Peter Kaufman on The Multidisciplinary Approach to Thinking
Go first, go positive, and be the list.
A distillation of Peter Kaufman’s timeless wisdom that he shared during his talk with the CalPoly Pomona Economics Club in 2018.
Listen to the full-length recording below.
On the importance of being a multidisciplinary thinker
Why do you need to be multidisciplinary in your thinking? Because as the Japanese proverb says, ‘The frog in the well knows nothing of the mighty ocean.’ You may know everything there is to know about your specialty, your silo, your “well”, but how are you going to make any good decisions in life…the complex systems of life, the dynamic system of life…if all you know is one well?
So why is it important to be a multidisciplinary thinker? The answer comes from the Austrian philosopher Ludwig Wittgenstein who said, ‘To understand is to know what to do.’ Could there be anything that sounds simpler than that?
This is the beauty of deriving things multidisciplinarily. You can’t be wrong! You see these things lined up there like three bars on a slot machine. Boy do you hit the jackpot.
A practical approach to becoming a multidisciplinary thinker
I tried to learn what Munger calls ‘the big ideas’ from all the different disciplines.
“Right up front I want to tell you what my trick was, because if you try to do it the way he did it, you don’t have enough time in your life to do it. It’s impossible. Because the fields are too big and the books are too thick. So my trick to learn the big ideas of science, biology, etc., was I found this science magazine called Discover Magazine. I found that this magazine every month had a really good interview with somebody from some aspect of science. Every month. And it was six or seven pages long. It was all in layperson’s terms.
So I discovered that on the Internet there were 12 years of Discover Magazine articles available in the archives. So I printed out 12 years times 12 months of these interviews. I had 144 of these interviews. And I put them in these big three-ring binders. Filled up three big binders. And for the next six months, I went to the coffee shop for an hour or two every morning, and I read these.
I would read some arcane subject and, oh my god, I saw, ‘That’s exactly how this works over here in biology.’ or ‘That’s exactly how this works over here in human nature.’ You have to know all these big ideas.”
On bucketing knowledge, “my three buckets”
Bucket number one is 13.7 billion years. It’s the inorganic universe. Physics. Geology. Anything that’s not living goes in my bucket number 1. 13.7 billion years.
Bucket number two is 3.5 billion years. It’s biology on the planet Earth
Bucket number three is 20,000 years of recorded human history. That’s the most relevant of all. That’s our story. That’s who we are.
On Newton’s Third Law of Motion.
For every action, there will always be an equal and opposite reaction.
Your entire life. Every interaction you have with another human being is merely mirrored reciprocation.
On Albert Einstein’s five ascending levels of cognitive prowess.
Level one is simple. Simple transcends genius
Level two is genius
Level three is brilliant.
Level four is intelligent
Level five is smart
Why is simple, the right kind of simple, better than genius? Because you can understand it!
...and If you understand, you know what to do.Einstein on compound interest
He said, ‘The most powerful force in the universe is compound interest.’ But that’s not all he said about compound interest. He not only said that it’s the most powerful force in the universe, he said it’s the greatest mathematical discovery of all time. He said it’s the eighth wonder of the world. And he said that those who understand it get paid by it and those who don’t pay for it. He said all these things, Albert Einstein, about compound interest.
A working definition of compound interest
I will propose one. You can have your own, but this is mine. Say compound interest is dogged incremental constant progress over a very long time frame. Is that a fair definition? Alright? I think that’s the answer from bucket number 1. The most powerful force that could be potentially harnessed is dogged incremental constant progress over a very long time frame.
The ethos behind my newsletter signoff/mantra ("Spirited & Resilient") is highly aligned with this definition and sentiment.On dogged incremental constant progress over very long time frames
We go to bucket number 2. 3.5 billion years of biology. What’s the most powerful force in three and a half billion years of biology? It’s the machine of evolution. How does it work? Dogged incremental constant progress over a long time frame.
What do you think we’re going to find when we go to bucket number three? 20,000 years of human experience on earth. You want to win a gold medal in the Olympics. You want to learn a musical instrument. You want to learn a foreign language. You want to build Berkshire Hathaway. What’s the formula? Dogged incremental constant progress over a very long time frame.
Being constant is above genius
The problem that human beings have is we don’t like to be constant. Think of each one of those terms. Dogged incremental constant progress over a very long time frame. Nobody wants to be constant.
You have to be constant. How many people do you know that are constant and what they do? I know a couple. Warren Buffett and Charlie Munger. Everybody wants to be rich, like Warren Buffett and Charlie Munger. I’m telling you how they got rich. They were constant. They were not intermittent.
On being the list
…every single other person in the whole world, has this list in their head – trustworthy, principled, courageous, competent, loyal, kind, understanding, forgiving, unselfish, and in every single one of your interactions with others, BE THE LIST!
