Tag: Immanuel Kant

Kristin Dombek: The Selfishness of Others

I'll bet you think this article is about you.

“We all know selfishness when we see it,” writes essayist Kristin Dombek opening The Selfishness of Others: An Essay on The Fear of Narcissism. She's right. We see it everywhere from TV to family and lovers. Playing in the tension between pathology and common selfishness, her book offers a thought-provoking look at how narcissism became a cultural phenomenon and repository for our fears.

What is wrong with the narcissist she asks?

This is harder to know. If you see the smile on the face of a murderer, you must run. But if you are unlucky enough to love someone who seems suddenly so into himself that he doesn't care who he hurts, someone who turns from warm to gone when he doesn't need you, so self-adoring or wounded he meets criticism with violence or icy rage, who turns into another person in front of your eyes, or simply turns away when he said he'd be there—if you love someone who seems to have the particular twenty-first-century selfishness in some more subtle, or worse, invisible way, you will likely go to the internet for help.

The internet of course offers answers to even the wrong questions.

You'll read, in that seizable portion of the self-help internet we might call, awkwardly, the narcisphere, a story that can change the way you see everything if you start believing in it, giving you the uncanny but slightly exciting sensation that you're living in a movie. It's familiar, this movie, as if you've seen in before and it's a creepy one, but you have the most important role in the script. You're the hero.

The basic script plays out like this.

At first, the narcissist is extraordinarily charming, even kind and sweet. Then, after a while, he seems full of himself. It could be a “he” or a “she,” but let's stick with “he.” That's what you start to think, when you know someone like this: he's full of himself. But the narcissist is empty.

Normal, healthy people are full of self, a kind of substance like a soul or personhood that, if you have it, emanates warmly from inside of you toward the outside of you. No one knows what it is, but everyone agrees that narcissists do not have it. Disturbingly, however, they are often better than anyone else at seeming to have it. Because what they have inside is empty space, they have had to make a study of the selves of others in order to invent something that looks and sounds like one. Narcissists are imitators par excellence. The murderer plagiarized most of his manifesto, obviously and badly, but often narcissists are so good at imitating that you won't even notice. And they do not copy the small, boring parts of selves. They take what they think are the biggest, most impressive parts of other selves, and devise a hologram of self that seems superpowered. Let's call it “selfiness,” this simulacrum of a superpowered self. Sometimes they seem crazy or are really dull, but often, perhaps because they have had to try harder than most to make it, the selfiness they've come up with is qualitatively better, when you first encounter it, than the ordinary, naturally occurring selves of normal, healthy people.

[…]

Because for the narcissist, this appreciation of you is entirely contingent on the idea that you will help him to maintain his selfiness. If you do not, or if you are near him when someone or something does not, then God help you. When that picture shatters, his hurt and his rage will be unmatched in its heat or, more often, its coldness. He will unfriend you, stop following you, stop returning your emails, stop talking to you completely. He will cheat on you without seeming to think it's a big deal, or break up with you, when he has said he'd be with you forever. He will fire you casually and without notice. Whatever hurts most, he will do it. Whatever you need the most, he will withhold it. He cannot feel other people's feelings, but he is uncannily good at figuring out how to demolish yours.

[…]

It isn't that the narcissist is just not a good person; she's like a caricature of what we mean by “not a good person.” She's not just bad; she's a living, breathing lesson in what badness is.

Immanuel Kant offered a formulation for how to do the right thing: Asking yourself, if everyone acted this way, would the world be a better place? Good people, we tend to believe, will treat others as the ends themselves, not the means. Narcissists, along with psychopaths, do the opposite. For them, people are the means toward other ends. “If everyone were to follow suit,” Dombek writes, “the world would go straight to hell.”

The realization that the narcissist, not so much selfish as not really having a self, changes everything. Suddenly you can see them for what they are: puppets or clowns. While they may look human, they are not.

So what should you do when you are confronted with a narcissist?

It seems no matter what you answer, you'll be haunted forever. With equal certainty the internet offers two pieces of common advice: love them and expect nothing and hope that they change, or run as fast and as far as you can.

If the prevailing wisdom that narcissism is becoming more and more common is indeed true, today's prevailing advice doesn't scale.

Kant's advice no longer holds. But that is not the worst of it. Running is an act of the very same coldness described by the diagnosis. What if the only way to escape a narcissist is to act like one yourself?

The question of the selfishness of others, though, leads quickly to the very difficult question of how we know things about others at all, and the mind-knotting question of how we know things at all.

