Tag Archives: Psychology

The Fundamental Attribution Error, or Why Predicting Behavior is So Hard


“Psychologists refer to the inappropriate use of dispositional explanation as
the fundamental attribution error, that is, explaining situation-induced behavior
as caused by enduring character traits of the agent.”
— Jon Elster

***

The problem with any concept of “character” driving behavior is that “character” is pretty hard to pin down. We call someone “moral” or “honest,” we call them “courageous” or “naive” or any other number of names. The implicit connotation is that someone “honest” in one area will be “honest” in most others, or someone “moral” in one situation is going to be “moral” elsewhere.

Old-time folk psychology supports the notion, of course. As Jon Elster points out in his wonderful book Explaining Social Behavior, folk wisdom would have us believe that much of this “predicting and understanding behavior” thing is pretty darn easy! Simply ascertain character, and use that as a basis to predict or explain action.

People are often assumed to have personality traits (introvert, timid, etc.) as well as virtues (honesty, courage, etc.) or vices (the seven deadly sins, etc.). In folk psychology, these features are assumed to be stable over time and across situations. Proverbs in all languages testify to this assumption. “Who tells one lie will tell a hundred.” “Who lies also steals.” “Who steals an egg will steal an ox.” “Who keeps faith in small matters, does so in large ones.” “Who is caught red-handed once will always be distrusted.” If folk psychology is right, predicting and explaining behavior should be easy.

A single action will reveal the underlying trait or disposition and allow us to predict behavior on an indefinite number of other occasions when the disposition could manifest itself. The procedure is not tautological, as it would be if we took cheating on an exam as evidence of dishonesty and then used the trait of dishonesty to explain the cheating. Instead, it amounts to using cheating on an exam as evidence for a trait (dishonesty) that will also cause the person to be unfaithful to a spouse. If one accepts the more extreme folk theory that all virtues go together, the cheating might also be used to predict cowardice in battle or excessive drinking. 

This is a very natural and tempting way to approach the understanding of people. We like to think of actions that “speak volumes” about others’ character, thus using that as a basis to predict or understand their behavior in other realms.

For example, let’s say you were interviewing a financial advisor. He shows up on time, in a nice suit, and buys lunch. He says all the right words. Will he handle your money correctly?

Almost all of us would be led to believe he would, reasoning that his sharp appearance, timeliness, and generosity point towards his “good character”.

But what the study of history shows us is that appearances are flawed, and behavior in one context often does not have correlation to behavior in other contexts. Judging character becomes complex when we appreciate the situational nature of our actions. The U.S. President Lyndon Johnson was an arrogant bully and a liar who stole an election when he was young. He also fought like hell to pass the Civil Rights Act, something almost no other politician could have done.

Henry Ford standardized and streamlined the modern automobile and made it affordable to the masses, while paying “better than fair” wages to his employees and generally treating them well and with respect, something many “Titans” of business had trouble with in his day. He was also a notorious anti-Semite! If it’s true that “He who is moral in one respect is also moral in all respects,” then what are we to make of this?

Jon Elster has some other wonderful examples coming from the world of music, regarding impulsivity versus discipline:

The jazz musician Charlie Parker was characterized by a doctor who knew him as “a man living from moment to moment. A man living for the pleasure principle, music, food, sex, drugs, kicks, his personality arrested at an infantile level.” Another great jazz musician, Django Reinhardt, had an even more extreme present-oriented attitude in his daily life, never saving any of his substantial earnings, but spending them on whims or on expensive cars, which he quickly proceeded to crash. In many ways he was the incarnation of the stereotype of “the Gypsy.” Yet you do not become a musician of the caliber of Parker and Reinhardt if you live in the moment in all respects. Proficiency takes years of utter dedication and concentration. In Reinhardt’s case, this was dramatically brought out when he damaged his left hand severely in a fire and retrained himself so that he could achieve more with two fingers than anyone else with four. If these two musicians had been impulsive and carefree across the board — if their “personality” had been consistently “infantile” — they could never have become such consummate artists.

