Author Archives: Farnam Street Team

The Four Laws of Ecology: The Clearest Explanation of What Ecology Really Means

Ecology is the study of relationships and processes linking living things to the physical and chemical environment. Exciting, right?

In the 1971 book The Closing Circle, Barry Commoner gives us a clear and understandable example of what ecology really means, while being one of the first to sound the alarm on the impending environmental crisis. (Although Rachel Caron’s Silent Spring certainly holds the mantle for implanting ecological thought into the popular consciousness.)

Commoner’s life was devoted to helping people see the benefits of ecological thinking:

Ecology has not yet explicitly developed the kind of cohesive, simplifying generalizations exemplified by, say, the laws of physics. Nevertheless there are a number of generalizations that are already evident in what we now know about the ecosphere and that can be organized into a kind of informal set of laws of ecology.

He goes on to lay out four basic and inescapable laws of ecology (which nicely complement Garett Hardin’s Three Filters). The principles describe a beautiful web of life on earth.

The Four Laws of Ecology

The First Law of Ecology: Everything Is Connected to Everything Else

It reflects the existence of the elaborate network of interconnections in the ecosphere: among different living organisms, and between populations, species, and individual organisms and their physicochemical surroundings.

The single fact that an ecosystem consists of multiple interconnected parts, which act on one another, has some surprising consequences. Our ability to picture the behavior of such systems has been helped considerably by the development, even more recent than ecology, of the science of cybernetics. We owe the basic concept, and the word itself, to the inventive mind of the late Norbert Wiener.

The word “cybernetics” derives from the Greek word for helmsman; it is concerned with cycles of events that steer, or govern, the behavior of a system. The helmsman is part of a system that also includes the compass, the rudder, and the ship, If the ship veers off the chosen compass course, the change shows up in the movement of the compass needle. Observed and interpreted by the helmsman this event determines a subsequent one: the helmsman turns the rudder, which swings the ship back to its original course. When this happens, the compass needle returns to its original, on-course position and the cycle is complete. If the helmsman turns the rudder too far in response to a small deflection of the compass needle, the excess swing of the ship shows up in the compass—which signals the helmsman to correct his overreaction by an opposite movement. Thus the operation of this cycle stabilizes the course of the ship.

In quite a similar way, stabilizing cybernetic relations are built into an ecological cycle. Consider, for example, the fresh water ecological cycle: fish-organic waste-bacteria of decay inorganic products—algae—fish. Suppose that due to unusually warm summer weather there is a rapid growth of algae. This depletes the supply of inorganic nutrients so that two sectors of the cycle, algae and nutrients, are out of balance, but in opposite directions. The operation of the ecological cycle, like that of the ship, soon brings the situation back into balance. For the excess in algae increases the ease with which fish can feed on them; this reduces the algae population, increases fish waste production, and eventually leads to an increased level of nutrients when the waste decays. Thus, the levels of algae and nutrients tend to return to their original balanced position.

In such cybernetic systems the course is not maintained by rigid control, but flexibility. Thus the ship does not move unwaveringly on its path, but actually follows it in a wavelike motion that swings equally to both sides of the true course. The frequency of these swings depends on the relative speeds of the various steps in the cycle, such as the rate at which ships responds to the rudder.

Ecological systems exhibit similar cycles, although these are often obscured by the effects of daily or seasonal variations in weather and environmental agents.

[…]

The dynamic behavior of a cybernetic system—for example, the frequency of its natural oscillations, the speed with which it responds to external changes, and its overall rate of operation, depends on the relative rates of its constituent steps. In the ship system, the compass needle swings in fractions of a second; the helmsman’s reaction takes some seconds; the ship responds over a time of minutes. These different reaction times interact to produce, for example, the ship’s characteristic oscillation frequency around its true course.

[…]

Ecosystems differ considerably in their rate characteristics and therefore vary a great deal in the speed with which they react to changed situations or approach the point of collapse.