Dombek goes on to explore provocative questions of ourselves—most of us can be put in environments where we display situational narcissisms; why is having a boyfriend or boss like having a villain; why do the narcissistic descriptions of others (“in moments you quietly bury deep inside you”) remind you of yourself.

 

Epistemology: How do you Know that you Know what you Know?

The role of perception in knowledge

It is hard to imagine a world that exists outside of what we can perceive. In the effort to get through each day without crashing our cars or some other calamity, we make assumptions about the objects in our physical world. Their continuity, their behaviour.

Some of these assumptions are based on our own experience, some on the knowledge imparted by others of their experience, and some on inferences of logic.

Experience, however, comes through the lens of perception. How things look, how they feel, how they sound.

Our understanding of, and interaction with, the world comes through particular constructs of the human body – eyes, ears, fingers, etc. Most people intuitively understand the subjectivity of some of our perceptions.

Colors look ‘different' to people who are color blind. Our feeling of temperature is impacted by immediate contrast – People stepping outside the doors of an airport will have a different impression of the temperature if they have just come from Moose Jaw or Cancun.

Even more substantial understandings come to us through the lens of our senses. We can see the shape of a tree, or we could close our eyes and infer the shape through touch, but in either case, or even combining the two, we are relying on our senses to impart an understanding of the physical world.

The question of what objectively ‘is', is something that has long been one of the subjects of philosophy. Philosophers from Descartes to Kant have tried to describe our existence in such a way as to arrive at understanding of the physical world in which things can be conclusively known.

Descartes introduces the idea in his Meditations: “Surely whatever I had admitted until now as most true I received either from the senses or through the senses. However, I have noticed that the senses are sometimes deceptive; and it is a mark of prudence never to place our complete trust in those who have deceived us even once.”

Descartes famously employed systematic doubt, questioning all knowledge conveyed by his experience in the world until the only knowledge he couldn't doubt was the fact that he could doubt.

Therefore I suppose that everything I see is false. I believe that none of what my deceitful memory represents ever existed. I have no sense whatever. Body, shape, extension, movement, and place are all chimeras. What then will be true? … Thus, after everything has been most carefully weighed, it must finally be established that this pronouncement “I am, I exist” is necessarily true every time I utter it or conceive it in my mind. (Descartes, Meditations)

Descartes confirmed we have a self. Unfortunately this self could be the one we see in the mirror each morning or a brain in a vat. If the only thing we cannot doubt is that we can doubt, essentially that guarantees us having only the mechanism to doubt. No body. We could therefore be isolated brains, being manipulated by things unknown, our entire world a mirage.

How then can we hope to claim knowledge about the physical world?

For Locke, our understanding of the world comes from our experience of it. It is this experience that provides knowledge. He says, in his Essay Concerning Human Understanding:

Let us then suppose the mind to be, as we say, white paper, void of all characters, without any ideas: – How comes it to be furnished? Whence comes it by that vast store with the busy and boundless fancy of man has painted on it with an almost endless variety Whence has it all the materials or reason and knowledge? To this I answer, in one word, from EXPERIENCE. In that all our knowledge is founded; and from that it ultimately derives itself.

He wrote that there were two types of qualities, ones that existed innately in an object or series of objects, such as size, number, or motion, and those that are wholly dependent on our perception of them, such as color or smell.

The particular bulk, number, figure, and motion of the parts of fire or snow are really in them, whether one's senses perceive them or no: and therefore they may be called real qualities, because they really exist in those bodies. But light, heat, whiteness, or coldness are not more really in them than sickness or pain is in manna. (Locke, An Essay Concerning Human Understanding)

Experience then, as long as we have an understanding of the limitations of our perception, will confer certain truths about the physical world we inhabit. For example, through experience we can claim knowledge of how many crows are perched on a telephone wire, but not how many of them have ‘black’’ as an intrinsic property of their feathers.

Quite in opposition to this was George Berkeley (pronounced Bar-clay), for whom ‘to be' was ‘to be perceived'. Berkeley wrote in A Treatise Concerning the Principles of Human Knowledge:

Besides all that endless variety of ideas or objects of knowledge, there is likewise something which knows or perceives them and exercised divers operations, as willing, imagining, remembering, about them. This perceiving … does not denote any one of my ideas, but a thing entirely distinct from them, wherein they exist or, which is the same thing, whereby they are perceived – for the existence of an idea consists in being perceived.

