Summary of a Summary: Accelerated Expertise

Ced Chin wrote a synopsis of Accelerated Expertise. He opens:

This is a summary of a remarkable 🌳 tree book, which presents a theory for and methods to accelerate expertise in real-world contexts. This summary is not comprehensive; it only covers some of the actionable theories and recommendations in the book and leaves out the considerable lit review and the book’s recommendations for future research directions. I’ll note that Accelerated Expertise is not written for the lay person — it is a book primarily written for organisational psychologists, training program designers and researchers employed in the US military. If you must read it — say because you want to put the ideas in the book to practice — my recommendation is to read Chapters 9-13 and skim everything else.

Accelerated Expertise is about ‘taking the concept of skill development to the limit’. This is not a book about pure theory; nor is this a book about deliberate practice in well-developed skill domains. No: this is a book that pushes the limits of two lesser-known learning theories, and in so doing have created successful accelerated training programs in messy, real-world military and industrial contexts.

The following is are my takeaways from Ced’s summary repurposed for my own future reference. As a dues-paying member of the “learn in public” congregation, I’m posting it for anyone else who might care.


In the current era of frequent deployments to a variety of locations worldwide to fight the War on Terror, there are far fewer opportunities to have systematic training and practice. These are highly dynamic tasks that require considerable cognitive flexibility. Speed in acquiring the knowledge and skills to perform the tasks is crucial, as the training must often be updated and provided shortly before the personnel must deploy to the theatres where the wars are being fought.

The ideas and recommendations in the book deviate from certain mainstream ideas about pedagogy and training.

(I notice that military applications like trading are adversarial environments — skill domains involving an adversary who is constantly evolving their tactics)

What is the book about?

Accelerated Expertise is about ‘taking the concept of skill development to the limit’. This is not a book about pure theory; nor is this a book about deliberate practice in well-developed skill domains. No: this is a book that pushes the limits of two lesser-known learning theories, and in so doing have created successful accelerated training programs in messy, real-world military and industrial contexts.

    • The report  that come out of those meetings became the precursor to Accelerated Expertise  — which was prepared by Robert R. Hoffman, Paul Ward, Paul J. Feltovich, Lia DiBello, Stephen M. Fiore and Dee H. Andrews for the Department of Defence and published in 2016.

Accelerated Expertise is divided into three parts. Part 1 presents a literature review of the entire expertise research landscape circa 2016. Part 2 presents several demonstrations of successful accelerated training programs, and then an underlying theory for why those training programs work so well. Part 2 also contains a generalized structure for creating these accelerated expertise training programs. Part 3 presents a research agenda for the future, and unifies Parts 1 and 2 by pointing out all the holes in the empirical base on which existing accelerated training programs have been built. This summary will focus on Part 2.


  1. Accelerate proficiency
  2. Increase retention

This necessitated 4 sub-goals:

  1. Rapid training
  2. Dynamic adjustments: rapidly incorporate changes in the metagame
  3. Higher levels of proficiency
  4. Facilitate retention

The classic tension: mastery vs time

Mastery or expertise takes time. It’s a higher bar than “accelerating” proficiency.

But what we do know is this: the set of successful accelerated training programs that currently exist enable accelerated proficiency, not accelerated mastery.

  1. Conventional approach to trainingFigure out a set of atomised skills and lay them out from the most basic skills to the most advanced, and then design a training syllabus to teach each skill in the right order, making sure to teach the pre-requisites first, and then incrementally complexify our taught concepts and skills and training programs. We would probably also design exercises for the lower levels of skills, and attempt to create intermediate assessment tasks or ‘tests’.

    We would, in short, attempt to replicate how we are taught in school.

    Problems with this approach:

    1. It takes too long
    2. Breaking a skill domain down to atomised skills is risky — it is likely that you will accidentally cause the construction of subtly wrong mental models, due to the incomplete nature of a skill hierarchy. This then slows expertise development, since trainers would now have to do additional work to help student unlearn.
    3. Experts are able to see connections and draw links between concepts or cues that novices cannot. Teaching atomised concepts will prevent novices from learning these connections, and may in fact result in either subpar performance or a training plateau later on.
    4. Assessments for atomised skills do not translate to assessments of real-world performance.
    5. Conventional methods try to lower the cognitive load of extraneous details to isolate skill acquisition, but this risks oversimplification.
    6. It is not easy to update the training program if the skill domain changes…a hierarchical syllabus resists updating. Which lesson do you update? At what level of complexity? What prerequisites must change? (I’m less concerned about this)
    7. A counterintuitive reason: external assessments often degrade the learner’s ability to sensemake in the field.  In other words, extremely clear feedback sometimes prevents students from learning effectively from experience, which may slow their learning when they arrive in a real world domai

The NDM Approach

The NDM field uses CTA, cognitive task analysis, to extract tacit mental models of expertise…This allows you to sidestep the problem of good hierarchical skill tree design. Once you have an explicated mental model of the expertise you desire, you may ask a simpler question: what kind of simulations may I design to provoke the construction of those mental models in the heads of my students?…This core insight underpins many of the successful accelerated expertise training programs in use today.

General structure of an accelerated expertise training program

  1. Identify who the domain experts are.
    1. In depth career interviews about education, training and job experiences
    2. professional standards or licensing
    3. measures of actual performance at familiar tasks
    4. social interaction analysis (asking groups of practitioners who is a master at what)
  2. Perform cognitive task analysis on these identified experts to extract their expertise.Depending on the exact CTA method you use, this step will initially take a few months, and require multiple interviews with multiple experts (and also with some novices) in order to perform good extraction.
  3. Building a case library of difficult cases

Store these cases, and code them according to measures of difficulty.

  1. Turn the case library into a set of training simulations

This step is a bit of an art — the researchers say that ‘no set of generalised principles currently exist for designing a good simulation’. They know that cognitive fidelity to the real world is key — but how good must the fidelity be? Training programs here span from full virtual simulations (using VR headsets) to pen-and-paper decision making exercises (called Tactical Decision-making Games) employed by the Marines.

  1. Feedback in simulation training is sometimes qualitative and multi-factorial.

Some exercises like Gary Klein’s Shadowbox method ask multiple-choice question at critical decision points during a presented scenario (e.g., ‘at this point of the cardiac arrest (freeze-frame the video), what cues do you consider important?’). Learners then compare their answers to an experts and then reflect on what they missed.

A common objection

A common reaction to this training approach is to say “wait, but novices will feel lost and overwhelmed if they have no basic conceptual training and are instead thrown into real world tasks!” — and this is certainly a valid concern. To be fair, the book’s approach may be combined with some form of atomised skill training up front. But it’s worth asking if a novice’s feeling of artificial progression is actually helpful, if the progression comes at the expense of real world performance. The authors basically shrug this off and say (I’m paraphrasing): “well, do you want accelerated expertise or not?” In more formal learning science terms, this ‘overwhelming’ feeling is probably best seen as a ‘**desirable difficulty’**, and may be an acceptable price to pay for acceleration. (When Zak had to figure out what was going on at the first club basketball practice I think the coach had premeditated this desirable difficulty and this was confirmed by another parent as the coach’s “style”. It’s intentional)

The importance of a case library

*Case experience is so important to the achievement of proficiency that it can be assumed that organisations would need very large case repositories for use in training (and also to preserve organisational memory). Instruction using cases is greatly enhanced when “just the right case” or set of cases can be engaged at a prime learning moment for a learner (Kolodner, 1993). This also argues for a need for large numbers of cases, to cover many contingencies. Creating and maintaining case libraries is a matter of organisation among cases, good retrieval schemes, and smart indexing—all so that “lessons learned” do not become “lessons forgotten.”

The US Marines, for instance, own a large and growing library of ‘Tactical Decision-Making Games’, or ‘TDGs’, built from various real or virtual battlefield scenarios; these represent a corpus of the collective operational expertise of the Marines Corps.*

The underlying theory behind this training approach

Cognitive Flexibility Theory (CFT)

Core syllogism

  1. Learning is the active construction of conceptual understanding.
  2. Training must support the learner in overcoming reductive explanation.
  3. Reductive explanation reinforces and preserves itself through misconception networks and through knowledge shields.
  4. Advanced learning is the ability to flexibly apply knowledge to cases within the domain. [This is what I mean when I use the word “learning” — effective behavior change]

Therefore, instruction by incremental complexification will not be conducive of advanced learning.

Therefore, advanced learning is promoted by emphasizing the interconnectedness of multiple cases and concepts along multiple dimensions, and the use of multiple, highly organized representations.

Empirical ground

  • Studies of learning of topics that have conceptual complexity (medical students).
  • Demonstrations of knowledge shields and dimensions of difficulty.
  • Demonstrations that learners tend to oversimplify (reductive bias) by the spurious reduction of complexity.
  • Studies of the value of using multiple analogies.
  • Demonstrations that learners tend to regularise that which is irregular, which leads to failure to transfer knowledge to new cases.
  • Demonstrations that learners tend to de-contextualize concepts, which leads to failure to transfer knowledge to new cases.
  • Demonstrations that learners tend to take the role of passive recipients versus active participants.
  • Hypothesis that learners tend to rely too much on generic abstractions, which can be too far removed from the specific instances experienced to be apparently applicable to new cases, i.e., failure to transfer knowledge to new cases.
  • Conceptual complexity and case-to-case irregularity pose problems for traditional theories and modes of instruction.
  • Instruction that simplifies and then complicates incrementally can detract from advanced knowledge acquisition by facilitating the formation of reductive understanding and knowledge shields.
  • Instruction that emphasizes recall memory will not contribute to inferential understanding and advanced knowledge acquisition (transfer).

Cognitive Transformation Theory (CTT)

Core syllogism

  1. Learning consists of the elaboration and replacement of mental models.
  2. Mental models are limited and include knowledge shields.
  3. Knowledge shields lead to wrong diagnoses and enable the discounting of evidence.