[…]

The amount of stress which an ecosystem can absorb before it is driven to collapse is also a result of its various interconnections and their relative speeds of response. The more complex the ecosystem, the more successfully it can resist a stress. … Most ecosystems are so complex that the cycles are not simple circular paths, but are crisscrossed with branches to form a network or a fabric of interconnections. Like a net, in which each knot is connected to others by several strands, such a fabric can resist collapse better than a simple, unbranched circle of threads—which if cut anywhere breaks down as a whole. Environmental pollution is often a sign that ecological links have been cut and that the ecosystem has been artificially simplified and made more vulnerable to stress and to final collapse.

The feedback characteristics of ecosystems result in amplification and intensification processes of considerable magnitude. For example, the fact that in food chains small organisms are eaten by bigger ones and the latter by still bigger ones inevitably results in the concentration of certain environmental constituents in the bodies of the largest organisms at the top of the food chain. Smaller organisms always exhibit much higher metabolic rates than larger ones, so that the amount of their food which is oxidized relative to the amount incorporated into the body of the organism is thereby greater. Consequently, an animal at the top of the food chain depends on the consumption of an enormously greater mass of the bodies of organisms lower down in the food chain. Therefore, any non-metabolized material present in the lower organisms of this chain will become concentrated in the body of the top one. …

All this results from a simple fact about ecosystems—everything is connected to everything else: the system is stabilized by its dynamic self-compensating properties; those same properties, if overstressed, can lead to a dramatic collapse; the complexity of the ecological network and its intrinsic rate of turnover determine how much it can be stressed, and for how long, without collapsing; the ecological network is an amplifier, so that a small perturbation in one network may have large, distant, long-delayed effects.

The Second Law of Ecology: Everything Must go Somewhere

This is, of course, simply a somewhat informal restatement of a basic law of physics—that matter is indestructible. Applied to ecology, the law emphasizes that in nature there is no such thing as “waste.” In every natural system, what is excreted by one organism as waste is taken up by another as food. Animals release carbon dioxide as a respiratory waste; this is an essential nutrient for green plants. Plants excrete oxygen, which is used by animals. Animal organic wastes nourish the bacteria of decay. Their wastes, inorganic materials such as nitrate, phosphate, and carbon dioxide, become algal nutrients.

A persistent effort to answer the question “Where does it go?” can yield a surprising amount of valuable information about an ecosystem. Consider, for example, the fate of a household item which contains mercury—a substance with serious environmental effects that have just recently surfaced. A dry-cell battery containing mercury is purchased, used to the point of exhaustion, and then “thrown out.” But where does it really go? First it is placed in a container of rubbish; this is collected and taken to an incinerator. Here the mercury is heated; this produces mercury vapor which is emitted by the incinerator stack, and mercury vapor is toxic. Mercury vapor is carried by the wind, eventually brought to earth in rain or snow. Entering a mountain lake, let us say, the mercury condenses and sinks to the bottom. Here it is acted on by bacteria which convert it to methyl mercury. This is soluble and taken up by fish; since it is not metabolized, the mercury accumulates in the organs and flesh of the fish. The fish is caught and eaten by a man and the mercury becomes deposited in his organs, where it might be harmful. And so on.

This is an effective way to trace out an ecological path. It is also an excellent way to counteract the prevalent notion that something which is regarded as useless simply “goes away” when it is discarded. Nothing “goes away”; it is simply transferred from place to place, converted from one molecular form to another, acting on the life processes of any organism in which it becomes, for a time, lodged. One of the chief reasons for the present environmental crisis is that great amounts of materials have been extracted from the earth, converted into new forms, and discharged into the environment without taking into account that “everything has to go somewhere.” The result, too often, is the accumulation of harmful amounts of material in places where, in nature, they do not belong.

The Third Law of Ecology: Nature Knows Best

In my experience this principle is likely to encounter considerable resistance, for it appears to contradict a deeply held idea about the unique competence of human beings. One of the most pervasive features of modern technology is the notion that it is intended to “improve on nature”—to provide food, clothing, shelter, and means of communication and expression which are superior to those available to man in nature. Stated baldly, the third law of ecology holds that any major man-made change in a natural system is likely to be detrimental to that system. This is a rather extreme claim; nevertheless I believe it has a good deal of merit if understood in a properly defined context.

