The Great Mental Models

And thinking better is about finding simple processes that help us work through problems from multiple dimensions and perspectives, allowing us to better choose solutions that fit what matters to us. The skill for finding the right solutions for the right problems is one form of wisdom.

The third flaw is distance. The further we are from the results of our decisions, the easier it is to keep our current views rather than update them.

We compound the problem of flawed models when we fail to update our models when evidence indicates they are wrong. Only by repeated testing of our models against reality and being open to feedback can we update our understanding of the world and change our thinking.

We run into problems when our knowledge becomes of the map, rather than the actual underlying territory it describes.

However, if the aim becomes simplification rather than understanding we start to make bad decisions.

First, having a general map, we may assume that if a territory matches the map in a couple of respects it matches the map in all respects. Second, we may think adherence to the map is more important than taking in new information about a territory.

For example, historians have shown that the modern borders of Syria, Jordan, and Iraq reflect British and French determination to maintain influence in the Middle East after World War I.10 Thus, they are a better map of Western interest than of local custom and organization. Models, then, are most useful when we consider them in the context they were created.

How do you know when you have a circle of competence? Within our circles of competence, we know exactly what we don’t know. We are able to make decisions quickly and relatively accurately. We possess detailed knowledge of additional information we might need to make a decision with full understanding, or even what information is unobtainable. We know what is knowable and what is unknowable and can distinguish between the two.

First, you have to be willing to learn. Learning comes when experience meets reflection. You can learn from your own experiences. Or you can learn from the experience of others, through books, articles, and conversations. Learning everything on your own is costly and slow. You are one person. Learning from the experiences of others is much more productive.

There are three parts to successfully operating outside a circle of competence: Learn at least the basics of the realm you’re operating in, while acknowledging that you’re a Stranger, not a Lifer.

Use a broad understanding of the basic mental models of the world to augment your limited understanding of the field in which you find yourself a Stranger.

Rather, first principles thinking identifies the elements that are, in the context of any given situation, non-reducible.

Socratic questioning generally follows this process: Clarifying your thinking and explaining the origins of your ideas. (Why do I think this? What exactly do I think?) Challenging assumptions. (How do I know this is true? What if I thought the opposite?) Looking for evidence. (How can I back this up? What are the sources?) Considering alternative perspectives. (What might others think? How do I know I am correct?) Examining consequences and implications. (What if I am wrong? What are the consequences if I am?) Questioning the original questions. (Why did I think that? Was I correct? What conclusions can I draw from the reasoning process?)

To improve something, we need to understand why it is successful or not. Otherwise, we are just copying thoughts or behaviors without understanding why they worked. First principles thinking helps us avoid the problem of relying on someone else’s tactics without understanding the rationale behind them.

So when we start with the idea that the way things are might not be the way they have to be, we put ourselves in the right frame of mind to identify first principles. The real power of first principles thinking is moving away from random change and into choices that have a real possibility of success.

We’re all born rather creative, but during our formative years, it can be beaten out of us by busy parents and teachers. As adults, we rely on convention and what we’re told because that’s easier than breaking things down into first principles and thinking for yourself. Thinking through first principles is a way of taking off the blinders. Most things suddenly seem more possible.

What you are trying to get to is a rough idea of how much it may have contributed to starting the war. The more scenarios you can imagine where war comes to pass without the assassination, the weaker the case for it being the critical cause. Thus, by exploring the realistic relationships between events you can better understand the most likely effects of any one decision. —

High degrees of connections make second-order thinking all the more critical, because denser webs of relationships make it easier for actions to have far-reaching consequences.

Being aware of second-order consequences and using them to guide your decision-making may mean the short term is less spectacular, but the payoffs for the long term can be enormous.

Second-order thinking needs to evaluate the most likely effects and their most likely consequences, checking our understanding of what the typical results of our actions will be. If we worried about all possible effects of effects of our actions, we would likely never do anything, and we’d be wrong.

Bayesian thinking allows us to use all relevant prior information in making decisions. Statisticians might call it a base rate, taking in outside information about past situations like the one you’re in.

