The Daily Stoic - Poker World Champion Annie Duke On Choosing the Truth

Episode Date: February 20, 2021

On today’s podcast, Ryan talks to World Series of Poker champion Annie Duke about making ethical choices, the overlap between Stoicism and cognitive psychology, how to objectively assess your own decisions, and more.Annie Duke is a former professional poker player and a bestselling author. She is an expert in cognitive psychology and co-founded the non-profit Ante Up for Africa in 2007 to benefit charities working in African nations. Her recent book, How To Decide, details how to be a more confident decision-maker. This episode is brought to you by Beekeeper’s Naturals, the company that’s reinventing your medicine with clean, effective products that actually work. Beekeepers Naturals has great products like Propolis Spray and B.LXR. As a listener of the Daily Stoic Podcast you can receive 15% off your first order. Just go to beekeepersnaturals.com/STOIC or use code STOIC at checkout to claim this deal.This episode is also brought to you by Trends. Trends is the ultimate online community for entrepreneurs and business aficionados who want to know the latest news about business trends and analysis. It features articles from the most knowledgeable people, interviews with movers and shakers, and a private community of like-minded people with whom you can discuss the latest insights from Trends. Just visit trends.co/stoic to start your $1 seven day trial.This episode is also brought to you by The School of Greatness podcast. Hosted by Lewis Howes it features interviews from athletes like Kobe Bryant and Novak Djokovic, influencers like Brene Brown and Tony Robbins, authors like Robert Greene and Tim Ferriss, and more. Subscribe to The School of Greatness on Apple Podcasts, Spotify, or visit lewishowes.com/podcast.This episode is brought to you by Scribd, the e-book and audiobook subscription service that includes one million titles. Scribd uses the latest technology with the smartest people to recommend you content that you’re going to love. We’re offering listeners of The Daily Stoic a free 60 day trial. Go to try.scribd.com/stoic for your free trial. That’s try.scribd.com/stoic to get 60 days of Scribd for free.***If you enjoyed this week’s podcast, we’d love for you to leave a review on Apple Podcasts. It helps with our visibility, and the more people listen to the podcast, the more we can invest into it and make it even better.Sign up for the Daily Stoic email: http://DailyStoic.com/signupFollow @DailyStoic:Twitter: https://twitter.com/dailystoicInstagram: https://www.instagram.com/dailystoic/Facebook: http://facebook.com/dailystoicYouTube: https://www.youtube.com/dailystoicFollow Annie Duke:Homepage: https://www.annieduke.com/ Twitter: https://twitter.com/annieduke YouTube: https://www.youtube.com/channel/UClDhEz5b55RH1ZfEZd7Y3hA See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Hey, prime members, you can listen to the Daily Stoic podcast early and add free on Amazon music. Download the app today. Welcome to the weekend edition of the Daily Stoic. Each weekday we bring you a meditation inspired by the ancient Stoic, something that can help you live up to those four Stoic virtues of courage, justice, wisdom, and temperance. And here on the weekend, we take a deeper dive into those same topics. We interview stoic philosophers. We reflect. We prepare. We think deeply about the challenging issues of our time. And we work through this philosophy in a way that's more possible here when we're not rushing to work or to get the kids to school. And we have the time to think, to go for a walk, to sit with our journals, and to prepare

for what the future will bring. Hi, I'm David Brown, the host of Wunderree's podcast business wars. And in our new season, Walmart must fight off target, the new discounter that's both savvy and fashion forward. Listen to business wars on Amazon Music, or wherever you get your podcasts. Hey, it's Ryan Holiday. Welcome to another episode of the Daily Stoke Podcast.

I was really excited about today's conversation, and I know my guest was to we ended up I think we talked like for 15 minutes before I hit record we just got way into it which is always a good sign with a guest and I've had a couple long dinner conversations with Annie Duke before so I knew this was going to be a good one. Annie is also an author at my publisher, Portfolio, an imprint of Penguin Random House. I loved her first book, Thinking In Betts. Her most recent book, How to Decide, is another awesome one. She's a bestselling author, but if that weren't enough as a former professional poker player, she's one more than

four million dollars in tournament winnings. And she's also an expert in cognitive psychology. So someone who has a lot to teach us about the sort of rationality elements of stoicism, but I think you'll be surprised at the ethical side of things that we get into as well. The stoics would say, you know, the ability to make good decisions in the abstract is worthless, right? To, this stoicism isn't about making you a better sociopath. It's about helping you get better at making the right decisions. It's about helping you be more rational and clearheaded

and more consistent at doing the right thing. So, professionally that might be for someone like Annie, making the right decisions at the card table. But you'll see her talk over and over again about the importance of making the right decisions as a member of a community, as a parent, as a citizen, as a human being in the world. We get way into that stuff.

She was telling me that, you know, she hears from Stoicism fans all the time. She thinks there's a big overlap between our works. I just love this conversation. I can't wait to share it with you. You're gonna like this. You can check out Annie's books, How to Decide Simple Tools for Making Better Choices

and of course Thinking in Bets, Making Smarter Decisions when you don't have all the facts. And you can follow Annie at at Annie Duke, A-N-N-I-E-D-U-K-E Annie Duke. And of course, you can follow her on her website, AnnieDuke.com. Thanks Annie for coming on, and she told me about her next book,

which I'm really excited about, so she will be on here again, airy soon. Okay, so I wanted to run something by you, where I think sort of your work in stoicism sort of connects. There's this line from Epictetus where he says sort of like the first, the moment you become a philosopher is when you possess the ability to think about your own thoughts,

to be able to sort of step back and analyze yourself from a distance. And it seems like that, that sort of the through line between your last two books, the ability to sort of think about what you think and how to do it better. Yeah, so I'm actually, it's funny because I have a lot of people who read my work, actually relate it to your work and ask me if I've read your work. Because I do think that there's an element of that in kind of two ways. You know, one is this real need to be able to entertain the idea that your beliefs are wrong, that you might hold false beliefs. And I think that's actually quite difficult. And then

then the other is what you just pointed out. This ability to sort of step back from your own thinking and view it from the outside. I think that's it's super hard to do. It's particularly hard to do when you're in the moment. So it's something that I think about a lot about how we can actually get better at that exercise of being able to step outside ourselves and examine our own thoughts and our own beliefs as if they're, like, if they're, as if they're an object that we're holding in our hands. It's kind of a contradiction because on the one hand, we have to sort of be very aware that we have, uh, you know, biased or incorrect thoughts. And on the other hand, there's this sort of, uh, trust one has to develop in oneself. And you would think those are indirect conflicts with each other, but maybe they're not.

Yeah, so actually, I think that one can't live without the other. So in this sense, that in order to be a really good decision maker, in order to, and I'm talking about real trust in yourself, like trusting that you're actually trying to find the truth as opposed to just some kind of certitude that you have the truth, which I consider sort of a different category, right? Is that it's this total acceptance that we're all deciding under uncertainty.

For two reasons, one is that we can't foresee the future. I'm not psychic. So the world is going to change. It's the world is stochastic and things change. And so I have to sort of recognize that what is true tomorrow may not, you know, today may not be what's true tomorrow may not, you know, today may not be what's true tomorrow. And then the other problem is that we decide behind a partial veil of ignorance at minimum, sometimes completely behind the veil of ignorance.

So there's only a certain, we don't know everything there is to know, because I'm non-amnitient. So I'm neither psychic nor amnitian. Sadly, I would like to be, but I'm not. So we are truth discoverers. Now, what's interesting is some people sort of hear that and they think, well, then how am I supposed to ever make a decision. But this is where we have to get to this kind of viewing ourselves from the outside and say, at any moment in time, when we're deciding, we have to trust that we have a good process that makes the best decision given the things that we know at the time.