Because our knowledge of the world comes from our perception of it, it is impossible to conclusively know the existence of anything independent of our perception. Berkeley, wrote:

Hence, as it is impossible for me to see or feel anything without an actual sensation of that thing, so it is impossible for me to conceive in my thoughts any sensible thing or object distinct from the sensation or perception of it.

This line of inquiry ultimately results in the entire physical world being called into question, as Berkeley observed:

If we have any knowledge at all of external things, it must be by reason, inferring their existence from what is immediately perceived by sense. {However} it is granted on all hands (and what happens in dreams, frenzies, and the like, puts it beyond dispute) that it is possible we might be affected with all the ideas we have now, though no bodies existed without resembling them.

If we can not know things outside of perception, and our perceptions are entirely unreliable, where does that leave us? It certainly isn't useful to imagine your existence as the sum total of your knowledge, or that our experiences are inherently mistrustful.

What these philosophies can be useful for understanding though, is that often what we consider knowledge is more of a general social agreement on a somewhat consistent comprehension of the things before us. For example, we appreciate that the color green can be perceived differently by various people, but we organize our language based on a general understanding of the color green without worrying about the particular experience of green that any individual may have.

For David Hume, there definitely was a physical world, our perception of which was ultimately responsible for all of our ideas, no matter how complex or abstract. He wrote in An Enquiry Concerning Human Understanding:

When we analyze our thoughts or ideas, however compounded or sublime, we always find that they resolve themselves into such simple ideas as were copied from a precedent feeling or sentiment. Even those ideas, which, at first view, seem the most wide of this origin, are found, upon a nearer scrutiny, to be derived from it.

Furthermore, since all of our perceptions of the physical world are coming from the same physical world, and the nature of perceiving works more or less the same in each person, we can achieve a consistency in our understanding.

So although it may not be possible to know things with the same certainty as knowing oneself, or to be able to really describe the construct of the world outside of our perception of it, at least we can get along with each other because of a general consistency of experience.

However, this experience still admits to a certain fragility. There is no guarantee that past experiences will be consistent with future ones. In An Enquiry Concerning Human Understanding, Hume observes:

Being determined by custom to transfer the past to the future, in all our inferences; where the past has been entirely regular and uniform, we expect the event with the greatest assurance and leave no room for any contrary supposition. But where different effects have been found to follow from causes, which are to appearance exactly similar, all these various effects must occur to the mind in transferring the past to the future, and enter into our consideration, when we determine the probability of the event.

To simultaneously understand all effects when considering an event in the future is not necessarily a limitation, thanks to our amazingly sophisticated brains. Immanuel Kant thought that the way we process the information provided by our senses was an important component of knowledge. Kant wrote in the Prolegomena to Any Future Metaphysics:

The difference between truth and dreaming is not ascertained by the nature of the representations which are referred to objects (for they are the same in both cases), but by their connection according to those rules which determine the coherence of the representation in the concept of an object, and by ascertaining whether they can subsist together in experience or not.

Kant did not support the view that the existence of objects was called into question because of the subjectivity of the perceptions by which we must experience them, but neither that all knowledge of the physical world comes from experience. Kant argued:

Experience teaches us what exists and how it exists, but never that it must necessarily exist so and not otherwise. Experience therefore can never teach us the nature of things in themselves.

Knowledge then, is made up of things we infer, things we experience, and the way our brain processes both. The great metaphysical question of ‘Why it is all this way?’ may always be out of our reach.

Understanding some of this metaphysical uncertainty in knowledge does not mean that we have to give up on knowing anything. It simply points to a certain subjectivity, an allowance for different conceptions of the world. And hopefully it offers a set of tools with which to evaluate or build claims of knowledge.

A Philosophy of Walking: Thoreau, Nietzsche and Kant on Walking

Solitude is an important aspect of creative thought. You could make an argument that in our information overloaded world where our senses are stimulated nearly 18 hours a day, solitude and calming our minds is more important than ever. Walking allows us time to play with ideas, explore concepts, and be wrong in our thinking without worrying about others seeing the rawness of our thoughts.

I've never been a big walker, but after reading Frederic Gros' A Philosophy of Walking, I think I'll start walking more. In the book Gros explores people and lives that were shaped by walking. He ponders Thoreau's seclusion, why Rimbaud walked in fury, Nerval and his cure to melancholy. Rousseau and Nietzsche walked to think. Kant walked through his town at the same time daily to escape the “compulsion of thought.”

***
Walking is not a sport.

Walking is not a sport. Sport is a matter of techniques and rules, scores and competition, necessitating lengthy training: knowing the postures, learning the right movements. Then, a long time later, comes improvisation and talent.

