Ideas That Changed My Life
People believe what they’ve seen happen exponentially more than what they read about has happened to other people, if they read about other people at all. We’re all biased to our own personal history. Everyone.
Capital Thinking • Issue #173 • View online
“You spend years trying to learn new stuff but then look back and realize that maybe like 10 big ideas truly changed how you think and drive most of what you believe.” - Morgan Housel
Everyone belongs to a tribe and underestimates how influential that tribe is on their thinking.
There is little correlation between climate change denial and scientific literacy. But there is a strong correlation between climate change denial and political affiliation.
That’s an extreme example, but everyone has views persuaded by identity over pure analysis.
There’s four parts to this:
- Tribes are everywhere: Countries, states, parties, companies, industries, departments, investment styles, economic philosophies, religions, families, schools, majors, credentials, Twitter communities.
- People are drawn to tribes because there’s comfort in knowing others understand your background and goals.
- Tribes reduce the ability to challenge ideas or diversify your views because no one wants to lose support of the tribe.
- Tribes are as self-interested as people, encouraging ideas and narratives that promote their survival. But they’re exponentially more influential than any single person. So tribes are very effective at promoting views that aren’t analytical or rational, and people loyal to their tribes are very poor at realizing it.
Your personal experiences make up maybe 0.00000001% of what’s happened in the world but maybe 80% of how you think the world works.
People believe what they’ve seen happen exponentially more than what they read about has happened to other people, if they read about other people at all.
We’re all biased to our own personal history. Everyone.
If you’ve lived through hyperinflation, or a 50% bear market, or were born to rich parents, or have been discriminated against, you both understand something that people who haven’t experienced those things never will, but you’ll also likely overestimate the prevalence of those things happening again, or happening to other people.
Start with the assumption that everyone is innocently out of touch and you’ll be more likely to explore what’s going on through multiple points of view, instead of cramming what’s going on into the framework of your own experiences.
It’s hard to do. It’s uncomfortable when you do. But it’s the only way to get closer to figuring out why people behave like they do.
Morgan Housel
*Featured post photo by Sharon Pittaway on Unsplash