Modern hubris: tech and AI feed false certainty

Joseph Hosler published an essay on May 29 on Auour Investments arguing that modern technology and artificial intelligence strengthen informational echo chambers and create a false sense of certainty in markets and public life.

The essay describes how social platforms and recommendation systems reduce exposure to opposing views and increase agreement within groups. Algorithms and curated networks can make people feel informed while they encounter fewer challenges to their views, the piece says. Hosler attributes this to persistent human behavior: a preference for belonging, agreement, and ideas that provide emotional comfort.

Hosler outlines how faster validation occurs today. He writes that recommendation systems shorten the time between an idea’s appearance and its confirmation. Artificial intelligence is described as a “personalized intellectual mirror” that can reflect users’ assumptions with fluency. The essay notes AI can improve thinking when used deliberately but can also reinforce shallow certainty when used without scrutiny.

On markets, the essay links narratives to price action. It states that money attached to prevailing stories creates immediate feedback: rising prices and momentum can be read as proof of insight. During long bull markets, the essay warns, gains can obscure the difference between genuine understanding and being in a favorable environment. It argues that investors may adopt concentration and speculative positions and reduce risk management as confidence grows.

The essay recommends using valuation as a gauge of risk rather than a timing tool and compares market excess to an elastic band that can stretch far before snapping back. It quotes the aphorism “markets can stay irrational longer than investors can stay solvent” and suggests markets can remain euphoric for extended periods.

Hosler includes a historical view and quotes R. G. Collingwood: “The only clue to what man can do is what man has done.” He lists past innovations such as railroads, electricity and the internet, and says artificial intelligence may change many sectors while historical patterns of behavior persist.

The piece does not offer specific regulatory prescriptions or investment rules. It calls for intellectual independence and for testing ideas against dissent. The essay closes with the line: “The Arrogance of the Modern is not believing we are intelligent. It is the belief that intelligence exempts us from human nature.”