optimism being:
House price figures compiled for The Weekend Australian show there has been no major crash in values since data began to be collected in 1965. The most significant correction is a 9 per cent dip in Sydney prices between March 2004 and December 2005.
I knew the author had committed a logical fallacy, but at the time I couldn’t think which one it was.
About a week later it occurred to me – the logical fallacy was that of ‘Russell’s Chicken’, so named because the philosopher Bertrand Russell, in Chapter VI of his book The Problems of Philosophy, summarised the problems attending inductive reasoning with this illustration:
The man who has fed the chicken every day throughout its life at last wrings its neck instead, showing that more refined views as to the uniformity of nature would have been useful to the chicken.
The lesson of the parable is: just because something hasn’t happened yet, doesn’t mean that it won’t happen in future. Not only that – what has happened to date may simply have been part of a process leading up to an event completely contrary to what has been experienced to date. There may be a twist in the tail!
Therefore, be like the wise chicken that escapes the coop before neck-wringing day – use your powers of reasoning to gain insight into what is happening around you, and have the courage to act on your conclusions, no matter what the other chickens may say about you. There may be a lot riding on your getting it right.