I have found it useful to explain this principle by means of an analogy. Suppose you were to open the back of your watch, close your eyes, and poke a pencil into the exposed works. The almost certain result would be damage to the watch. Nevertheless, this result is not absolutely certain. There is some finite possibility that the watch was out of adjustment and that the random thrust of the pencil happened to make the precise change needed to improve it. However, this outcome is exceedingly improbable. The question at issue is: why? The answer is self-evident: there is a very considerable amount of what technologists now call “research and development” (or, more familiarly, “R & D”) behind the watch. This means that over the years numerous watchmakers, each taught by a predecessor, have tried out a huge variety of detailed arrangements of watch works, have discarded those that are not compatible with the over-all operation of the system and retained the better features. In effect, the watch mechanism, as it now exists, represents a very restricted selection, from among an enormous variety of possible arrangements of component parts, of a singular organization of the watch works. Any random change made in the watch is likely to fall into the very large class of inconsistent, or harmful, arrangements which have been tried out in past watch-making experience and discarded. One might say, as a law of watches, that “the watchmaker knows best,”

There is a close, and very meaningful, analogy in biological systems. It is possible to induce a certain range of random, inherited changes in a living thing by treating it with an agent, such as x-irradiation, that increases the frequency of mutations. Generally, exposure to x-rays increases the frequency of all mutations which have been observed, albeit very infrequently, in nature and can therefore be regarded as possible changes. What is significant, for our purpose, is the universal observation that when mutation frequency is enhanced by x-rays or other means, nearly all the mutations are harmful to the organisms and the great majority so damaging as to kill the organism before it is fully formed.

The Fourth Law of Ecology: There Is No Such Thing as a Free Lunch

In my experience, this idea has proven so illuminating for environmental problems that I have borrowed it from its original source, economics. The “law” derives from a story that economists like to tell about an oil-rich potentate who decided that his new wealth needed the guidance of economic science. Accordingly he ordered his advisers, on pain of death, to produce a set of volumes containing all the wisdom of economics. When the tomes arrived, the potentate was impatient and again issued an order—to reduce all the knowledge of economics to a single volume. The story goes on in this vein, as such stories will, until the advisers are required, if they are to survive, to reduce the totality of economic science to a single sentence. This is the origin of the “free lunch” law.

In ecology, as in economics, the law is intended to warn that every gain is won at some cost. In a way, this ecological law embodies the previous three laws. Because the global ecosystem is a connected whole, in which nothing can be gained or lost and which is not subject to over-all improvement, anything extracted from it by human effort must be replaced. Payment of this price cannot be avoided; it can only be delayed. The present environmental crisis is a warning that we have delayed nearly too long.

Lest you feel these are all scientific, Commoner ends by referring you to classic literature:

A great deal about the interplay of the physical features of the environment and the creatures that inhabit it can be learned from Moby Dick.”

***

Still Interested? Check these related posts out:

Garrett Hardin on the Three Filters Needed to Think About Problems — “The goal of these mental filters, then, is to understand reality by improving our ability to judge the statements of experts, promoters, and persuaders of all kinds.”

The Effect of Scale in Social Science, or Why Utopia Doesn’t Work — Why can’t a mouse be the size of an elephant? Weclome to the effect of scale on values.

Learning From Your Mistakes … When You Win

“Men ought either to be indulged or utterly destroyed,
for if you merely offend them they take vengeance,
but if you injure them greatly they are unable to retaliate,
so that the injury done to a man ought to be such
that vengeance cannot be feared.”

— Machiavelli, The Prince.

