How People Think
One hundred billion people have walked this planet.
Nearly eight billion of them are alive today.
Each has a story, few have a microphone.
Each has seen something different and thought something unique. Most know something you can’t fathom, and you have experienced stuff they wouldn’t believe.
But so many behaviors are universal across generations and geographies. Circumstances change, but people’s reactions don’t. Technologies evolve, but insecurities, blind spots, and gullibility rarely does.
This article describes 17 of what I think are the most common and influential aspects of how people think.
It’s a long post, but each point can be read individually. Skip the ones you don’t agree with and reread the ones you do – that itself is a common way people think.
1. Everyone belongs to a tribe and underestimates how influential that tribe is on their thinking.
Tribes are everywhere – countries, states, parties, companies, industries, departments, investment styles, economic philosophies, religions, families, schools, majors, credentials. Everyone loves their tribe because there’s comfort in knowing other people who understand your background and share your goals.
But tribes have their own rules, beliefs, and ideas. Some of them you might disagree with; some are even abjectly terrible. Yet they remain supported because no one wants to risk being shunned by a tribe that’s become part of their identity. So people either willingly nod along with bad ideas, or become blinded by tribal loyalty at how bad the ideas are to begin with.
2. What people present to the world is a tiny fraction of what’s going on inside their head.
The Library of Congress holds three million books, or something like a quarter of a trillion words.
All of the information accessible on the internet is estimated at 40 trillion gigabytes, which is roughly enough to hold a high-def video lasting the entire 14 billion years since the big bang.
So much of history has been recorded.
But then you remember, that’s just what’s been publicly shared, recorded, and published. It’s a trivial amount of what’s actually happened, and an infinitesimal amount of what’s gone through people’s heads.
As much as we know about how crazy, weird, talented, and insightful people can be, we are blind to perhaps 99.99999999% of it. The most prolific over-sharers disclose maybe a thousandth of one percent of what they’ve been through and what they’re thinking.
One thing this does is gives a false view of success. Most of what people share is what they want you to see. Skills are advertised, flaws are hidden. Wins are exaggerated, losses are downplayed. Doubt and anxiety are rarely shared on social media. Defeated soldiers and failed CEOs rarely sit for interviews.
Most things are harder than they look and not as fun as they seem because the information we’re exposed to tends to be a highlight reel of what people want you to know about themselves to increase their own chances of success. It’s easiest to convince people that you’re special if they don’t know you well enough to see all the ways you’re not.
When you are keenly aware of your own struggles but blind to others’, it’s easy to assume you’re missing some skill or secret that others have. Sometimes that’s true. More often you’re just blind to how much everyone else is making it up as they go, one challenge at a time.
3. Prediction is about probability and putting the odds of success in your favor. But observers mostly judge you in binary terms, right or wrong.
There’s a scene in the movie Zero Dark Thirty where the CIA director questions an analyst team who claim to have located Osama Bin Laden.
“I’m about to go look the president in the eye,” he says. “And what I’d like to know, no bullshit, very simply, is he there, or is he not f*cking there?”
The team’s leader says there’s a 60% to 80% chance Bin Laden is in the compound.
“Is that a yes or a no?” the director asks.
A young analyst jumps in. “One hundred percent chance he’s there,” she says.
Everyone is stunned.
“OK fine, 95%, because I know certainty freaks you guys out. But it’s 100%.”
It’s a good example of how uncomfortable probability can be.
The idea that something can be likely and not happen, or unlikely and still happen, is one of the world’s most important tricks.
Most people get that certainty is rare, and the best you can do is make decisions where the odds are in your favor. They understand you can be smart and end up wrong, or dumb and end up right, because that’s how luck and risk work.
But almost no one actually uses probability in the real world, especially when judging others’ success.
Most of what people care about is, “Were you right or wrong?”
Probability is about nuance and gradation. But in the real world people pay attention to black and white.