Sport is keeping score: What’s your ranking? Your time? Your place in the results? Always the same division between victor and vanquished that there is in war – there is a kinship between war and sport, one that honours war and dishonours sport: respect for the adversary; hatred of the enemy.

Sport also obviously means cultivation of endurance, of a taste for effort, for discipline. An ethic. A labour.

Walking is not a sport. Putting one foot in front of the other is child’s play. When walkers meet, there is no result, no time: the walker may say which way he has come, mention the best path for viewing the landscape, what can be seen from this or that promontory.

Walking is the best way to go more slowly than any other method that has ever been found.

***
Freedoms

[T]here is the suspensive freedom that comes by walking, even a simple short stroll: throwing off the burden of cares, forgetting business for a time. You choose to leave the office behind, go out, stroll around, think about other things. With a longer excursion of several days, the process of self-liberation is accentuated: you escape the constraints of work, throw off the yoke of routine. But how could walking make you feel this freedom more than a long journey? … only walking manages to free us from our illusions about the essential.

Walking can provoke these excesses: surfeits of fatigue that make the mind wander, abundances of beauty that turn the soul over, excesses of drunkenness on the peaks, the high passes (where the body explodes). Walking ends by awakening this rebellious, archaic part of us: our appetites become rough and uncompromising, our impulses inspired. Because walking puts us on the vertical axis of life: swept along by the torrent that rushes just beneath us.

What I mean is that by walking you are not going to meet yourself. By walking, you escape from the very idea of identity, the temptation to be someone, to have a name and a history.

During long cross-country wanders, you do glimpse that freedom of pure renunciation. When you walk for a long time, there comes a moment when you no longer know how many hours have passed, or how many more will be needed to get there; you feel on your shoulders the weight of the bare necessities, you tell yourself that’s quite enough – that really nothing more is needed to keep body and soul together – and you feel you could carry on like this for days, for centuries. You can hardly remember where you are going or why; that is as meaningless as your history, or what the time is. And you feel free, because whenever you remember the former signs of your commitments in hell – name, age, profession, CV – it all seems absolutely derisory, minuscule, insubstantial.

***
Walking Philosophers 

As you would expect, the book explores philosophers and their relationship to walking. Nietzsche was a walker. He wrote:

Sit as little as possible; do not believe any idea that was not born in the open air and of free movement — in which the muscles do not also revel. All prejudices emanate from the bowels. — Sitting still (I said it once already) — the real sin against the Holy Ghost.

When he wrote, The Wanderer and His Shadow, he walked, alone, for up to eight hours a day. Nietzsche would stop to scribble notes in small notebooks with a pencil. The entire book, except for a few lines, was thought out and composed en route.

Walking is different things to different people. To Nietzsche walking was more than relaxation, it was where he worked best.

“Think while walking,” Gros writes “walk while thinking, and let writing be but the light pause, as the body on a walk rests in contemplation of wide open spaces.”

While Nietzsche walked to work, Kant walked to escape. This was his way to escape — “a distraction from work.”

Like Nietzsche — although with different emphasis — (Kant) was concerned with only two things apart from reading and writing: the importance of his walk, and what he should eat. But their styles differed absolutely. Nietzsche was a great, indefatigable walker, whose hikes were long and sometimes steep; and he usually ate sparingly, like a hermit, always trying out diets, seeking what would least upset his delicate stomach.

Kant by contrast had a good appetite, drank heartily, although not to excess, and spent long hours at the table. But he looked after himself during his daily walk which was always very brief, a bit perfunctory. He couldn't bear to perspire. So in summer he would walk very slowly, and stop in the shade when he began to overheat.

Rain or shine, Kant had to walk.

(Kant) went alone, for he wanted to breathe through his nose all the way, with his mouth closed, which he believed to be excellent for the body. The company of friends would have obliged him to open his mouth to speak.

He always took the same route, so consistently that his itinerary through the park later came to be called ‘The Philosopher's Walk.' According to rumor he only ever altered the route of his daily constitutional twice in his life: once to obtain an early copy of Rousseau's Emile, and to join the scramble for hot news after the announcement of the French Revolution.

***
Speed

Walking is the best way to go more slowly than any other method that has ever been found.
Many people think that walking fast is the key. We're driven to get from point A to point B and we need to get there as quickly as possible. This is not leisure. Nor is it restful.