Therefore learning must also involve unlearning.

Empirical ground and claims

  • Studies of the reasoning of scientists
  • Flawed “storehouse” memory metaphor and the teaching philosophy it entailed (memorization of facts; practice plus immediate feedback, outcome feedback).
  • Studies of science learning showing how misconceptions lead to error.
  • Studies of scientist and student reactions to anomalous data.
  • Success of “cognitive conflict” methods at producing conceptual change.

Additional propositions in the theory

  • Mental models are reductive and fragmented, and therefore incomplete and flawed.
  • Learning is the refinement of mental models. Mental models provide causal explanations.
  • Experts have more detailed and more sophisticated mental models than novices. Experts have more accurate causal mental models.
  • Flawed mental models are barriers to learning (knowledge shields).
  • Learning is by sensemaking (discovery, reflection) as well as by teaching.
  • Refinement of mental models entails at least some un-learning (accommodation; restructuring, changes to core concepts).
  • Refinement of mental models can take the form of increased sophistication of a flawed model, making it easier for the learner to explain away inconsistencies or anomalous data.
  • Learning is discontinuous. (Learning advances when flawed mental models are replaced, and is stable when a model is refined and gets harder to disconfirm.)
  • People have a variety of fragmented mental models. “Central” mental models are causal stories.

The emphasis of CFT is on overcoming simplifying mental models. Hence it advises against applying instructional methods that involve progressive complexity.

CTT, on the other hand, focuses on strategies, and the learning and unlearning of strategies.

CFT and CTT each try to achieve increases in proficiency, but in different ways. For CFT, it is flexibility and for CTT, it is a better mental model, but one that will have to be thrown out later on. CFT does not say what the sweet spot is for flexibility. A learner who over complexifies may not get any traction and might become paralysed. It thus might be considered a “lopsided” theory, or at least an incomplete one. CFT emphasises the achievement of flexibility whereas CTT emphasises the need for unlearning and relearning. Both theories regard advanced learning as a form of sensemaking (discovery, reflection) and both regard learning as discontinuous; advancing when flawed mental models are replaced, stable when a model is refined and gets harder to disconfirm.

The core syllogism of the CFT-CTT merger

  1. Learning is the active construction of knowledge; the elaboration and replacement of mental models, causal stories, or conceptual understandings.
  2. All mental models are limited. People have a variety of fragmentary and often reductive mental models.
  3. Training must support the learner in overcoming reductive explanations.
  4. Knowledge shields lead to wrong diagnoses and enable the discounting of evidence.
  5. Reductive explanation reinforces and preserves itself through misconception networks and through knowledge shields. Flexible learning involves the interplay of concepts and contextual particulars as they play out within and are influenced by cases of application within a domain.

Therefore learning must also involve unlearning and relearning.

Therefore advanced learning is promoted by emphasizing the interconnectedness of multiple cases and concepts along multiple conceptual dimensions, and the use of multiple, highly organized representations.

2 frustrating realities

  1. That, first, everything in the expertise literature is difficult to generalise. Some methods work well in some domains but not in others. The ultimate test is in the application: if you attempt to put something to practice, and it doesn’t work out, it doesn’t necessarily mean that the technique is bad. It just means that it doesn’t work for your particular context. The sooner you learn to embrace this, the better.
  2. Second, the authors take care to point out that a great many things about training can probably never be known. For instance, it is nearly impossible to isolate the factors that result in successful training in real world contexts — and yet real world contexts is ultimately where we want training to occur. There are simply too many confounding variables.

Ced’s final point

The overall picture that I got from the book goes something like this: “We know very little about expertise. There are large gaps in our empirical base. (Please, DoD, fund us so we can plug them!) What we do know is messy, because there are a ton of confounding variables. And yet, given that we’ve mostly worked in applied domains, our training programs seem to deliver results for businesses and soldiers, even if we don’t perfectly understand how they do so. Perhaps this is simply the nature of things in expertise research. We have discovered several things that work — the biggest of which is Cognitive Task Analysis, which enable us to extract actual mental models of expertise. We also have a usable macrocognitive theory of learning. But beyond that — phooey. Perhaps we just have to keep trying things, and check that our learners get better faster, and we can only speculate at why our programs work; we can never know for sure.”

This appears to be the price of research in real world environments. And I have to say: if the price of progress in expertise is that we don’t really know what works for sure, then I think on balance, this isn’t too bad. But I am a practitioner, not a scientist; I want things that work, I don’t necessarily need to get at the truth

Notes From Moloch

Select excerpts from Slatestarcodex’s:

Meditations on Moloch (Link)

The premise:

The implicit question is – if everyone hates the current system, who perpetuates it? And Ginsberg answers: “Moloch”. It’s powerful not because it’s correct – nobody literally thinks an ancient Carthaginian demon causes everything – but because thinking of the system as an agent throws into relief the degree to which the system isn’t an agent.

Categories and examples of “multi-polar traps”

Situations where the best course of action for an individual makes the group worse off.

I sorted them as follows:

  1. Prisoner’s Dilemma
    • Dollar auctions (think of “pay to bid” auctions)
    • Tragedy of the commons problems (ie overfishing)

  2. Race to the bottom
    • Malthusian Traps (intense competitive pressures that penalize attempts at “slack”)
    • Capitalism (an instance of the evolutionary mechanism underlying Malthusian traps)
    • Two-income traps (From within the system, absent a government literally willing to ban second jobs, everyone who doesn’t get one will be left behind.)
    • Agriculture (Maybe hunting-gathering was more enjoyable, higher life expectancy, and more conducive to human flourishing – but in a state of sufficiently intense competition ag wins)
    • Arms races
    • Education signaling
    • Science and pseudo-science research
    • Gov’t corruption
    • Politics (Congressmen tactics to get elected)

All these scenarios are in fact a race to the bottom. Once one agent learns how to become more competitive by sacrificing a common value, all its competitors must also sacrifice that value or be outcompeted and replaced by the less scrupulous. Therefore, the system is likely to end up with everyone once again equally competitive, but the sacrificed value is gone forever. From a god’s-eye-view, the competitors know they will all be worse off if they defect, but from within the system, given insufficient coordination it’s impossible to avoid.

…in some competition optimizing for X, the opportunity arises to throw some other value under the bus for improved X. Those who take it prosper. Those who don’t take it die out. Eventually, everyone’s relative status is about the same as before, but everyone’s absolute status is worse than before. The process continues until all other values that can be traded off have been – in other words, until human ingenuity cannot possibly figure out a way to make things any worse.

My own local example:

The public school system shifted the start date of the scholastic year up from late August to early August to gain an artifical advantage in year-end standardized test scores by giving the students more time to prepare. Eventually, all schools will adopt this to maintain competitiveness and we’ll sacrifice the value of summer vacations in August when people commonly take off work and camps are not in session.

Select Excerpts

On incentives and initial conditons…

Any human with above room temperature IQ can design a utopia. The reason our current system isn’t a utopia is that it wasn’t designed by humans. Just as you can look at an arid terrain and determine what shape a river will one day take by assuming water will obey gravity, so you can look at a civilization and determine what shape its institutions will one day take by assuming people will obey incentives. But that means that just as the shapes of rivers are not designed for beauty or navigation, but rather an artifact of randomly determined terrain, so institutions will not be designed for prosperity or justice, but rather an artifact of randomly determined initial conditions.

We just analogized the flow of incentives to the flow of a river. The downhill trajectory is appropriate: the traps happen when you find an opportunity to trade off a useful value for greater competitiveness. Once everyone has it, the greater competitiveness brings you no joy – but the value is lost forever. Therefore, each step of the Poor Coordination Polka makes your life worse.


Capitalism is a lossy accounting system in that it can elevate priorities without precision. Not unlike napalm. Its a victim of its own success in the sense that any critique of it galvanizes its defense with soothing rationalizations both by the rich and by those to whom it has unknowingly imprisoned. Look, capitalism is good. It doesn’t need religious arguments in its favor to affirm that. Those arguments discredit its supporters which is a collective self-own. It’s possible to discuss its merits and flaws in the same room.

With that said, here’s a nuanced point from the essay…

I know that “capitalists sometimes do bad things” isn’t exactly an original talking point. But I do want to stress how it’s not equivalent to “capitalists are greedy”. I mean, sometimes they are greedy. But other times they’re just in a sufficiently intense competition where anyone who doesn’t do it will be outcompeted and replaced by people who do. Business practices are set by Moloch, no one else has any choice in the matter. (from my very little knowledge of Marx, he understands this very very well and people who summarize him as “capitalists are greedy” are doing him a disservice)


Politics is similarly skewed…

As well understood as the capitalist example is, I think it is less well appreciated that democracy has the same problems. Yes, in theory it’s optimizing for voter happiness which correlates with good policymaking. But as soon as there’s the slightest disconnect between good policymaking and electability, good policymaking has to get thrown under the bus. For example, ever-increasing prison terms are unfair to inmates and unfair to the society that has to pay for them. Politicans are unwilling to do anything about them because they don’t want to look “soft on crime”, and if a single inmate whom they helped release ever does anything bad (and statistically one of them will have to) it will be all over the airwaves as “Convict released by Congressman’s policies kills family of five, how can the Congressman even sleep at night let alone claim he deserves reelection?”. So even if decreasing prison populations would be good policy – and it is – it will be very difficult to implement.

The libertarian-authoritarian axis on the Political Compass is a tradeoff between discoordination and tyranny. You can have everything perfectly coordinated by someone with a god’s-eye-view – but then you risk Stalin. And you can be totally free of all central authority – but then you’re stuck in every stupid multipolar trap Moloch can devise. The libertarians make a convincing argument for the one side, and the monarchists for the other, but I expect that like most tradeoffs we just have to hold our noses and admit it’s a really hard problem.

