Tag: Life

Don’t Get “Should” Mixed Up with “Is”

The hardest truth to swallow is that the world isn’t really fair, and it isn’t a world you’d necessarily draw up from scratch. It’s not usually what you suppose it should be. None of what’s around us came about by grand design: From a spark many billion years ago, things evolved in a fairly undirected manner (as far as we can tell).

When the world doesn’t quite agree with our ideas, we often begin distorting our own cognition. We confuse should with is, and then complain or rationalize when reality shows we’ve gotten the wrong answer.

The history of Marxist political ideology is a pretty good example. It’s not unreasonable to think that the world should, in some cosmic sense, be a bit more egalitarian. We’re all born and we all die just the same — why should some among us enjoy the spoils while some among us wallow? Capitalism encourages that outcome to an extent, and it sometimes accidentally rewards behavior that is anti-social or simply not adding anything to the world. (A thousand derivatives traders and casino operators just cringed.)

The problem is that reality is way more complex than a simple fairness test would hope to show.

A really large-scale egalitarian society has never worked for a few interrelated reasons, chief among them that: groups don’t have power, people have power (raising the question, who specifically decides how to allocate society’s resources?); utopia doesn’t scale; market forces provide very effective carrots, sticks, and signals that directed egalitarianism lacks, among other reasons. Reaching for extreme levelness in outcomes has always been deeply problematic and always will be, because that’s how reality is constructed.

Inevitably when certain people who get into power run the experiment again, and it does not work as intended, its deepest acolytes return to first principles instead of acknowledging a flawed premise. Well, that wasn’t real Marxism. Yes the proposed system of economic distribution didn’t work, but that’s not our fault. It still should be this way. Things should be fairer. We just did it wrong. Let’s run it again!

Results like that show the brain performing some real acrobatics to keep its desired and cherished idea intact. The Greek statesman Demosthenes, living about 350 years before the birth of Christ, put it best by saying “What a man wishes, he also believes.” In other words, because we want it to be true, we make it so in our minds, evidence be damned.

We’re all subject to this bias from time to time.

In the financial world, many an investor has seen his investment go south only to complain about how unfair the damn world is, how things shouldn’t have gone that way — the CEO should have been more attentive, the creditors should have been more fair, competitors should have been more rational. It’s not supposed to go like this! Far from the investor’s mind is the thought that he simply misdiagnosed a complex situation with a range of outcomes, including bad ones. But reality is irreducibly complicated — it doesn’t ignore things just because you do. It isn’t supposed to be anything. It’s just hard.

This isn’t to be harsh. It’s just the way things are. It’s not about you. Nature just doesn’t care too much about your should.

This happens in relationships all the time. It’s almost an iron rule of life that marrying someone with the intent of changing them is not going to work. Who wants to be chiseled, molded, and nagged by their spouse? Who’s really been successful at that? Most of us seek acceptance, and when we don’t get it, we fight for our independence. That’s just human nature.

And yet how many divorces happen due to traits that were plainly present before the marriage began? Is a continuation of long-held traits the fault of the non-compliant spouse, or was there a willful misunderstanding from Day 1?

That’s not to say that a good spouse shouldn’t work to improve themselves. Of course they should. It is a recognition of the base rate that major improvements are not very common.

Think of the last major personality flaw you had that you actually shed for good. I’ll wait…

And so our lack of understanding human nature and of the complex reality leads us to bad results, frequently because we wish the world was another way. We think it ought to be another way, and we keep that conclusion even after the world shows us we’re wrong, leading to one mistake after another as we rationalize repeated errors with ought style thinking.

Start resolving to test yourself with the basic question: Do I believe this because I wish it was so, or because it actually is so? Have I acted in some way because I wish that action caused success, or because it actually does? If you can’t tell the difference, it’s likely to be wishful. And if you simply don’t know, then leave it at that: You don’t know. Resolve to find out the truth as best you can.

Instead of beating our heads against the wall, we should spend more time trying to understand the world as it is, and live accordingly. Or, in the brilliant words of Joseph Tussman:

“What the pupil must learn, if he learns anything at all, is that the world will do most of the work for you, provided you cooperate with it by identifying how it really works and aligning with those realities. If we do not let the world teach us, it teaches us a lesson.”

Still Interested? Check out some related posts:

The Powerful Predictor Behind Successful Relationships — When does a broken relationship start to go wrong? Whatever you’re thinking — an awkward conversation with your boss, the white lie you told about being busy that was discovered, the time you were supposed to be out with friends but were really somewhere else — you’re probably wrong.