Most people spend all day long trying to get other people to like them. They do it wrong. You do this list, you won’t be able to keep the people away. Everybody’s going to want to attach to you. And be willing to do what? Just like the puppy, they’d be willing to die for you. Because you are what they’ve been looking for their whole lives. This is pretty profound isn’t it?
On all humans being alike
How many of you want to be paid attention to? How many of you want to be listened to? How many of you want to be respected? How many of you want meaning, satisfaction, and fulfillment in your life in the sense that you matter? How many you want to be loved? Everybody’s exactly the same. The only difference is, as Craig said, the strategy that they’re employing to try to get to fulfill those needs.
On canine strategies for manipulating humans
All you have to do is every single time they come home, you greet them at the door with the biggest unconditional show of attention that they’ve ever gotten in their whole life. And you only have to do it for like 15 seconds and then you can go back to doing whatever you were doing before and completely ignore them for the rest of the evening.’ However, you do have to do this every single time they come home. And what will the person do? They’ll take care of them. They’ll do anything for this dog.
On going first and going positive
All you have to do, if you want everything in life from everybody else, is first pay attention, listen to them, show them respect, give them meaning, satisfaction, and fulfillment. Convey to them that they matter to you. And show you love them. But you have to go first. And what are you going to get back? Mirrored reciprocation. Right? See how we tie this all together? The world is so damn simple. It’s not complicated at all! Every single person on this planet is looking for the same thing.
You have to go first. And you’re going to get back whatever you put out there.
It’s all mirrored reciprocation. So what do you want to do? You want to go positive, you want to go first.
On loss aversion
There’s huge asymmetry between the standard human desire for gain and the standard human desire to avoid loss. Which one do you think is more powerful? 98 percent versus 2!
Lou Brock set the Major League record for stolen bases with the St. Louis Cardinals many years ago. And he once said, ‘Show me a man who is afraid of appearing foolish and I’ll show you a man who can be beat every time.’ And if you’re getting beat in life, chances are it’s because you’re afraid of appearing foolish. So what do I do with my life? I risk the two percent.
On being patient enough
So you’ve got one lifetime. How do you want to spend your one lifetime? Do you want to spend your one lifetime like most people do, fighting with everybody around them? No. I just told you how to avoid that. And in exchange have what? A celebratory life. Instead of an antagonistic fighting life. All you have to do is go positive, go first, be patient enough. You know we have to be patient for a week with this puppy. Do you know how long it usually takes for a human being to do all the probing and testing that Emily was going to do and to find out that you’re for real? It takes six months.
On Win-Win relationships
The three hallmarks of a great investment are superior returns, low risk, and long duration. The whole world concentrates on Category 1. But if you’re a leader of any merit at all, you should be treating these three as what? Co-priorities.** How do you get low risk and long duration? Win-Win. This is the biggest blind spot in business. People are actually proud of a win-lose relationship. ‘Yeah we really beat the crap out of our suppliers.’ You know, ‘We’ve got these employees for…you know, we’ve got them on an HB1 visa, they can’t work anywhere else for three years.’ They’re proud of it! Total Win-Lose. You take game theory and you insert the word lose in any scenario in game theory and what do you have? A suboptimal outcome. What happens you insert win-win in any game theory scenario, what do you get? Optimal every time.
Axioms from psychology
The basic axiom of clinical psychology reads, ‘If you could see the world the way I see it, you’d understand why I behave the way I do.’
But corollary number two, if you want to change a human being’s behavior and you accept that axiom, you must necessarily, to get them to change, change how they see the world.
It’s not really that hard. You take a business. Most employees of a business see the world as employees. What if you could get them to see the world instead through the eyes of an owner? Do you think that’s going to change how they behave? It totally changes how they behave. Employees don’t care about waste. Owners do. Employees don’t self-police our place. Owners do.
See also, Principle Agent Problem. Always act like an owner.On Leadership
This is the secret to leadership. The secret to leadership is to see through the eyes of all six important counterparty groups and make sure that everything you do is structured in such a way to be win-win with them.** So here are the six. Your customers, your suppliers, your employees, your owners, your regulators, and the communities you operate in. And if you can truly see through the eyes of all six of these counterparty groups and understand their needs, their aspirations, their insecurities, their time horizons. How many blind spots do you have now? Zero.
How many mistakes are you going to make? You’re going to make zero.
Two Proverbs
African proverb - ‘If you want to go quickly go alone, if you want to go far, go together.’ Live your life to go far together. Don’t live it to go quickly alone.
Turkish Proverb. ‘No road is long with good company.’ The essence of life is to surround yourself, as continuously as you can, with good company.