Five Lessons from History: Little Rules About Big Things

Aviral Vaid

Aviral Vaid

Jun 28, 20235 min read

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Five Lessons from History: Little Rules About Big Things

In the course of history, one recurring pattern stands out: people who are under stress quickly embrace ideas and goals they never would during calm times. This phenomenon of reversion to the mean has left its fingerprints all over history. It occurs because the individuals who are persuasive enough to make something grow often lack the personalities that allow them to stop before pushing too far. The pursuit of growth often requires risk-taking and confidence, but the ability to sustain that growth requires room for error and a healthy dose of paranoia.

One important lesson we can learn from history is that being right is the enemy of staying right. When we become convinced of our own correctness, we tend to forget the way the world works. We become blind to the fact that identifying something as unsustainable does not provide much information on when that thing will ultimately collapse. Unsustainable things can sustain for a surprisingly long time, catching many off guard.

Moreover, most of us underestimate the extent to which we would act similarly if we found ourselves in the same incentive pool. We are all susceptible to the influence of our environment and the incentives that shape our behavior. There are so many moving parts in any given situation that the easiest way to answer the question "What should I do?" is to be guided by a story that makes sense to us. We are more likely to be swayed by a compelling narrative than by cold statistics or facts.

Another lesson we can glean from history is the importance of compounding. Growth is driven by compounding, which always takes time. On the other hand, destruction is driven by single points of failure, which can happen in an instant, as well as the loss of confidence, which can be shattered in a moment. The irony is that growth, if we can stick around long enough, is a more powerful force because it compounds over time. However, setbacks and failures tend to capture our attention more because they happen suddenly, drawing the spotlight away from the gradual progress that comes with compounding.

Now, let's explore some little rules about big things that can guide us in our decision-making and understanding of the world. It's easy to fall into the trap of overestimating the value of our own skills and abilities. We may conflate our proficiency in a particular area with others' lack thereof. However, it's important to recognize that people have vastly different desires, except for three fundamental things: respect, feeling useful, and control over their time. These three factors are nearly universal and should be taken into account when considering the motivations and needs of others.

Finding the sweet spot between understanding the important stuff and avoiding boredom is crucial. It's tempting to assume that the more we know, the better off we are. However, there is a point where our knowledge can become a burden, making us jaded and uninterested. Striking a balance between ignorance and expertise can help us maintain a healthy curiosity and avoid complacency.

Pessimism often appears smarter than optimism because it can come across as a realistic assessment of the world. Optimism, on the other hand, can sound like a sales pitch. However, it's worth noting that comedians make excellent thought leaders because they possess a deep understanding of how the world works. Their aim is not to make themselves feel smart, but rather to make others laugh. By infusing humor into their insights, they can effectively convey important messages without alienating their audience.

When it comes to happiness, we often find ourselves constantly moving the goalposts. What once brought us joy may no longer have the same effect. On the other hand, misery tends to be more predictable. Understanding this dynamic can help us manage our expectations and find contentment in the present moment.

Risk management is a crucial skill in navigating life's uncertainties. It's not just about how we respond to risk; it's also about recognizing the multitude of things that can go wrong before they actually do. By anticipating potential pitfalls and having contingency plans in place, we can mitigate the impact of unforeseen events.

Good writing often captures points that people already intuitively know but haven't yet put into words. It resonates with readers because it presents familiar ideas in a new and engaging way. This approach allows readers to learn something new without expending much energy questioning its validity. It strikes a balance between stating the obvious (which can be boring) and presenting something entirely unknown (which can be overwhelming).

Finally, let's explore the fuels and antidotes of risk. Leverage, overconfidence, ego, and impatience are often the driving forces behind risky behavior. These factors can cloud our judgment and lead us down a dangerous path. Conversely, having options, humility, and earning the trust of others can serve as powerful antidotes to risk. By diversifying our options, acknowledging our limitations, and building strong relationships, we can navigate risks with greater confidence and resilience.

In conclusion, history offers valuable lessons that can guide our decision-making and understanding of the world. It reminds us of the tendency for reversion to the mean and the importance of recognizing unsustainable patterns. By acknowledging the influence of our environment and the power of storytelling, we can gain a better understanding of our own behavior. Furthermore, understanding the dynamics of growth and destruction, as well as the little rules that govern big things, can help us navigate life's challenges more effectively.

Three actionable advice based on these lessons are:

1. Foster humility and recognize the limits of our knowledge and expertise. This will prevent us from becoming overconfident and making rash decisions.

2. Cultivate strong relationships and earn the trust of others. Having a support system and diverse perspectives can help us navigate risks and make more informed choices.

3. Embrace the power of storytelling. Use narratives and anecdotes to convey important messages and engage others in a meaningful way. This can be particularly effective in thought leadership and communication.

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