Recognizing Our Flaws is The Beginning of Wisdom — “We are drunks looking for our lost keys under a lamppost not because that’s where we lost our keys but because that’s where the light is.”

The Munger Operating System: How to Live a Life That Really Works

In 2007, Charlie Munger gave the commencement address at USC Law School, opening his speech by saying, “Well, no doubt many of you are wondering why the speaker is so old. Well, the answer is obvious: He hasn’t died yet.”

Fortunately for us, Munger has kept on ticking. The commencement speech is an excellent response to the Big Question: How do we live a life that really works? It has so many of Munger’s core ideas that we think the speech represents the Munger Operating System for life.

Munger Operating System

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To get what you want, deserve what you want. Trust, success, and admiration are earned. 

It’s such a simple idea. It’s the golden rule so to speak: You want to deliver to the world what you would buy if you were on the other end. There is no ethos, in my opinion, that is better for any lawyer or any other person to have. By and large the people who have this ethos win in life and they don’t win just money, not just honors. They win the respect, the deserved trust of the people they deal with, and there is huge pleasure in life to be obtained from getting deserved trust.

Learn to love and admire the right people, live or dead.

A second idea that I got very early was that there is no love that’s so right as admiration-based love, and that love should include the instructive dead. Somehow, I got that idea and I lived with it all my life; and it’s been very, very useful to me.

Acquiring wisdom is a moral duty as well as a practical one. 

And there’s a corollary to that proposition which is very important. It means that you’re hooked for lifetime learning, and without lifetime learning you people are not going to do very well. You are not going to get very far in life based on what you already know. You’re going to advance in life by what you’re going to learn after you leave here…if civilization can progress only when it invents the method of invention, you can progress only when you learn the method of learning.

Learn to fluency the big multidisciplinary ideas of the world and use them regularly. 

What I noted since the really big ideas carry 95% of the freight, it wasn’t at all hard for me to pick up all the big ideas from all the big disciplines and make them a standard part of my mental routines. Once you have the ideas, of course, they are no good if you don’t practice — if you don’t practice you lose it.

So I went through life constantly practicing this model of the multidisciplinary approach. Well, I can’t tell you what that’s done for me. It’s made life more fun, it’s made me more constructive, it’s made me more helpful to others, it’s made me enormously rich, you name it, that attitude really helps.

Now there are dangers there, because it works so well, that if you do it, you will frequently find you are sitting in the presence of some other expert, maybe even an expert that’s superior to you, supervising you. And you will know more than he does about his own specialty, a lot more. You will see the correct answer when he’s missed it.

[…]

It doesn’t help you just to know them enough just so you can give them back on an exam and get an A. You have to learn these things in such a way that they’re in a mental latticework in your head and you automatically use them for the rest of your life.

Learn to think through problems backwards as well as forward.

The way complex adaptive systems work and the way mental constructs work, problems frequently get easier and I would even say usually are easier to solve if you turn around in reverse.

In other words if you want to help India, the question you should ask is not “how can I help India?”, you think “what’s doing the worst damage in India? What would automatically do the worst damage and how do I avoid it?” You’d think they are logically the same thing, but they’re not. Those of you who have mastered algebra know that inversion frequently will solve problems which nothing else will solve. And in life, unless you’re more gifted than Einstein, inversion will help you solve problems that you can’t solve in other ways.

Be reliable. Unreliability can cancel out the other virtues.

If you’re unreliable it doesn’t matter what your virtues are, you’re going to crater immediately. So doing what you have faithfully engaged to do should be an automatic part of your conduct. You want to avoid sloth and unreliability.

Avoid intense ideologies. Always consider the other side as carefully as your own.

Another thing I think should be avoided is extremely intense ideology, because it cabbages up one’s mind. You’ve seen that. You see a lot of it on TV, you know preachers for instance, they’ve all got different ideas about theology and a lot of them have minds that are made of cabbage.

But that can happen with political ideology. And if you’re young it’s easy to drift into loyalties and when you announce that you’re a loyal member and you start shouting the orthodox ideology out what you’re doing is pounding it in, pounding it in, and you’re gradually ruining your mind. So you want to be very careful with this ideology. It’s a big danger.

In my mind I have a little example I use whenever I think about ideology, and it’s these Scandinavian canoeists who succeeded in taming all the rapids of Scandinavia and they thought they would tackle the whirlpools in the Grand Rapids here in the United States. The death rate was 100%. A big whirlpool is not something you want to go into and I think the same is true about a really deep ideology.