This reminds me of a story I heard from my wife about an elementary school class election. One kid gave an impassioned speech about what they would change (no hall monitors anymore? I have no idea what kids see as the real issues in that otherwise simulcrum of no reality I know of called “school”). Anyway, the challenging candidate rolls up to the podium and declares that if you elect him, he’ll secure the school a…rollercoaster! In the exit poll one of the students was asked why they voted for the rollercoaster candidate and the student said, “I know it probably won’t happen, but what if it did?! That would be soooo cool”.

I suspect the challenger is on their way to a lucrative career in politics.

And we are all worse off for it.

How conservative and liberal views of societal evolution dictate thir imperatives

Societies, like animals, evolve. The ones that survive spawn memetic descendants – for example, the success of Britan allowed it to spin off Canada, Australia, the US, et cetera. Thus, we expect societies that exist to be somewhat optimized for stability and prosperity. I think this is one of the strongest conservative arguments. Just as a random change to a letter in the human genome will probably be deleterious rather than beneficial since humans are a complicated fine-tuned system whose genome has been pre-optimized for survival – so most changes to our cultural DNA will disrupt some institution that evolved to help Anglo-American (or whatever) society outcompete its real and hypothetical rivals.

The liberal counterargument to that is that evolution is a blind idiot alien god that optimizes for stupid things and has no concern with human value. Thus, the fact that some species of wasps paralyze caterpillars, lay their eggs inside of it, and have its young devour the still-living paralyzed caterpillar from the inside doesn’t set off evolution’s moral sensor, because evolution doesn’t have a moral sensor because evolution doesn’t care. Suppose that in fact patriarchy is adaptive to societies because it allows women to spend all their time bearing children who can then engage in productive economic activity and fight wars. The social evolutionary processes that cause societies to adopt patriarchy still have exactly as little concern for its moral effects on women as the biological evolutionary processes that cause wasps to lay their eggs in caterpillars. Evolution doesn’t care. But we do care. There’s a tradeoff between Gnon-compliance – saying “Okay, the strongest possible society is a patriarchal one, we should implement patriarchy” and our human values – like women who want to do something other than bear children.

Too far to one side of the tradeoff, and we have unstable impoverished societies that die out for going against natural law. Too far to the other side, and we have lean mean fighting machines that are murderous and miserable. Think your local anarchist commune versus Sparta.

An optimistic angle. Or maybe not.

Franklin continues: “The project of civilization [is] for man to graduate from the metaphorical savage, subject to the law of the jungle, to the civilized gardener who, while theoretically still subject to the law of the jungle, is so dominant as to limit the usefulness of that model. This need not be done globally; we may only be able to carve out a small walled garden for ourselves, but make no mistake, even if only locally, the project of civilization is to capture Gnon. “

I maybe agree with Warg here more than I have ever agreed with anyone else about anything. He says something really important and he says it beautifully and there are so many words of praise I want to say for this post and for the thought processes behind it. But what I am actually going to say is…

Gotcha! You die anyway!

My Concluding Thoughts

  • First a general thought:

    This essay is infotainment. It’s a work of art, it’s provocative, and one I expect to return to because it is stirring. Its sense-making Slatestar at his best. It’s dreary by default. But I see a glimmer of liberation peeking from behind its nimbus:

    If you accept its hopelessness and kneel to Moloch, you might fare better. But it’s delaying the inevitable. Instead, you can rebel. It might be quiet. And maybe nobody will care. But a large part of your reality is your own internal narration of it. There are truths that inhabit the physical world. Beyond that, things veer pretty quickly towards “it’s all made up”. This is liberation. How you feel about how you play matters. You might as well play your way since it doesn’t matter anyway.

    But this is not even the useful part.

    The real gift is once you witness how others deal with this non-mattering, you have found a magic compass. It points you to the family you choose. It gives you back control of your attention. And while we’re here, that’s probably the most useful choice we have.

  • A (pollyannish?) thought:

    This essay highlights how capitalism and competition narrow our values. ESG seeks to broaden our values. There is some irony in that one of the arguments in favor of ESG is that if we internalized our externalities, through what amounts to a broader system of accounting, that it would also maximize a Chicago-school capitalists brand of utility.

    Perhaps this is true. Companies that are more virtuous might be better for “shareholder value” in the long run. But part of me finds that reasoning patronizing. Like hiding the dog’s pill in peanut butter. 

    The ESGer is conceding a point they shouldn’t have to. Instead of trying to fit a wider set of values into an existing legible accounting system we could realize that the system is a needless sacrifice to legibility.

    (I don’t need a lecture on the grifty aspects of ESG. Every movement that gains traction brings its share of mops and sociopaths.)

  • Finally:

    You should read the essay. It’s a classic from a good writer. If you need another breadcrumb, one of the questions Slatestar poses:

    Why do things not degenerate more and more until we are back at subsistence level?

    I can think of three bad reasons – excess resources, physical limitations, and utility maximization – plus one good reason – coordination.

    You’ll need to read it to explore the answers.

Keepsakes From Slatestar’s Fake Graduation Speech

Link to original post:

These excerpts capture the gist of the “speech” that I want to retain.

What if education, as you understand it – public or private or charter schooling from age four or five all the way to university as young adults – is, on net, a waste of your time and money?

Addressing The Alleged Benefits

Benefit 1: The philosophical benefits of feeling connected to the beauty of mathematics, the passion of the humanities, the great historical traditions.

Testing the claim: Compare to a control group — the unschooled

“unschooling” movement, a group of parents who think school is oppressive and damaging. They tell the government they’re home-schooling their children but actually just let them do whatever they want. They may teach their kid something if the child wants to be taught, otherwise they will leave them pretty much alone.

And this is really hard to study, because they’re a highly self-selected group and there aren’t very many of them.

What do we know from the small sample?

    1. if you’d stayed out of public school and stayed home and played games and maybe asked your parents some questions, then by the time your friends were graduating twelfth grade, you would have the equivalent of an eleventh-grade education.
    2. Louis Benezet’s experiment: He decreed that in some of the schools in his district, there would be no math instruction until grade six. He found that within a year, these sixth graders had caught up with their peers in traditional schools, and furthermore that they were able to think much more logically about math problems – figure out what was going on rather than desperately trying to multiply and divide all the numbers in the problem by one another.math education before grade six is useless at best. And it’s hard to resist the urge to generalize to other subjects and children even older still.

Why is it so easy for the unschooled to keep up with their better-educated brethren? My guess is that it’s because very little learning goes on at school at all.

      • According to the general survey of knowledge among college students, 3.3% know who Euclid was, 7.6% know who wrote Canterbury, and a full 15% know what city the Parthenon’s in.
      • 36% of high school students know that an atom is bigger than an electron, rather than vice versa. But a full 59% of college students know the same. That’s a whole nine percent better than chance. On one of the most basic facts about the fundamental entities that make up everything in existence.

“But knowledge isn’t about names and dates!” No, but names and dates are the parts that are easy to measure, and it’s a pretty good bet that if you don’t know what city the Parthenon’s in you probably haven’t absorbed the full genius of the Greek architectural tradition. Anyone who’s never heard of Chaucer probably doesn’t have strong opinions on the classics of Middle English literature.

Benefit #2: The practical benefits of being able to get a job and afford nice things like food and shelter.

Testing the claim: Employment

About fifteen percent of you will be some variant of unemployed straight out of college. Another ten percent will find something part-time. And another forty or so percent will be underemployed, working as waiters or clerks or baristas or something else that uses zero percent of the knowledge you’ve worked so hard to accumulate.

As bad as you will have it, everyone who didn’t graduate college still has it much, much worse. All the economic indicators agree with the signs from the desolate wasteland that was once our industrial heartland: they are doomed. Their wages are not stagnating but actively declining

Testing the claim: More education

As bad as the job market is, staying in school looks worse. Economists warn that attending law school is the worst career decision you can make, so much so that newly graduated lawyers have nothing do to but sue law schools for not warning them against attending and established firms offer an Anything But Law School Scholarship to raise awareness of the problem. Doctors are so uniformly unhappy that they are committing suicide in record numbers and nine out of ten would warn young people against going into medicine. Graduate school has always been an iffy bet, but now the ratio of Ph. D applicants to open tenure track positions has hit triple digits, with the vast majority ending up as miserable adjunct professors who juggle multiple part time jobs and end up making as much as a Starbucks barista but without the health insurance.

We were counting the benefits of formal education. We did not do so well in trying to prove that it left you more knowledgeable, but it did seem like it had some practical value in getting you a little bit more money.

What of the costs of education?

Musing for society at large

Well, first about twenty thousand hours of your youth. That’s okay. You weren’t using that golden time of perfect health and halcyon memories when you had more true capacity for creativity and imagination and happiness than you ever will again anyway.

the financial side of it. At $11,000 average per pupil spending per year times thirteen years plus various preschool and college subsidies, the government spends $155,000 on the kindergarten-through-college education of the average American.

How about to each of the individual types?

To the one who says:

I am the 3.3%! I know who Euclid was and I understand the sublime beauty of geometry. I don’t think I would have been exposed to it, or had the grit to keep studying it, if I hadn’t been here surrounded by equally curious peers, under the instruction of enthusiastic professors.

