Little Ways the World Works

@tags:: #lit✍/📰️article/highlights
@links::
@ref:: Little Ways the World Works
@author:: Morgan Housel

=this.file.name

Book cover of "Little Ways the World Works"

Reference

Notes

Quote

If you find something that is true in more than one field, you’ve probably uncovered something particularly important. The more fields it shows up in, the more likely it is to be a fundamental and recurring driver of how the world works.
- View Highlight
-

Quote

(highlight:: “You might well expect a machine built in haste to fail quicker than one put together carefully and methodically, and our study suggests that this may be true for bodies too,” one of the researchers wrote.
The same thing has been found in humans. And in birds. And in rats.
And isn’t it the same in business?
Chamath Palihapitiya once noted that however fast your business grows, that’s the half-life for how quickly it can be destroyed. So many companies, flush with cheap money from previous years, are learning this right now. Every business and every industry has a natural growth rate – push beyond it and short-term growth comes at the cost of long-term quality, and eventually survival.)
- View Highlight
-
- [note::The relationship between an organization's growth velocity and its product quality & enterprise sustainability]

Quote

(highlight:: Part of the second law of thermodynamics is that you get the most efficiency out of a system when the hottest heat source meets the coldest sink – that’s when an engine will waste the least amount of heat, converting as much energy into power as it can.
And isn’t it the same in business and careers?
A genius entering a crowded and competitive field may find a little success, but put her in a “cold” industry full of idiots and she’ll create a monopoly, destroying competitors. Jeff Bezos famously said “your margin is my opportunity,” which is the same concept. The biggest opportunities happen when a hot talent meets a cold industry. Thermodynamics has proven this since the beginning of the universe – no one should doubt how true and powerful it is.)
- View Highlight
-

Quote

Muller’s ratchet (evolution): Dangerous mutations tend to pile up when there’s no genetic recombination, ultimately leading to extinction. It’s is why so few species reproduce asexually. In the absence of variety, bad ideas tend to stick around, which is also exactly what happens in closed societies and large corporations.
- View Highlight
-
- [note::Love that there's a phrase for this!]

Quote

Sagan standard (astronomy): Extraordinary claims require extraordinary evidence, in equal proportion. As a corollary: Extraordinary claims require extraordinary scrutiny. Sagan used it as a standard to measure whether extraterrestrials were communicating with Earth, but it applies to almost any field where people get attention, recognition, and money for discovering something new.
- View Highlight
-

Quote

Cope’s Rule (evolutionary biology): Species evolve to get bigger bodies over time, because there are competitive advantages to being big. But big has its own drawbacks, and can often be the cause of extinction. So the same force that pushes you to become big can also cause you to go extinct. It describes the lifecycle not only of species, but most companies and industries.
- View Highlight
-

Quote

Benford’s law of controversy (astrophysics): Passion is inversely proportional to the amount of real information available. When given the opportunity to fill information gaps with rumor, theory, and imagination, people cling to what they want to be true, which tends to be something they are passionate about. The real world is often very boring.
- View Highlight
-

Quote

Absorption rates (biology, geology, chemistry): There is a natural limit to how fast something can grow, governed by how fast it can absorb certain nutrients. But different organisms have massively different absorption rates despite being delivered nutrients at the same rate, so you can get vastly different outcomes despite feeding something the same nutrients. Same with education, career success, and social networks – some people are primed to absorb much more than others, even when they are part of the same system.
- View Highlight
-
- [note::This is an interesting angle to explain why I'm so obsessed with information diets/consumption. It's perhaps one of the greatest levers I have in a world filled with smart people. Is this really true though?]

Quote

Galilean Relativity (physics): All physical laws work when you’re moving the same way they do when you’re at rest, which gives two people watching an event different perspectives of what happened. If I’m on an elevator and I throw a ball in the air, to me the ball only rises a few feet. If you’re watching me ride up in an elevator and you see me throw a ball in the air, to you it looks like the ball is traveling faster and higher. Neither view is right or wrong; it’s just relative to another. So to fully understand what’s happening in a system, you have to see it from two perspectives: as an insider, and an outsider. Same in any social system, where an outsider can be blind to internal details but an insider can underestimate the power of tribal affiliations.
- View Highlight
-
- [note::This underscores the importance of acknowledging your "reference frame" in any context you find yourself in.]

Quote

Stationarity (statistics): An assumption that the past is a statistical guide to the future, based on the idea that the big forces that impact a system don’t change over time. If you want to know how tall to build a levee, look at the last 100 years of flood data and assume the next 100 years will be the same. Stationarity is a wonderful, science-based concept that works right up until the moment it doesn’t. It’s a major driver of what matters in economics and politics. “Things that have never happened before happen all the time,” says Stanford professor Scott Sagan.
- View Highlight
-
- [note::I suspect this only really applies when the system you're projecting falls within the same regime. If a certain tipping point is triggered and causes a system to fall into another regime (see ball in egg carton visual), using past behavior of a system to predict its future behavior system may lead to dangerous assumptions.]