Gros claims the lesson, “in walking,” is that “the authentic sign of assurance is a good slowness.” He later continues:

The illusion of speed is the belief that it saves time. It looks simple at first sight: finish something in two hours instead of three, gain an hour. It's an abstract calculation, though, done as if each hour of the day were like an hour on the clock, absolutely equal. But haste and speed accelerate time, which passes more quickly, and two hours of hurry shorten a day. Every minute is torn apart by being segmented, stuffed to bursting. You can pile a mountain of things into an hour.

***
Solitude

Nietzsche, Thoreau, and Rousseau think we should walk alone.

Being in company forces one to jostle, hamper, walk at the wrong speed for others. When walking it's essential to find your own basic rhythm, and maintain it. The right basic rhythm is the one that suits you, so well that you don't tire and can keep it up for ten hours. But it is highly specific and exact. So that when you are forced to adjust to someone else's pace, to walk faster or slower than usual, the body follows badly.

So, Gros concludes, “it's best to walk alone.” But we are never alone. Thoreau wrote: “I have a great deal of company in the house, especially in the morning when nobody calls.”

***

A Philosophy of Walking explores the purpose walking served to Thoreau, Rousseau, Kant, and more.

Kantian Fairness Tendency: The World Isn’t Fair

The Kantian Fairness Tendency refers to the pursuit of perfect fairness which causes a lot of terrible problems. Stop expecting the world to be fair and adjust your behavior accordingly.

To learn about this mental model we turn to Charlie Munger, who mentioned it twice.

First in this UCCB talk entitled “Academic Economics — Strengths and Weaknesses, after Considering Interdisciplinary Needs” where he said:

It is not always recognized that, to function best, morality should sometimes appear unfair, like most worldly outcomes. The craving for perfect fairness causes a lot of terrible problems in system function. Some systems should be made deliberately unfair to individuals because they'll be fairer on average for all of us. I frequently cite the example of having your career over, in the Navy, if your ship goes aground, even if it wasn't your fault. I say the lack of justice for the one guy that wasn't at fault is way more than made up by a greater justice for everybody when every captain of a ship always sweats blood to make sure the ship doesn't go aground. Tolerating a little unfairness to some to get a greater fairness for all is a model I recommend to all of you. But again, I wouldn't put it in your assigned college work if you want to be graded well, particularly in a modern law school wherein there is usually an over-love of fairness-seeking process.

The second time was in his essay entitled: The Psychology of Human Misjudgment:

Kant was famous for his “categorical imperative,” a sort of a “golden rule” that required humans to follow those behavior patterns that, if followed by all others, would make the surrounding human system work best for everybody. And it is not too much to say that modern acculturated man displays, and expects from others, a lot of fairness as thus defined by Kant.

In a small community having a one-way bridge or tunnel for autos, it is the norm in the United States to see a lot of reciprocal courtesy, despite the absence of signs or signals. And many freeway drivers, including myself, will often let other drivers come in front of them, in lane changes or the like, because that is the courtesy they desire when roles are reversed. Moreover, there is, in modern human culture, a lot of courteous lining up by strangers so that all are served on a “firstcome-first-served” basis.

Also, strangers often voluntarily share equally in unexpected, unearned good and bad fortune. And, as an obverse consequence of such “fair-sharing” conduct, much reactive hostility occurs when fairsharing is expected yet not provided. It is interesting how the world's slavery was pretty well abolished during the last three centuries after being tolerated for a great many previous centuries during which it coexisted with the world's major religions. My guess is that Kantian Fairness Tendency was a major contributor to this result.

* * *

Professor Sanjay Bakshi makes a connection between the Kantian Fairness Tendency and the “law of the higher good” in reference to Machiavelli's famous book The Prince. Bakshi said this to his students:

Machiavelli's “The Prince” is a great book and should be made compulsory reading for all MBA students.

To many people, The Prince is an evil book. But Joseph L. Badaracco, who teaches a hugely popular course titled “The Moral Leader” at the Harvard Business School uses this book to teach ethics. And he teaches ethics by telling students to follow Machiavelli's advice in The Prince.

In an interview, Badaracco has said that four different takes on The Prince usually emerge in classroom discussions of The Prince at HBS:

Version 1 : “This book is a mess. It was written by a guy who hoped to get to the center of things, was there briefly, offended some of the wrong Medicis, was exiled, was tortured, and wanted to get back in.” It's “a scholar's dream because you can find anything you want in it and play intellectual games. But just put it aside.”

Version 2 : “Now wait a minute. There's some good common sense in there. Machiavelli is basically saying that if you want to make an omelet you have to break some eggs… To do some right things, you may have to not do some other right things.”