If you said something will happen and it happens, you were right. If you said it will happen and it doesn’t, you’re wrong. That’s how people think, because it requires the least amount of effort. It’s hard to convince others – or yourself – that there could have been an alternative outcome when there’s a real-world outcome sitting in front of you.
The core here is that people think they want an accurate view of the future, but what they really crave is certainty.
It’s normal to want to rid yourself of the painful reality of not knowing what’s going to happen next. Someone who tells you there’s a 60% chance of a recession happening doesn’t do much to erase that pain. They might be adding to it. But someone who says, “There is going to be a recession this year,” offers something to grab onto with both hands that feels like taking control of your future.
After the Bin Laden raid, President Obama later said the odds placed on whether Bin Laden was actually in the target house were 50/50. A few years ago I heard one of the SEALS involved in the mission speak at a conference. He said, regardless of whether Bin Laden was in the house, the team felt the odds they’d all be killed in the mission were also 50/50. So here we have a 75% chance that the raid would have ended in disappointment or catastrophe.
It didn’t – but that alternative outcome isn’t a world many pay much attention to.
4. We are extrapolating machines in a world where nothing too good or too bad lasts indefinitely.
When you’re in the middle of a powerful trend it’s difficult to imagine a force strong enough to turn things the other way.
What we tend to miss is that what turns trends around usually isn’t an outside force. It’s when a subtle side effect of that trend erodes what made it powerful to begin with.
When there are no recessions, people get confident. When they get confident they take risks. When they take risks, you get recessions.
When markets never crash, valuations go up. When valuations go up, markets are prone to crash.
When there’s a crisis, people get motivated. When they get motivated they frantically solve problems. When they solve problems crises tend to end.
Good times plant the seeds of their destruction through complacency and leverage, and bad times plant the seeds of their turnaround through opportunity and panic-driven problem-solving.
We know that in hindsight. It’s almost always true, almost everywhere.
But we tend to only know it in hindsight because we are extrapolating machines, and drawing straight lines when forecasting is easier than imagining how people might adapt and change their behavior.
When alcohol from fermentation reaches a certain point it kills the yeast that made it in the first place. Most powerful trends end the same way. And that kind of force isn’t intuitive, requiring you to consider not just how a trend impacts people, but how that impact will change people’s behavior in a way that could end the trend.
5. There are limits to our sanity. Optimism and pessimism always overshoot because the only way to know the boundaries of either is to go a little bit past them.
Jerry Seinfeld had the most popular show on TV. Then he quit.
He later said he killed his show while it was thriving because the only way to identify the top is to experience the decline, which he had no interest in. Maybe the show could keep rising, maybe it couldn’t. He was fine not knowing the answer.
If you want to know why there’s a long history of the world blowing past the boundaries of sanity, bouncing from boom to bust, absurdity to absurdity, it’s because so few people have Jerry’s mentality. Opportunity is scarce and people don’t want to leave any on the table. So they insist on knowing where the top is.
Most things in the world are a mix of facts and emotions. How much steel can this factory produce (a fact), and what are investors willing to pay for that output (an emotion).
The important thing is that emotions aren’t something you can predict with a formula.
What is bitcoin worth? How high can Tesla go? How much crazier can politics get before voters revolt? The only way to answer those questions is to know what kinds of moods people will be in in the future – how optimistic they’ll feel, what they’ll want to believe, and how persuasive storytellers are. Which is impossible to know. I don’t know what kind of mood I’ll be in tonight, let alone how a bunch of strangers will feel years in the future.
The only way to find the limits of people’s moods – the only way to find the top – is to keep pushing until we’ve gone too far, when we can look back and say, “Ah, I guess that was the limit.”
It’s tempting to watch things go from boom to bust and think, “Why are people doing this? Are they crazy?”
Probably not. They’re just rationally looking for the limits of what everyone else can handle.
6. Ignoring that people who think about the world in unique ways you like also think about the world in unique ways you won’t like.