But even though we can be quite decisive in the moment that this is the best decision for us in this moment, that's where we have to step back and say, but I'm still gonna hold those beliefs loosely because I have to be able to see when the world is changing. I have to be able to see when I get new information and I have to be able to see when I should

wanna change my mind and redirect my course. And that's how you can have total trust in your decision making capabilities because you're seeing it clearly for what it is. Yeah, part of why you're able to trust yourself is you know that you have or regularly do ask yourself the tough question. So people kind of go like, well, couldn't this be a huge mistake? And I think you have to honestly be able to go, yes. And I've thought about that a lot. Right. Yeah. I mean, I've thought about that a lot. I have trusted advisors. There's a lot of help in thinking about that in advance.

And so one thing is that people from the outside will see you more clearly than you see yourself. So it's really helpful to make sure that you're thinking about what's true of the world independent of your own perspective. That's gonna help you spot mistakes in the moment. But then also you can act as your own advisor because what I think is really

interesting is that you are different versions of you and more or less endowed to your own beliefs at different times in your life. So when I'm in the middle of a decision, I'm going to be quite endowed to my beliefs. I'm going to, I'm going to be holding on to those like extremely tightly and I'm going to have some inflexibility around the things that I believe in the course of action that I'm already on. What's interesting and I think that people can feel this is that if I think about my beliefs when I was 20 and the course of action that I might have been on when I was 20, I do

not hold those as tight and I'm much more willing to look at that person and say, no, here are the things that I think that person sort of had right, but here's the just incredibly long list of things that I think that that person had wrong. And I can actually do some counterfactual thinking if I could go back to when I was 20 here are the things that I would do differently. But if you ask someone to say that about this moment in time, what are the beliefs that you hold right now that you believe might not be true, they're quite poor at that. And when you ask them to sort of say,

what are the courses of action that you're currently on or engaging in that you think that you should change course on, they have trouble answering that. So then the question is how can we sort of harness that difference between like you today and you 20 years ago and help that to get a better view of ourselves that doesn't require an outside observer. And that's doing some time traveling of ourselves and saying, imagine it's a year from

now. And you find out that some belief that you had was mistaken or some course of action that you're on didn't work out. Why do you think that might be? And it allows you to sort of loosen up your hold on the things that you believe that can get you to a better place? And do you find really good decision makers, whether they're chess players or poker players or politicians or whatever, it can seem like they're trusting themselves, but really that trust is that over the years, it's like there actually is quite a lot of computation going along, but it becomes, like, their trust is earned.

So it might appear to be a gut decision, but actually a whole sort of set of processes has occurred and they're able to trust their gut because they know, I know that I'm mixing my metaphors a little bit, but like their gut decision was really a decision that ran through a really great mental model, they just sort of feel it at almost an intuitive level at this point. Yeah, so that's a really interesting question. There's a quote that I just posted from Obama that actually was sent out in Shane Parish's newsletter last weekend, which is just on this,

where he sort of talks about what people sort of view as gut as actually probabilistic thinking, which I think is what you're getting at, right? So there's a set of calculations and then also an understanding that you can't get to 100% certainty, particularly in the types of things that he was deciding, what he's pointing out is that if the decision got to him, what it meant was that somebody else couldn't handle it, so it therefore had to be a difficult decision where you weren't going to be able to get to any kind of certainty. So he had to understand that he had to be doing these sort of probabilistic calculations and then make the best decision he could given the information that he had at the time, which from the outside might sort of look like gut,

but it's actually quite a complicated decision process that's going on. So what I would say is this is that really good decision makers generally understand what a really good process is. And that process is going to involve this kind of probabilistic thinking. I mean, the famous example of that would be Jeff Bezos saying, he wants people to only have to be 70% sure before they go

and 90% would be too much, right? That you're gonna be getting too slowly. So that's like a good example of that. So what a lot of times what happens is that people sort of say then, well, I should be going with my gut, but that's actually not what you're doing. You're saying, I'm going to have some sort of probabilistic process. It's going to be something that I can take out and examine.

So when I say that things are going to occur 70% of the time, I'd like to know that over time, those types of things are actually occurring at that rate so that I can kind of close the loop. So, it's not so much that your gut might not be correct a lot of the time. It's that the process that you've practiced over and over again that's informing those gut decisions needs to have been robust at some point so that you understand how to think probabilistically. And then you should be willing to make the assumptions that are being made by your gut decision explicit in a way that you could then go back and examine them.

Because otherwise, what can happen is that you make gut decisions and whether they work out well or not, you come up with some reason why the gut decision was really good, because it's really easy not to hold a gut decision accountable. So when you look at like the passage from Obama, it's clear that what he's doing, you would be held accountable to because he's making those probabilistic forecasts like quite explicit when he's talking about it. And that's what allows you to go back and look at what was my thesis, what did I believe was

going to be true of the world that led me to this decision. So it doesn't mean that it has to be slow. It just means that you have to be able to go back and examine it. I think what strikes me about the Obamacoi, I think it's from Dean Aikus in the Secretary of State. He was saying that he watched sort of George Marshall and he watched Truman, who served both directly.

And he was saying that the problem with being a president, I think this is true for all leaders, is that basically, you never get to make good decisions as president, because all the obvious easy decisions have been done for you. And this isn't like a flaw of the system. It's like, if you have a good hierarchy, then you have chosen competent people who can make the obvious decisions and whom you have communicated what your desires are. So they're able to execute when it's clear.

So when it does get to the president or it gets to the CEO or it gets to the parents, right? There's some school at you or something. There is no easy clear answer or it would have not even come to you. And I think people struggle with these, I don't want to call them no win choices, but they struggle with choices that are like, it's not even choices, they're dilemmas. These people struggle with dilemmas. Yeah, so I think that, you know, it's quite funny. So when you get into a dilemma,

there's two ways to be in a dilemma. One way is that your standard for being willing to decide is too high. So this is the Jeff Bezos problem. So if you believe that you need to get to 90% certain in order to decide, you're going to be in a lot of dilemmas. So the fact is that, like, let's say that you're weighing two options, and one option is going to, you think you estimate is going to work out 70% of the time,

and the other option is going to work out 30% of the time. That's actually not a dilemma. That's quite a clear decision. So the issue for a lot of people is that they aren't willing to decide on something that's only 70%. So they'll go and try to gather more and more data trying to create more and more certainty around the decision, even when it wouldn't change the relative pricing of the two options. Right. Right. Like, the one option is clearly better. So we're not thinking about which relative is, you know, given that I have constraints on my time and whatnot, which option is relatively better. And in this purchase, it would be clear we're actually holding it to some absolute standard against certainty. And you can see these kinds of things happen, for example, in when people like persistent

endeavors too long, why are they doing that? Well, because they need the world to give them certainty that it's right to actually quit. Because if you don't have that certainty, then I have to sort of live in this regret of what could I've been. But if it's clear that I'm failing, then I'm willing to actually quit because sort of I've already failed, like it's already 100%. So you can see this kind of need for certainty

in a lot of places. So that's one kind of dilemma. And what I would say to people who are in that kind of dilemma is you have to think about the options that you have relative to each other. You shouldn't think about an option relative to whether you're certain about it because then you're going to be in too many dilemmas. So that's one type.

The other type of dilemma that people have, and this is quite common, they'll think that a choice is really hard because the two options are very close to each other. So these types of decisions I actually call sheep and wolf's clothing, just to kind of turn that red riding hood on its head. So I'll give you an example. Like, let's say that you're trying to decide between taking two jobs. And you really like, you really can't make a decision between the two of them.