Once we realize this truth, it seems obvious. We begin seeing it everywhere. Dan Ariely wrote a book about situational dishonesty and cheating which we have written about before. Judith Rich Harris based her theory of child development on the idea that children do not behave the same elsewhere as they do at home, misleading parents into thinking they were molding their children. Good interviewing and hiring is a notoriously difficult problem because we are consistently misled into thinking that what we learn in the interview process is representative of the interviewee’s general competence. Books have been written about the Halo Effect, a similar idea that good behavior in one area creates a “halo” around all behavior.

The reason we see this everywhere is because it’s how the world works!

This basic truth is called the Fundamental Attribution Error, the belief that behavior in one context carries over with any consistency into other areas.

Studying the error leads us to conclude that we have a natural tendency to:

A. Over-rate some general consideration of “character” and,
B. Under-rate the “power of the situation”, and its direct incentives, to compel a variety of behavior.

Elster describes a social psychology experiment that effectively demonstrates how quickly any thought of “morality” can be lost in the right situation:

In another experiment, theology students were told to prepare themselves to give a brief talk in a nearby building. One-half were told to build the talk around the Good Samaritan parable(!), whereas the others were given a more neutral topic. One group was told to hurry since the people in the other building were waiting for them, whereas another was told that they had plenty of time. On their way to the other building, subjects came upon a man slumping in the doorway, apparently in distress. Among the students who were told they were late, only 10 percent offered assistance; in the other group, 63 percent did so. The group that had been told to prepare a talk on the Good Samaritan was not more likely to behave as one. Nor was the behavior of the students correlated with answers to a questionnaire intended to measure whether their interest in religion was due to the desire for personal salvation or to a desire to help others. The situational factor — being hurried or not — had much greater explanatory power than any dispositional factor.

So with a direct incentive in front of them — not wanting to be late when people were waiting for them, which could cause shame — the idea of being a Good Samaritan was thrown right out the window! So much for good character.

What we need to appreciate is that, in the words of Elster, “Behavior is often no more stable than the situations that shape it.” A shy young boy on the playground might be the most outgoing and aggressive boy in his group of friends. A moral authority in the realm of a religious institution might well cheat on their taxes. A woman who treats her friends poorly might treat her family with reverence and care.

We can’t throw the baby out with the bathwater, of course. Elster refers to contingent response tendencies that would carry from situation to situation, but they tend to be specific rather than general. If we break down character into specific interactions between person and types of situations, we can understand things a little more accurately.

Instead of calling someone a “liar,” we might understand that they lie on their taxes but are honest with their spouse. Instead of calling someone a “hard worker,” we might come to understand that they drive hard in work situations, but simply cannot be bothered to work around the house. And so on. We should pay attention to the interplay between the situation, the incentives and the nature of the person, rather than just assuming that a broad  character trait applies in all situations.

This carries two corollaries:

A. As we learn to think more accurately, we get one step closer to understanding human nature as it really is. We can better understand the people with whom we coexist.

B. We might better understand ourselves! Imagine if you could be the rare individual whose positive traits truly did carry over into all, or at least all important, situations. You would be traveling an uncrowded road.

***

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Daniel Pink on Incentives and the Two Types of Motivation

Motivation is a tricky multifaceted thing. How do we motivate people to become the best they can be? How do we motivate ourselves? Sometimes when we are running towards a goal we suddenly lose steam and peter out before we cross the finish line. Why do we lose our motivation part way to achieving our goal?

Dan Pink wrote an excellent book on motivation called Drive: The Surprising Truth About What Motivates Us. We’ve talked about the book before but it’s worth going into a bit more detail.

When Pink discusses motivation he breaks it into two specific types: extrinsic and intrinsic.

