Tag Archives: Wisdom

The Two Types of Knowledge

In The Art of Thinking Clearly, Rolf Dobelli tells the following story about Max Planck.

After receiving the Nobel Prize in Physics in 1918, Max Planck went on tour across Germany. Wherever he was invited, he delivered the same lecture on new quantum mechanics. Over time, his chauffeur grew to know it by heart: “It has to be boring giving the same speech each time, Professor Planck. How about I do it for you in Munich? You can sit in the front row and wear my chauffeur’s cap. That’d give us both a bit of variety.” Planck liked the idea, so that evening the driver held a long lecture on quantum mechanics in front of a distinguished audience. Later, a physics professor stood up with a question. The driver recoiled: “Never would I have thought that someone from such an advanced city as Munich would ask such a simple question! My chauffeur will answer it.”

Charlie Munger, the billionaire business partner of Warren Buffett frequently tells this story in speeches. Why? He elaborates in a 2007 address to USC Law. The point of the story is not the quick wittedness of the protagonist, but rather – to echo Richard Feynman – it’s about making a distinction between the two types of knowledge.

In this world we have two kinds of knowledge. One is Planck knowledge, the people who really know. They’ve paid the dues, they have the aptitude. And then we’ve got chauffeur knowledge.

They have learned the talk. They may have a big head of hair, they may have fine temper in the voice, they’ll make a hell of an impression.

But in the end, all they have is chauffeur knowledge. I think I’ve just described practically every politician in the United States.

And you are going to have the problem in your life of getting the responsibility into the people with the Planck knowledge and away from the people with the chauffeur knowledge.

And there are huge forces working against you. My generation has failed you a bit… but you wouldn’t like it to be too easy now would you?

Real knowledge is when people do the work. This is so important that Elon Musk tries to tease it out in interviews. Then we have the people who don’t do the work. While they’ve learned to put on a good show they lack understanding. The problem is that it’s difficult to separate the two.

One way to tease out the difference between Planck and chauffeur knowledge — is to ask them why.

In The Art of Thinking Clearly Dobelli goes on:

With journalists, it is more difficult. Some have acquired true knowledge. Often they are veteran reporters who have specialized for years in a clearly defined area. They make a serious effort to understand the complexity of a subject and to communicate it. They tend to write long articles that highlight a variety of cases and exceptions. The majority of journalists, however, fall into the category of chauffeur. They conjure up articles off the tops of their heads or, rather, from Google searches. Their texts are one-sided, short, and— often as compensation for their patchy knowledge— snarky and self-satisfied in tone.

The same superficiality is present in business. The larger a company, the more the CEO is expected to possess “star quality.” Dedication, solemnity, and reliability are undervalued, at least at the top. Too often shareholders and business journalists seem to believe that showmanship will deliver better results, which is obviously not the case.

One way to guard against this is to understand your circle of competence.

Dobelli concludes:

Be on the lookout for chauffeur knowledge. Do not confuse the company spokesperson, the ringmaster, the newscaster, the schmoozer, the verbiage vendor, or the cliché generator with those who possess true knowledge. How do you recognize the difference? There is a clear indicator: True experts recognize the limits of what they know and what they do not know. If they find themselves outside their circle of competence, they keep quiet or simply say, “I don’t know.” This they utter unapologetically, even with a certain pride. From chauffeurs, we hear every line except this.

Garrett Hardin: The Other Side of Expertise

From Garrett Hardin’s mind-blowingly awesome Filters Against Folly.

In our highly technological society we cannot do without experts. We accept this fact of life, but not without anxiety. There is much truth in the definition of the specialist as someone who “knows more and more about less and less.” But there is another side to the coin of expertise. A really great idea in science often has its birth as apparently no more than a particular answer to a narrow question; it is only later that it turns out that the ramifications of the answer reach out into the most surprising corners. What begins as knowledge about very little turns out to be wisdom about a great deal.

So it was with the development of the theory of probability. It all began in the seventeenth century, when one of the minor French nobility asked the philosopher-scientist Blaise Pascal to devise a fair way to divide the stakes in an interrupted gambling game. Pascal consulted with lawyer-mathematician friend Pierre de Fermat, and the two of them quickly laid the foundation of probability theory. Out of a trivial question about gambling came profound insights that later bore splendid fruit in physics and biology, in the verification of the causes of disease, the calculation of fair insurance premiums, and the achievement of quality control in manufacturing processes. And much more.

The service of experts is indispensable even if we are poor at ascertaining under which circumstances they add value, when they add noise, and when they are harmful. Hardin cautions that each new expertise introduces “new possibilities of error.”

It is unfortunately true that experts are generally better at seeing their particular kinds of trees than the forest of all life.

Thoughtful laymen — that’s us — can, however, “become very good at seeing the forest, particularly if they lose their timidity about challenging the experts. … In the universal role of laymen we all have to learn to filter the essential meaning out of the too verbose, too aggressively technical statements of the experts. Fortunately this is not as difficult a task as some experts would have us believe.”

Filters Against Folly is Hardin’s attempt “to show there …. (are) some rather simple methods of checking on the validity of the statements of experts.”

A Few Lessons


Looking back on my first years out of school and the countless mistakes I made, I can’t help but feel that any success I’ve enjoyed is more through dumb luck than any particular brilliance on my part.

Through Farnam Street, I detail my journey of self-discovery and learning. Basically, I explore two things in parallel:

First is the enduring search for how we should live and what it means to live a good life. And second, more practically, I explore things we can learn and connect that better equip us to solve problems by thinking.

While unqualified, I’m often asked to give advice to young people who are just beginning their own journey of self-discovery. With that disclaimer, let me share a few things that I’ve learned in the hopes that these help you navigate your journey.