For each bit of prior knowledge, you are not putting it in a binary structure, saying it is true or not. You’re assigning it a probability of being true. Therefore, you can’t let your priors get in the way of processing new knowledge. In Bayesian terms, this is called the likelihood ratio or the Bayes factor. Any new information you encounter that challenges a prior simply means that the probability of that prior being true may be reduced.

Finally, you need to think about something we might call “metaprobability”—the probability that your probability estimates themselves are any good.

First, never take a risk that will do you in completely. (Never get taken out of the game completely.) Second, develop the personal resilience to learn from your failures and start again. With these two rules, you can only fail temporarily.

Successfully thinking in shades of probability means roughly identifying what matters, coming up with a sense of the odds, doing a check on our assumptions, and then making a decision. We can act with a higher level of certainty in complex, unpredictable situations.

Avoiding stupidity is easier than seeking brilliance. Combining the ability to think forward and backward allows you to see reality from multiple angles.

Instead of wasting your time trying to disprove complex scenarios, you can make decisions more confidently by basing them on the explanation that has the fewest moving parts.

If all else is equal, that is if two competing models both have equal explanatory power, it’s more likely that the simple solution suffices.

Sometimes unnecessary complexity just papers over the systemic flaws that will eventually choke us. Opting for the simple helps us make decisions based on how things really are.

With this experiment, and a host of others, Kahneman and Tversky exposed a sort of tic in our mental machinery: we’re deeply affected by vivid, available evidence, to such a degree that we’re willing to make judgments that violate simple logic.

The first flaw is perspective. We have a hard time seeing any system that we are in.

A map can also be a snapshot of a point in time, representing something that no longer exists.

They seem to get in the way of what we want to accomplish. And after we do them a couple of times we realize that after one or two questions, we are often lost. We actually don’t know how to answer most of the questions. But when we are confronted with our own ignorance, we can’t just give up or resort to self-defense. If we do, we will never identify the first principles we have to work with, and will instead make mistakes that will slow us down in the long term.

argues that any small error in measuring the risk of an extreme event can mean we’re not just slightly off, but way off—off by orders of magnitude, in fact. In other words, not just 10% wrong but ten times wrong, or 100 times wrong, or 1,000 times wrong. Something we thought could only happen every 1,000 years might be likely to happen in any given year!

The second flaw is ego. Many of us tend to have too much invested in our opinions of ourselves to see the world’s feedback—the feedback we need to update our beliefs about reality. This

Thought experiments can be defined as “devices of the imagination used to investigate the nature of things.”

Assume you wanted to make it into the Fortune 500. Capital is necessary, but not sufficient. Hard work is necessary, but not sufficient. Intelligence is necessary, but not sufficient. Billionaire success takes all of those things and more, plus a lot of luck. That’s a big reason that there’s no recipe.

Understanding only becomes useful when we adjust our behavior and actions accordingly.

When we read the news, we’re consuming abstractions created by other people. The authors consumed vast amounts of information, reflected upon it, and drew some abstractions and conclusions that they share with us. But something is lost in the process. We can lose the specific and relevant details that were distilled into an abstraction. And, because we often consume these abstractions as gospel, without having done the hard mental work ourselves, it’s tricky to see when the map no longer agrees with the territory. We inadvertently forget that the map is not reality.

They are tools for exploration, not doctrines to force conformity. They are guidebooks, not laws.

Reality is the ultimate update. Consider the cartographer. Maps can influence territories.

you don’t have at least a few years and a few failures under your belt, you cannot consider yourself competent in a circle.

We don’t become Lifers overnight. It isn’t the result of taking a few courses or working at something for a few months—being a Lifer requires more than skimming the surface.

Second, you need to monitor your track record in areas which you have, or want to have, a circle of competence. And you need to have the courage to monitor honestly so the feedback can be used to

We don’t keep the right records, because we don’t really want to know what we’re good and bad at.

Finally, you must occasionally solicit external feedback. This helps build a circle, but is also critical for maintaining one.