Extrinsic motivation is driven by external forces such as money or praise. Intrinsic motivation is something that comes from within and can be as simple as the joy one feels after accomplishing a challenging task. Pink also describes two distinctly different types of tasks: algorithmic and heuristic. An algorithmic task is when you follow a set of instructions down a defined path that leads to a single conclusion. A heuristic task has no instructions or defined path, one must be creative and experiment with possibilities to complete the task.

As you can see the two types of motivations and tasks are quite different.

Let’s look at how they play against each other depending on what type of reward is offered.

Baseline Rewards

Money was once thought to be the best way to motivate an employee. If you wanted someone to stay with your company or to perform better you simply had to offer financial incentives. However, the issue of money as a motivator has become moot in many sectors. If you are a skilled worker you will quite easily be able to find a job in your desired salary range. Pink puts it succinctly:

Of course the starting point for any discussion of motivation in the workplace is a simple fact of life: People have to earn a living. Salary, contract payments, some benefits, a few perks are what I call “baseline rewards.” If someone’s baseline rewards aren’t adequate or equitable, her focus will be on the unfairness of her situation and the anxiety of her circumstance. You’ll get neither the predictability of extrinsic motivation nor the weirdness of intrinsic motivation. You’ll get very little motivation at all. The best use of money as a motivator is to pay people enough to take the issue of money off the table.

Once the baseline rewards have been sorted we are often offered other ‘carrots and sticks’ to nudge our behavior. Many of these rewards will actually achieve the opposite effect to what was intended.

‘If, then’ Rewards

‘If, then’ rewards are when we promise to deliver something to an individual once they complete a specific task. If you hit your sales goals this month then I will give you a bonus. There are inherent dangers with ‘if, then’ rewards. They tend to prompt a short term surge in motivation but actually dampen it over the long term. Just the fact of offering a reward for some form of effort sends the message that the work is, well, work. This can have a large negative impact on intrinsic motivation. Additionally, rewards by their very nature narrow our focus, we tend to ignore everything but the finish line. This is fine for algorithmic tasks but hurts us with heuristic based tasks.

Amabile and others have found that extrinsic rewards can be effective for algorithmic tasks – those that depend on following an existing formula to its logical conclusion. But for more right-brain undertakings – those that demand flexible problem-solving, inventiveness, or conceptual understanding – contingent rewards can be dangerous. Rewarded subjects often have a harder time seeing the periphery and crafting original solutions.

Goals

When we use goals to motivate us how does that affect how we think and behave?

Like all extrinsic motivators, goals narrow our focus. That’s one reason they can be effective; they concentrate the mind. But as we’ve seen, a narrowed focus exacts a cost. For complex or conceptual tasks, offering a reward can blinker the wide-ranging thinking necessary to come up with an innovative solution. Likewise, when an extrinsic goal is paramount – particularly a short-term, measurable one whose achievement delivers a big payoff – its presence can restrict our view of the broader dimensions of our behavior. As the cadre of business school professors write, ‘Substantial evidence demonstrates that in addition to motivating constructive effort, goal setting can induce unethical behavior.

The examples are legion, the researchers note. Sears imposes a sales quota on its auto repair staff – and workers respond by overcharging customers and completing unnecessary repairs. Enron sets lofty revenue goals – and the race to meet them by any means possible catalyzes the company’s collapse. Ford is so intent on producing a certain car at a certain weight at a certain price by a certain date that it omits safety checks and unleashes the dangerous Ford Pinto.

The problem with making extrinsic reward the only destination that matters is that some people will choose the quickest route there, even if it means taking the low road.

Indeed, most of the scandals and misbehavior that have seemed endemic to modern life involve shortcuts. Executives game their quarterly earnings so they can snag a performance bonus. Secondary school counselors doctor student transcripts so their seniors can get into college. Athletes inject themselves with steroids to post better numbers and trigger lucrative performance bonuses.