***

In the ancient world, wars were wars of conquest or survival. The Persian, Macedonian and Roman empires were the spear-won fruits of conquest, resulting in the total annihilation of their enemies. By the seventeenth century, however, the increased cost of war made such triumphs nearly impossible. The victors of the Thirty Years War (1618-48) were as devastated as the defeated. Nations lacked the infrastructure to mobilize for total war, and so it became a more limited activity. Small, expensive professionally-trained armies fought campaigns to obtain limited benefits in a series of king-of-the-hill conflicts between dynasties. Total victory, and the accompanying hatred and annihilation of the loser, was rare.

This pattern changed again with the rise of the nation-in-arms. Mass conscript armies, supported by large-scale propaganda campaigns at the home front, fought the wars of Napoleon, the American Civil War, and, approaching the Twentieth Century, the wars of German unification. During the Franco-Prussian War (1870-71), after defeating the regular French army, the Germans had to face a people’s militia; Paris was besieged and bombarded. When the war finally ended, Germany annexed the provinces of Alsace and Lorraine, claiming that they were historically German. But German Chancellor Bismarck himself recommended against the annexation, stating that it would cause continued enmity, and jeopardize any hope for long-term peace between the two nations.

Bismarck was correct; the annexation created resentment that only increased and helped generate the momentum leading to the First World War. (At least someone understood the Hydra.) Four years later, the horrific devastation of the war reinforced the victors’ attitude of debellation – harsh and absolute punishment of the losers to ensure that they are never able to rise again. The Paris Peace Talks were awkward as they tried to balance the ideals of the League of Nations, to create a unified bond of peace and mutual recognition, with the reality of seizures and break-ups of territory, and the reparations to be paid by the losers.

In The Economic Consequences of the Peace, John Maynard Keynes argued that the reparations inflicted on Germany were unjust and would lead to future conflict, the opposite of their intent. Historians continue to debate his arguments. What is true is that the sense of injustice created by the reparations was a major element of Hitler’s rhetoric, and this emotion echoes throughout his speeches in his rise to power. The causes of the Great War had been murky, and it was not clear who was the aggressor. Was Germany forced into aggression by Russian mobilization? Was it right that Germany should have to pay so much, and furthermore, later see the French occupy the Ruhr, the center of Germany’s industry? Hitler used this resentment – an emotion he himself felt to his core – along with the general economic collapse of the 1930s, to create the anger for justice and revenge that brought him public support and the role of Chancellor. Human beings have a strong desire to see justice – that is, our very limited emotional interpretation of it – carried out to restore our belief in fairness in the world.

Fast forward to 1945, and the end of the second global conflict in thirty years, unimaginably worse than the first one. This time the destruction of the defeated was as utter as any nation has suffered since Carthage. The French proposed that Germany’s industrial heartland be annexed, to ensure that France would have the industrial power to always serve as a check on future German ambition. US Treasury Secretary Henry Morgenthau Jr. went even further, proposing to completely de-industrialize Germany, turning it into an agrarian society, incapable of waging modern war.

For the first few years, a variation of Morgenthau’s plan was used to guide post-war policy. However, by 1947, it was apparent that a crippled West Germany was delaying European recovery in general, and the continent would be unable to defend against Soviet encroachment. US Secretary of State George Marshall introduced the plan that bears his name, providing $1.5 billion to West Germany (and over $2.3 billion to France). Between 1948 and 1951, seventeen European nations obtained a total of almost $13 billion ($130 billion in today’s money) in aid through the Marshall Plan. Substantial sums were also provided to Asia, including Japan, during the same period.

Did the Marshall Plan fuel Europe’s post-war recovery? In the two decades after the war, France spent at least the same amount of money fighting two unnecessary wars in Vietnam and Algeria. It’s hard to say that they earned much benefit from the aid. West Germany was better able to invest the money, but economic historians argue that their growth had more to do with their own internal policies on currency stabilization, low taxes for the middle class, and investment in both capital stock and education. But all those polices had to operate in the context of investment, and much of that investment came from the Marshall Plan.