  • to you my advice is: if you’ve sacrificed everything for knowledge, don’t forget that. When you are a paralegal in Brooklyn, and you get home from work, and you are very tired, and you want to curl up in front of the TV and watch reality shows until you are numb, remind yourself that you value knowledge above everything else, that you will seek intellectual beauty though the world perish, and read a book or something. Or take a class at a community college.

my education was worth it….because of the friends, I made here

  • my advice is similar: if you’ve sacrificed everything for friendship, don’t forget that. When you are a paralegal in Brooklyn, or a market analyst in Seattle, or God forbid an intern in Michigan, and you get home from work, and you are very tired, and you want to curl up in front of your computer and check Reddit, remind yourself of the friends you made here and give them a call. See how they’re doing. Write them a Christmas card, especially if it is December. Anything other than declaring friendship your supreme value and drifting out of touch.

my education was worth it…because of the connections I made

  • If you’ve sacrificed everything for ambition, be ambitious as hell. When you are a paralegal in Brooklyn or whatever, claw your way to the top, stay there, and use it to do something important. If you’ve sacrificed everything for ambition, don’t you dare stop at middle manager.

my education was worth it… because it helped me learn civic values, become a better person who is better able to help others.

  • If you’ve sacrificed everything to help others, don’t let it all end with donating a tenner to the OXFAM guy on the street now and then. Join Giving What We Can or go volunteer somewhere. If you’ve sacrificed everything for others, make sure others get something good out of the deal!

my education was worth it because formal education in the school system taught me how to think.

  • Sorry, one second, HAHAHAHAHAHHAHAAAHAHAHAHHHAAHAHA…I’m sorry. Ahem. To you my advice is, again, similar. If you’ve sacrificed everything to learn how to think, learn how to think. When someone says something you disagree with, before you dismiss a straw man it and call that person names and slap yourself five for your brilliant rebuttal, take a second to consider it fairly on its own terms. Go learn about biases and heuristics and how to avoid them. Read enough psychology and cognitive science to figure out why your claim might kind of inspire hysterical laughter from people even a little familiar with the field. Just don’t sacrifice everything to learn how to think and end up only rearranging your prejudices.

And To Those Us Who Feel Fleeced

Finally, some of you will say, wait a second, maybe my education wasn’t worth it. Or, maybe it was the best choice to make from within a bad paradigm, but I’m not content with that.

To you, I can offer a small amount of compensation. You have learned a very valuable lesson that you might not have been able to learn any other way. You have learned that the system is Not Your Friend. I use those last three words very consciously. People usually say “not your friend” as an understatement, a way of saying something is actively hostile. I don’t mean that.

The system is not your friend. The system is not your enemy. The system is a retarded giant throwing wads of $100 bills and books of rules in random directions while shouting “LOOK AT ME! I’M HELPING! I’M HELPING!” Sometimes by luck you catch a wad of cash, and you think the system loves you. Other times by misfortune you get hit in the gut with a rulebook, and you think the system hates you. But either one is giving the system too much credit.

To you I don’t have very much advice…if I knew how to fix the system, it’s a pretty good bet other people would know too and the system would already have been fixed. Maybe you, armed with a degree from the University of [mumble], will be the one to help figure it out.

On the other hand, someone a lot smarter than I am did have some advice for you. Poor Kurt Vonnegut never did get to give a real graduation speech, but one of his books has some advice targeted at another major life transition:

Hello babies. Welcome to Earth. It’s hot in the summer and cold in the winter. It’s round and wet and crowded. On the outside, babies, you’ve got a hundred years here. There’s only one rule that I know of, babies-“God damn it, you’ve got to be kind.”

I don’t know how to fix the system, but I am pretty sure that one of the ingredients is kindness.

I think of kindness not only as the moral virtue of volunteering at a soup kitchen or even of living your life to help as many other people as possible, but also as an epistemic virtue. Epistemic kindness is kind of like humility. Kindness to ideas you disagree with. Kindness to positions you want to dismiss as crazy and dismiss with insults and mockery. Kindness that breaks you out of your own arrogance, makes you realize the truth is more important than your own glorification, especially when there’s a lot at stake.

Unpacking The Beauty Of A deBoer Book Review

Freddie deBoer’s review of Ross Douthat’s The Deep Places, a memoir of Douthat’s illness, is impressively balanced and justified (I say justified because the definition of balance has shifted from what I can tell from “reasonable opposition” to “any opposition” as if every view holds equal merit. No doubt a side effect of “democratization” of distribution. Look, just because there are a few ghouls who deny the Holocaust or rationalize slavery doesn’t mean the school library should grant them shelf space).

deBoer’s praise of the book is as profound as the experience he had reading it. Yet his well-founded criticisms are never watered down. It’s hard to imagine a reviewer who found so many problems with the narrative taking the effort to extol, with equal sincerity, its virtue. The review is a lesson in seeing and communicating. The nuance stands in such relief to the binary discourses that at this point have left us haggard at best but more likely numb. Reading this review left me feeling that integrity was a fringe value, because it was jarring to see a sweaty writer say “good game” and actually mean it.

You can read the full review here.

My highlights are below (boldface is mine).

The nature of the internet

  1. In the internet era, likeminded people will find each other, including those that are suffering from ailments the conventional medical system can’t treat or even define. It’s therefore no surprise that since the whole world went online the number of people claiming to suffer from disputed diseases with shifting symptoms and complex etiologies has risen dramatically. All of those people, I have no doubt, are in some kind of pain, and we are compelled by decency and shared humanity to confront that pain. But it’s also true that the internet creates conspiracists, it heightens distrust of institutions, it magnifies paranoia. On the internet, no matter how fanciful your sneaking suspicions might be, no matter how disordered and unhealthy, someone will emerge from the digital fog and whisper to you that all of it is real. From this stems gangstalking, stems QAnon, stems people who think they’re getting sick from 5G. It’s a problem from hell and one I don’t know how to fix.

  2. When one group of people in society feels unheard for so long, in time they form a crusade, and the object of that crusade is the most human of all demands: feel our pain. It is natural to want the world to understand our suffering as something different, something deeper, something special. The cacophony of our political lives stems in no small part from the ceaselessly multiplying number of groups that ask that their suffering be seen as something transcendent and unique. The trouble, of course, is that we’re all suffering, and in fact to suffer is the least special, most ordinary thing any person can do.

Why Douthat is an interesting narrator to this story:

  1. I have also known a fair number of people who claimed to suffer from chronic Lyme, and they have all been… crunchy. The diagnosis and its inherent antagonism to the medical establishment fit very well into a kind of bourgie hippie boomer counterculture. Chronic Lyme advocates insist that all manner of people believe they suffer from the disease, and I have no reason to doubt them. But it’s also the case that there is a decided cultural slant to their community, and I associate it more with the world of acupuncture and reiki than dissident conservatives.

    And yet Douthat proves himself to be the right guide, I think precisely because he’s likely never paid money to have his chakras aligned. He so clearly does not want the answer to be found in the types of medicine that are so often superficially ridiculous, but has been moved to by unrelenting illness, and the consequence is that he is open-minded but never credulous.* 2. Douthat seems to attract more progressive ire, I suppose precisely because he refuses to occupy the stereotype of the snarling right-winger. (I can tell you from long experience that there are many people whose first demand is not left-wing politics or right-wing politics but political comprehensibility, for everyone to dutifully sort into teams.) On balance I can think of few writers who have paid more of a price for being thoughtful than Douthat. His recent book The Decadent Society is an often compelling, occasionally meandering collection of complaints that I can imagine emerging from no other writer.

Why deBoer’s affection for the book does not relieve him from his critical duty

  1. What we have in The Deep Places, I think, is the most compelling and moving version of a bad argument; it provoked my admiration again and again even while I shook my head in concern on every page.

  2. I also take Ross Douthat seriously, and to take an author seriously is to subject their books to real critical evaluation, which means that I can’t simply enjoy the elements I liked and ignore those I didn’t. A less fair reason for my critical sympathy is that I suspect The Deep Places may well become a new bible for the chronic Lyme movement. And if so, like all bibles this one will find its considerable nuance and restraint drained from it as it becomes a holy object to a group of people who, whatever the truth of their medical conditions, are looking for someone to tell them that the world has been uniquely hard on them.

  3. The author is excused for loading the dice. But the book is not.

  4. Skepticism towards a particularly story about the origins of pain is not the same as skepticism towards the pain itself.

  5. Setting aside its unjustifiable placement in scare quotes, the use of the word hypochondriac is notable here because, though I have not counted, the word cannot have appeared in the text more than a handful of times. I don’t believe the term Munchausen appears at all. But these are real, documented, prevalent conditions that have serious negative consequences for our overtaxed healthcare system. I spent the entire book wondering when Douthat would confront those conditions directly and with research, rather than expressed as his fleeting fears about the legitimacy of his own feelings. But it never arrived, and if there is one part of this book that I would name a serious flaw, it’s that.

  6. The chronic Lyme community, as sympathetic as I find them, makes difficult demands of the rest of us, including surrendering empirical rigor in the field where it is most essential… I have tried to separate my skepticism towards the illness from my impressions of the book, but I haven’t been able to. I am left with a long record of pain, a man who has responded to that pain in profoundly human and sympathetic ways, and a mess, a terrible mess of illness and medicine and science and conspiracism, and at its core a tangle of bodies and the people who no longer recognize them. And a book I do not know how to evaluate.

deBoer’s logic at work

  1. But I am compelled to point out that, again and again, Douthat shares something that would seem to point firmly against his working theory of his suffering and yet seems not to notice. He references Pamela Weintraub’s Cure Unknown, another chronic Lyme memoir, and notes that “her family of four were all infected in the same yard, the same woods, the same neighborhood – and yet she, her husband, and their two sons followed completely variable paths toward recovery.” Douthat mentions this uncritically and takes it as evidence for the mysterious nature of Lyme. I, on the other hand, hear such a thing and think that a disease that supposedly springs from the same infection by the same bacterium carried by the same parasite in the same geography and yet results in totally dissonant outcomes for treatment and recovery is not one disease in any conventional sense. At times I wanted to say to some imaginary listener, “Isn’t an illness that can seem to have any symptoms imaginable at any given time a little hard to believe?”