Like they just seem like so close to each other. People will really get caught up in like horrible analysis, paralysis, trying to figure out which is the right job for them. But here's kind of the secret to this, is that the whole reason why that feels so hard is because if you were to think about given the information that you have, what's the expected value, how would I expect those two jobs to turn out or how, what do I think the probability is that I'm going to

be happy or fulfilled in those two jobs? It's hard because they're identical. Because given the information that you have, which doesn't involve a time machine and seeing how you actually like being in that job, there isn't anything that distinguishes them from each other. So then what happens is that we spend a whole bunch of time trying to try to parse that apart, which has two problems. One is that you can't, because you don't have the information to be able to do it. You just don't have the cognitive acuity to be able to figure out what the difference between

those two opportunities might be, whether it's two jobs or in the olden days before COVID, going to Paris or Rome, or even choosing between the chicken and the fish on a menu where we know people will sometimes take 15 minutes with that decision. The problem is their identical choices as far as your cognitive acuity is. At which point, honestly, you should flip a coin and relieve yourself of the dilemma. So those are sort of, you know, what's interesting is that for most things, it's kind of a false dilemma,

that we create the dilemma for ourselves by not seeing the decision through the right frame. Sure. And what I mean sort of by hard decisions also is like, and I think the last year has been a great example of this with the pandemic, where suddenly the stakes are much higher than like the ordinary decisions, right? Like if we're bad at decisions between like chicken or fish, as you said, how do you choose between like sending your kid to school and not sending your kid to school? It's like there's

school and not sending your kid to school. It's like there's sort of either way, there's real costs and quite a bit of uncertainty. And I think it's been fascinating to watch and horrifying to watch, of course, but just how bad people are at making decisions and people, and I'm not talking like society, I'm just saying like I think all of us have friends and you're like, wow, this is a person who went to Harvard,

this is a person who picks stocks for a living. This is a person who's, holds public office, and then you sort of look at their decisions, and then you talk to them about their decisions, and you're like, this person not only doesn't know what they're doing, but their reasons and their choices are in direct conflict with each other. You just realize like how difficult it is for people to be rational and to be clear and to be consistent with their choices because life is complicated.

People are busy and as we started off, we have so many biases and sort of emotional forces that confuse us. Yeah, so it's interesting. Like one of the things that, so the bias blind spot is quite a robust phenomenon. And that's basically that we don't see our own bias very well. We see it very well in other people. And so I think one of the lessons from what you said is to recognize that if you're seeing that

in other people, you should be very suspicious of your own decision making. Right. Which we tend not to be, right? So we spend a lot of time talking about other people's bad. And I'm not saying you were doing this. I'm saying in general, this is like people talk about other people's bad decision making, but then they don't think that that might be occurring for them. Right. be occurring for them as well. So that's something. And by the way, I do that all the time too. Like, I'm like, oh, that person's an idiot. I'm so smart. So, so. And that's what my wife and I spent a lot of time talking about. You're talking to someone

and it's like, it's obvious what they're doing is insane. And then you have to stop and go. And I'm sure they are having the exact same conversation with their spouse about us at this very moment. Right. Exactly. And by the way, like this is something in COVID that you see a lot, like people who are being very, very risk averse versus people who are not being risk averse. And it's almost like a tribal fight. Right. Like you're an idiot. No, you're an idiot. You know, like, okay, well, okay, I can give you my reasons for why I don't leave my house and I'm happy to do that, right?

So yeah, so I think that this is an issue is that we need to recognize really how much bias is driving our decision making. And I think that one of the best frameworks for thinking about that comes from Coniman and it's the inside and outside view. I actually have a whole chapter on that and how to decide.

And what we need to recognize is that, when we're making decisions and this comes from gut decision making, it would be that you don't allow to be examined. So this would be when you're just like, one of these like I can look founders in my eyes and in the eyes and don't question me, which is hopefully you don't think that way.

But so when we think about our decision-making, the inside view is the world kind of driven by our own beliefs and our own mental models and the mental models that we tend to apply to problems, the information that we have, we tend to cherry pick the information. And that's really where the cognitive bias lives. So we can think about like, for example, like the way that we reason about information is motivated to reinforce the beliefs that we already have. So that's going to be an inside view problem because

those are my beliefs that I'm trying to reinforce. So I'm going to notice information that confirms my beliefs. When I see information that disconfirms my beliefs, I'm going to find a, I'm going to pretty much write a dissertation on why I should reject it. We tend to be very good at that type of process. Confirmation bias, overconfidence obviously would be an inside view problem. I can go through the illusion of control that we can control our futures much more than we actually can. That's obviously an inside view problem. So what we want to do is try to find ways to get to what Connemon would call the outside view, what's true of the world in general. So it doesn't matter if I think the Earth is a trapezoid, it's round, regardless of what type of right thing. But also the way that other people would view

the situation that we're in. So two people can be looking at the same set of facts and they can come to different conclusions about it. People could actually look at the same set of facts, apply the same model to it, where that then gives you an answer like the chances of success are 70%. And the two people would still come to different conclusions about what you're supposed to do with that information. So it's helpful because other people have different facts. Other people have different ways of viewing the world to allow your view to collide with people who hold a different view than you do. And that can help us start to discipline

some of these biases that we have. And what's interesting is like, and this is a lot of the work that I do with companies, is that the way that companies are set up is actually not to take advantage of the fact that you have lots and lots of different people on a team and hopefully a lot of cognitive diversity. And a lot of people who have different mental models

and different perspectives and different ideas that you've assembled this team. We're hopefully that's the way that the team thinks, but you don't actually and fall in the creative groupthink and bandwagoning and things like that. And so that they just become like one big expression of the inside view. So this is happening not just in our personal lives, where we sort of get into these kind of echo chambers, but the way that a general like decision process and a corporation goes is also amplifying the inside view as well, which is where a lot of our problems are coming from. Got a quick message from one of our sponsors and then we'll get right back to the show.

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Follow Baby This Is Kiki Palmer, whatever you get your podcast. Hey, prime members, you can listen early and at free on Amazon music. Download the Amazon music app today. Yeah, that's been helpful for me during COVID is sort of stepping, stepping back and thinking like, okay, what are my kids going to think about this decision in 10 years, right? Or in 20 years. And sometimes you'll see like crazy people say stuff on the internet.

Like in retrospect, we're all going to look back at this and think we way overreacting. And it's like, that's just, if you have any sense of history, we're not going to look back and see a thing that killed as many people as the second world war by the time we're done. And as an overreaction, that's just not how it's going to go. But I think about these decisions, were we making this decision because we were afraid, were we making this decision because we were thinking of expediency, or were we thinking of this decision as to what is going to be true and appear to be true when the dust has settled? as to sort of what is going to be true and appear to be true when the dust has settled.

And I think you watch a lot of people make sort of decisions that, you know, I'm just done. And it's like, the facts don't care if you're done, or like the fact that you're tired, or that you've been really good up until this point. You know, like you watch a lot of factors pop into people's thinking that has nothing to do with the underlying calculus that they have to be making. You know, like the fact that you've been, like this is the Sun Cosfalsy,

the fact that you've been in lockdown, let's say for 10 months, does not have any input on whether, on what is a good decision tomorrow, right? It's only the facts that are true when you wake up tomorrow morning that should be incorporated into that decision. Yeah, so yeah, I've been thinking about some cost fallacy and like escalation traps, like escalation of commitment and that kind of thing quite a bit recently actually for the for the next book that I'm writing. And I think that's true.

It's like, that's a big problem. And then the other one, which you touched on, is your time horizon. So this is kind of like the little kid in the target problem. When you're in target with your two-year-old and they're screaming for the toy, are you giving them the toy now just to be quiet so you could not be in that kind of pain, right?