A recent profile of Eliud Kipchoge, the world’s best marathon runner, wrote:
Cramped in a dull room with hours to kill, the Olympic medallists did what most would do: they opened their phones, logged into wifi, and started scrolling through the river of goodwill messages.
All except one. Kipchoge placed his phone in front of him and never touched it, sitting there — for hours — in contented silence.
Bashir Abdi, the bronze medallist from Belgium, recalls the story in laughing disbelief, adding a line, only half-joking, that those in the sport have said many times about Kipchoge.
“He is not human.”
He is not human.
Some variation of that phrase can be used on most of your role models – people who have extreme, outlying success. You like them because they do things other people would never consider, or can’t even comprehend.
Some of those traits are awesome and you should look up to them. Others aren’t.
Kanye West once put it:
If you want these crazy ideas and these crazy stages, this crazy music, and this crazy way of thinking, there’s a chance it might come from a crazy person.
Paul Graham put it this way: “Half the distinguishing qualities of the eminent are actually disadvantages.”
Andrew Wilkinson says: “Most successful people are just a walking anxiety disorder harnessed for productivity.”
I’ve always thought that people who are abnormally good at one thing tend to be abnormally bad at something else. Or maybe not bad, but something you wouldn’t necessarily want in your own life. They’re natural maniacs, extreme in every way, good and bad.
But it’s so easy to ignore that fact when you admire someone. It gets dangerous when you admire a person for their good traits but start emulating their bad traits because you mistakenly believe that’s what made them great. That’s part of the saying, “Never meet your heroes.”
Beyond personal traits, jealousy is often misguided because you can’t pick and choose parts of someone’s life to emulate. Naval once wrote:
One day, I realized with all these people I was jealous of, I couldn’t just choose little aspects of their life. I couldn’t say I want his body, I want her money, I want his personality. You have to be that person. Do you want to actually be that person with all of their reactions, their desires, their family, their happiness level, their outlook on life, their self-image? If you’re not willing to do a wholesale, 24/7, 100 percent swap with who that person is, then there is no point in being jealous.
Years ago, David Brooks gave a real-world example:
Two things happened to Sandra Bullock this month. First, she won an Academy Award for best actress. Then came the news reports claiming that her husband is an adulterous jerk. So the philosophic question of the day is: Would you take that as a deal? Would you exchange a tremendous professional triumph for a severe personal blow?
If you had to take more than three seconds to think about this question, you are absolutely crazy.
Admiration can be so gullible.
7. We are pushed toward maximizing efficiency in a way that leaves no room for error, despite room for error being the most important factor of long-term success.
The world is competitive. If you don’t exploit an opportunity your competition will. So opportunity is usually exploited to its fullest extent as soon as possible.
That’s great – it pushes the world forward. But it has a nasty side effect: When all opportunity is exploited there is no room for error, and when there’s no room for error any system exposed to volatility and accident will eventually break.
Describing the supply chain fiasco of the last year, Flexport CEO Ryan Petersen explained:
What caused all the supply chain bottlenecks? Modern finance with its obsession with “Return on Equity.”
To show great ROE almost every CEO stripped their company of all but the bare minimum of assets. Just in time everything. No excess capacity. No strategic reserves. No cash on the balance sheet. Minimal R&D.
We stripped the shock absorbers out of the economy in pursuit of better short term metrics. Now as we’re facing a hundred year storm of demand, our infrastructure simply can’t keep up.
The global logistics companies have no excess capacity, there are no reserves of chassis (trailers for hauling containers), no extra shipping containers, no extra yard space, no extra warehouse capacity. The brands have no extra inventory. Manufacturers have no extra components or raw materials on hand.
He’s right, but part of me can also empathize with the CEOs who maximized efficiency because if they didn’t their competition would have and put them out of business. There’s a weird quirk of human behavior that incentivizes people to maximize potential all the way up to destroying themselves.