  2. At one point, Douthat recalls that his wife asked a skeptical doctor if Lyme’s prevalence in the region meant it was an unsafe place to raise children. I am trying to summon all of my charity here: this is a little much. It’s hard to entertain the notion that a disease that is serious but treatable, and a potential variant that is incredibly rare if it exists at all, poses such a serious threat to children that it might make the 70,000 square miles that constitute New England an irresponsible place to raise a family. Such questions emerged from a harried and exhausted family that had been brought to its breaking point, and I have no desire to mock the sentiment, at all. But the question also has appeared now in an important work of nonfiction by a prominent and successful writer, and it is my responsibility to point out that it is this type of excess that has done so much to discredit chronic Lyme advocates. I recognize that this aside is meant, in part, to demonstrate the degree to which fear of Lyme had crept into their lives. But Douthat clearly saw it as a sensible question, describing the doctor’s response, “he looked at her as if the question had never even occurred to him.” Well, yes, I imagine he would. Skin cancer kills 15,000 people a year. The incidence of skin cancer is significantly higher in regions with a higher UV index. Yet no one has declared the Southwest an irresponsible place in which to raise children. The doctor was surprised by the question because it was not a sensible one.

  3. Well, Occam’s razor can be a cold thing, and it is far from an infallible guide. But I must invoke it here: can it possibly be the most direct, most parsimonious explanation that a disease runs rampant among some of the most affluent and well-connected people in the country, and yet for reasons that remain inscrutable to me, the medical establishment has conspired to belittle and ignore them? Medical researchers live to discover new diseases and doctors flourish professionally when they treat them. So why the conspiracy? For what purpose? Who profits? Both because of the incentives of malpractice law and the fact that more treatment means more money, our doctors tend to over treat, over diagnose. But the chronic Lyme narrative requires us to believe that doctors refuse to take it seriously, despite such suffering… for what?

deBoer’s undiluted praise

  1. But boy, it’s beautifully rendered. Thus my dilemma, as a reviewer. Despite how harsh the above might sound, I experienced this book as a brave and brilliantly-realized cry of pain and loss, and that’s worth the purchase price itself.

    It’s autumn, as I write this. Like any good stereotypical white dude from New England, fall is my favorite season. Pretentiously I tell myself that it’s because fall is the beginning of an ancient ritual of death and rebirth, because it helps me access the most visceral elements of human life, because it helps me imagine that everything I loved that has died will sometime return, flowering and green. More accurately I love fall because the weather is pleasant and the leaves are pretty and football is the only sport I really follow anymore. But either way, fall is my time of ritual. In fall I read old books by dead writers who were unafraid to sift through the silt of mundane experience to find those things that survive the cruel and steady passage of time. I drink dark beer and let pot roast braise for hours on the stove. I curl up into myself.

    The Deep Places is a book for fall; I wandered today through Prospect Park and saw stubborn leaves at last beginning to change, and I thought about old gods and Christ’s love and chronic Lyme and those families that suffer from it, whatever “it” really is. The book’s manner is as spartan and tangled as the denuded trees that grace its cover. Douthat walks a narrow line, depicting a story that must by its nature invite sympathy without appearing to seek it, and he achieves this beautifully. He writes about pain, famously hard to put into words, with clarity and poise. The book is one of those rare few that tread in mourning without the constant reassurance of a happy ending soon to come. And its palette is somber and rich.

    I am one of those untrustworthy types who looks for craft first in anything I read, and I respect degree of difficulty. Writing about suffering is not easy, putting yourself out there so nakedly to a public that seems crueler by the day is not easy, and wandering through such a tangled story of the heart is not easy. For that reason alone, I commend The Deep Places.*

  1. Writing on suffering:

    But the moral imagination does not have limits. Our capacity for compassion cannot be overtaxed. What’s immensely clear in The Deep Places, and rendered beautifully, is that Ross Douthat has suffered, terribly, and his suffering has seeped out into his family and his home and his work. As so many have, he has been forced to deal with frequently uncaring doctors and a Byzantine and cruel medical system when he was least equipped to deal with them. He has seen people close to him express doubts about his sanity, he has questioned whether he will be well enough to continue his career, he has worried ceaselessly about leaving his family fatherless or, worse, of being a permanent burden on them. All of that deserves not just sympathy but understanding, adult and rigorous and friendly and honest understanding. For that reason, above all else, I’m glad that The Deep Places exists and I’m glad to have read it.

    The late Ram Dass once wrote to grieving parents, “something in you dies when you bear the unbearable, and it is only in that dark night of the soul that you are prepared to see as God sees, and to love as God loves.” I do not know what it’s like to love as God loves. But I do know what it’s like to suffer, and then to suffer more, and at last to feel something die inside me. The note of uplift at the end of The Deep Places, uncertain but real, is a record of Douthat’s willingness to let that something die inside of him too, in order to move on. That’s a thing of beauty, and though it’s difficult that Douthat cannot declare himself healthy at the end, it’s the kind of difficulty that should be faced by any adult. In that, his book triumphs.

Bubbles: Knowing You’re In One Is Not Even Half The Battle

Select excerpts from Aaron Brown and Richard Dewey’s paper:

Toil and Trouble, Don’t Get Burned Shorting Bubbles (SSRN)

It was not a mystery that there was a bubble in subprime from 2005-2008. That did not mean shorting it was an easy trade. With the benefit of hindsight, we can learn about the risks of shorting frothy assets that may even be a bubble.

From the abstract:

Bubbles are among the most puzzling and controversial phenomena of financial markets. Although rare, their cumulative impact on both investor returns and the broader economy can be great. One particular question that has motivated research is why shrewd short sellers don’t prevent excessive price increases. The “limits to arbitrage” idea argues that correcting inefficient market prices is neither easy, cheap nor riskless. The “rational bubble” literature identifies situations in which being long the bubble is a better trade than being short, even if investors know for certain the bubble will pop.

We examine the “short subprime” trade from 2005 to 2008 to evaluate these and other explanations. We argue that the short subprime trades had more risk than is commonly appreciated. We discuss how the opaque and illiquid nature of subprime mortgages deterred some investors from purchasing CDS contracts and note that other investors assessed the risk of counterparty failure, government intervention and unknown time horizon to be sufficient enough not to purchase CDS contracts.

Talking to investors who saw the bubble and passed on shorting it, instead opting for alternative strategies:

We interviewed and analyzed the internal research of several investors who evaluated the short subprime mortgage trade and decided not to purchase CDS contracts and present some of their reasoning below.
    • The Basis Trade: Magnetar Capital in Chicago.

      Magnetar did not cooperate with the media, so their story has not been widely told. Magnetar reportedly employed a strategy whereby they purchased the riskiest equity tranche in many CDOs which often offered double-digit returns. They used this positive carry to pay for protection on the AAA tranches that most investors assumed were safe. Magnetar appreciated that the correlation between the safest AAA tranche and the lowest quality equity tranche would be close to one in a crisis due to the way these securities were constructed.

    • Picking-up-the pieces trade: Soros and Tepper


      Perhaps the safest way to profit from the subprime mortgage meltdown was the time-honored method of picking up the pieces at the bottom. George Soros and his Chief Investment Officer Keith Anderson smelled opportunity and hired two ex-Salomon Brothersmortgage experts, Mason Haupt and Howie Rubin.


      David Tepper purchased shares of Citi and Bank of America near the bottom, helping his Appaloosa fund return 120% in 2009 on $12 billion in capital.

    • Convex-listed hedges correlated with a downturn: Talpins and Dalio

      Ray Dalio at Bridgewater and Jeff Talpins at Element Capital are rumored to have purchased futures or options on government bonds that would rise in value if the Fed aggressively cut interest rates. Many on Wall Street believe that Element purchased Eurodollar options in 2007 that helped his firm generate returns of 26.4% in 2007 and 34.9% in 20083. Talpins has posted annualized returns north of 20%, without a single losing year in the decade that followed. And simply being long volatility in equity markets, fixed income or currency markets paid off nicely for many traders. The key to these trades is that they removed some of the unattractive aspects of the subprime trade, by using more liquid instruments, waiting for the crisis to materialize or constructing more nuanced expressions.

The collection of people that did these trades: George Soros, David Tepper and the team at PIMCO are investors with long-term track records. They made their money quietly, in sensible trades over several years, and were also able to put large amounts of capital to work.

The sobering difficulty of the short subprime trade:

Betting against subprime mortgages worked, but it was somewhat of a Goldilocks trade: it required default rates to get high enough to generate profits on your insurance, but low enough that the banking system survived to pay you and that the government didn’t help out borrowers at your expense.

Current backdrop:

As we write this analysis in the first quarter of 2021, financial market pundits are calling bubbles in everything from cryptocurrencies and TSLA to SPACs, high-end real estate and, most recently, stocks hyped on Reddit.

My takeaways:

    • Shorting subprime looked like a hero trade but the path was painful and uncertain. You needed to weather the negative carry and margin calls on bilateral trades with banks for years. And you needed to bet against on institutions that were not bailed out.
    • Taking a bubble on straight ahead looks like foolish risk reward, especially if the bubble is “rational”1 and has no clear correcting catalyst.
    • Need to think about the risks and incentives of the system. For example, if you believe bonds are currently overpriced and shorting them, even with their low-yield and therefore relatively small negative carry, you cannot ignore the possibility that the rules can be tampered with in the name of the system. Just as banks were bailed out, it’s not impossible to imagine a yield curve control policy (YCC) similar to post-WWII would cap any upside on a short Treasury trade.
    • The paper describes what you are up against eloquently:

      The reality is that structuring good trades is often every bit as difficult as forecasting. This is particularly true if a trade is contingent on a crisis materializing, when pricing is less reliable, liquidity dries up and contractual obligations are sometimes not honored. In these instances, trade construction is everything. Even if an asset price bubble can be confidently identified ex-ante (no easy task), making money from the bubble is perhaps equally challenging….