Contrast that approach with behavior sparked by intrinsic motivation. When the reward is the activity itself – deepening learning, delighting customers, doing one’s best – there are no shortcuts. The only route to the destination is the high road. In some sense, it’s impossible to act unethically because the person who’s disadvantaged isn’t a competitor but yourself.

“Most of the scandals and misbehavior that have seemed endemic to modern life involve shortcuts.” Click To Tweet

These same pressures that may nudge you towards unethical actions can also push you to make more risky decisions. The drive towards the goal can convince you to make decisions that in any other situation you would likely never consider. (See more about the dangers of goals.)

It’s not only the person who is being motivated with the reward that is hurt here. The person who is trying to encourage a certain type of behaviour also falls into a trap and is forced to try and course correct which, often, leaves them worse off than if they had never offered the reward in the first place.

The Russian economist Anton Suvorov has constructed an elaborate econometric model to demonstrate this effect, configured around what’s called ‘principal-agent theory.’ Think of the principal as the motivator – the employer, the teacher, the parent. Think of the agent as the motivatee – the employee, the student, the child. A principal essentially tries to get the agent to do what the principal wants, while the agent balances his own interests with whatever the principal is offering. Using a blizzard of complicated equations that test a variety of scenarios between principal and agent, Suvorov has reached conclusions that make intuitive sense to any parent who’s tried to get her kids to empty the garbage.

By offering a reward, a principal signals to the agent that the task is undesirable. (If the task were desirable, the agent wouldn’t need a prod.) But that initial signal, and the reward that goes with it, forces the principal onto a path that’s difficult to leave. Offer too small a reward and the agent won’t comply. But offer a reward that’s enticing enough to get the agent to act the first time, and the principal ‘is doomed to give it again in the second.’ There’s no going back. Pay your son to take out the trash – and you’ve pretty much guaranteed the kid will never do it again for free. What’s more, once the initial money buzz tapers off, you’ll likely have to increase the payment to continue compliance.

Even if you are able to trigger the better behaviour it will often disappear once incentives are removed.

In environments where extrinsic rewards are most salient, many people work only to the point that triggers the reward – and no further. So if students get a prize for reading three books, many won’t pick up a fourth, let alone embark on a lifetime of reading – just as executives who hit their quarterly numbers often won’t boost earnings a penny more, let alone contemplate that long-term health of their company. Likewise, several studies show that paying people to exercise, stop smoking, or take their medicines produces terrific results at first – but the healthy behavior disappears once the incentives are removed.

When Do Rewards Work?

Rewards can work for routine (algorithmic) tasks that require little creativity.

For routine tasks, which aren’t very interesting and don’t demand much creative thinking, rewards can provide a small motivational booster shot without the harmful side effects. In some ways, that’s just common sense. As Edward Deci, Richard Ryan, and Richard Koestner explain, ‘Rewards do not undermine people’s intrinsic motivation for dull tasks because there is little or no intrinsic motivation to be undermined.’

You will increase your chances for success when rewarding routine tasks using these three practices:

  1. Offer a rationale for why the task is necessary.
  2. Acknowledge that the task is boring.
  3. Allow people to complete the task their own way (think autonomy not control).

Any extrinsic reward should be unexpected and offered only once the task is complete. In many ways this is common sense as it is the opposite of the ‘if, then’ rewards allowing you to avoid its many failings (focus isn’t solely on the prize, motivation won’t wane if reward isn’t present during task, etc…). However, one word of caution – be careful if these rewards become expected, because at that point they are no different than the ‘if, then’ rewards.

Daniel Pink on Incentives and the Two Types of Motivation Click To Tweet

Don’t Let Your (Technology) Tools Use You

HERBERT SIMON 2

***

A shovel is just a shovel. You shovel things with it. You can break up weeds and dirt. (You can also whack someone with it.) I’m not sure I’ve seen a shovel used for much else.

Modern technological tools aren’t really like that.