I have what I call an iron prescription that helps me keep sane when I naturally drift toward preferring one ideology over another. And that is I say “I’m not entitled to have an opinion on this subject unless I can state the arguments against my position better than the people do who are supporting it. I think that only when I reach that stage am I qualified to speak.” Now you can say that’s too much of an iron discipline..it’s not too much of an iron discipline. It’s not even that hard to do.

Get rid of self-serving bias, envy, resentment, and self-pity. 

Generally speaking, envy, resentment, revenge and self pity are disastrous modes of thought. Self-pity gets pretty close to paranoia, and paranoia is one of the very hardest things to reverse. You do not want to drift into self-pity.

I have a friend who carried a big stack of index cards about this thick, and when somebody would make a comment that reflected self pity, he would take out one of the cards, take the top one off the stack and hand it to the person, and the card said, “Your story has touched my heart, never have I heard of anyone with as many misfortunes as you”. Well, you can say that’s waggery, but I suggest that every time you find you’re drifting into self pity, I don’t care what the cause — your child could be dying of cancer — self-pity is not going to improve the situation. Just give yourself one of those cards.

It’s a ridiculous way to behave, and when you avoid it you get a great advantage over everybody else, almost everybody else, because self-pity is a standard condition and yet you can train yourself out of it.

And of course self-serving bias, you want to get that out of yourself; thinking that what’s good for you is good for the wider civilization and rationalizing all these ridiculous conclusions based on the subconscious tendency to serve one’s self.

At the same time, allow for the self-serving bias in others who haven’t removed it.

You also have to allow for the self serving bias of everybody else, because most people are not going to remove it all that successfully, the human condition being what it is. If you don’t allow for self serving bias in your conduct, again you’re a fool.

I watched the brilliant Harvard Law School trained general counsel of Salomon lose his career, and what he did was when the CEO became aware that some underling had done something wrong, the general counsel said, “Gee, we don’t have any legal duty to report this but I think it’s what we should do it’s our moral duty.”

Of course, the general counsel was totally correct but of course it didn’t work; it was a very unpleasant thing for the CEO to do and he put it off and put if off and of course everything eroded into a major scandal and down went the CEO and the general counsel with him.

The correct answer in situations like that was given by Ben Franklin, he said, “If you want to persuade, appeal to interest not to reason.” The self serving bias is so extreme. If the general counsel had said, “Look this is going to erupt, it’s something that will destroy you, take away your money, take away your status…it’s a perfect disaster,” it would have worked!

Avoid being part of a system with perverse incentives.

Incentives are too powerful a controller of human cognition and human behavior, and one of the things you are going to find in some modern law firms is billable hour quotas. I could not have lived under a billable hour quota of 2,400 hours a year. That would have caused serious problems for me — I wouldn’t have done it and I don’t have a solution for you for that. You’ll have to figure it out for yourself but it’s a significant problem.

Work with and under people you admire, and avoid the inverse when at all possible.

And that requires some talent. The way I solved that is, I figured out the people I did admire and I maneuvered cleverly without criticizing anybody, so I was working entirely under people I admired. And a lot of law firms will permit that if you’re shrewd enough to work it out. And your outcome in life will be way more satisfactory and way better if you work under people you really admire. The alternative is not a good idea.

Learn to maintain your objectivity, especially when it’s hardest.

Well we all remember that Darwin paid special attention to disconfirming evidence particularly when it disconfirmed something he believed and loved. Well, objectivity maintenance routines are totally required in life if you’re going to be a correct thinker. And there we’re talking about Darwin’s attitude, his special attention to disconfirming evidence, and also to checklist routines. Checklist routines avoid a lot of errors. You should have all this elementary wisdom and then you should go through and have a checklist in order to use it. There is no other procedure that will work as well.

Concentrate experience and power into the hands of the right people – the wise learning machines. 

I think the game of life in many respects is getting a lot of practice into the hands of the people that have the most aptitude to learn and the most tendency to be learning machines. And if you want the very highest reaches of human civilization that’s where you have to go.

You do not want to choose a brain surgeon for your child among fifty applicants all of them just take turns during the procedure. You don’t want your airplanes designed that way. You don’t want your Berkshire Hathaways run that way. You want to get the power into the right people.

You’ll be most successful where you’re most intensely interested.

Another thing that I found is an intense interest of the subject is indispensable if you are really going to excel. I could force myself to be fairly good in a lot of things, but I couldn’t be really good in anything where I didn’t have an intense interest. So to some extent, you’re going to have to follow me. If at all feasible you want to drift into doing something in which you really have a natural interest.

Learn the all-important concept of assiduity: Sit down and do it until it’s done.