Quote

Leibniz’s Worlds (philosophy): There are infinite possible worlds; we just happen to live in this one. Some ideas hold true in all possible worlds, while others would only work in this specific iteration. Naval put it this way: “In 1,000 parallel universes, you want to be wealthy in 999 of them. You don’t want to be wealthy in the fifty of them where you got lucky, so we want to factor luck out of it … I want to live in a way that if my life played out 1,000 times, Naval is successful 999 times.”
- View Highlight
-
- [note::Meh. I guess this is useful for assessing risk, but I'm not sure if doing things that "would make me successful 999/1000 times" would end up producing the kind of life that I personally would want for myself.]

Quote

Orgel’s rule (evolutionary biology): “Evolution is cleverer than you are.” Whenever a critic says, “evolution could never do that” they usually just lack imagination. When trillions of organisms among millions of species interact for billions of years, the results can be indistinguishable from magic. Same with technology and social trends.
- View Highlight
-

Quote

Tocqueville Paradox (sociology): People’s expectations rise faster than living standards, so a society that becomes exponentially wealthier can see a decline in net happiness and satisfaction. There is virtually nothing people can’t get accustomed to, which also helps explain why there is so much desire for innovation and improvement.
- View Highlight
-
- [note::Interesting! I think I might love studying sociology.]

Quote

Cromwell’s rule (statistics): Never say something cannot occur, or will definitely occur, unless it is logically true (1+1=2). If something has a one-in-a-billion chance of being true, and you interact with billions of things during your lifetime, you are nearly assured to experience some astounding surprises, and should always leave open the possibility of the unthinkable coming true.
- View Highlight
-
- [note::This underscores the importance of "increasing your opportunity surface area"]

Quote

Liebig’s law of the minimum (agriculture): A plant’s growth is limited by the single scarcest nutrient, not total nutrients – if you have everything except nitrogen, a plant goes nowhere. Liebig wrote, “The availability of the most abundant nutrient in the soil is only as good as the availability of the least abundant nutrient in the soil.” Most complex systems are the same, which makes them more fragile than we assume. One bad bank, one stuck container ship, or one broken supply line can ruin an entire system’s trajectory.
- View Highlight
-
- [note::Reminds me of Theory of Constraints]

Quote

Three Men Make a Tiger (Chinese proverb): If one person tells you there’s a tiger roaming around your neighborhood, you can assume they’re lying. If two people tell you, you begin to wonder. If three say it’s true, you’re convinced there’s a tiger in your neighborhood and you run for your life. The proverb first came about hundreds of years ago, but is probably more relevant than ever in the social media age. People will believe anything if enough people tell them it’s true.
- View Highlight
-


dg-publish: true
created: 2024-07-01
modified: 2024-07-01
title: Little Ways the World Works
source: reader

@tags:: #lit✍/📰️article/highlights
@links::
@ref:: Little Ways the World Works
@author:: Morgan Housel

=this.file.name

Book cover of "Little Ways the World Works"

Reference

Notes

Quote

If you find something that is true in more than one field, you’ve probably uncovered something particularly important. The more fields it shows up in, the more likely it is to be a fundamental and recurring driver of how the world works.
- View Highlight
-

Quote

(highlight:: “You might well expect a machine built in haste to fail quicker than one put together carefully and methodically, and our study suggests that this may be true for bodies too,” one of the researchers wrote.
The same thing has been found in humans. And in birds. And in rats.
And isn’t it the same in business?
Chamath Palihapitiya once noted that however fast your business grows, that’s the half-life for how quickly it can be destroyed. So many companies, flush with cheap money from previous years, are learning this right now. Every business and every industry has a natural growth rate – push beyond it and short-term growth comes at the cost of long-term quality, and eventually survival.)
- View Highlight
-
- [note::The relationship between an organization's growth velocity and its product quality & enterprise sustainability]

Quote

(highlight:: Part of the second law of thermodynamics is that you get the most efficiency out of a system when the hottest heat source meets the coldest sink – that’s when an engine will waste the least amount of heat, converting as much energy into power as it can.
And isn’t it the same in business and careers?
A genius entering a crowded and competitive field may find a little success, but put her in a “cold” industry full of idiots and she’ll create a monopoly, destroying competitors. Jeff Bezos famously said “your margin is my opportunity,” which is the same concept. The biggest opportunities happen when a hot talent meets a cold industry. Thermodynamics has proven this since the beginning of the universe – no one should doubt how true and powerful it is.)
- View Highlight
-

Quote

Muller’s ratchet (evolution): Dangerous mutations tend to pile up when there’s no genetic recombination, ultimately leading to extinction. It’s is why so few species reproduce asexually. In the absence of variety, bad ideas tend to stick around, which is also exactly what happens in closed societies and large corporations.
- View Highlight
-
- [note::Love that there's a phrase for this!]

