When we say that human behavior is unpredictable, we are right because it is too complex to be predicted, especially by ourselves. Our intense sensation of interior liberty, as Spinoza acutely saw, comes from the fact that the ideas and images that we have of ourselves are much cruder and sketchier than the detailed complexity of what is happening within us. We are the source of amazement in our own eyes.
-Carlo Rovelli, Seven Brief Lessons on Physics
Complexity is easier to sell but the more complex a financial plan or portfolio becomes, the harder it is for clients to stick with it. Simple strategies, when clearly defined and explained, work better in the long run.
But simple is harder than complex.
You have to fight to keep things simple because your natural tendencies make you susceptible to stories and narratives. Simplicity is more of a psychological exercise while complexity is more about trying to outsmart the competition.
Complex problems like the markets or financial plans don’t require complex solutions.
Charlie Munger once said, “Simplicity has a way of improving performance through enabling us to better understand what we are doing.”
-Ben Carlson, from this post
It would be good to be able to say that we should dispense with visions entirely, and deal only with reality. But that maybe the most utopian vision of all. Reality is far too complex to be comprehended by any given mind. Visions are like maps that guide us through a tangle of bewildering complexities. Like maps, visions have to leave out many concrete features in order to enable us to focus on a few key paths to our goals. Visions are indispensable—but dangerous, precisely to the extent that we confuse them with reality itself.
-Thomas Sowell, A Conflict of Visions: Ideological Origins of Political Struggles
Of the complexities introduced by the "present vast and delicate division of labor," he wrote, "When everybody is working for everybody, everybody is injured by the mischances of everybody."
-James Grant, Bagehot: The Life and Times of the Greatest Victorian
I just think it’s important to recognize that outward measures of success don’t automatically translate into inward feelings of happiness.
Life is often more complicated than it seems.
-Ben Carlson, from here
But most big things – companies, events, careers, pandemics, etc – are just a bunch of small, random, boring things that compound at just the right time and explode into something bigger and more powerful than anyone imagined.
Once one realizes the reality of reality’s vast and incomprehensible-in-its-concrete-details complexity, one is naturally humble about what one can do to ‘change’ reality. Schemes for using the coercive powers of government to achieve economic and social betterment are then naturally viewed with enormous skepticism. How do you know? How will you acquire the knowledge you must acquire if your scheme is to work as promised? Such questions are instinctively asked by the wise and stubbornly ignored by the schemers.
-Don Boudreaux, from this post
All species struggle to survive and strive to reproduce. A chance mutation about 200,000 years ago made early Homo sapiens more sensitive to social information. This mutation increased the number of oxytocin receptors in the brain's frontal lobe, enabling out ancestors to not only understand what others were doing cognitively, but also experience the emotions of others. This helped early humans survive by enabling them to draw on social resources more effectively.
Over time the mutation spread. Rather than being limited to living in small bands of kin-based groups as our genus had for millions of years, Homo sapiens could live in increasingly larger and more complex societies because they could intuit others' intentions. The most basic social information is the intention to help or harm. As culture flourished, societies developed norms in which helpers were embraced and the selfish and violent were ostracized. . . .
We truly became social creatures when the brain network that oxytocin activates allowed us to determine who to trust. Knowing when to trust strangers led to large-scale societies. In these communities, an individual's survival depended on many others. Cooperation among nonkin provided social insurance against a bad crop or an unsuccessful hunt. Communities began to function like superorganisms in which each segment nourished the other parts.
Paul J. Zak, Immersion: The Science of The Extraordinary and the Source of Happiness
Everywhere you look in the universe, you see systems attaining greater complexity as they evolve. This is true in astrophysics. It is true of a puddle. Leave rainwater alone in a low spot and it will grow more complex. Advanced systems of every variety are complex adaptive systems without an authority in charge. Every complex system in nature, of which the market economy is the most evident social manifestation, depends upon dispersed capabilities. Systems that work most effectively under the widest range of conditions depend for their resilience upon spontaneous order that accommodates novel possibilities. Life itself is such a complex system. Billions of potential combinations of genes produce a single human individual. Sorting among them would confound any bureaucracy.
-Davidson and Rees-Mogg, The Sovereign Individual: Mastering the Transition to the Information Age
Economics helps you understand that money isn't the only thing that matters in life. Economics teaches you that making a choice means giving up something. And economics can help you appreciate complexity and how seemingly unrelated actions and people can become entangled. . . . But life is about choices. Getting the most out of life means choosing wisely and well. And making choices—being aware of how choosing one road means not taking another.
-Russ Roberts, How Adam Smith Can Change Your Life: An Unexpected Guide To Human Nature And Happiness
If you find yourself saying ' __________ is always good' or '_________ is always bad', you may be a member of an idea cult. Appreciating complexity reminds us that no behavior is always effective and that all cures have unintended consequences.
-Adam Grant, Think Again
If artists have the capacity to make work that defies time, it is because instead of trying to force-fit a predetermined idea of the future, they have learned to live productively with ambiguity, to see it as a rich source of discovery and exploration. Instead of trying to reduce complexity, they mine it, undaunted by contradictions and paradoxes. . . . In this, artists have much to teach us about how we ourselves could address the future with imagination and independence. In addition to thinking about what to do, the artist's method suggest that we should think about how to be.
-Margaret Heffernan, Uncharted: How To Navigate The Future
"While we can never render complexity simple, we could embrace it as an adventure, calling us to investigate the infinite permutations of life that it contains. Surrendering agency, action and adventure for convenience is a miserable bargain. In the uncharted world, who is content to be left hugging the shore when we could use our freedom to explore."
-Margeret Heffernan, Uncharted: How To Navigate The Future
A hallmark of true expertise and insight is making complex subjects understandable. A hallmark of mediocrity and bad strategy is unnecessary complexity—a flurry of fluff masking an absence of substance.
-Richard P. Rumelt, Good Strategy/Bad Strategy: The Difference and Why It Matters
. . . humans are social animals and communication plays an important role in decision-making. We frame out thinking in terms of narratives. And able leaders - whether in business, in politics, or in everyday life - make decisions, both personal and collective, by talking with others and being open to challenge from them. Humans, uniquely, produce artefacts of extraordinary complexity and are able to do so only by the successful development of networks of trust, cooperation and coordination. Market economies function only by virtue of being embedded in a social context.
-John Kay and Mervyn King, Radical Uncertainty: Decision-Making Beyond The Numbers
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