Two partners that I chose for one little phase of my life had the following rule: They created a little design/build construction team, and they sat down and said, two-man partnership, divide everything equally, here’s the rule; “Whenever we’re behind in our commitments to other people, we will both work 14 hours a day until we’re caught up.”

Well, needless to say, that firm didn’t fail. The people died rich. It’s such a simple idea.

Use setbacks in life as an opportunity to become a bigger and better person. Don’t wallow.

Another thing of course is life will have terrible blows, horrible blows, unfair blows, doesn’t matter. And some people recover and others don’t. And there I think the attitude of Epictetus is the best. He thought that every mischance in life was an opportunity to behave well, every mischance in life was an opportunity to learn something, and your duty was not to be submerged in self-pity but to utilize the terrible blow in a constructive fashion. That is a very good idea.

The highest reach of civilization is a seamless system of trust among all parties concerned. 

The last idea that I want to give you as you go out into a profession that frequently puts a lot of procedure and a lot of precautions and a lot of mumbo jumbo into what it does, this is not the highest form which civilization can reach. The highest form which civilization can reach is a seamless web of deserved trust. Not much procedure, just totally reliable people correctly trusting one another. That’s the way an operating room works at the Mayo Clinic.

If a bunch of lawyers were to introduce a lot of process, the patients would all die. So never forget when you’re a lawyer that you may be rewarded for selling this stuff but you don’t have to buy it. In your own life what you want is a seamless web of deserved trust. And if your proposed marriage contract has 47 pages, my suggestion is do not enter.


Still Interested?
Check our our Munger compendium.

The Road Less Travelled: The Source of Many of the Ills of Mankind

This is a must read.

Our view of reality is like a map with which to negotiate the terrain of life. If the map is true and accurate, we will generally know where we are, and if we have decided where we want to go, we will generally know how to get there. If the map is false and inaccurate, we generally will be lost.

While this is obvious, it is something that most people to a greater or lesser degree choose to ignore. They ignore it because our route to reality is not easy. First of all, we are not born with maps; we have to make them, and the making requires effort. The more effort we make to appreciate and perceive reality, the larger and more accurate our maps will be. But many do not want to make this effort. Some stop making it by the end of adolescence. Their maps are small and sketchy, their views of the world narrow and misleading. By the end of middle age most people have given up the effort. They feel certain that their maps are complete and their Weltanschauung is correct (indeed, even sacrosanct), and they are no longer interested in new information. It is as if they are tired. Only a relative and fortunate few continue until the moment of death exploring the mystery of reality, ever enlarging and refining and redefining their understanding of the world and what is true.

But the biggest problem of map-making is not that we have to start from scratch, but that if our maps are to be accurate we have to continually revise them. The world itself is constantly changing. Glaciers come, glaciers go. Cultures come, cultures go. There is too little technology, there is too much technology. Even more dramatically, the vantage point from which we view the world is constantly and quite rapidly changing. When we are children we are dependent, powerless. As adults we may be powerful. Yet in illness or an infirm old age we may become powerless and dependent again. When we have children to care for, the world looks different from when we have none; when we are raising infants, the world seems different from when we are raising adolescents. When we are poor, the world looks different from when we are rich. We are daily bombarded with new information as to the nature of reality. If we are to incorporate this information, we must continually revise our maps, and sometimes when enough new information has accumulated, we must make very major revisions. The process of making revisions, particularly major revisions, is painful, sometimes excruciatingly painful. And herein lies the major source of many of the ills of mankind.

What happens when one has striven long and hard to develop a working view of the world, a seemingly useful, workable map, and then is confronted with new information suggesting that that view is wrong and the map needs to be largely redrawn? The painful effort required seems frightening, almost overwhelming. What we do more often than not, and usually unconsciously, is to ignore the new information. Often this act of ignoring is much more than passive. We may denounce the new information as false, dangerous, heretical, the work of the devil. We may actually crusade against it, and even attempt to manipulate the world so as to make it conform to our view of reality. Rather than try to change the map, an individual may try to destroy the new reality. Sadly, such a person may expend much more energy ultimately in defending an outmoded view of the world than would have been required to revise and correct it in the first place.

— Via The Road Less Traveled, Timeless Edition: A New Psychology of Love, Traditional Values and Spiritual Growth

This beautiful excerpt encapsulates so much of Farnam Street.

Still Interested? Check these out:

The Map is Not the Territory — Maps are necessary, but flawed. The problem, however, goes deeper than abstraction.

What made Charles Darwin an Effective Thinker? — Most people take evidence that disconfirms their prior beliefs and ignore it. Darwin was different and that’s part of the reason he was so incredibly successful.