Quote

Sagan standard (astronomy): Extraordinary claims require extraordinary evidence, in equal proportion. As a corollary: Extraordinary claims require extraordinary scrutiny. Sagan used it as a standard to measure whether extraterrestrials were communicating with Earth, but it applies to almost any field where people get attention, recognition, and money for discovering something new.
- View Highlight
-

Quote

Cope’s Rule (evolutionary biology): Species evolve to get bigger bodies over time, because there are competitive advantages to being big. But big has its own drawbacks, and can often be the cause of extinction. So the same force that pushes you to become big can also cause you to go extinct. It describes the lifecycle not only of species, but most companies and industries.
- View Highlight
-

Quote

Benford’s law of controversy (astrophysics): Passion is inversely proportional to the amount of real information available. When given the opportunity to fill information gaps with rumor, theory, and imagination, people cling to what they want to be true, which tends to be something they are passionate about. The real world is often very boring.
- View Highlight
-

Quote

Absorption rates (biology, geology, chemistry): There is a natural limit to how fast something can grow, governed by how fast it can absorb certain nutrients. But different organisms have massively different absorption rates despite being delivered nutrients at the same rate, so you can get vastly different outcomes despite feeding something the same nutrients. Same with education, career success, and social networks – some people are primed to absorb much more than others, even when they are part of the same system.
- View Highlight
-
- [note::This is an interesting angle to explain why I'm so obsessed with information diets/consumption. It's perhaps one of the greatest levers I have in a world filled with smart people. Is this really true though?]

Quote

Galilean Relativity (physics): All physical laws work when you’re moving the same way they do when you’re at rest, which gives two people watching an event different perspectives of what happened. If I’m on an elevator and I throw a ball in the air, to me the ball only rises a few feet. If you’re watching me ride up in an elevator and you see me throw a ball in the air, to you it looks like the ball is traveling faster and higher. Neither view is right or wrong; it’s just relative to another. So to fully understand what’s happening in a system, you have to see it from two perspectives: as an insider, and an outsider. Same in any social system, where an outsider can be blind to internal details but an insider can underestimate the power of tribal affiliations.
- View Highlight
-
- [note::This underscores the importance of acknowledging your "reference frame" in any context you find yourself in.]

Quote

Stationarity (statistics): An assumption that the past is a statistical guide to the future, based on the idea that the big forces that impact a system don’t change over time. If you want to know how tall to build a levee, look at the last 100 years of flood data and assume the next 100 years will be the same. Stationarity is a wonderful, science-based concept that works right up until the moment it doesn’t. It’s a major driver of what matters in economics and politics. “Things that have never happened before happen all the time,” says Stanford professor Scott Sagan.
- View Highlight
-
- [note::I suspect this only really applies when the system you're projecting falls within the same regime. If a certain tipping point is triggered and causes a system to fall into another regime (see ball in egg carton visual), using past behavior of a system to predict its future behavior system may lead to dangerous assumptions.]

Quote

Leibniz’s Worlds (philosophy): There are infinite possible worlds; we just happen to live in this one. Some ideas hold true in all possible worlds, while others would only work in this specific iteration. Naval put it this way: “In 1,000 parallel universes, you want to be wealthy in 999 of them. You don’t want to be wealthy in the fifty of them where you got lucky, so we want to factor luck out of it … I want to live in a way that if my life played out 1,000 times, Naval is successful 999 times.”
- View Highlight
-
- [note::Meh. I guess this is useful for assessing risk, but I'm not sure if doing things that "would make me successful 999/1000 times" would end up producing the kind of life that I personally would want for myself.]

Quote

Orgel’s rule (evolutionary biology): “Evolution is cleverer than you are.” Whenever a critic says, “evolution could never do that” they usually just lack imagination. When trillions of organisms among millions of species interact for billions of years, the results can be indistinguishable from magic. Same with technology and social trends.
- View Highlight
-

Quote

Tocqueville Paradox (sociology): People’s expectations rise faster than living standards, so a society that becomes exponentially wealthier can see a decline in net happiness and satisfaction. There is virtually nothing people can’t get accustomed to, which also helps explain why there is so much desire for innovation and improvement.
- View Highlight
-
- [note::Interesting! I think I might love studying sociology.]

Quote

Cromwell’s rule (statistics): Never say something cannot occur, or will definitely occur, unless it is logically true (1+1=2). If something has a one-in-a-billion chance of being true, and you interact with billions of things during your lifetime, you are nearly assured to experience some astounding surprises, and should always leave open the possibility of the unthinkable coming true.
- View Highlight
-
- [note::This underscores the importance of "increasing your opportunity surface area"]

Quote

Liebig’s law of the minimum (agriculture): A plant’s growth is limited by the single scarcest nutrient, not total nutrients – if you have everything except nitrogen, a plant goes nowhere. Liebig wrote, “The availability of the most abundant nutrient in the soil is only as good as the availability of the least abundant nutrient in the soil.” Most complex systems are the same, which makes them more fragile than we assume. One bad bank, one stuck container ship, or one broken supply line can ruin an entire system’s trajectory.
- View Highlight
-
- [note::Reminds me of Theory of Constraints]

Quote

Three Men Make a Tiger (Chinese proverb): If one person tells you there’s a tiger roaming around your neighborhood, you can assume they’re lying. If two people tell you, you begin to wonder. If three say it’s true, you’re convinced there’s a tiger in your neighborhood and you run for your life. The proverb first came about hundreds of years ago, but is probably more relevant than ever in the social media age. People will believe anything if enough people tell them it’s true.
- View Highlight
-