So many people strive for efficient lives, where no hour is wasted. But when no hour is wasted you have no time to wander, explore something new, or let your thoughts run free – which can be some of the most productive forms of thought. Psychologist Amos Tversky once said “the secret to doing good research is always to be a little underemployed. You waste years by not being able to waste hours.” A successful person purposely leaving gaps of free time on their schedule can feel inefficient. And it is, so not many people do it.
The paradox that room for error is essential to survival in the long run, but maximizing efficiency in a way that eliminates room for error can be essential to surviving the short run, is a strange one.
Those who fight it – the rare company or employee or economy willing to sacrifice short-term gain for long-term survival – are the oddballs, rarely understood, easily belittled, who underperform most of the time but survive long enough to get the last laugh, and the highest returns.
8. The best story wins.
Not the best idea. Not the right answer. Just whoever tells a story that catches people’s attention and gets them to nod their heads.
Sherlock Holmes put it: “What you do in this world is a matter of no consequence. The question is what can you make people believe you have done.”
Wherever information is exchanged – wherever there are products, companies, careers, politics, knowledge, education, and culture – you will find that the best story wins. Great ideas explained poorly can go nowhere while old or wrong ideas told compellingly can ignite a revolution. Morgan Freeman can narrate a grocery list and bring people to tears, while an inarticulate scientist might cure disease and go unnoticed.
Even when the right idea or an expert talent is at work, there’s almost always a powerful story at play.
Charles Darwin didn’t discover evolution, he just wrote the first and most compelling book about it. Andrew Carnegie said he was as proud of his charm and ability to befriend people as he was his business acumen. Elon Musk is as skilled at getting investors to believe a vision as he is at engineering. Rory Sutherland recently put it: “No one would have heard of Jesus if it wasn’t for Saint Paul.”
Author Elias Canette wrote:
The largest crowds are drawn by the storytellers. It is around them that the people throng most densely and stay longest… their words come from further off and hang longer in the air than those of ordinary people.
George Packer echoes the same:
The most durable narratives are not the ones that stand up best to fact-checking. They’re the ones that address our deepest needs and desires.
This drives you crazy if you assume the world is swayed by facts and objectivity – if you assume the best idea wins. But it’s how people think. And it’s actually optimistic, because when you realize you can change the world by explaining an old thing in a new way vs. creating something new, you start to see so much potential.
9. We are swayed by complexity when simplicity is the real mark of intelligence and understanding.
Sometimes length is necessary. When the Allies met to discuss what to do with Germany after World War II Winston Churchill noted, “We are dealing with the fate of eighty million people and that requires more than eighty minutes to consider.”
But computer scientist Edsger Dijkstra once wrote:
Simplicity is the hallmark of truth— we should know better, but complexity continues to have a morbid attraction. When you give for an academic audience a lecture that is crystal clear from alpha to omega, your audience feels cheated and leaves the lecture hall commenting to each other: “That was rather trivial, wasn’t it? The sore truth is that complexity sells better.
The sore truth is that complexity sells better.
Of course that’s the case.
A tweet can be more insightful than a book, but people pay $20 for books and would never pay a cent for thousands of tweets. Charge a client for ten sentences of advice and they’ll leave in disgust. Give them a phone-book-size elaboration and they’ll pay you a fortune and refer their friends.
Why do complexity and length sell when simplicity and brevity will do?
A few reasons.
One is that length is often the only thing signaling effort and thoughtfulness. Consumers of information rarely try to dissect an argument objectively; that’s too hard. When reading they just try to figure out whether the author is credible or not. Does this sound right? Does it pass the smell test? Has the author put more than a few seconds of thought into this argument? Length and complexity are often the only indication that an argument was thoughtful vs. a random gut feeling.
A second is that things you don’t understand create a mystique around people who do. When you understand things I don’t, I have a hard time judging the limits of your knowledge in that field, which makes me more prone to taking your views at face value.