Joseph Tussman: Getting the World to do the Work for You — The world will do the work for you if you know this one secret.

The Farnam Street Latticework of Mental Models — Acquiring knowledge may seem like a daunting task. There is so much to know and time is precious. Luckily, we don’t have to master everything.

Exploiting Unrecognized Simplicity — How geniuses really prosper. Once you know this, the world looks different.

Isaac Asimov: Integrity over Honesty

This thought from Isaac Asimov sums up much of Farnam Street’s ethos in how to operate ethically in the world.

From the book he co-authored with his wife How to Enjoy Writing: A Book of Aid and Comfort.

Integrity, is, to me, a somewhat stronger word than “honesty.” “Honesty” often implies truth-telling and little more, but “integrity” implies wholeness, soundness, a complex philosophy of life.

To have integrity is to stand by your word, to have a sense of honor, to do what you have agreed to do and to do it as best as you can. To have integrity is to be satisfied with nothing less than the best job you can do.

In that sense, anyone can have integrity, regardless of how small and unimportant a role he may play in the world…

A bit later, Asimov gives a short example of his concept of integrity:

Integrity not only simplifies your life by making it easy to come to a decision, but it may keep you out of trouble.

A writer I knew slightly once suggested that I write a book very quickly and that I then engage in complicated financial dealings that would involve my risking some money to begin with. The book I wrote would, however, fail and that would enable me to write off so much money as a loss that I would save on taxes many, many times what I had invested in the book. Of course, we would have to be certain that my book would be a failure, so I would have to undertake to write a really bad one. I would be taking advantage of a “tax shelter” in this way, and it was all perfectly legal.

I shook my head. “No,” I said. “It’s perfectly possible for me to write a bad book while I am trying honestly to write a good one, but writing a bad one on purpose is more than I can undertake to do, no matter how much money it would save me on taxes and no matter how legal it might be.”

I walked away and, a couple of years later, I read that the fellow who had advanced this proposition to me was now on trial for this same “tax shelter,” I was rather relieved that I had been simpleminded enough to have integrity.

Still Interested? See our post on The Difference Between Truth and Honesty.

Marcus Aurelius: You Have One Life To Live

Young Marcus Aurelius
Young Marcus Aurelius

The excerpt is from this version online, although if you’re going to read it, get the Hayes translation.

Our mental powers should enable us to perceive the swiftness with which all things vanish away: their bodies in the world of space, and their remembrance in the world of time. We should also observe the nature of all objects of sense–particularly such as allure us with pleasure, or affright us with pain, or are clamorously urged upon us by the voice of self-conceit — the cheapness and contemptibility of them, how sordid they are, and how quickly fading and dead. We should discern the true worth of those whose word and opinion confer reputations. We should apprehend, too, the nature of death; and that if only it be steadily contemplated, and the fancies we associate with it be mentally dissected, it will soon come to be thought of as no more than a process of nature (and only children are scared by a natural process) — or rather, something more than a mere process, a positive contribution to nature’s well-being. Also we can learn how man has contact with God, and with which part of himself this is maintained, and how that part fares after its removal hence.

Nothing is more melancholy than to compass the whole creation, ‘probing into the deeps of earth’ as the poet says, and peering curiously into the secrets of others’ souls, without once understanding that to hold fast to the divine spirit within, and serve it loyally, is all that is needful. Such service involves keeping it pure from passion, and from aimlessness, and from discontent with the works of gods or men; for the former of these works deserve our reverence, for their excellence; the latter our goodwill, for fraternity’s sake, and at times perhaps our pity too, because of men’s ignorance of good and evil–an infirmity as crippling as the inability to distinguish black from white.

Were you to live three thousand years, or even thirty thousand, remember that the sole life which a man can lose is that which he is living at the moment; and furthermore, that he can have no other life except the one he loses. This means that the longest life and the shortest amount to the same thing. For the passing minute is every man’s equal possession, but what has once gone by is not ours. Our loss, therefore, is limited to that one fleeting instant, since no one can lose what is already past, nor yet what is still to come–for how can he be deprived of what he does not possess? So two things should be borne in mind. First, that all the cycles of creation since the beginning of time exhibit the same recurring pattern, so that it can make no difference whether you watch the identical spectacle for a hundred years, or for two hundred, or for ever. Secondly, that when the longest-and the shortest-lived of us come to die, their loss is precisely equal. For the sole thing of which any man can be deprived is the present; since this is all he owns, and nobody can lose what is not his.

(h/t Lampham’s Quarterly)