Or are you thinking about, is this gonna be good for my child when they're 10? And I think that a lot of times we come down on the side of I just don't wanna be in pain right now, right? And I think for the point of this, out when you said like, what is my child gonna think of this decision in 10 years? Yeah, okay, so they're sad because they're not in school

or they're sad because you're not letting them go over to a friend's house and play, right? But in 10 years, how are they gonna look back on that decision? Are they gonna be pissed at you that you didn't let them go play? I mean, I think this is a really good answer. And when we think about where we started with that idea of like the way that I view myself when I was 20, right, is like, is like so different than how can you sort of get

out of the moment? And what you just talked about is a way to get out of the moment, right, to become your own advisor, to become your own outside, you know, advisor, to help you to get to more rational decisions and to say, how am I going to think about this in 10 years or how will my child view this in 10 years? To allow you to get out of that, I just don't want to be in pain right now. I just don't want my child to be sad today, right? Or I don't want to be sad today. When I was thinking about dropping out of college, I had this sort of mentor who I was

going to go work for and I remember I was like, you know, what if it doesn't work out? What if it blows up my face and I have to go back to school and then I'm behind. And he said he's like, when I was like a junior in college, he's like, I got really sick with something and I spent a year in the hospital. And I was like, wow. And he's like, do you know how that has affected my life ever since? It is like not at all. It's literally never come up. Nobody cares that I graduated college when I was 22,

instead of 21. Right. You know, it didn't affect me in any way, other than I spent a year in the hospital and that was hard and I had to do that. And that was, that's really helped my time horizon, not just then, but even in something like COVID or even something like, I think about this,

it's like you're in an argument with your spouse and like things have been rough around your house for a month and you're like, okay, but if we're gonna be married, ostensibly forever, who cares if this is a rough month? I think a lot of times you get so caught up in the urgency of it, and I think people have really struggled during the pandemic. They're like, I kid can't miss out on school for this long,

or what about socialization and blah, blah, blah. It's like, if you were taking a sailing trip around the world, some amazing opportunity, you would be, this is so great for my kid. You wouldn't be thinking like, but they're not on the slide with their friends. I try to sometimes think about other alternatives that take the same set of facts, but reframes them. And I see how I would not be upset then, and I would not be worried then, and I would not be taking it so seriously then. And then I go,

oh, okay, so really this is kind of a free period. I don't need to sweat this thing at all. And that's been helpful for me like 10 months. Like, you know, you could, I could take a 10, a 10 month vacation. And I think that this, that 2020 was the best year of my life. And sometimes I've, I found that by reframing the decision in a different perspective, it totally turns down the volume on how

seriously I have to take it. So I have it. So I think that's amazing. Like that's such a great way to get to the outside view on your own. It's to think that the one that, so I've tended to use, you know, a lot of time traveling strategies. So like when my kids are pissed that I grounded them, I'll say this is going to be so great for you when you're at the Thanksgiving table when you're 40. You're so excited to be telling this story.

Right. And that usually comes them down. I've done. I've thought about a situational travel just in terms of if I were advising somebody else. somebody else, how would I advise them? And that's been helpful. But I haven't done what you just said, which I think is another great tool to put into your kit, which is imagine it's the same circumstance, but a different situation. I've somehow not seen people for 10 years, for 10 months, and whatever, but I'm on a yacht. I do think that that's actually a really, really good,

another way to get outside of your situation and be able to see it from the outside better. Yeah, it's like, let's say you just got unjustly fired from your job and you're like, this is so horrible. This was a huge injustice to me. I hate this place. How could I have spent time here blah, blah, blah. And so that you feel very disempowered. to me, I hate this place. How could I have spent time here blah, blah, blah.

And so that's that you feel very disempowered. But if you had quit the day before, because exactly. And it's the same outcome. You don't work there anymore. And you can choose to tell yourself whatever story you want about what happened. You can say, I was the victim, I was screwed over, or you can say, I was fired because I don't suck like everyone else who works here. Like you choose that story.

And I think oftentimes we, we choose the bad story and worse, we choose a bad story to justify bad decisions. That's the rough work. True, yeah. And I would even say that I love to try to get to second order thinking, which it would be like, I was fired because I wasn't a good fit for the company. Or, and so that's good.

That's good that I discovered that, because I should try to be at a place where I fit with them, you know, that we're all happy. Another thing that you can do, and this is some, you know, poker players have to do this all the time, because sometimes you play like crap, right? I was fired, and let me actually try to figure out why I was fired so I can be stellar in the future, because if I don't take the lesson from that, I'm really missing out on an opportunity. I need to view this

as an opportunity that I was fired. It's an opportunity for self-discovery and learning, right? If not just, even if it was unjust, that I need to think about what the signals were at that company that they were unjust things going on, so they don't end up at a company like that again. You might do. I, you know, so I love to get to sort of the second order like, you know, we don't wanna think about things as either good or bad.

And we wanna understand like what's the good that you can take from situations that are occurring in your life and try to figure out how you can turn those until learning moments in order to become a better decision maker. And I think that that's so important because of something that you said that it's so easy to, again, thinking about this time problem to, to interpret something that's happened in a way that protects my identity today at the sacrifice of my long-term well-being. So if I get fired and I just say it was unjust, it was so unfair, that was so mean to me, I get to preserve the idea that I'm a great employee and I'm a good person and there's nothing that I could ever do that where I should deserve to be fired and that's a big like that's really good for myself narrative. But it's probably not good for my long-term

well-being because maybe there were reasons that I was fired that I actually could have done better in my job and I should be willing to explore that. So in order to preserve my identity today, I'm losing out on the opportunity to actually create better outcomes for myself in the future by trying to figure out how I might improve my decision-making and my reform is going forward. And most of the time, when we're faced with that trade-off, should I protect myself today

or protect all the versions of me that are going to occur in the future that should like to create better outcomes because I learn from what's happening in my life and I become a better decision maker. When you're faced with that choice between those two people, you'll choose you today. And that's actually really harmful for your long-term well-being. Right, you're choosing not to learn from the situation at the, you're choosing to preserve your sense of self over your ability to learn from what's happened.

Right, so you can think about like the, the, the, the, it's sort of a paradox, right? Like if I were thinking about what what what's gonna actually generate a really positive self-image for me? Right in the long run and in the long run what's gonna generate a positive self-image is like I'm gonna have great outcomes I'm gonna achieve my goals and that doesn't mean like I'm gonna make tons of money because that might not be my goal, right? My goal might be like I want to be an amazing member of money because that might not be my goal, right? My goal might be like, I want to be an amazing member of the community and I want to be an incredible parent and, you know, a really amazing spouse or whatever your goals are, right?

So you're thinking about what, what, you know, that's ultimately like achieving those goals, the things that we strive for and increasing the probability that you're actually going to achieve those things, that's ultimately what's going to be what determines the way that we view ourselves, right? So that's like having the long view. But what happens is that we think about, you know, when we're in the moment of something bad happening to us, we sacrifice the, we basically lower the probability that ultimately we'll end up thinking well of ourselves. In order to take the shore like I think well of myself this moment. And I think that that's that problem is

that tradeoff between now and sort of all the versions of me that are going to exist after now. Yeah, you talk, you talk in the book about that idea of resulting sort of letting the results sort of determine whether something was good or bad and being sort of to attach the results. I find that to be so tricky. It's not just giving yourself credit

for things that you don't deserve, that's tricky. This is where the ego thing comes into play. It's, it's, and we're seeing this play out politically right now. What happens when it doesn't work out? That's actually where the ego and the identifying too much with the results is really insidious. Because now you're incapable of losing, you're incapable of getting fired, you're incapable of being wrong, you know, you're incapable of being wrong, you're incapable of looking foolish. And so instead of facing the facts and having to own that discomfort, you create an alternate reality where it wasn't your fault, it didn't happen, so on and so forth.