      This separates opinion havers from risk-takers. Getting the right odds on the right contingent payoff in the state of the world that matched that payoff. And then actually being able to collect. Having an opinion on markets is like have a business idea but no ability to execute.

Graham Duncan’s “What’s Going On Here, With This Human?”

Excerpts from Graham Duncan’s “What’s Going On Here, With This Human?” (Link)

Interviewing is really a narrow application of a broader art. Duncan begins:

The philosopher Kwame Appiah writes that “in life, the challenge is not so much to figure out how best to play the game; the challenge is to figure out what game you’re playing.”

When I try to figure out what game I’m playing, I see that for the last 25 years I have been playing a game of strategy applied to people, a game where over and over I try to answer the question “what’s going on here, with this human?”  In this essay, I make recommendations about candidate selection based on thousands of assessments I have made and my somewhat obsessive interest in the topic.

My goal in this essay is to help others make better decisions on a potential hire, business partner, or even life partner as quickly and as accurately as possible.  It’s made up of suggested action steps and some of the ruminations that underlie them. At the end I include my own assessment of different personality assessments and some of my go-to interview and reference questions.

These notes are select excerpts from the essay that I want to keep as a reference. My favorite line from the entire essay:

One of the greatest gifts we have for each other, for our children and spouses, for our teammates, is the positive feedback loop we can put someone into purely by believing in them, by seeing their genius and their dysfunction clearly and then helping them construct conditions for the former to flourish.

That emphasis is mine. I consider this to be one of the cheapest forms of human capital and this essay is ultimately about allocating that capital.

From the introduction

My summary: When we interview someone for a job we are looking for signs that they will do the job well. But when our goal is to “see someone clearly”, our focus shifts to finding the best role for them.


It can be useful, when interviewing someone, to take Rumelt’s cue and ask explicitly: what’s going on here with this person in front of me?  The more I’ve done it, the more I realize that what most people think of as the hard parts of hiring—asking just the right question that catches the candidate off guard, defining the role correctly, assessing the person’s skills—are less important than a more basic task: how do you see someone, including yourself, clearly?

Seeing people clearly—or at least more clearly—matters not just when finding the “best” hire, but in identifying the best role for them. Even looking at those of us who are lucky enough to have a high degree of choice about what we do with our work, I’ll bet that as few as 20% of us are in the seat that best optimizes our talents and skills at any given time—the seat that makes us feel at home in the world. That’s not good for the 80%, and it’s not good for their teams either.

The poet David Whyte describes the unfolding of life and career as a “conversation with reality”:

Whatever a human being desires for themselves will not come about exactly as they first imagined it or first laid it out in their minds…what always happens is the meeting between what you desire from your world and what the world desires of you. It’s this frontier where you overhear yourself and you overhear the world.And that frontier is the only place where things are real…in which you just try to keep an integrity and groundedness while keeping your eyes and your voice dedicated toward the horizon that you’re going to, or the horizon in another person you’re meeting.

Whyte captures how hiring can be an art form. When you see people clearly, you see the transcript of their conversation with reality up until that moment of your meeting, and you glimpse the horizon that stretches out ahead of them. And then sometimes you can help them overhear themselves and overhear what the world wants from them, whether or not that includes working in the role that you had initially imagined for them.

Part I: Seeing your Reflection in the Window

My summary: The role of being an interviewer can affect your judgment in ways in which you are not aware.


If I picture my thirty-year-old self doing an interview, I see him as the friend looking through the window: not seeing the way his mind was constantly making snap judgments about the candidate, creating stories with the slightest bit of material, “I like this,” “I don’t like that.” He would project his reality onto the reality of the other person, missing that, for instance, often even very senior people are not their usual selves in a formal interview setting, that there’s a power dynamic that he should not take lightly. He would not yet be aware that while his sensitivity to being hustled is a gift, it also creates a blind spot that causes him to mistakenly pass on a particularly good sales person or someone who is earlier in their career and still relies on jargon or cliché.

Part II: Seeing the Elephants in the Room

My summary: There are meta-techniques for overcoming your own blindspots


So let’s reframe the interview process: there are two elephants in the room, yours and that of the person you’re trying to see. The bad news is that you’re mostly blind to both elephants. The good news is that there are a lot of other riders who’ve traveled alongside the other rider and elephant. If you take your perspective on the rider and your glimpses of his or her elephant, and add everyone else’s experience of the rider and their elephant, and then control a bit for your own elephant and the references’ own elephants, you can get a good sense of how the candidate’s rider-elephant combination behaves.

Diving into techniques:

  • During interviews, I try to create a stillness that helps separate signal from noise, elephants from riders.

    During interviews, I try to create a stillness that helps separate signal from noise, elephants from riders. The easiest way to create conditions of stillness is to talk very little. It also helps to have the candidate you’re trying to see clearly ask you questions. Questions have very high signal value compared to most anything else you can get from a candidate. This is harder to do in practice than you might think—you need to make the candidate feel safe enough to ask their true questions, and you need to answer concisely or you’ll run out of time (which is particularly hard if the person asks good questions). I write down each question and sometimes respond with “I’ll answer, but first I’m curious, why did you ask that?” I’m looking for the felt sense of a “hungry mind” based on the way their questions flow. That’s very hard to fake.

    I like asking up-front, “So what criteria would you use if you were the one hiring someone for this role?” I love this question because of how unexpected the answers are. Some are tactical when you expect abstraction. Some improve your own criteria. Some use jargon that may indicate they are playing someone else’s game versus authoring their own. All are quite revealing.

  • I now consider in-person references with someone who knows the candidate well 5x more valuable than an interview. They can be 10x more valuable when you are already in a high-trust relationship with the reference-giver, and the reference-giver is in a position to see the candidate clearly, with no agendas and few blind spots of their own.

    • Given the importance of references, the highest purpose of your own interview with a candidate might be to improve your ability to conduct reference interviews, where you hold your own view as just one in a collection of views. This requires an ability to hold multiple perspectives at once. This is difficult to do because your own impressions from the interview are so vivid and multi-sensory, and everyone else’s views are mainly conveyed through language. In my experience, holding your own perspective alongside those of references should feel slightly uncomfortable and disorienting, or you’re doing it wrong. You should find the candidate confusing at times. If you first see their dysfunction, you should know you have yet to find their genius, and vice versa.
    • I try to conduct references with an eye to quirky forms of excellence. When I’m on the receiving end of reference calls, I notice that the caller is often subtly framing the exercise with a mildly suspicious “gotcha” vibe (“so why did George leave after only two years?”). I don’t find that particularly effective; it tends to make me shut down as a reference giver. Instead, when I’m calling someone, I try to imagine myself as head of people operations for the entire hedge fund or private equity ecosystem, that I’m agnostic as to where they should sit and just trying to help them get to the best spot.  That mindset seems to allow me to size up people more generously and accurately, and to accommodate more quirkiness…I also try to stick to the default assumption that “everyone is an A player at something.” It’s a more effective and more dynamic way to approach an interview—a live, fascinating puzzle to discover what the elephant and the rider do well—rather than going in with the purpose of determining whether someone is an A player in a binary, Manichean way. I prefer to imagine that I’m trying to find the candidate the best possible job for them; it may be the job I had in mind, or something else altogether.
    • As your sample size of references goes up, you can begin to calibrate on the credibility of the reference giver (what’s their sample size? What are their biases?) as well as to tune into what a “table-pounding” reference sounds like. Fourteen years later I still remember a reference I did for our CFO hire: the woman who had worked with him had a tone of “why are you wasting your time talking to me and not spending your time trying to convince him to join you?”

    • The hardest part is understanding the dog that doesn’t bark. If you don’t hear that table-pounding from someone who knows the reference well, is it contextual in some way (the person is tired, you caught them right after a tough conversation, they are jealous, etc.) or is there signal there? It’s one element of the process that requires the 10,000 hours of practice to get calibrated.


Part III: Seeing the Water

My summary: After making best efforts to illuminate your own blindspots, you also need to consider the context from which the candidate you are evaluating emerges.


I now believe that there is no such thing as an A player in the abstract, across all time, in whatever ecosystem they end up in.

Considering the candidates’ context:

  • When you’re taking someone from one ecosystem to another, changing their context, you have to try to see the water in both.

    • It’s disruptive and risky to take someone out of the setting in which they’re thriving, since there are a lot of subtle things going on in the original that may not be immediately obvious. How much of their success depends on the water in the first ecosystem?  Was there someone there who believed in them that set a positive feedback loop in motion that may not persist across systems? Try to understand as much as possible about “what’s going on here” in the candidate’s prior ecosystem. For instance in the investment management context, often a portfolio manager will run a large idea by their boss and subtle reactions (a raised eyebrow, a long pause) will cause them to actually size the position smaller.  That constant tension is constructive, and if you take the portfolio manager out of that container they will not perform in the same way in the absence of the tension. This particularly applies to people who leave to start their own companies—in part because they may have a hard time recreating the culture and context that allowed them to thrive when they worked in a structure designed by someone else.

    • It’s even possible that strengths in one context become weaknesses in another. Take someone who is super motivated and who loves to win, but because of this competitiveness doesn’t give as much as they get from peers. In one ecosystem they develop a reputation as a talented “taker” that people are wary of, while in another they are celebrated without reservation.

    • It’s even possible that strengths in one context become weaknesses in another. Take someone who is super motivated and who loves to win, but because of this competitiveness doesn’t give as much as they get from peers. In one ecosystem they develop a reputation as a talented “taker” that people are wary of, while in another they are celebrated without reservation.

Discussion of Personality Tests

The Big 5 or OCEAN personality test

My summary: I have noticed this is a favorite of the tech world. Marc Andreesen addresses the focus on ‘concientiousness’ in his interview on education (my notes here). Founder Slava Akhmechet says the Big 5 personality traits “are kind of like Myers Briggs, except real.”


