Charlie Munger, the billionaire business partner of Warren Buffett, frequently tells the story below to illustrate how to distinguish between the two types of knowledge: real knowledge and pretend knowledge.
At the 2007 Commencement to the USC Law School, Munger explained it this way:
I frequently tell the apocryphal story about how Max Planck, after he won the Nobel Prize, went around Germany giving the same standard lecture on the new quantum mechanics.
Over time, his chauffeur memorized the lecture and said, “Would you mind, Professor Planck, because it’s so boring to stay in our routine. [What if] I gave the lecture in Munich and you just sat in front wearing my chauffeur’s hat?” Planck said, “Why not?” And the chauffeur got up and gave this long lecture on quantum mechanics. After which a physics professor stood up and asked a perfectly ghastly question. The speaker said, “Well I’m surprised that in an advanced city like Munich I get such an elementary question. I’m going to ask my chauffeur to reply.”
The point of the story is not the quick-wittedness of the protagonist, but rather — to echo Richard Feynman — it’s about making a distinction between knowing the name of something and knowing something.
Two Types of Knowledge
The first type of knowledge is real. It can’t be bought. It can’t be copied. If you want real knowledge you need to earn it. The second type of knowledge is copied. On the surface you know the answer but you lack the understanding to show your work.
In this world we have two kinds of knowledge. One is Planck knowledge, the people who really know. They’ve paid the dues, they have the aptitude. And then we’ve got chauffeur knowledge. They’ve learned the talk. They may have a big head of hair, they may have fine temper in the voice, they’ll make a hell of an impression.
But in the end, all they have is chauffeur knowledge. I think I’ve just described practically every politician in the United States.
And you are going to have the problem in your life of getting the responsibility into the people with the Planck knowledge and away from the people with the chauffeur knowledge.
And there are huge forces working against you. My generation has failed you a bit… but you wouldn’t like it to be too easy now would you?
Real knowledge comes when people do the work. On the other hand, we have the people who don’t do the work — they pretend. While they’ve learned to put on a good show, they lack understanding. They can’t answer questions that don’t rely on memorization. They can’t explain things without using jargon or vague terms. They have no idea how things interact. They can’t predict the consequences.
“Any fool can know. The point is to understand.”
— Albert Einstein
In The Art of Thinking Clearly, Rolf Dobelli offers some commentary on distinguishing fake from real knowledge:
With journalists, it is more difficult. Some have acquired true knowledge. Often they are veteran reporters who have specialized for years in a clearly defined area. They make a serious effort to understand the complexity of a subject and to communicate it. They tend to write long articles that highlight a variety of cases and exceptions. The majority of journalists, however, fall into the category of chauffeur. They conjure up articles off the tops of their heads or, rather, from Google searches. Their texts are one-sided, short, and— often as compensation for their patchy knowledge— snarky and self-satisfied in tone.
The same superficiality is present in business. The larger a company, the more the CEO is expected to possess “star quality.” Dedication, solemnity, and reliability are undervalued, at least at the top. Too often shareholders and business journalists seem to believe that showmanship will deliver better results, which is obviously not the case.
One way to guard against this is to understand your circle of competence.
Dobelli concludes with some advice worth taking to heart.
Be on the lookout for chauffeur knowledge. Do not confuse the company spokesperson, the ringmaster, the newscaster, the schmoozer, the verbiage vendor, or the cliché generator with those who possess true knowledge. How do you recognize the difference? There is a clear indicator: True experts recognize the limits of what they know and what they do not know. If they find themselves outside their circle of competence, they keep quiet or simply say, “I don’t know.” This they utter unapologetically, even with a certain pride. From chauffeurs, we hear every line except this.
Sorting through the people with real knowledge from those that do not is so important that Elon Musk tries to tease it out in interviews.