Which was the more peaceful Europe? The Europe of the 1920s or the Europe of the 1950s? Many factors led to the rise of Hitler, the global depression being one of them, but Hitler was molded by his experience living homeless on the streets of Vienna before the First World War, and the turmoil of anger and unemployment that followed the end of the war.

Which Europe are we more grateful for? The idea of a unified Europe was almost unimaginable in the context of the perceived injustice of punishment for losing. Only after the second war did it become real. A Frenchman in 1913, or a German in 1919, would have laughed in disbelief if you described to them how close their two nations are now.

When we win, we often want to be like Machiavelli’s Prince, and win utterly. It is when your opponent is defeated that he is weakest, helpless, and you can take the most from him. And, if somehow he rises to confront you again, then that means you were not severe enough in your punishment, and you should only punish him harder.

But it seems that no victory is complete, now. For every terrorist leader struck down, another pops up to replace him. The Marshall Plan looked at the idea of punition and decided that it wouldn’t work. The only way to make your enemy incapable of revenge would be to wipe them out completely. Or, conversely, rebuild them and take away the cause for anger. Make them more like you, not as a nation, but as a victor.

Still Curious? Check out why win-win relationships are the only ones that stand the test of time. 

An Important Life Lesson we can Learn from Sailors

A quick yet incredibly important quote today that adds to the wisdom of Andy Benoit and Joseph Tussman.

Bion of Borysthenes

… [W]e should not try to alter circumstances but to adapt ourselves to them as they really are, just as sailors do. They don’t try to change the winds or the sea but ensure that they are always ready to adapt themselves to conditions. In a flat calm they use the oars; with a following breeze they hoist full sail; in a head wind they shorten sail or heave to. Adapt yourself to circumstances in the same way.

— Bion of Borysthenes (From Peter Bevelin’s All I Want to Know Is Where I’m Going to Die So I’ll Never Go There: Buffett and Munger — A Study in Simplicity and Uncommon, Common Sense)

***

Still Curious? you’ll love the the wisdom of Publilius Syrus

The Narrative Fallacy and What You Can Do About It

“These types of stories strike a deep chord: They give us deep, affecting reasons on which to hang our understanding of reality. They help us make sense of our own lives. And, most importantly, they frequently cause us to believe we can predict the future. The problem is, most of them are a sham.”

***

The Narrative Fallacy

A typical biography starts by describing the subject’s young life, trying to show how the ultimate painting began as just a sketch. In Walter Isaacson’s biography of Steve Jobs, for example, Isaacson determines that Jobs’s success was determined to a great degree by the childhood  influence of his father, a careful, detailed-oriented engineer and craftsman – Paul Jobs would carefully craft the backs of fences and cabinets even if no one would see – who Jobs later found out was not his biological father. The combination of his adoption and his craftsman father planted the seeds of Steve’s adult personality: his penchant for design detail, his need to prove himself, his messianic zeal. The recent movie starring Michael Fassbender especially plays up the latter cause; Jobs’s feeling of abandonment drove his success. Fassbender’s emotional portrayal earned him an Oscar nomination.

Nassim Taleb describes a memorable experience of a similar type in his book The Black Swan. He’s in Rome having an animated discussion with a professor who has read Nassim’s first book Fooled by Randomness, parts of which promote the idea that our mind creates more cause-and-effect links than reality would support. The professor proceeds to congratulate Nassim on his great luck by being born in Lebanon:

…had you grown up in a Protestant society where people are told that efforts are linked to rewards and individual responsibility is emphasized, you would never have seen the world in such a manner. You were able to see luck and separate cause and effect because of your Eastern Orthodox Mediterranean heritage. 

These types of stories strike a deep chord: They give us deep, affecting reasons on which to hang our understanding of reality. They help us make sense of our own lives. And, most importantly, they frequently cause us to believe we can predict the future. The problem is, most of them are a sham.

***

To continue reading you must be a member or purchase a copy. (Current members can log-in here.)

To learn more about our membership program please visit this page or instantly sign up and become a Farnam Street Insider.

If you don’t want a membership but you do want to read this article, a copy is available here for purchase.