So to me, the safest and most rational position to be is to like really focus on the decision, really focus on the action. And then you kind of have to kiss the other part up to God. Like you have to say, like the result is the result, it doesn't reflect on me either way. Yeah, so like, for example, like you had mentioned sunk cost, when you look at the research at Smedana and sunk cost, what you just talked about is kind of one of the only things that actually reduces that behavior, which is to say the outcome of any single decision is not indicative of my decision making

capability. When you do that, and when you say what really matters is the process that I use to make decisions, and if you can create that kind of accountability to process as opposed to accountability to outcome, that can relieve some of these sunk-cost traps, right, and some of these escalation traps. Because otherwise, what happens is that as the world, you know, I think that we have this intuition that if we enter into our course of action or we make a particular decision that when the world in the future tells us, hey, by the way, like maybe that wasn't the best thing to do, that of course we're all gonna say,

okay, that wasn't the best thing to do. I now change my mind, I'm changing my beliefs, I get it. But we know that that doesn't happen because we have all these traps that we've been talking about. We know that when the world delivers you that news that maybe what you're doing, you should reconsider, we don't reconsider. We hold very tight to the things that we believe

and we do it's actually what you just said, is we find all sorts of reasons that we get to reject it and hold on to our ever tighter belief that the things that we believe are true. And then there's actually a kind of interesting paradox, which is that we know that a lot of times our actions inform our beliefs. So now we can get into this vicious cycle. As we start to reject these negative signals from the world in order to preserve

the things that we believe as true and that we're on the right course of action, that actually ends up reinforcing the beliefs that we have. Because otherwise, why would we have rejected those facts in the first place? If the things that we believed weren't totally true, we wouldn't have rejected those facts. And now you can see this spiral, where in some ways, the more bad information

that you get, the more that you end up entrenching in your beliefs, I think that one of the best examples of this is so back in the 50s Leon Festinger was really interested in these kinds of problems of how do we process outcomes that are sort of contradict what we believe to be true about ourselves and particularly our identities. And there was a doomsday cult that believed that humanity was really awful. And there were aliens that were going to come down and destroy the world, but they were going to save the pious few, the true believers.

So there was a particular date that this event was supposed to happen. It was supposed to happen at midnight on a particular date. So, festering are actually joined the cult of like a week or something before this was supposed to happen. Like right before this was supposed to happen because he wanted to understand what's going to happen when the aliens don't come. Right, are they going to all go, duh, cult disbanded, right? Or are they going to entrench in their beliefs? And I think that what happened is so it's really illuminating. So the date comes and it's midnight. And of course the aliens don't come. And everybody sort of a little bit confused. And then somebody says, this clock is wrong. The clock in the

next room is right because there was like a five minute difference between the clocks. So they all go running to the next room. They look at that clock and it becomes midnight. So now the question is what happens. And it takes a little bit like everybody's a little bit uncomfortable at first, but then it happens. We were so devout in our beliefs that we've saved the world temporarily. And now there's a new date when the aliens are going to come and destroy humanity. And that's the power of that, right? Like, if your whole identity is wrapped up, I mean, these people have probably rejected their families.

They've rejected their careers and their, I mean, this is who they are. They are true believers in this. What do you do when it turns out not to be true when the world tells you it's not to be true? You know, it's not true. You're fine to waive for it to be true anyway. Got a quick message from one of our sponsors and then we'll get right back to the show. Stay tuned. Yeah, it's because cognitive dissonance and I think, you know, that's where we are, you know,

politically right now. It's like how can you, how can someone come to terms with the magnitude of either what they've been directly complicit in or sort of tacitly been sort of fooled by? It's the trickiest thing in the world. I love that expression. You can't reason a person out of a position they didn't reason themselves into. I don't know what the answer is, but it is a very tricky situation where when people get their identity tied up with what they believe, and then the more severe or the more extreme the things they have done as part of that identity,

it becomes harder and harder to ever come back from that. And quite frankly, I'm not sure if people can come back from it at this point., I'm not sure if people can come back from it at this point. I mean, we've seen how far it's gone. I'm not sure if you can come back from that. Yeah, I mean, I think that that's true. And you can see it's like, it's that,

what are the actions that you have taken, that I think are really different. So like someone who voted for Trump in 2020 is going to be in a very different position than for example someone who's stormed the Capitol. And you might say, oh well of course, but the people who stormed the Capitol had a stronger belief that the people who merely voted for him. But if somebody just couldn't get to that demonstration, but they would have gone if they could have, they're also in a much better position. Right, we're just people who stayed outside,

people who stayed outside, much better position than the ones who went inside. Right, because our actions really do inform our beliefs and the more that we act in a way that would prove that we believe the thing that we do because that the action would have to generate from that, the more entrenched in the beliefs that we become. And interestingly enough, like this isn't just having to do with things like that, this has to do with like, for example, subject matter experts, right, who obviously have incredibly strong models of the world. Even when the world is sort of giving them information that they might want to change their model,

they won't. They're so deeply entrenched because every moment that they've breathed, you know, this expertise that they have, it's now part of their identity. You see this, like, there's really wonderful worth it. Marie Schweitzer and Katie Milkman did where they just looked at analysts, stock market analysts who took very out of consensus and extreme opinions

on particular stocks. And then you check in with them like a year later when it turns out that those extreme positions didn't actually come true and you ask, well, what happens with them? And they actually escalate their commitment to those positions. Right. Right. So now imagine if that's happening with a stock analyst, someone who we might think is quite rational. Right. What happens when you start to get into these sort of broader problems that we're sort of

now seeing play out on the national stage? And it's a big conundrum because this is very deeply part of our mind where? Well, the other thing, you know, there's that zen saying about like we shall see, you know, like where we tend to try to evaluate the good or badness of something far too early. Like I think you I saw this play out in an interesting way right after the election. And I don't think this is political at all. But it's like, so obviously the polls for Biden were sort of very, very favorable. And then election night came in and it seemed like sort of immediately

all the models had been wrong. And people were ready to basically string up some like Nate Silver and Nate Corden. And then as the evidence, and they were about to, you know, Biden's campaign was a failure and a huge mistake and all this stuff. And you know that Trump had sort of outperformed in all these different areas and then he was looking good. And then over the next three or four days, the numbers shifted again and then the numbers

shifted again. And now, you know, two months out from the election, we have sort of a different narrative. I think the other realizing that people try to sort of wrap things up very, very early, and that you have to kind of have a sort of a zen element of like, I'm gonna wait and see before I cement this in my mind as to what it is, is to me also a really key sort.

Like, you know, when we say that word to be philosophical, we think that means like being wise, but I also think it means that kind of taking that longer view, not not jumping on things, like even I'm sure you've seen this with your own books. Certainly I have books that I thought did great when they came out have turned out not to hold up over time as well as I would have liked. And other books that came out of the gate slow have over time accumulated and even accelerated to the point where I now look great for it. But if I was really being honest with myself, I not only didn't think this would happen, I was kicking myself in the months after it came out for having failed.

So this idea of not only does nobody know anything, the famous William Goldman line, but it's way too early to tell is another thing I think about. Yeah, so I love that you're talking about this because I think about what is your time horizon? I think this matters so much., what is your time horizon? Right? I think this matters so much.