What is an iPhone, functionally? Sure, it’s a got the phone thing down, but it’s also a GPS, a note-taker, an emailer, a text messager, a newspaper, a video-game device, a taxi-calling service, a flashlight, a web browser, a library, a book…you get the point. It does a lot.

This all seems pretty wonderful. To perform those functions 20 years ago, you needed a map and a sense of direction, a notepad, a personal computer, a cell phone, an actual newspaper, a Playstation, a phone and the willingness to talk to a person, an actual flashlight, an actual library, an actual book…you get the point. Basically, as Mark Andressen puts it, the world is being eaten by software. One simple (looking) device and a host of software can perform the functions served by a bunch of big clunky tools of the past.

So far, we’ve been convinced that usage of the New Tools is mostly “upside,” that our embrace of them should be wholehearted. Much of this is for good reason. Do you remember how awful using a map was? Yuck.

The problem is that our New Tools are winning the battle of attention. We’ve gotten to the point where the tools use us as much as we use them. This new reality means we need to re-examine our relationship with our New Tools.

***

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Francis Bacon and the Four Idols of the Mind

Francis Bacon the Four Idols of the Mind


Among the Enlightenment founders, his spirit is the one that most endures.
It informs us across four centuries that we
must understand nature
both around us and within ourselves, in order to set humanity
on the course of self-improvement. 

-E.O. Wilson on Francis Bacon

***

The English statesman and scholar Francis Bacon (1561-1626) was one of the earliest thinkers to truly understand the nature of the mind and how humanity truly progresses in collective knowledge.

Bacon’s first great contribution was to lessen the focus on traditional scholarship: the constant mining of the old Greek and Roman philosophers and the old religious texts, the idea that most of our knowledge had already been “found” and needed to be rediscovered.

To Bacon, this was an unstable artifice on which to build our understanding of the world. Better that we start reasoning from first principles, building up our knowledge of the world through inductive reasoning. E.O. Wilson summarizes Bacon’s contribution in a chapter on the Enlightenment in his excellent book Consilience.

By reflecting on all possible methods of investigation available to his imagination, he concluded that the best among them is induction, which is the gathering of large numbers of facts and the detection of patterns. In order to obtain maximum objectivity, we must entertain only a minimum of preconceptions. Bacon proclaimed a pyramid of disciplines, with natural history forming the base, physics above and subsuming it, and metaphysics at the peak, explaining everything below–though perhaps in powers and forms beyond the grasp of man.

In this way, Wilson crowns Bacon as the Father of Induction — the first to truly grasp the power of careful inductive reasoning to generate insights. Bacon broke down the old, rigid ways of classifying knowledge in favor of building a new understanding from the ground up, using experiments to prove or disprove a theory.

In this way, he realized much of what was being taught in his time, including metaphysics, alchemy, magic, astrology, and other disciplines, would eventually crumble under scrutiny. (A feeling we share about our current age.)

Insights of the Mind

Most importantly, hundreds of years before the advent of modern psychology, Bacon understood clearly that the human mind doesn’t always reason correctly, and that any approach to scientific knowledge must start with that understanding. Over 400 years before there was a Charlie Munger or a Daniel Kahneman, Bacon clearly understood the first-conclusion bias and the confirmation bias.

In his Novum Organum, Bacon described these errors in the same manner we understand them today:

The mind, hastily and without choice, imbibes and treasures up the first notices of things, from whence all the rest proceed, errors must forever prevail, and remain uncorrected.

[…]

The human understanding when it has once adopted an opinion (either as being the received opinion or as being agreeable to itself) draws all things else to support and agree with it. And though there be a greater number and weight of instances to be found on the other side, yet these it either neglects and despises, or else by some distinction sets aside and rejects, in order that by this great and pernicious predetermination the authority of its former conclusions may remain inviolate.

He called the wide variety of errors in mental processing the Idols of the Mind. There were four idols: Idols of the Tribe, Idols of the Cave, Idols of the Marketplace, and Idols of the Theater.

