The Trivial Vs. The Profound

In 2003, I took a trip to Normandy, France, to fulfill a long-time interest in World War II. Omaha beach, it turned out, is a bland place. Nearly 70 years ago, Allied troops were dodging a fusillade of bullets. When I was there, there were a few tourists wondering the beach. That was it.

I knew, right then, that I was interested in something else: Stephen Ambrose’s D-Day, Saving Private Ryan and the HBO Mini-Series Band of Brothers. I wasn’t a history buff. I enjoyed history books, movies and TV shows that were fun to read and watch.

We might not admit it, but we rarely engage content that’s informative unless it’s also entertaining. Do we watch TED talks to acquire wisdom? Or do we watch TED talks because the speakers are great storytellers, occasionally funny and also informative?

What looks like genuine insight might be great story telling in disguise. “You may have the insight of a Buddha, but if you cannot tell story, your ideas turn dry as chalk,” says Robert McKee.

The Hidden Value of Negative-Advice

Negative-advice (what not to do) is more valuable than positive-advice (what to do). We should therefore listen to those who failed instead of those who only succeeded. If you’re going to grad school, talk to drop outs, not professors; if you’re an aspiring entrepreneur, talk to people who never broke even, not Mark Zuckerberg; if you’re getting married, talk to people who got divorced, not happy couples; if you want to start an acting career, talk to the waiters and waitresses in the L.A. area, not Oscar winners; if you want to buy a book, go on Amazon and read all the bad reviews first. If you’re looking for a role model, search for an antimodel—someone you despise. In sum, when seeking knowledge, we can often get closer to the truth through contradiction and subtraction, not verification.

The problem is that most negative-advice is in the cemetery. In the finance section of your local book store hundreds of books promise the “Ten Simple Steps to Get Rich.” The implication is that if you follow each step, you will become rich. The critical book shopper will ask: “Where are all the books written by people who followed the steps and didn’t get rich?” These would-be authors had a hard time pitching their manuscripts from their graves.

What I Learned Losing a Million Dollars, by Jim Paul and Brendan Moynihan (originally self-published), may be the most important book someone interested in finance could read. Here’s Paul’s bit of negative-advice: “Learning how not to lose money is more important than learning how to make money.”

The Difference Between Complex and Complicated, And Why It Matters

Last week I listened to a panelist speak about the future of digital marketing. His opening remarks—“the world is a complex place” and later “the world is complicated”—were familiar, but I wondered what they meant.

When we say that something is “complicated” we’re usually venting about decision fatigue—what used to take one step now takes five. Think about watching TV today versus fifty years ago. In 1964, there were a few channels and to pick from. Today we plug in Apple TV or Xbox One to watch shows on demand. We need to pick between different payment options, provide credit card information and remember passwords.

“Complexity” is something else. In the language of researchers, it is a system that’s composed of many interacting parts. Complex systems, such as the weather, are sensitive to initial conditions. A slight temperature shift in Africa can trigger a hurricane over the Atlantic, just like a market crash in Russia can send a ripple through the entire system. The world is “complex” in the sense that small local changes can have large global consequences.

Here’s why the distinction matters. If you want to understand something that’s complex, it doesn’t help to study the individual parts. Traffic jams occur when a highway exceeds its carrying capacity. Alleviating a jam requires addition lanes, or maybe more public transportation options, but it won’t help to study the individual drivers—they don’t cause the traffic jam. The system does.

If you want to understand something that’s complicated, it does help to study the individual. Think about Netflix, iPhones, or gmail. They emerged from observation. By watching how a someone rents movies, uses his cell phone, and sends email, we can spot what doesn’t work and design better alternatives. Netflix would not exist if Reed Hasting’s only studied Blockbuster’s business model. He needed to feel the sting of paying those late fees.

 

If you live in a complex world check out Linked by Albert-Laszlo Barbasi and Six Degrees by Duncan J. Watts.

If you live in a complicated world check out Change by Design by Tim Brown and The Laws of Subtraction Matthew May.

 

False Premises in Popular Psychology Literature

Most of us now work in teams, in offices without walls, for managers who prize people skills above all. Lone geniuses are out. Collaboration is in.

Susan Cain (Quite: The Power of Introverts in a World That Can’t Stop Talking)

little in our culture trains, rewards or even seems to notice great collaboration.

Margaret Heffernan (A Bigger Prize: How We Can Do Better Than The Competition)

The old stigmatized C’s associated with coming together and “sharing”–cooperatives, collectives, and communes–are being refreshed and reinvented into appealing and valuable forms of collaboration and community. We call this groundswell Collaborative Consumption.

Rachel Botsman and Roo Rogers (What’s Mine Is Yours)

Why Money Is Not the Essence of Economics

In the early 20th century, the isolated Pacific Island Yap was home to an unusual monetary system. The economy only contained three goods: fish, coconuts, and sea cucumbers. Yet, Yap had a highly developed system of money. Its coinage—fei—were large stone wheels, some with a diameter of twelve feet. Owners rarely possessed their fei. After completing a bargain, a simple acknowledgement determined new ownership between sellers and buyers. One family even “possessed” a large fei that had lain on the bottom of the sea for generations. No one questioned their wealth.

In Money: The Unauthorized Biography, Felix Martin asks, “What is money, and where does it come from?” Economists typically argue that money emerged as an alternative to barter. Before money, we would trade fish or corn and other goods but it was an inefficient system. Money became a stable commodity—a medium of exchange—that lubricated the markets. For Martin, however, this view is deeply flawed because it draws on a history of money that relies on what survived.

At first glance, that makes sense. If you want to study money, the first thing you examine is the evidence—coins. However, if you only study what physically survived, you’ll never get the full picture. “Coinage may have been only the very tip of the monetary iceberg,” Felix Martin says.

The unfortunate incineration of one of the largest collections of “Exchequer tallies” tells us why. From the twelfth to the late eighteenth century, financial operations in England relied on thin wooden sticks (tallies) typically harvested from willow trees. An Act of Parliament abolished tally sticks, and in 1834 the government burned millions of the defunct sticks in a large stove in the House of Lords (inadvertently starting a fire that burnt down the Houses of Parliament). Thus, an “immense wealth of knowledge that the Westminster archive embodied about the state of England’s money and finances throughout the Middle Ages… [was] irretrievably lost.” By analogy, if a natural disaster destroyed the digital records of our current financial system, we’d hope that future historians studying the Great Recession don’t only examine nickels and euros.

Coinage, in other words, is not essential to a monetary system. “It is the underlying mechanism of credit accounts and clearing that is the essence of money,” Martin writes. Currency is ephemeral and cosmetic; it is not itself money but a representation of credit. Remember the fei at the bottom of the sea.