So I love your example of the election, right? Like on election night, it was, oh, the forecast was really going to have to have a, you know, a come to Jesus because they were so wrong. And then when it was clear that Biden was going to win, but everybody sort of felt like it was going to be close, then it was like, wow, they're still going to have to have to come to Jesus because this was a really close election. And they're going to really have to think about it. And then of course it turned out to be a landslide. Right. Right. So I think that that's such a good point. And I know like one of the things that I think about is luck. So and this is something that's in Nicholas Resher's book of the same name luck

that was, I think he published that in the late 90s It's a it's a great you would actually love it So I really recommend that you read it if you haven't and your listeners would love it and one of the Is it by Nicholas Resher? Okay, and the name of the book is luck it's short. It's a very quick read Not that well. No, it's like about the size of like a Seth Goden book. Like it's not long, but it's amazing. And so one of the things that he really talks about is that,

you know, we have this need to label luck as good or bad. And that we need to recognize that luck is just luck for two reasons. Good luck for me might be bad luck for you. Right. So we need to think about what perspective and that's kind of the point need to think about what perspective, and that's kind of the point that you made about,

like, does it matter if I'm on a yacht or it's COVID, right? We need to think about what are the different perspectives, how would this look from the outside, for example. But then the other problem is that it depends on your time horizon. So with luck, it's like, is it good luck or bad luck? I don't know, we shall see. And I've thought about this for myself. I mean, right at the end of graduate school,

I got really sick and I ended up in the hospital and I had to delay all of my job talks. And it meant that I had to wait until a year to go back out onto the job market. And I can tell you at that time, I felt really unlucky. I was like, why is this happening to me? This is so, you know, all the things. It's so unfair and I'm sick and blah, blah, blah,

and all this stuff. And I was really sad. And I felt like very bad luck had occurred. But it was in that year that I started playing poker. What good luck? But I only can recognize that it is good luck because I'm a, you know, a long time away from it. And I think that we need to view luck as luck.

I don't think that we should be putting these labels on it. Because we, as you just said, like, we don't know. So the question then becomes like, why should be putting these labels on it, because as you just said, we don't know. So the question then becomes, why do we need these labels? Why do we need to kind of not leave it as an open thread and say, I need to wait a while before I make any kind of judgment of this. And it's because most people have, Phil Tatluck has done work on this

who wrote super forecasting, but a lot of his earlier work was on sort of cognitive styles. A lot of people have a very high need for closure. And so we don't, just as human beings, a lot of us, we just don't like to leave those things open and unjudged because it means we're sort of saying, we're in the middle somewhere. We're not yes or no, we're not bad luck or good luck.

We're not right or wrong. We're allowing ourselves to allow things to play out and to entertain the possibility that we're somewhere in the middle. And I think that it's a really important cognitive style to try to develop for yourself. Because a lot of these things, even when we're talking about something like escalation traps or some cost or or motivated reasoning, these are actually related to this need for closure. And so the more that we can allow ourselves to be open, you know, not just open-minded to like

other people's ideas, but open-minded to the idea that we don't know what you know what things mean. We don't know what is true. We don't know whether things are good or bad, good luck or bad luck. I mean, sometimes it's clear, but a lot of times it takes time to play out. If you can develop that in yourself, you're going to be a lot happier. But I don't think you're being quite fair to yourself, right? It's not that you, because you got sick and then you had to take a year pause, it's not like, then you won the lottery. So is that good luck or bad luck? It's that you were out of the job market

and then you did what the Stokes talk about, Mark Sturis, is good fortunes what you make for yourself. It's that you decided to start playing poker. And sure, I'm sure there was serendipity involved and you were exposed to it or you got the opportunity because of this or that. But the good luck was something inside your control and that it was something you chose to do.

So I think often we have this sort of deterministic, like I was, I'm writing about this in my next book. We talk about this idea of moral luck. And I was talking about the sort of the Victorian era. And Churchill has this line of how it was, you know, an era of great men, but small events. But I went and I sort of looked at the things, injustices in the world, and the bad things that did happen during the Victorian era that just nobody chose to do anything about.

And it sort of makes that idea of moral luck. Yeah, sure. You know, we weren't drafted to fight in World War II because we weren't born. But that doesn't mean horrible things aren't happening right now that we could do something about if we decided to assert some agency over our own lives. So I think oftentimes people sort of look at things as good luck or bad luck when really they should be thinking of sort of look at things as good, like, or bad luck, when really they should be thinking of sort of luck as something one makes for themselves. Yeah, so yeah, so I'm gonna come down somewhere

in between, I think, those two positions, which is, and this is something I've been thinking about, like what happens when someone is forced to quit, right? So what I, obviously, when I get sick and that happens to me, I could just spend the whole year in my house being sad. And I did not choose to do that. So I completely agree with you there is that I said, okay, this has happened. What can I make of it? Where I think that it was really good luck is that it forced me to explore other options besides academia. And it should, and I otherwise wouldn't have. And that's why I consider it good luck

because I think that had that not happened, I would not have done that exploration. And I may have had, by the way, quite a nice life in academics. That could, that certainly could have been. But regardless, I think it was a good thing having been in school every second of my life up until the time that I was 26 years old. I think it was a good thing that I was forced to go and explore. So that's where I think the good luck, that's why I call it good luck.

Because it made me actually go explore. Now what I did with that exploration for sure, it's a mix of luck and skill, right? Like, I was in the right place at the right time for poker and I had talent for it and I was willing to go do that and not just feel sorry for myself and so and so forth. And I'm perfectly happy to take credit for that. But the fore-

And there's definitely good breaks and bad breaks. So I would never dispute that. And I think Bill Walsh talks about this and the score takes care of itself. He's like, at the end of the season, whether you win the Super Bowl or you go O and 12, you have to look at the bad cause and the balls that bounced out. And the injuries, there's definitely good breaks and bad breaks.

And also, we all have good breaks and bad breaks. And you know, also, you know, we all have good good breaks and bad breaks as far as when we're born, where we're born, who we're born to. It can be very self-serving to pretend those things don't exist as well. Yeah, and I think that I would add just circling back that again, we have to remember that something that feels like a good break right now might, with time having passed, actually, you might feel like it was a bad break. And something that feels like a bad break right now, with time having passed, as you look back on it, might feel like a good break.

And I think that's why we should, as you pointed out, we should be better at sort of withholding judgment and not need to close that loop right away and just like no in this moment and allow time to pass and allow the passage of time to kind of give us a better perspective on how we should process what that is. You talked about something else in the book that I think pertains to this or maybe you disagree, but you talked about finite else in the book that I think pertains to this, or maybe you disagree, but you talked about sort of finite goals versus infinite goals.

I see people sort of get themselves into trouble, right? Like when I work with authors, they'd be like, my goal is to sell one million copies. And I go, why do you have a goal? You know, like why have a goal at all? Like obviously the goal should be for this book to do as well as it can possibly do, right? Which no one actually knows what that number is.

That number could be 10,000 or that number could be 10 million. I actually think maybe the other stoic idea, you sort of detach from results a little bit, you kind of just have a vague directional sense of where you wanna go. So then you can be flexible. And then honestly, also there's less of such a thing as good or bad luck, right? Like if my goal is to like

make a great book that has impact in the world, it's somewhat semantic here, but that is an easier target to hit because it can be redefined based on the things that occur in the world as opposed to forcing myself into this binary win loss mentality that doesn't actually exist on a product like this. not just to be unhappy, but to be unsuccessful because you've constrained yourself. Yeah, so gosh, I got a couple of thoughts about this, because that was so good. So thought I think the more that we can disconnect our identities from something that is very finite and like super concrete and well defined in terms of the things that we're engaging in, the better off we are. So what immediately comes to mind is like this idea of like what do you want to be when you grow up? And the answer is like doctor. As opposed to I'd like to be a good member of the community who does a job that has these particular features, right? Or like simply like, are you do you want to grow

up to be a scientist or do you want to grow up to do science? And I think that there's a really big difference between those two things that's got a very similar flavor to me with between like, you know, I want to sell a million copies versus I want to write a book that has impact in the world, right? Because it could have amazing impact in the world if exactly the right person reads it, right? So, so, you know, I, so I'm going to get like a sort of weirdly philosophical. So, I, when I was in high school in my junior year, I had to take a religion. And I just said, say, I'm not religious, but, you know, and I'm, I was at an Episcopalian school, but I'm Jewish. It's like my dad taught there, but we had to take religion. So we had to read the Bible and read some philosophy,

and there was a particular philosopher who's a Protestant philosopher, whose name is Paul Tillock. And required reading in junior year at my high school was a book that he wrote called The Dynamics of Faith. And if somebody were to ask me what's the book that has had the most impact on you in your life, I would say that book. Now this is a product in philosopher who's arguing for belief in God.