They are the foundation on which we must build, and thus will be different in every situation, but the more we know, the more we can challenge.

If your “whys” result in a statement of falsifiable fact, you have hit a first principle. If they end up with a “because I said so” or ”it just is”, you know you have landed on an assumption that may be based on popular opinion, cultural myth, or dogma. These are not first principles.

called the historical counter-factual and semi-factual. If Y happened instead of X, what would the outcome have been? Would the outcome have been the same?

Certainly you have to know how to write well to become either, but it isn’t sufficient to become a Rowling. This is somewhat obvious to most. What’s not obvious is that the gap between what is necessary to succeed and what is sufficient is often luck, chance, or some other factor beyond your direct control.

But the sufficient set itself is far larger than the necessary set. Without that distinction, it’s too easy for us to be misled by the wrong stories.

Once a few people decide to stand on their tip-toes, everyone has to stand on their tip-toes. No one can see any better, but they’re all worse off.

The more extreme events that are possible, the higher the probability that one of them will occur. Crazy things are definitely going to happen, and we have no way of identifying when.

The first one is what Wall Street traders would call “upside optionality”, that is, seeking out situations that we expect have good odds of offering us opportunities. Take

Whenever possible, try to create scenarios where randomness and uncertainty are your friends, not your enemies.

Instead he thought about what the world would look like if women smoked often and anywhere, and then set about trying to make that world a reality.

One important counter to Occam’s Razor is the difficult truth that some things are simply not that simple.

Hanlon’s Razor states that we should not attribute to malice that which is more easily explained by stupidity.

When we see something we don’t like happen and which seems wrong, we assume it’s intentional. But it’s more likely that it’s completely unintentional. Assuming someone is doing wrong and doing it purposefully is like assuming Linda is more likely to be a bank teller and a feminist. Most people doing wrong are not bad people trying to be malicious.

It is extremely difficult to maintain a circle of competence without an outside perspective. We usually have too many biases to solely rely on our own observations.

thought experiment generally has the following steps: Ask a question Conduct background research Construct hypothesis Test with (thought) experiments Analyze outcomes and draw conclusions Compare to hypothesis and adjust accordingly (new question, etc.)

As popular—and generally useful—as counter- and semi-factuals are, they are also the areas of thought experiment with which we need to use the most caution. Why? Because history is what we call a chaotic system. A small change in the beginning conditions can cause a very different outcome down the line. This is where the rigor of the scientific method is indispensable if we want to draw conclusions that are actually useful.

Thus, running historical counter-factuals is an easy way to accidentally mislead yourself. We simply don’t know what else would have occurred had Cleopatra not met Caesar or had you not been stuck at that airport. The potential outcomes are too chaotic. But we can use thought experiments to explore unrealized outcomes—to re-run a process as many times as we like to see what could have occurred, and learn more about the limits we have to work with.

In other words, a thought experiment allows us to verify if our natural intuition is correct by running experiments in our deliberate, conscious minds that make a point clear.

To tackle the idea of smoking as a slimming aid, he mounted a large anti-sweets campaign. After dinner, it was about cigarettes, not dessert. Cigarettes were slimming, while desserts would ruin one’s figure. But Bernays’s real stroke of genius lay not just in coming out with adverts to convince women to stay slim by smoking cigarettes; “instead, he sought nothing less than to reshape American society and culture.”6 He solicited journalists and photographers to promote the virtues of being slim.

successful management of that change requires applied inversion. Here is a brief explanation of his process: Identify the problem Define your objective Identify the forces that support change towards your objective Identify the forces that impede change towards the objective Strategize a solution! This may involve both augmenting or adding to the forces in step 3, and reducing or eliminating the forces in step 4.

He linked cigarette smoking with women’s emancipation. To smoke was to be free. Cigarettes were marketed as “torches of freedom.”

Once we figure out our objective, we focus on the things we need to put in place to make it happen, the new training or education, the messaging and marketing. But Lewin theorized that it can be just as powerful to remove obstacles to change.