A third is that complexity gives a comforting impression of control, while simplicity is hard to distinguish from cluelessness. The more knobs you can fiddle with the more control you feel you have over the situation, because the impression of knowledge increases. Only paying attention to a few variables while ignoring everything else can make you look ignorant, even if it’s the right thing to do. If a client says, “What about this, what’s happening here?” and you respond, “Oh, I have no idea, I don’t look at that,” the odds that you’ll sound uninformed might outweigh the odds of indicating you’ve mastered simplicity.
10. Your willingness to believe a prediction is influenced by how much you want or need that prediction to be true.
What was the happiest day of your life?
The documentary How to Live Forever asks that innocent question to a centenarian who offered an amazing response.
“Armistice Day,” she said, referring to the 1918 agreement that ended World War I.
“Why?” the producer asks.
“Because we knew there would be no more wars ever again,” she says.
World War II began 21 years later, killing 75 million people.
There are so many things in life that we think are true because we desperately want them to be true. People do this with their relationships, careers, investments, political views – anything forward-looking is subject to being swayed by your desire to have a pleasant life.
Everyone is a dreamer because it’s hard to go about your day when you genuinely believe the future will be difficult. An appealing fiction – believing in the outcome you want even if it’s unlikely to come true – is often the only comfort in an uncertain world.
The higher the stakes, the truer this becomes. Before modern medicine came centuries of blood-letting, starvation therapy, cutting holes in your body to let the evils out, and other treatments that made everything worse but gave people a little hope that it could work. If you desperately need a solution and a good one isn’t known or readily available to you, the path of least resistance is willingness to believe anything. Not just try anything, but believe it.
The same thing happens in investing, when people eagerly listen to forecasters whose track record is indistinguishable from guessing. Same in politics. The more uncertain the endeavor, and the higher the stakes of the outcome, the more you are persuaded by the most pleasing answer. And if you tell people what they want to hear you can be wrong indefinitely without penalty.
11. It’s hard to empathize with other people’s beliefs if they’ve experienced parts of the world you have not.
Jason Zweig of the Wall Street Journal wrote last week:
If I ask you in a questionnaire whether you are afraid of snakes, you might say no. If I throw a live snake in your lap and then ask if you’re afraid of snakes, you’ll probably say yes—if you ever talk to me again.
The gap between how you feel as an outsider vs. how you feel when you’re experiencing something firsthand can be a mile wide.
There are theories that big wars tend to happen 20-40 years apart because that’s the amount of time it takes to cycle through a new generation of voters, politicians, and generals who aren’t scarred by the last war. Other political trends – social rights, economic theories, budget priorities – follow a similar path.
It’s not that people forget. It’s that empathy and open-mindedness cannot recreate what genuine fear and uncertainty feel like.
My guess is that more than half of all disagreements – personal, domestic, international, financial – would disappear if you could see the world through the lens of your opponent, and had experienced what they have in life.
Nassim Taleb summarizes this well when he says, “If something looks irrational – and has been so for a long time – odds are you have a wrong definition of rationality.”
A few questions everyone should ask themselves:
Which of my current views would I disagree with if I were born in a different country or generation?
What haven’t I experienced firsthand that leaves me naive to how something works?
What is a problem that I think only applies to other countries/industries/careers that will eventually impact me?
But they’re impossible to answer completely. So everyone’s a little bit blind to how the world works, and when they think they’re disagreeing with someone else they’re actually just uncovering an experience they haven’t had.
12. An innocent denial of your own flaws, caused by the ability to justify your mistakes in your own head in a way you can’t do for others.
George Carlin once joked how easy it is to spot stupid people. “Carry a little pad and pencil around with you. You’ll wind up with 30 or 40 names by the end of the day. It doesn’t take long to spot one of them, does it? Takes about eight seconds.”
Like most comedy it’s funny because it’s true.
But Daniel Kahneman mentions a more important truth in his book, Thinking, Fast and Slow: “It is easier to recognize other people’s mistakes than our own.”
I would add my own theory: It’s easier to blame other people’s mistakes on stupidity and greed than our own.