There are thousands of studies using the Big Five. Within psychology, it’s the equivalent of gravity, and at this point, nearly everyone in academia finds it a useful mental model for personality. Sam Barondes’ book Making Sense of People is a great introduction to the Big Five. I tracked down Sam and asked him about the book’s raison d’être. He told me that he wrote it because he knew the Big Five was solid as science but had noticed that, in his own hiring in the medical department at UCSF as well as among the fancy tech CEOs he counseled, no one was actually using it in practice.


My summary: A high-signal form of interviewing described in Geoff Smart’s book Who and his father Brad Smart’s book Topgrading. 


“Resourcefulness” is the meta competency:  

Resourcefulness is the single most important competency, so here’s my advice: look for evidence of Resourcefulness 100% of the time as you evaluate candidates. Imagine that you have special magical glasses that register through the lens whether the candidate is, at this moment, revealing Resourcefulness and maybe then it flashes green, or lack of Resourcefulness and maybe then it flashes red. I’m making the point that Resourcefulness is not a competency you first think of after the interview while you’re reviewing your notes. You must constantly ask yourself, “Does that example, what I’m seeing, what I’m feeling, what I’m hearing, show Resourcefulness, or lack of it?” 

I sometimes imagine I’ve dropped the candidate I’m interviewing on a desert island and I come back five years later. Some people I’d worry about, some people I wouldn’t. The Y Combinator application question “what’s a system or game you’ve hacked in the last year?” is a good arrow in the quiver when exploring the resourcefulness dimension.

Guide to References

  • Preparing for reference calls

    Before calling references, Duncan and his team review these points:

    • There are two kinds of information: public information and private information. Our personal assessments of our peers and former employees are firmly in the bucket of private information. That’s both what makes references valuable, and what makes them hard to get.
    • Your mission is to collect as many private assessments on your candidate as possible.
    • Remind yourself that your base case is that you will not proceed with the candidate despite the fact you’re at the stage of doing references. You want to create a default mindset that listening to the references is going to actively make you change your mind to make the hire. “Let the references speak” is our mantra.
    • For each candidate there is often one reference that is the motherlode, the Yoda reference—the unbiased, calibrated, no bullshit, clear-eyed reference, someone with “acerbic good taste” who has experienced your candidate with limited ego baggage of their own and is willing to transfer that private information to you. Sometimes you get them on the first call, sometimes it’s on the 20th call. Have you found that reference giver yet? If not and the context permits, do not proceed with the hire, allow yourself to hold the uncertainty.
    • Assess whether the reference giver is calibrated—what’s their sample size and do they actually know what excellence in this role is? (Assume 80% of people are not calibrated on the Michael Jordan of this thing.)
    • Assess whether you find the reference givers themselves credible. Identify any biases. Would you hire the reference givers or want to work for them? If not, make sure you weight the content of the reference slightly lower.
    • Try to mess with the expected “script” of a reference conversation, where the reference giver reads a LinkedIn testimonial and you read from a check-list of questions. Skim the questions below in advance in order to have them in mind, but try not to read from the list because it creates a different dynamic, more interrogation and less creative exploration and appreciation of someone’s idiosyncrasies.
    • The dog that doesn’t bark is the hardest thing to assess and requires calibration / a big sample size —what could they say on the positive side but are not saying?
    • Do references in person if you can, Zoom is second best, phone is third best.
    • Start with an opener that makes it safe to convey private information: “Thanks for taking the time. I’m trying to find the right seat for Jane and I’m investing the time in speaking to people who know her. Everything you say will be off the record, and I don’t plan on conveying any of it back to Jane.”

  • Reference questions

    • How would you describe Jane to someone who doesn’t know her?
    • What’s your sample size of people in the role in which you knew Jane?
    • Who was the best person at this role that you’ve ever seen?
    • If we call that person a “100”, the gold standard, where’s Jane right now on a 1-100?
    • Does she remind you of anyone else you know?
    • If Jane’s number comes up on your caller ID, what does your brain anticipate she’s going to be calling about? What’s the feeling?
    • Three attributes I like to keep in mind are someone’s hunger, their humility, and how smart they are about people. If you were to force rank those for Jane from what she exhibits the most to least, how would you rank them?
    • What motivates Jane at this stage of her life?
    • If you were coaching Jane, how would you help her take her game up?
    • If you were going to hire someone to complement Jane doing the same activity (NOT a different role), what would they be good at to offset Jane’s strengths and weaknesses?
    • How strong is your endorsement of Jane on a 1-10? (If they answer 7, say actually sorry 7s are not allowed, 6 or 8? If the answer is an 8, “What is in that two points?”)

Guide to Interviews

  • Preparing for interviews

    • Remember that your mission is primarily to get to know the person well enough to do effective reference checks
    • Can you glimpse the person’s elephant as distinct from the rider, who is speaking to you?
    • Can you establish enough safety to allow the frame of “how can I help you find the best job for you in the world?” instead of “are you an A player, are you a fit for this role?”
    • Interrupt often to establish a fast cadence and avoid monologues

  • Interview Questions

    • What criteria would you use to hire someone to do this job if you were in my seat?
    • How would your spouse or sibling describe you with ten adjectives?
    • I think we’re aligned in wanting this to be a good fit, you don’t want us to counsel you out in six months and neither do we. Let’s take the perspective of ourselves in six months and it didn’t work. What’s your best guess of what was going on that made it not work?
    • What are the names of your last five managers, and how would they each rate your overall performance on a 1-100?
    • What are you most torn about right now in your professional life?
    • How did you prepare for this interview?
    • How do you feel this interview is going?

The Why And How Of Taking “Discoverable Notes”

I have been an active note-taker for years and a fan of how meta Tiago Forte gets about the process of taking notes. Tiago’s Building A Second Brain course is very popular in productivity circles. While I have never take it, I recently came across his essay Progressive Summarization: A Practical Technique for Designing Discoverable Notes. (Link)

It’s an outstanding framework for understanding the whys and hows of taking notes. I, by accident, have arrived at a very similar system so it was interesting to see someone explain it thoroughly as only Tiago can.

This is a summary of what resonated with me.

The Why Of Taking Notes

The Right Info At The Wrong Time

What you read is good and useful and very important, you’re just reading it at the wrong time.

The challenge is knowing which knowledge is worth acquiring. And then building a system to forward bits of it through time, to the future situation or problem or challenge where it is most applicable, and most needed.

Bridging The Acquisition And Use Of Knowledge

It’s too mentally expensive, if not impossible, to internalize all or most of the information we consume. A good system is intended to bridge the time between when you discovered the information to when you use it.

At that future point, when you’re applying that knowledge directly to a real-world challenge…By the time you’re done solving a real problem with it, book knowledge has become experiential knowledge [which you carry forever].

The How Of Taking Notes

Defining The “Second Brain”

An external, integrated digital repository for the things you learn and the resources from which they come. It is a storage and retrieval system, packaging bits of knowledge into discrete packets that can be forwarded to various points in time to be reviewed, utilized, or deleted.

Designing The “Second Brain”

Goal: You are trying to triage information in an organized way. You read something you know is interesting and you want to be able to reference later.

Challenge: You need to file it quickly, make it discoverable, and emphasize why it’s important so “future you” can make sense of the notes efficiently.

Tiago says:

A note-first approach to knowledge management means we have to think about design. You are, in a very real sense, designing a product for a demanding customer — Future You. Future You doesn’t necessarily trust that everything Past You put into your notes is valuable. Future You is impatient and skeptical, demanding proof upfront that the time they spend reviewing notes will be worthwhile.

Balancing Tradeoffs

  • Discoverable: Digestible notes. So needs to be compressed
  • Understandable: Context including sources, examples, details

Getting the balance between compression and context right is not a trivial matter. When the time comes for Future You to decide whether or not to review this note, seconds count.

When you fail, you successfully sent a packet of information forward through time, but not in a state where it could survive the journey… You have to summarize the note without knowing what it will be used for.

The Progressive Summarization System

  • Layer 0 is the original, full-length source text.
  • Layer 1 is the content that I initially bring into my note-taking program. I just capture anything that feels insightful, interesting, or useful.
  • Layer 2 is the first round of true summarization, in which I bold only the best parts of the passages I’ve imported. Keywords, phrases, sentences
  • Layer 3, I switch to highlighting, so I can make out the smaller number of highlighted passages among all the bolded ones. This time, I’m looking for the “best of the best”
  • Layer 4, I’m still summarizing, but going beyond highlighting the words of others, to recording my own…restating the key points in my own words
  • Layer 5 (as needed): Remix. for a tiny minority of sources, the ones that are so powerful and exciting I want them to become part of how I think and work immediately, I remix them. After pulling them apart and dissecting them from every angle in layers 1–4, I add my own personality and creativity and turn them into something else.

My Own Accidental Version of Progressive Summarization

  • Layer 0 is usually just the link without the text which is risky since the link can break. (With Slatestarcodex site being taken down I’m experiencing this firsthand)
  • Layer 1 same as Tiago
  • Layers 2 and 3 are combined. Mix of bold and italics.
  • Layer 4 is paraphrasing often drawing connections to other ideas. While time-consuming because it requires thinking I am rewarded by an easier retrieval stage. More selective about what notes I do this with.
  • Layer 5 usually means pasting the note in other notebooks when the content has multiple contexts

Li Lu on China-US Relations

Excerpts from part 2 of Li Lu’s series Discussion of Modernization:

A Look at the Future of Sino-US Relations

Link to paper

The paper traces the parallel histories of the land and nation known as the United States in the West and China in the East. An especially interesting thread was how Lu charts the shift from land to market economies. The backdrop and ensuing developments in the 20th century set the current stage and inform possible futures.