Version 3 : Other students believe the book is still around because it's so evil. Why is it evil? “If you look closely at The Prince,” he said, “it's quite interesting what isn't in the book. Nothing about religion. Nothing about the Church. Nothing about God. There's nothing about spirituality. Almost nothing about the law. Almost nothing about traditions. You're out there on your own doing what works for you in terms of naked ambition.”

Version 4 : “A fourth Prince that other students uncover is the most interesting one, in Badaracco's mind. Students find that the book reveals a kind of worldview, he says, and it's not an evil worldview. This version goes: “If you're going to make progress in the world you've got to have a clear sense, a realistic sense, an unsentimental sense, of how things really work: the mixed motives that compel some people and the high motives that compel some others. And the low motives that unfortunately captivate other people.” Students who claim the fourth Prince, Badaracco said, believe that if they're going to make a difference, it's got to be in this world, “and not in some ideal world that you would really like to live in.”

One of my favourite mental models comes from The Prince. I call this model, the “law of the higher good“. Before I read The Prince, I read an excellent book called, “The Contrarian Guide to Leadership” by Steven Sample. In this book, which was recommended by Mr. Munger, Sample's thoughts on the law of the higher good from The Prince resonated very well with what Mr. Munger has been advocating for years.

I reproduce here an extract from Sample's book which deals with the law of the higher good:

“Let me clarify the most fundamental misunderstanding. Machiavelli was not an immoral or even an amoral man; as mentioned earlier, he had a strong set of moral principles. But he was driven by the notion of a higher good: an orderly state in which citizens can move about at will, conduct business, safeguard their families and possessions, and be free of foreign intervention or domination. Anything which could harm this higher good, Machiavelli argued, must be opposed vigorously and ruthlessly. Failure to do so out of either weakness or kindness was condemned by Machiavelli as being contrary to the interests of the state, just as it would be contrary to the interests of a patient for his surgeon to refuse to perform a needed operation out of fear that doing so would inflict pain on the patient.”

The law of the higher good is a terribly useful model for leaders because it forces them to think about things from a totally different perspective.

Here's a hypothetical situation to ponder about:

You are in charge of running a retail store and one of your cashiers, an elderly woman, is caught committing a minor embezzlement. Fearing that she might be dismissed, she approaches you to plead forgiveness. She tells you that this is the first time she embezzled money from the company and promises that she'll never do it again. She tells you about her sad situation, namely that her husband is very ill and that she was going to use the money to buy medicines for him. She becomes extremely emotional and your heart is melting. What do you do?

Something similar to the above situation was described by Mr. Munger in a talk given by him. He used two models to produce his answer. The first model was probability. Mr. Munger implores you to reduce the problem to the mathematics of Fermat/Pascal by asking the question: How likely is it that the old woman's statement, “I've never done it before, I'll never do it again” is true?

Note that this question has nothing whatsoever to do with the circumstances in this particular instance of embezzlement. Rather, Munger is relying on his knowledge of the theory of probability. He asks: “If you found 10 embezzlements in a year, how many of them are likely to be first offences?”

The possible actions are: (1) She is lying and you fire her (good outcome – because it cures the problem and sends the right signals); (2) She is telling the truth and you fire her (bad outcome for her but good outcome for system integrity); (3) She is lying and you pardon her (bad outcome for system integrity); and (4) She is telling the truth and you pardon her (bad outcome for system integrity because it will send the wrong signal that its ok to embezzle once).

Weighed with probabilities, and after considering signalling effects of your actions on other people's incentives and its effect on system integrity, its clear that the woman should be fired.

Looked this way, this is not a legal problem or an ethical problem. Its an arithmetical problem with a simple solution. This extreme reductionism of practical problems to a fundamental discipline (in this case mathematics), is, of course, the hallmark of the Munger way of thinking and living.

So, from a leader's perspective, it's more important to have the right systems with the right incentives in place, rather than trying to be fair to one person – even if that person is the leader or someone close to the leader.

The logic is that leaders must look at such situations from their civilization's point of view rather than the viewpoint of an individual. If we create systems which encourage embezzlements, or tolerate such systems, we'll ruin our civilization. If we don't punish the woman, the idea that its ok to do minor embezzlement once in a while, will spread because of incentive effects, and social proof (everyone's doing it so its ok). And we cannot let that idea spread because that will ruin our civilization. Its that simple.

Kantian Fairness is part of the Farnam Street latticework of Mental Models.