That’s because when you make a mistake, I judge it solely based on what I see. It’s quick and easy.
But when I make a mistake there’s a long and persuasive monologue in my head that justifies bad decisions and adds important context other people don’t see.
Everyone’s like that. It’s normal.
Here’s a big reason this occurs: My brother-in-law, a social worker, recently told me, “All behavior makes sense with enough information.”
It’s such a good point.
You see someone doing something crazy and think, “Why in the world would you do that?” Then you sit down with them, hear about their life, and after a while you realize, “Ah, I kind of get it now.”
Everyone is a product of their own life experiences, few of which are visible or known to other people.
What makes sense to me might not make sense to you because you don’t know what kind of experiences have shaped me and vice versa.
The question, “Why don’t you agree with me?” can have infinite answers.
Sometimes one side is selfish, or stupid, or blind, or uninformed.
But usually a better question is, “What have you experienced that I haven’t that would make you believe what you do? And would I think about the world like you do if I experienced what you have?”
It’s the question that contains the most answers of why people don’t agree with each other.
But it’s such a hard question to ask. It’s uncomfortable to think that what you haven’t experienced might change what you believe because it’s admitting your own ignorance. It’s much easier, and common, to assume those who disagree with you aren’t thinking as hard as you are – especially when judging others’ mistakes.
13. An underappreciation for how small things compound into extraordinary things.
The most astounding force in the universe is obvious. It’s evolution. The thing that guided single-cell organisms into a human who can read this article on an iPhone with 500 gigs of storage. The thing that’s responsible for 20/20 vision and flying birds and immune systems. Nothing else in science can blow your mind more than what evolution has accomplished.
Biologist Leslie Orgel used to say, “evolution is cleverer than you are” because whenever a critic says, “evolution could never do that” they usually just lacked imagination.
It’s also easy to underestimate because of basic math.
Evolution’s superpower is not just selecting favorable traits. That part is so tedious, and if it’s all you focus on you’ll be skeptical and confused. Most species’ change in any millennia is so trivial it’s unnoticeable.
The real magic of evolution is that it’s been selecting traits for 3.8 billion years.
The time, not the little changes, is what moves the needle. Take minuscule changes and compound them by 3.8 billion years and you get results that are indistinguishable from magic.
That’s the real lesson from evolution: If you have a big number in the exponent slot you do not need extraordinary change to deliver extraordinary results. It’s not intuitive, but it’s so powerful. “The greatest shortcoming of the human race is our inability to understand the exponential function,” physicist Albert Bartlett used to say.
A lot of things work like that.
I have heard many people say the first time they saw a compound interest table – or one of those stories about how much more you’d have for retirement if you began saving in your 20s vs. your 30s – changed their life. But it probably didn’t. What it likely did was surprise them, because the results intuitively didn’t seem right. Linear thinking is so much more intuitive than exponential thinking. Michael Batnick once explained it. If I ask you to calculate 8+8+8+8+8+8+8+8+8 in your head, you can do it in a few seconds (it’s 72). If I ask you to calculate 8x8x8x8x8x8x8x8x8, your head will explode (it’s 134,217,728).
A common area we see this shortcoming in action is investing.
Howard Marks once talked about an investor whose annual results were never ranked in the top quartile, but over a 14-year period he was in the top 4% of all investors. If he keeps those mediocre returns up for another 10 years he may be in the top 1% of his peers – one of the greatest of his generation despite being unmentionable in any given year.
So much focus in investing is on what people can do right now, this year, maybe next year. “What are the best returns I can earn?” seems like such an intuitive question to ask.
But like evolution, that’s not where the magic happens.
If you understand the math behind compounding you realize the most important question is not “How can I earn the highest returns?” It’s, “What are the best returns I can sustain for the longest period of time?”
That’s the big lesson from compounding: Less focus on change, more focus on the exponent.
14. The gap between knowing what to do and actually getting people to do it can be enormous.
I once asked a doctor: What’s the hardest part of your job?