On America’s “Soft” Power

As the creator of the American Order, the United States has always retained the rights to make rules for the market, admit membership to access the market, and impose and lift sanctions on states that violate the rules. At the same time, it has borne most of the costs – military and economic – of safeguarding this global market. Rights and obligations together form the core of this American Order.

The United States has also established and promoted her set of ideological values, which we now know as her soft power. In Agrarian Civilization, imperial China established a political system structured around Legalism, and a belief system rooted in the values of Confucius and Mencius. This system of beliefs was intended to achieve the willing submission of its people through subtle cultural and spiritual influence. Similarly, the American ideology promotes freedom, democracy, human rights, constitutional government, the rule of law, free markets, free competition, free trade, and the sanctity of private property. These universal values are so powerful that they have been adopted by almost everyone in the world. It is the very combination of hard and soft power that has brought the United States such tremendous success.

On America’s “Hard” Power

America’s hard powers also include its global network of military bases, the sheer size of its economy, its huge domestic market, its open investment climate, its competitive tech sector, and its world-class universities. So, whenever a global financial crisis strikes, investors around the world will flock to the safe havens of the US Dollar and American assets. This remains true even after what happened in the 2008 crisis.

Whenever the US becomes less confident, it dispenses with the niceties of soft power, and unabashedly resorts to hard power. Those on the receiving end of American hard power are likely to conclude that while the US implements democracy at home, internationally it resorts to hegemony. As the creator of the American Order, its prerogatives include market access, market denial, and selective sanctions and penalties. These special privileges are constituent elements of American hard power.


Trump’s Lack of Subtlety In Wielding Power

The election of Trump has revealed the true nature of American hard power in the context of the American Order.

With China rising rapidly, areas of incompatibility between China and the US have become increasingly pronounced. In the global arena, China has presented a challenge to American dominance, and conflicts have arisen. On the economic stage, a China-led system of international institutions has been established and often without the participation of the United States. China has also pursued the militarization of the South China Sea. The US economy accounts for 25% of the global GDP, but it bears the lion’s share of military costs associated with the maintenance of the global market. From the American perspective, China’s share of global GDP is 15%, but her share of the cost is de minimis, making her a free rider. And to make matters worse, as bilateral frictions mount, the cost of maintaining the American Order has only gone up. To the US, China is becoming more and more like Russia.

One of US economic hard powers is the US Dollar as the default currency of global trade, finance, and settlement…This is why American sanctions are so effective, as evidenced by the developments following Trump’s announcement of America’s unilateral withdrawal from the Iran nuclear deal. ZTE and Huawei, two Chinese companies, have also fallen victim to American sanctions”.

4 Schools of Thought on China Policy

  1. Engagement
  2. Practical
  3. Hawkish
  4. Populist

The four schools have always had divergent views. But in recent years, in light of all the developments in China, there has been a gradual convergence. Whatever the case may be, the reality of Sino-US relations is that today the American perception of China is approaching its perception of Russia.


American Order Focuses on Economic Power

The American Order is mainly preoccupied with the rules of access to and exit from the global market. It doesn’t wield much power over other nations’ political choices. The UN Charter states “the Organization is based on the principle of sovereign equality of all its Members”. So in fact, under the American Order, different political systems may develop, provided that they do not directly challenge America’s superpower status. The rapid growth of China’s share of global GDP (from less than 2% to 15%) is proof of this. Indeed, there is plenty of room for sustained growth.


Outstanding follows for China coverage: 

Michael Pettis

Dan Wang 


Mauboussin on Making Better Comparisons

Michael Mauboussin Guide to Making Better Comparisons (Link)

Comparing via analogies (steps and common mistakes)

  1. Select the source for analogy
    • Common pitfall at this stage: Undersampling due to availability bias
  2. Map the source to target to make inferences usually looking for similarities
    • A common pitfall at this stage: mistaking correlation for causality
      • Consider the first attempts at flight were people putting feathers on their arms, not studying lift
      • Confusing a star performer with talent in a volatile field
  3. Adjust for differences between source and target
    • Tversky showed we place more emphasis on similarity than differences
    • The framing problem: We are influenced by which differences and similarities we are prodded to focus on (ie framing)
  4. Learn by the success or failure of the analogy
    • Pitfalls in heuristics and intuition
      • Intuition works great in chess since it is a form of pattern recognition, but works poorly in investing where outcomes are non-linear
      • Recency bias influences sample
      • Choice-supportive or confirmation bias taps into our need to be consistent; we create stories after the fact to validate our decisions
      • Hyperbolic discount rates prevail when we study inter-temporal decision making
        • Stress is good response for crisis because it focuses on immediate needs; chronic stress causes decisions to be short-sighted
    • Using poor reference points in comparison
      • 2 companies in different industries can be more similar than their peers within their own industry; this shows how we can conflate attributes with what is actually driving value
      • Not recognizing that widely varied values can be justifiable. For example, 2 companies with the same earnings growth can trade at justifiably different valuations if underlying returns on invested capital are very different
      • Anchoring bias
      • When I went to Capital Camp, Mauboussin discussed T Theory. The top row of a category have more in common with each other than the average in the category. This articulates how I think about investors! Warren Buffet, Annie Duke, and Sam Hinkie have more in common with each other than other people in the same category.

So how to get better?

Instead of relying on analogies drawn from memory we can use “similarity-based” forecasting.

  • Inputs
    1. A wide sample for the reference class rather than 1 or 2 examples from memory
      • Additional refinement by weighting the results of the most similar samples more heavily
        • Ways to quantify the similarity
          • “nearest neighbor” algorithm (requires identifying relevant axes for the dimensions)
          • “connectionist” technique for weighting features by similarities and differences
    2. A statistical “base rate” drawn from the outcomes of varied reference classes

Matt Levine on shareholder value

Matt Levine discusses:

  • Traditional and progressive views of the role of corporations
  • How a narrow desire to raise shareholder value keeps frauds from capitalizing on investors who appeal to higher causes.
  • Compartmentalizing your job from your personhood as a necessary convenience

Primacy of Corporate profits

Friedman, along with Michael Jensen and William Meckling, is probably the person most associated with the theory that—as his famous article put it—“The Social Responsibility of Business Is to Increase its Profits.” In this theory, managers of a corporation have a singular duty to the shareholders to maximize their economic return as far as possible (while complying with the law), and if managers pursue any other objective—treating workers well or being good environmental stewards or standing up for what they believe in—at the expense of shareholder value, then they are misbehaving. Of course, there is plenty of room to argue that pursuing those other objectives actually enhances shareholder value. And there is much to be said for Friedman’s view—which is also after all Adam Smith’s view—that by focusing on economic profits, a company will maximize the amount of social good that it does, simply because the normal way to maximize profits is to figure out what people want and then sell it to them.

Including More Stakeholders

It is popular, these days, to criticize that view. The corporation is a political construct, embedded in a society; it has many stakeholders whose interests it needs to consider, not just shareholders. You see this criticism everywhere, from attacks on stock buybacks to Elizabeth Warren’s call for “accountable capitalism.” In its more extreme form, you can see shareholder-profit-maximizing corporations compared to science-fiction robot villains, or to psychopaths: If you value only profit and nothing else, then there is something inhuman about you.


That probably overstates matters. If you come to work and focus on maximizing the profits of your company, that probably doesn’t mean that you’re a psychopath. It probably just means that you have a job. You compartmentalize things a bit; your work does not contain the entirety of your personhood; it’s a thing that you do because you need to make a living. In this sense, a company whose philosophy is “we will sell products that people want for more than it costs us to make them so that we can make a profit and increase our share price” is rather psychologically healthy. That is a good goal to work on during business hours Monday through Friday, and then leave. It is a modest, reasonable, businesslike goal. Obviously there are large contested margins, and you shouldn’t do psychopathic things to pursue that goal, and some people do and that’s bad, but for the most part “shareholder value” is the sort of mission that inspires people more or less the right amount. If you go around murdering people to maximize shareholder value then, yes, you are a psychopath, but most people aren’t.

The Difficulty of Accounting for Intentions

But there are other goals. Those goals are bigger, and you can wrap your whole personhood up in them, and you can believe that those goals are so important that they can justify anything. If Facebook’s goal is to maximize revenue by selling targeted ads to clothing companies, and you find out that it has features that enable genocide, then you shut down those features because the ads just aren’t worth it. If Facebook is about the “noble mission” of “connecting people,” then the tradeoffs are murkier. If “Facebook is truly the only company that’s singularly about people,” then … what even … how do you measure how about-people it is being? If you’re the singular company whose focus is people, then whatever you do is sort of necessarily good; your end is so vague and noble that it can justify any means. And for all that Facebook’s meddling with Instagram and WhatsApp seems to be driven by straightforward ad-revenue-maximization considerations, it’s worth saying that Facebook isn’t really answerable to shareholders and that its explicit ideology rejects shareholder value as a goal. “Facebook was not originally created to be a company,” Mark Zuckerberg wrote when it went public. “It was built to accomplish a social mission.” Okay!

Grand Visions Can Be Weaponzied, But Shareholder Value? Not So Much.

I am late to it, but I just finished reading John Carreyrou’s “Bad Blood,” the story of the fraud at Theranos Inc. and his work to uncover it. Theranos—in Carreyrou’s view, and the view of federal prosecutors—issued tens of thousandsof blood-test results to real patients using technology that it knew didn’t work, endangering those patients’ lives. There are a lot of passages in the book about Theranos founder Elizabeth Holmes inspiring and cajoling her employees to work harder, to get with the mission, to override their moral objections to faking the technology and push ahead. None of those passages mention shareholder value or profit maximization. They mention Holmes’s vision of revolutionizing health care to save lives and treat cancer patients. If you want to inspire people to do terrible things, it is very useful to sell them on a grand vision, a higher purpose, a noble mission. Shareholder value is nobody’s idea of an inspiring mission. That’s what’s good about it!”