Idols of the Tribe

The Idols of the Tribe made the false assumption that our most natural and basic sense of thing was the correct one. He called our natural impressions a “false mirror” which distorted the true nature of things.

The Idols of the Tribe have their foundation in human nature itself, and in the tribe or race of men. For it is a false assertion that the sense of man is the measure of things. On the contrary, all perceptions as well of the sense as of the mind are according to the measure of the individual and not according to the measure of the universe. And the human understanding is like a false mirror, which, receiving rays irregularly, distorts and discolors the nature of things by mingling its own nature with it.

Idols of the Cave

The Idols of the Cave were the problems of individuals, their passions and enthusiasms, their devotions and ideologies, all of which led to misunderstandings of the true nature of things.

The Idols of the Cave are the idols of the individual man. For everyone (besides the errors common to human nature in general) has a cave or den of his own, which refracts and discolors the light of nature, owing either to his own proper and peculiar nature; or to his education and conversation with others; or to the reading of books, and the authority of those whom he esteems and admires; or to the differences of impressions, accordingly as they take place in a mind preoccupied and predisposed or in a mind indifferent and settled; or the like. So that the spirit of man (according as it is meted out to different individuals) is in fact a thing variable and full of perturbation, and governed as it were by chance. Whence it was well observed by Heraclitus that men look for sciences in their own lesser worlds, and not in the greater or common world.

Idols of the Marketplace

You might call the Idols of the Marketplace a problem of political discourse: The use of words to mislead. (Nearly a half a century later, Garrett Hardin would argue similarly that good thinkers need a literary filter to suss out sense from nonsense.)

There are also Idols formed by the intercourse and association of men with each other, which I call Idols of the Market Place, on account of the commerce and consort of men there. For it is by discourse that men associate, and words are imposed according to the apprehension of the vulgar. And therefore the ill and unfit choice of words wonderfully obstructs the understanding. Nor do the definitions or explanations wherewith in some things learned men are wont to guard and defend themselves, by any means set the matter right. But words plainly force and overrule the understanding, and throw all into confusion, and lead men away into numberless empty controversies and idle fancies.

Idols of the Theater

The final idol, of the Theater, is how Bacon referred to long-received wisdom, the ancient systems of philosophy, the arbitrary divisions of knowledge and classification systems held onto like dogma. Without emptying one’s mind of the old ways, no new progress could be made. This would be an important lasting value of the Baconian view of science. Truth must be reasoned from first principles.

Lastly, there are Idols which have immigrated into men’s minds from the various dogmas of philosophies, and also from wrong laws of demonstration. These I call Idols of the Theater, because in my judgment all the received systems are but so many stage plays, representing worlds of their own creation after an unreal and scenic fashion. Nor is it only of the systems now in vogue, or only of the ancient sects and philosophies, that I speak; for many more plays of the same kind may yet be composed and in like artificial manner set forth; seeing that errors the most widely different have nevertheless causes for the most part alike. Neither again do I mean this only of entire systems, but also of many principles and axioms in science, which by tradition, credulity, and negligence have come to be received.

The Lasting Importance of Narrative

Even with his rationalistic view of the world, a rigorous devotion to truth, Bacon realized that unless you used creative storytelling and engaged a learner’s mind, it would be impossible to communicate real truths about the world. He knew the power narrative had to instruct. E.O. Wilson writes in Consilience:

Reality still had to be embraced directly and reported without flinching. But it is also best delivered the same way it was discovered, retaining a comparable vividness and play of the emotions. Nature and her secrets must be as stimulating to the imagination as are poetry and fables. To that end, Bacon advised us to use aphorisms, illustrations, stories, fables, analogies–anything that conveys truth from the discoverer to his readers as clearly as a picture. The mind, he argued, is not like a wax tablet. On a tablet you cannot write the new till you rub out the old, on the mind you cannot rub out the old except by writing in the new.”

 

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. 

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.”

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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.

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