It wasn’t the stress or responsibility. It was so basic. “Getting my patients to do what I ask of them,” she said.
I didn’t understand at first, but it made sense when she explained.
“You have an appointment with a patient and you say, ‘I need you to get this lab done, see this specialist, pick up this medicine.’ And they come back a month later and they haven’t done any of it.” They either couldn’t afford it, or it was too intimidating, or they didn’t have time.
She explained that becoming a better doctor meant spending more time managing her patients rather than managing those patients’ illnesses. There is a huge difference, she said, between an expert in medicine and an expert in healthcare.
An expert in medicine knows all the right answers out of the textbook. They can diagnose with precision and are up to date on all the latest treatments.
An expert in healthcare understands that medicine from the patient’s view is intimidating, confusing, expensive, and time-consuming. Nothing you diagnose or prescribe matters until you’ve addressed that reality with patients, because even a perfect solution makes no difference to the patient who doesn’t follow it.
So many things in life work like that. Investing, relationships, health, careers. In each, what we should do isn’t that hard – it’s actually doing it that requires moving mountains.
In many cases this is caused by the appeal of hacks – shortcuts and tricks to get what you want without paying the price. The patient doesn’t want to eat better and exercise; they want a pill to fix everything. The investor doesn’t want to wait a decade for their money to compound; they want a stock that will double next week.
But the real world abhors hacks, and rather than an easy win those who pursue them are often charged punitive damages. So we live in a world where solutions to problems can be shockingly simple but getting people to follow simple advice can be astoundingly difficult.
Issac Asimov said, “Science gathers knowledge faster than society gathers wisdom,” which sums up a lot of things quite well.
15. We’re bad at imagining how change will feel because there’s no context in dreams.
Everyone thinks they have a high risk tolerance when things are going great. Then things turn down and they say, “Ah, you know, actually, this hurts more than I thought.”
When thinking about future risks you tend to think in isolation. If I think about a 40% market decline, I imagine everything in the world being the same except stocks being 40% cheaper. That doesn’t feel so bad. But the reason stocks fall 40% cheaper is probably because people think the world is falling apart – a brutal recession, a pandemic, a political meltdown, whatever. The stress of that is much harder to think about until it happens.
The same thing happens when we’re imagining a gain.
I don’t think I’ve met, or know of, anyone with outsized success who gained as much happiness as an outsider might expect. That doesn’t mean success can’t bring pride or contentment or independence. But it’s rarely what you thought it would be before achieving it.
Jim Carrey once said, “I think everybody should get rich and famous and do everything they ever dreamed of so they can see that it’s not the answer.”
I think part is the same reason predicting loss is difficult: It’s hard to imagine the full context.
If you think of your future self living in a new mansion, you imagine basking in splendor and everything feeling great. What’s easy to forget is that people in mansions can get the flu, have psoriasis, become embroiled in lawsuits, bicker with their spouses, are wracked with insecurity and annoyed with politicians – which in any given moment can supersede any joy that comes from material success. Future fortunes are imagined in a vacuum, but reality is always lived with the good and bad taken together, competing for attention.
16. We are blind to how fragile the world is due to a poor understanding of rare events.
John Littlewood was a mathematician who sought to debunk the idea of miracles being anything more than simple statistics.
Physicist Freeman Dyson explains:
Littlewood’s law of miracles states that in the course of any normal person’s life, miracles happen at the rate of roughly one per month.
The proof of the law is simple. During the time that we are awake and actively engaged in living our lives, roughly for eight hours each day, we see and hear things happening at a rate of one per second. So the total number of events that happen to us is about 30,000 per day, or about a million per month.
With few exceptions, these events are not miracles because they are insignificant. The chance of a miracle is about one per million events. Therefore we should expect about one miracle to happen, on average, every month.
The idea that incredible things happen because of boring statistics is important, because it’s true for terrible things too.