And I don't believe in God. I'm an atheist. But why did this have such a big impact on me? Because he talks about something called existential disappointment. And this is a really big piece of this book, The Dynamics of Faith. Essentially, you say in what you said and this is why it had such an impact on me, that what people will do is they'll strive for the finite, right?

Like I want to sell a million copies or I want to make a million dollars or things like this where this is a goal that you can attain within your lifetime. And he says that what ends up happening is that you sort of pin your ability to be happy on the achievement of that goal as opposed to on the things that would actually make you happy. What are the features of you as a human being and your interaction with the world and the things that you're sort of striving for that would help you to achieve happiness. And he points out that what happens is that when people achieve those goals, I made a million dollars, I sold a million copies, they tend to go into very deep depressions afterwards.

You see this actually the weight of gold is a good example of this, like what happens when you win the gold and then what do you do afterwards? Right? I'm the same person I was the day before then the day after and I thought this was going to fulfill me and it was going to create the happiness that I haven't created for myself yet. And of course it doesn't. And then you're sad. Now he uses this as an argument for believing in God because he says that striving toward God who is infinite is going to solve this problem. But what I took from that is that there's all sorts of ways that you can create infinite

goals for yourself. You can say, every day I want to be a little bit better than the day that I was before. I want to try to be the best parent that I can. Now, that's a goal that I can never, it isn't finite, I can't ever reach it. I want to try to write in a way that's going to create the most impact in the world, given what I'm capable of. Right now, you've taken it from the finite into something that is more infinite. And I think it creates a lot more happiness.

So it's weird, I read this little book called The Dynamics of Faith, which was trying to argue for belief in God. And I took from it so much that this has been the single most impactful book that I've ever read in my life. I got a quick message from one of our sponsors, and then we'll get right back to the show. Stay tuned.

I love that so much. Yeah, it's, I think people who say they know exactly where they're going are lying, or they're putting a lot, they're putting all their eggs in one basket. I want to be sort of flexible and to be like, I kind of prefer to have these sort of vague, like, like, my goals are for the rest of my life to continue being a writer, to be in a happy marriage and to be a great father. So like those are goals that I have a lot of influence over, a lot of the ability to define. And it allows me to sort of absorb what happens.

And not like, but if my goal was to be the best selling writer of my generation, now not only is that very specific. And so in some ways easier to achieve, but it's also probably more unlikely that I will actually achieve it because it is so specific. And what again going back to Paul Tillic, what he would say is it's more unlikely

that if you did achieve it, you'd be unhappy. Right, right. So that's the thing that I really took from that. I mean, it's like goes into this, you've created something that's not only pass fail, but like only one person can do it. So you're setting yourself up for failure anyway. And then because you've sort of pinned your whole identity on that, once you achieve it, you probably won't be happy anyway because you probably haven't done the things that you need to do in your life to actually create happiness, absent that one one event occurring in your life. So yeah, so the type of goals that you have are

very similar to the type of goals that I have, and I kind of started working on that when I was 16 because that the book really kind of really made such a big impact on me. I had one more question for you, and if you have to go or you don't want to touch you, feel free. No, so I was thinking about your book Thinking in Betts and I had, I had Professor Tamler Summers on the podcast recently. He wrote this great book called Why Honor Matters. And we were talking about this, there's this pivotal moment in Stoke philosophy, where Kato, who's this famously principled politician, is sort of offered a bribe slash alliance by Pompey. And he turns it down.

He says, you cannot buy my loyalty. Now, the upshot of this decision was that the person who was trying to bribe him and the potential person he could have been an alliance with ends up allying with Caesar instead and they become moral enemies and it leads to the collapse of the Roman Republic. So we were talking about this. Some historians even at the time were like, look, Kato's principles ultimately brought

about the exact ruin that he was trying to prevent. So was this a bad bet or not? And what Professor Summers was saying that I thought was interesting, he's like, no, you have to think about it more like this. Is taking a bribe a good bet or a bad bet, right? He's like 99% of the time not taking a bribe is going to work out better, right? It's the right thing to do for a reason. Usually, it's not going to blow up in your face and cause more harm than being corrupt

will harm. And I thought that was a really interesting way to think about it. And what he said was, he's like, the problem is the reason we often break our own rules is we get overconfident and we say, I know. We say, I know this time, it's an exception. I know this is wrong, but it's gonna work. And it strikes me that that is, that is an insidious way of thinking

that we're dealing with now as a country where a lot of politicians, some whom you and I have both spent some time with and some, you know, that we only hear about on television, basically made this bet that working with a bad person who did not share their values and was fundamentally unreliable and untrustworthy would work out because it would help them accomplish a number of other goals.

And now we're, you know, now we're dealing with the intense fallout, the four years of fallout of that decision. I'm curious, when you think about just like these bets, where do you like principles and beliefs and a sense of right and wrong fit in there, or have you thought about how they come together? Yeah, I actually have. So just a couple of things. So one thing with history in the Keto example

is that one of the things I think about a lot is that the future is many branched, but the past is only one branch, like you know what the past is. And so again, Phil Tetlock again, sort of, I mean, he's done so much amazing work. It's not surprising him, referring to him more than once. It's done really great work on the idea that when we sort of think about history, and we offer somebody counterfactuals, they will

generally reason to get to the outcome that actually occurred. Because, you know, it's like, that's what happened. And so we really view it as inevitable. So when I'm listening to that story about Kato, I'm thinking, well, at the point that he decided not to take that bribe, it's not inevitable that the history unfolds the way that it does. That might have been passed on more probability. And we don't know.

It's just that when we look at things in retrospect, it's very hard for us to get out from under that feeling of inevitability. So that's just one thing I would think. The other thing that I would say is that, look, a lot of the problems that we have on a personal level, or as a country, are these kind of death by a thousand cuts problems. Failure is built out of exceptions in a lot of cases. Like, oh, this is an exception to the rule. This is an exception to the rule. So I'll give you a simple example.

It isn't as big as the political one, but relates to it really well. It's like, I want to eat healthier, but it's my kids birthday. So even if you're from the outside watching me and trying to be an accountability coach to me, when you come to me and say, why do we eat the cake, I'm like, well, is my child's birthday? And I didn't want to set a bad example, and I didn't want them to have food issues, and whatever, I can come up with a billion different

rationalization. And that's fine for that one thing, but if you're a good accountability coach for me, what you'll say is how many exceptions have you been making recently? I need to understand this in the aggregate and the scope of time. Like did you eat pizza last night because the news was really bad and you were stress-seating and did you have cake with your spouse because it was your anniversary or were you on a

day? And you're going to keep eating the leftover cake for the next week because it was recently your kids first day. Exactly. So it's like I get that you have a justification for this one time. But the problem is you keep making that justification over and over again. You can see this also like with NFL 4th Down decisions funnily enough, right? It's like and you can tell it's that it's a problem because it's unidirectional. Nobody ever goes for it on 4th Down when the analytics say you shouldn't. They don't go for it on 4th Down when the analytics say you shouldn't. They don't go for it on fourth down when the analytics say you should,

and they always have a good justification on that one time, right? Like, our running back wasn't performing, or the offensive line wasn't holding, or our quarterback was off that day, or the defense was really on, or whatever it is, they have a reason for not going for it on fourth down.

