Quote of the week
Often injustice lies in what you aren’t doing, not only in what you are doing.
What I learned this week
On universal truths 📜
A big part of my personal interest lies in thinking and reading about investing. The starting point for this was to get knowledge in buying stocks (yes, low interest rates bother me), but I soon realized that real investing is not only about money but also time and personal resources. Plus, it really changed my point of view for strategic project planning (also some way of capital allocation), setting my own priorities and getting to know myself and my own biases in a better way.
It also triggered my interest in
- philosophy (Why do we do the stuff we do?)
- multidisciplinary learning (How would you know about opportunity cost otherwise? How do you get competitive advantage if you know the same stuff all others do?)
- mental and physical health (How should I make healthy decisions if I don‘t know what‘s healthy?)
To my parent’s (and grandparent‘s) pain I never found a lot of interest in the catholic church. It only occurred to me a lot later that thinking about god and higher principles does not have anything to do with the church as an institution. Every single one of us tries to find purpose in life. And as this is incredibly hard, we look for guidance in ourselves, in our tribes and in society.
And now to what I find most fascinating about this: There are universal principles that repeat themselves across societies, religions, politics, business,… over the whole world and across history. Religious metaphors, mythological stories or old games try to teach us through morals. There is so much to learn from this ancient wisdom: basic human traits didn‘t change over thousands of years; every situation existed already in similar circumstances and people need to believe in something.
Everything is just a remix.
Economic incentives + behavioral economics = 💪
The economic concept of equilibria is not a single dimensional idea. You can tweak systems where bad equilibria (that are based on distrust) can be turned into good equilibria (that are based on trust).
Consider the example from the talk linked below: Insurances are the best example of a distrustful relationship. There is an incentive for the insurance to reject claims, as their profit or employee bonuses are based on how much money they can keep by themselves.
On the other hand, the insurants have an incentive to cheat the insurance because they feel cheated because of the described behavior.
Now consider this: let‘s say you make the insurance company a non-profit, that wires the profits to a charity the insurer chooses. All bad incentives vanish: the insurance company is not incentivized to hold back on justified claims and the insurants don‘t have an incentive to cheat.
It would be pretty interesting to look into the company’s numbers: How do employees get paid? How are claims managed in this system? Ariely’s example of a guy returning a laptop is of course sample size of 1 – does honesty really increase across a bigger scale as well?
A model for value differences
We think of fundamental value differences between the political left and right as dichotomies. However, even people on the far other side of the spectrum might have some shared core values (like raising the standard of living), but just disagree on how we actually come close to fulfill those values.
There is one heck of a big difference in not believing in fundamental principles like liberty or equality than in not sharing the same perspective on immigration. If we don‘t agree on basic rights, a discussion on detail might not make sense at all, does it? On the other hand, if it‘s only about opinions about the eg. refugee crisis and we can‘t agree, ongoing discussions and thought exchange makes a lot of sense and probably brings us closer to policies that are actually sustainable.
Cool thing of the week 🤯
If I would go to a lone island and would be allowed to take one podcast with me, it would be this one. Malcolm Gladwell is an author, story teller and now also podcaster. I find his work really impressive. He has a gift of taking a different perspective on things and explaining them in really nice stories.