Epistemic Humility: Not Just a “Nice to Have”

People don’t get into positions of power by showing self-doubt.

Those who rise to run a company, a movement, or a nation are, almost without exception, people who believed in themselves more than the evidence available at the time could fully justify. It makes sense: one who projects uncertainty about whether they are right won’t get others to follow. That’s not a character flaw; it is almost a job requirement.

And what happens when they achieve power? That self-confidence gets more pronounced.

Psychiatrists studying this pattern gave it a name, hubris syndrome, describing a change that develops after significant time in power. The finding, published in a peer-reviewed study of American presidents and British prime ministers over the last century, show the problem. the very qualities that let someone acquire high office, like boldness, self-belief, and a willingness to act on incomplete information, are the same qualities that, left unchecked by the isolation and flattery power tends to produce, turn into an inability to imagine being wrong.

It isn’t that only hubristic people become leaders. It’s that leadership itself, sustained long enough, tends to make it increasingly difficult to admit error.

Long-Term Capital Management shows what that blindness costs when it isn’t checked. Founded in 1994 by a group that included two Nobel laureates in economics, the fund built its strategies on models that priced financial risk with unprecedented precision. So the market rewarded LTCM. By 1998 it was leveraged more than twenty-five to one against the assumption that its models had correctly captured how markets behave under stress. When Russia defaulted on its debt that August, markets moved in ways the models had classified as almost impossible, an event they’d priced as likely to occur roughly once in the lifetime of the universe. The fund lost more than four billion dollars in weeks, and the Federal Reserve had to organize a bailout by the very banks exposed to its collapse to keep the failure from spreading through the entire financial system.

The partners weren’t reckless people. They were exceptionally accomplished people who, over time, doubted that their successful model could ever be wrong. No one asked “what if?” because the question itself was out of bounds.