 

Second-Level Thinking: What Smart People Use to Outperform

“Experience is what you got when you didn’t get what you wanted.”
Howard Marks

***

Second Order Thinking

Successful decision making requires thoughtful attention to many separate aspects.

Decision making is as much art as science. The goal, if we have one, is not to make perfect decisions but rather to make better decisions than average. To do this we require either good luck or better insight. And since luck isn’t really much of a plan, we should probably focus on better insight.

In most of life you can get a step ahead of others by going to the gym or the library, or even a better school. In thinking, however, a lot of what you’d think gets you ahead is only window dressing.

Would be thinkers and deciders can attend the best schools, take the best courses and, if they are lucky, attach themselves to the best mentors. Yet only a few of them will achieve the skills and superior insight necessary to be an above average thinker. And we live in a world that, if it rewards anything, rewards better decisions. The rest is increasingly automated.

But how do we get there in a world where everyone else is also smart and well-informed? How do we get there in a world that is increasingly becoming computerized? You must find an edge. You must think differently.

In his exceptional book, The Most Important Thing, Howard Marks hits on the concept of second-level thinking.

First-level thinking is simplistic and superficial, and just about everyone can do it (a bad sign for anything involving an attempt at superiority). All the first-level thinker needs is an opinion about the future, as in “The outlook for the company is favorable, meaning the stock will go up.” Second-level thinking is deep, complex and convoluted.

Second-level thinkers take into account a lot of what we put into our decision journals. Things like, What is the range of possible outcomes? What’s the probability I’m right? What’s the follow-on? How could I be wrong?

The real difference for me is that first-level thinkers are the people that look for things that are simple, easy, and defendable. Second-level thinkers push harder and don’t accept the first conclusion.

***

“It’s not supposed to be easy. Anyone who finds it easy is stupid.”
— Charlie Munger

***

Marks writes:

First-level thinkers think the same way other first-level thinkers do about the same things, and they generally reach the same conclusions. By definition, this can’t be the route to superior results.

This is where things get interesting. Extraordinary performance comes from being different. It must be that way. Of course, below average performance comes from being different too — on the downside.

So it’s not enough to be different — you also need to be correct. “The problem is that extraordinary performance comes only from correct nonconsensual forecasts, but nonconsensual forecasts are hard to make, hard to make correctly and hard to act on,” writes Marks. The goal is not blind divergence but rather rather a way of thinking that sets you apart from others.

In short, you can’t do the same things that other people are doing and expect to outperform.

We can look at this as a simple two-by-two matrix (via The Most Important Thing).

Second Level Thinking Matrix

I’m generalizing a bit here, but if your thoughts and behavior are conventional, you’re likely to get conventional results. Steve Jobs was right.

This is where loss aversion comes in. Most people are simply unwilling to be wrong because that means they might look like a fool. Yet this is a grave mistake. The ability to risk looking like an idiot is necessary for being different. You never look like a fool if you look like everyone else. (Bringing to mind Keynes’ dictum: Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.) Only by doing — or, in our case, thinking — something different do you put yourself at risk.

JOHN MAYNARD KEYNES

Conventional thinking and behavior is safe. But it guarantees mediocrity. You need to know when your performance is likely to be improved by being unconventional.

Here’s a pro tip. If you want to have fun at work this week, do one of two things. First, start digging below the surface of people’s opinions. Ask them why they think what they think. Second, ask them to take the other side of the argument.

Ten Words That Forever Change How You View Leadership

Anyone can steer the ship when the sea is calm. — Publilius Syrus

“Anyone can steer the ship when the sea is calm.”
— Publilius Syrus

It’s easy to lead when things are going well.

It’s easy to take credit for success.

It’s easy to look good when the metrics are going in the right direction.

And yet … I’m reminded of Warren Buffett’s words of caution: “Only when the tide goes out do you discover who’s been swimming naked.”

If you want to gain an edge you need to think deeper. And when you do that … nothing looks the same again.