Think about 100-year events. One-hundred-year floods, hurricanes, earthquakes, financial crises, frauds, pandemics, political meltdowns, economic recessions, and so on endlessly. Lots of terrible things can be called “100-year events”.
A 100-year event doesn’t mean it happens every 100 years. It means there’s about a 1% chance of it occurring in any given year. That seems low. But when there are hundreds of different independent 100-year events, what are the odds that any one of them will occur in a given year?
Pretty good, in fact.
If next year there’s a 1% chance of a new disastrous pandemic, a 1% chance of a crippling depression, a 1% chance of a catastrophic flood, a 1% chance of political collapse, and on and on, then the odds that something bad will happen next year – or any year – are … uncomfortably high.
Littlewood’s Law tells us to expect a miracle every month. The flip side is to expect a disaster roughly as often.
Which is what history tells us, isn’t it?
History is “just one damn thing after another,” said Arnold Toynbee. Dan Carlin’s book The End is Always Near highlights periods – from pandemics to nuclear war – where it felt like the world was coming to an end. They exist in every era, every continent, every culture. Bad news is the norm.
Even during what we remember as prosperous periods, like the 1950s and 1990s, there was a continuous chain of grief. Adjusted for population growth, more Americans lost their jobs during the 1958 recession than did in any single month during the Great Recession of 2008. The global financial system nearly fell apart in 1998, during the greatest prosperity boom we’ve ever seen.
The world breaks about once every ten years, on average. For your country, state, town, or business, once every one to three years is probably more common.
Sometimes it feels like terrible luck, or that bad news has new momentum. More often it’s just Littlewood’s Law at work. A zillion different things can go wrong, so at least one of them is likely to be causing havoc in any given moment.
17. The inability to accept hassle, nonsense, and inefficiency frustrates people who can’t accept how the world works.
Steven Pressfield wrote for 30 years before publishing The Legend of Bagger Vance. His career leading up to then was bleak, at one point living in a halfway house because it had cheap rent.
He once spoke about the people he met living there:
The people in this halfway house, we used to hang out in the kitchen and talk all night long, were among the smartest people that I ever met and the funniest and the most interesting.
And what I concluded from hanging out with them and from others in a similar situation was that they weren’t crazy at all. They were actually the smart people who had seen through the bullshit. And because of that, they couldn’t function in the world.
They couldn’t hold a job because they just couldn’t take the bullshit, and that was how they wound up in institutions. The greater society thought, “Well these people are absolute rejects. They can’t fit in.” But in fact they were actually the people that really saw through everything.
This may not have been Pressfield’s point, but it reminds of something I’ve long believed, and an insight into how so many people think.
If you recognize that BS is ubiquitous, then the question is not “How can I avoid all of it?” but, “What is the optimal amount to put up with so I can still function in a messy and imperfect world?”
If your tolerance is zero – if you are allergic to differences in opinion, personal incentives, emotions, inefficiencies, miscommunication and such – your odds of succeeding in anything that requires other people rounds to zero. You can’t function in the world, as Pressfield says.
I’ll tell you: So many people don’t have enough tolerance for BS. Maybe they’re not at the level Pressfield describes. But there’s a gap between their expectations and the reality of how the world works.
The thing people miss is that there are bad things that become bigger problems when you try to eliminate them. I think the most successful people recognize when a certain amount of acceptance beats purity.
Theft is a good example. A grocery store could eliminate theft by strip-searching every customer leaving the store. But then no one would shop there. So the optimal level of theft is never zero. You accept a certain level as an inevitable cost of progress.
A unique skill, an underrated skill, is identifying the optimal amount of hassle and nonsense you should put up with to get ahead while getting along.
Franklin Roosevelt – the most powerful man in the world whose paralysis meant the aides often had to carry him to the bathroom – once said, “If you can’t use your legs and they bring you milk when you want orange juice, you learn to say ‘that’s all right,’ and drink it.”
Every industry and career is different, but there’s universal value in that mentality, accepting hassle when reality demands it.