The complexity of our world, and the large global problems we have to contend with, require collaboration and compromise on a scale not yet attempted on this planet. Unfortunately it appears the world is moving away from those two virtues at the moment. The “What’s Interesting” section includes three pieces that help us to understand where we are and what we can do to move back in the direction of collaboration and compromise. These pieces are paired with Second Order Thinking in the “Mental Model of the Week” section and a “Meditation” from Marcus Aurelius that reminds us to compromise with our fellow human beings.
Let’s get after it.
What’s Interesting
+ American Disruption (Stratechery) - “There is one other very important takeaway from disruption: companies that go up-market find it impossible to go back down, and I think this too applies to countries.”
+ Why Trump Could Lose His Trade War With China w/ Tom Friedman (Ezra Klein Show) - “Humanity faces basically three existential questions. One is how we manage artificial general intelligence, and we are going to have to find a way to collaborate to make sure we get the best and push in the worst out of what is going to be a new species. That’s number one. Second, as a product of our development we have unleashed a level of climate change that we have to collaborate in order to deal with. And thirdly, I believe that the combination of all these stresses is going to blow up a lot of states, a lot of weak states, and you’re going to have zones of disorder. You already see that in some parts of the world. My view is that there are only two superpowers who can manage this, but only if they collaborate. The United States and China.” - Tom Friedman
+ EconTalk: Why Christianity Needs to Help Save Democracy (with Jonathan Rauch) - Editors note: I wasn’t sure what to expect from this episode, but it was a very interesting and worthwhile hour. I especially like the discussion about compromise that begins at 37:46 and contains this comment from Rauch:
“Americans today don't understand compromise because they think of it in the sense of compromising on your values. They think of it as, 'Okay: Two people walk into a room. They have different ideas. They split the difference. Both walk out unhappy.' That's not what compromise is.
Compromise is when the two kids can't decide whether to play chess or checkers and make up a new game of their own. Or go out and find a third and fourth kid and say, 'What do you want to play?' And, wind up playing something different. Or even, make up their own game--Chesters--I don't know. Compromise is a dynamic force where people are required to channel their disagreements by looking for new solutions.
What often happens in a compromise--ask any legislator--is, you walk out of the room with a better idea than anyone walked in with.”
Meditations
“When you first rise in the morning tell yourself: I will encounter busybodies, ingrates, egomaniacs, liars, the jealous and cranks. They are all stricken with these afflictions because they don’t know the difference between good and evil. Because I have understood the beauty of good and the ugliness of evil, I know that these wrong-doers are still akin to me … and that none can do me harm, or implicate me in ugliness-nor can I be angry at my relatives or hate them. For we are made for cooperation.” - Marcus Aurelius, Meditations, 2.1
Mental Model of the Week
Second Order Thinking
I often think of second order thinking as playing chess. A great chess player is always thinking about the consequences of the move they are about to make. They are thinking many moves ahead and across different scenarios relative to what moves their opponent is likely to make. Thinking of only the move right in front of you is a sure way to lose, and lose quickly, in the game of chess and in the game of life.
One simple way to build a habit of second order thinking is to always ask yourself what you believe will happen if you make a certain decision. What moves will others make in reaction to this move you are contemplating? If other folks make those moves, what position will you be in? Is that the position you want to be in? If not, it is time to start thinking of a new solution.
The evolving trade wars we are experiencing strike me as first order thinking writ large (though I am not a part of the administration and, therefore, can’t know if there is a grand plan underpinning all of these trade moves). It appears that the main issue the administration is trying to solve for is the imbalance of trade with China. Interestingly, China produces much more of the world’s output than it uses, which makes the issue important to the U.S. and to many other countries. Therefore, rather than raising tariffs on all of the U.S.’s trading partners at once, perhaps the U.S. could have brought their allies together and, as a combined front, began to slowly raise tariffs on China, which would have been more likely to minimize an all out global trade war and would have had a higher probability of bringing China to the table to work on a compromise.
Second order thinking is more important than ever given the large scale complex systems that underpin much of our modern world. Unintended consequences loom around every corner. Thinking about those consequences ahead of a decision can provide immense value.
Extra: A mental model that pairs nicely with second order thinking is Chesterton’s Fence. Here’s an explanation of Chesterton’s Fence from Econlib.org:
“Chesterton’s Fence is an argument against hasty abolition of laws, institutions, or customs, courtesy of G. K. Chesterton. Chesterton imagines someone coming across a fence in a field for which he sees no point or purpose. A reckless reformer might say “Well, I don’t see any purpose being served by this fence, so we might as well tear it down.” This is folly, says Chesterton. If you don’t see the point of something, that doesn’t provide a justification to eliminate it—it only shows the limits of your understanding. After all, the fences don’t grow in fields like plants—someone put it there for a reason. If you don’t know why the fence was built in the first place, maybe it’s there for a good reason.”
On The Night Stand
“Drunk: How We Sipped, Danced, and Stumbled Our Way to Civilization” by Edward Slingerland - From the publisher: “Drunk shows that our taste for chemical intoxicants is not an evolutionary mistake, as we are so often told. In fact, intoxication helps solve a number of distinctively human challenges: enhancing creativity, alleviating stress, building trust, and pulling off the miracle of getting fiercely tribal primates to cooperate with strangers.”
I read Drunk a couple of years back, but I was thinking about it recently given the younger generations’ lack of interest in alcohol. It seems pretty clear, if it wasn’t already, that alcohol (especially in excess) is not good for the body, but what do we lose when we cut out alcohol?
Drunk chronicles what we stand to lose from a social perspective and it shows how important alcohol was in developing civilization as we know it. For example, my ancestors, the Vikings, viewed alcohol as a critical part of social, religious and ceremonial life. Statements made while intoxicated were considered sacred and binding. In a way, alcohol was viewed as a truth serum. A way to quiet down the calculating mind and amp up honesty to improve collaboration. Perhaps this is why Faulkner said, “Civilization begins with distillation.”
Drunk shows us that, like many things, alcohol is not universally good or bad. Everything has its place.
In Heavy Rotation
+ Incubus: Make Yourself - It had been a while since I dusted this one off. It was in heavy rotation for me back in my college days. I always felt Incubus was very innovative and their hooks still hold up over 25 years later. Jose Pasillas’ drumming is still a big influence on my own playing. He is clearly talented and a student of the drums, but he doesn’t get in the way of the song and try to do too much. Instead, his playing compliments and elevates each song. Give this one a spin. It’s an oldie (cringe…), but a goodie.
Still Curious?
+ There are two types of dishwasher people - “Isn’t it amazing how the answer to everything is always the same? Pay attention. Trust the process. Seek to understand. Question your assumptions. Read a book.”
+ Making sense of venture capital’s AI paradox - “If AI is supposed to supercharge productivity, why are startups raising more money? Shouldn't they need less?” (Editors note: Jevon’s paradox is mentioned here. See last week’s issue for more on that.)
+ Melinda French Gates shares advice from Warren Buffett: I rely on it when ‘I get tough on myself’ - “If I get tough on myself about philanthropy, I remember what Warren Buffett said to us originally, which is, ‘You’re working on the problems society left behind, and they left them behind for a reason. They are hard, right? So don’t be so tough on yourself,’” French Gates, 60, recalled.”
+ AI has grown beyond human knowledge, says Google's DeepMind unit - “‘Powerful agents should have their own stream of experience that progresses, like humans, over a long time-scale,’ they write.”
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Until next week,
Eric