And if you ask them on that one time, they'll say, they'll give you a reason that you're going to accept, because you can always accept it in the one off. But the question is, when I look across your fourth down behavior, do I see a pattern where you're making that exception a lot? And that's what I should really care about, because I need to think about these things in the aggregate.

So I'm actually a big fan of what I would call a category decision, which is essentially, brags are bad. Right. And like, there isn't, I don't want to get into a situation where I'm making an exception about that. So if I take like the healthy eating version, like, for example, I'm a vegan. So that solves my problem for me because I've made a decision about the category, right? I just can't eat certain stuff that I believe is bad for my health. I'm not a bribe taker. So now when someone comes and offers me a bribe,

I'm not a bribe taker. I don't need to make a decision that's gonna allow me to be rationalized because I'm gonna come up with like some version of history where this is a good idea. It's just a bad idea to do the thing that I'm doing. And it's much better if we think about those things in advance because otherwise we can get into these really bad slippery slope decisions,

situations where you just sort of keep figuring out a way to treat it as a one off every single time. As opposed to viewing all of those decisions in the aggregate, because if I presented that list of decisions to you and an aggregate and said, do you want to make exceptions on all of these, you would probably say no, right? But because it's occurring sequentially

and you're not seeing it that way, you do that and then we get into the problem that we started with, which is our actions in form, our beliefs and can cause them to entrench. So the more exceptions that you started with, which is our actions in form, our beliefs and can cause them to entrench. So the more exceptions that you've made, the more willing you're going to be able to make exceptions in the future, because if you didn't in the future, what would that

say about all the decisions that you made in the past to make exceptions? Because now it becomes part of your identity. And then all of a sudden you're a true believer. And this is really, really a problem. It's really bad. And so I'm a big fan of saying, no, it's okay to have hard and fast rules. And it's right. Taking a bribe is bad. And so you should not do it.

And how it ends up turning out is somewhat out of your control. And you don't want to start imagining, well, maybe this, that's the way to get to the exception. Well, maybe this is a K-do situation. Right. No, and I think sports is another good example you mentioned for it down, but the other one you see all the time is like, you know, we're a culture team. This is what we need in our organization. This is what we accept. And then a talented player and talented player exceptions get made for them or, you know, a person whose market value has plummeted because of a domestic violence dispute or a drug addiction, you know, Antonio Brown or, or their Kyrie Irving,

because they're, they're just incapable of not, you know, being a cancer in the locker room and you go, it'll be different with me. Right. Like, you know, so that, to me, that's the other bet where you go as so insidious as we go, hey, and I saw this at American Apparel. I saw, you know, billionaire investor after a billionaire investor go, it failed for everyone else because they're not as good as me. And I will be able to get a different result because I am the exception. And I think that's also what we've seen over the last four years.

It's like, you saw how your predecessors did. How do you think you'd be different? Well, I think over the last four years, I mean, you've seen a sequence of people when, when it's, yes, but I mean, eventually everybody in a sequence of people when, when, you know, it's yes, but, you know, I mean, eventually everybody gets turned on, right? Yeah, of course. You mean that won't happen to, you know, but I'm the one that that won't happen to.

It's like, well, okay, but, and I think this actually brings up a general decision-making principle, which is you should always be checking for base rates, right? You should be looking for the reference class, right? Like, in my situation before, how do things go for them? So like an example would be like when you're talking about somebody buying American apparel, for example, let's say that you were opening a restaurant in the non-pandemic era, right?

So you're opening a restaurant and you think, like it's a location where the five restaurants in front of you have failed. And you're thinking, no, but I'm gonna,, you know, this, it's the leases cheap and this is a, you know, but I'm different than them. I'm going to be able to be better than them. You're just ignoring the base rate. Right.

Right. Like five ones before you, their failure rate was 100% within the first year. You shouldn't assume that you can possibly be that much better than what the base rate is. So, so we can think about base rates as like, what's the probability you die of heart disease or what's the probability that a restaurant fails within the first year or so and so forth.

So those would be, but then we can think about reference classes as well. What has happened to people like me in this situation? And it's really good to ask yourself those questions. It's a way to get out to the outside view. Another example would be like, this is one that happened to Connemon. If you're telling your publisher that, okay, I've written the proposal and you haven't actually outside of the proposal you haven't written the book yet and you say, I'm going to be able to turn this book into you in three months.

You might want to check the base rate. That's right. Sure. How long does it normally take? Right. How long does it normally take? Right. How long does it normally take an author? And then you can sort of figure out, like, what's the fastest that they tend to deliver? And what's the longest that they tend to deliver? You know, and then you can say, well, where do I sort of feel like I fit in that distribution? And you're probably going to then tell your publisher, like, you know, assuming you've, if you've done a lot of work into the proposal, maybe you tell them you'll deliver it in nine

months, right? Maybe you think you can be pretty fast, but at least you come off of this idea that you're gonna deliver this book in three months. So. We all think we're gonna be the exception that proves the rule, and we do end up proving the rule,

just not how we think. Right, exactly, exactly, exactly right. No, and to me, that's the sort of ultimate bet that the still makes and that I think we're sort of ruined now culturally is this idea, like character is fate. Like when people tell you who they are, you should believe them. And definitely when they show you who they are, you should believe them. And very rarely has that bet paid off and not turned out to be true.

And you know, it could be, hey, you really got to know this person, and actually you found a different element of their character that they're betting on. That may be true. But often, that's not what they're doing. They're saying, oh, yes, this person is a bad character, but I will be able to control them,

or I'm smarter than them, you know, all of these rationalize it. Yeah, I'd be like, you know, if somebody, if somebody has rehabilitated, right? Like someone, you know, committed crimes when they were young and then now they're, you know, it's years later and they're, you know, they really are like a different person. I believe them, right?

It's, but I, if you're acting in a certain way today, I believe you. Yeah. Yeah. Right, right, right? But if you're acting in a certain way today, I believe you. Yeah. Yeah. Right, right, right. Yeah, no, it's you can, and rarely the, like in Kato's situation to go back to the point, it's not what the tricky part is,

not when people go, oh, this isn't a bribe, this will be okay for the following reasons. The problem is when they go, I know this is a bribe, but the circumstances warrant the exception. That's the problem. Almost no one has said, hey, look, I really got in there and I understood Trump's soul, and I think for the following reasons, we're going to be able to do good together. They're saying, no, I know this person is X, y, or z, but circumstances warrant me, you know, because judges or because, you know, whatever, whatever extreme belief you've decided, you know, make it possible. And then everyone gets burned. Yeah, it's like exactly. And, and, and again, the thing that I want to say is that I think

about the small ways in which that's occurring in your life as well. Of course. Yeah. Yeah. So exactly that, and that's occurring in your life as well. Of course. Yeah, yeah. So, exactly. And that's exactly what happens. And I feel like it's like, you know, results are, you know, bad results are built out of single incidents that you rationalize and justify.

Well, I wrote something where I was saying, like, look, you see people go, why don't these politicians do something? Why don't they stand up? Why don't they put people over profit? You know, we run down the list of all the things we want other people to do. And then it's like, you work a job that you don't like. You drive a car, you know, it's terrible for the environment. You know, you're wearing clothes from a sweatshop.

You know, you down the list and it's like, the, the, the mate, when we, when we make these judgments, you make a good point I mean make these judgments. They they're certainly educational, but we have to find a way to imply them at our own level as opposed to Letting it letting us think we're above other people because we're definitely not right exactly. That's exactly right Well, thank you so much. I love the books and hopefully I'll bump into you at a conference when those happen again. Yeah, hopefully we'll be able to see each other in person again.

And I'm such a huge fan and I so appreciated this conversation. It was a really nice part of my day. So thank you. Oh, thank you. Well, we'll do it again very soon. And when you come back when you when you have the next book. Well, it's hopefully going to be pretty soon because I'm already writing it. So John, great, awesome.

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