1. Learn to say “I don’t know.”
Being caught without an opinion on something can be the kiss of death for the modern knowledge worker. This fosters an environment where we borrow our opinions from others without doing the necessary thinking.

And to make matters worse, once blurted out, we feel the need to defend these borrowed opinions because we don’t want to appear inconsistent. So we end up defending a superficial opinion based on the thoughts of others all because we couldn’t say three simple words: “I don’t know.”

2. Learn the difficult skill of changing your mind.
When was the last time you changed your mind on something? If you’re honest, it was probably a long time ago. We tend to accumulate knowledge and assume, even in the face of evidence to the contrary, that we are right.

The point here is to re-examine your conclusions and attitudes. When someone has a better one, adopt it. Seek evidence that contradicts what you think and try to explain it.

3. Your reputation for helping others is the most important thing.
Harry Truman had a saying that resonates a lot with me: “It is amazing what you can accomplish if you do not care who gets the credit.”

The thirst for credit fuels our ego. When culturally reinforced, this leads to predictably disastrous outcomes. Ego often prevents us from being as generous as we would like. It causes us to show how smart we are by making others look bad rather than making them look good.

Ego causes us to withhold information. And so on. When your ego gets too big, people won’t want to work with you. Help others achieve their goals and you’ll be amazed at the places you’ll go.

4. Knowing what to avoid is often more valuable than knowing what you think you want.
Sometimes the best thing you can do is invert the problem. It’s often as helpful to know what you want to avoid as what you want. Things that ruin lives tend to be predictable over time.

Avoid debt or leverage as well as over-consumption of drugs and alcohol. But there are some less obvious things to avoid.

For instance, when you start out in the workforce you’re looking for a cool place to work, but the person you work for is important, too.

Generally you want to work with people who have three traits: intelligence, energy and integrity. Avoid at all costs the seductive allure of smart people that lack integrity.

5. Mistakes.
Just because we’ve lost our way doesn’t mean that we are lost forever. In the end, it’s not the failures that define us so much as how we respond. Learn to recognize mistakes and correct them. (see #2.)

6. Goal-orientated people mostly fail.
Goal-oriented people mostly fail. What you really want is a system that increases your odds of success. Even if that system only improves the odds a little it adds up over a long life.

7. Friendships.
Friendship is more than just being there for your friends. Being a great friend means that you let your friends be there for you.

Marcus Aurelius: You Have One Life To Live

Young Marcus Aurelius
Young Marcus Aurelius

The excerpt is from this version online, although if you’re going to read it, get the Hayes translation.

Our mental powers should enable us to perceive the swiftness with which all things vanish away: their bodies in the world of space, and their remembrance in the world of time. We should also observe the nature of all objects of sense–particularly such as allure us with pleasure, or affright us with pain, or are clamorously urged upon us by the voice of self-conceit — the cheapness and contemptibility of them, how sordid they are, and how quickly fading and dead. We should discern the true worth of those whose word and opinion confer reputations. We should apprehend, too, the nature of death; and that if only it be steadily contemplated, and the fancies we associate with it be mentally dissected, it will soon come to be thought of as no more than a process of nature (and only children are scared by a natural process) — or rather, something more than a mere process, a positive contribution to nature’s well-being. Also we can learn how man has contact with God, and with which part of himself this is maintained, and how that part fares after its removal hence.

Nothing is more melancholy than to compass the whole creation, ‘probing into the deeps of earth’ as the poet says, and peering curiously into the secrets of others’ souls, without once understanding that to hold fast to the divine spirit within, and serve it loyally, is all that is needful. Such service involves keeping it pure from passion, and from aimlessness, and from discontent with the works of gods or men; for the former of these works deserve our reverence, for their excellence; the latter our goodwill, for fraternity’s sake, and at times perhaps our pity too, because of men’s ignorance of good and evil–an infirmity as crippling as the inability to distinguish black from white.

Were you to live three thousand years, or even thirty thousand, remember that the sole life which a man can lose is that which he is living at the moment; and furthermore, that he can have no other life except the one he loses. This means that the longest life and the shortest amount to the same thing. For the passing minute is every man’s equal possession, but what has once gone by is not ours. Our loss, therefore, is limited to that one fleeting instant, since no one can lose what is already past, nor yet what is still to come–for how can he be deprived of what he does not possess? So two things should be borne in mind. First, that all the cycles of creation since the beginning of time exhibit the same recurring pattern, so that it can make no difference whether you watch the identical spectacle for a hundred years, or for two hundred, or for ever. Secondly, that when the longest-and the shortest-lived of us come to die, their loss is precisely equal. For the sole thing of which any man can be deprived is the present; since this is all he owns, and nobody can lose what is not his.

(h/t Lampham’s Quarterly)

Charlie Munger: Adding Mental Models to Your Mind’s Toolbox

Berkshire Headquarters
In The Art of War Sun Tzu said “The general who wins a battle makes many calculations in his temple before the battle is fought.”

Those ‘calculations’ are the tools we have available to think better. One of the best questions you can ask is how we can make our mental processes work better.

Charlie Munger says that “developing the habit of mastering the multiple models which underlie reality is the best thing you can do.”

Those models are mental models.

They fall into two categories: (1) ones that help us simulate time (and predict the future) and better understand how the world works (e.g. understanding a useful idea from like autocatalysis), and (2) ones that help us better understand how our mental processes lead us astray (e.g., availability bias).

When our mental models line up with reality they help us avoid problems. However, they also cause problems when they don’t line up with reality as we think something that isn’t true.


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Seneca on Wisdom


In Seneca’s Morals: Of a Happy Life, Benefits, Anger, and Clemency, the famous stoic philosopher Seneca, who brought us combinatorial creativity, illuminates real wisdom.

Wisdom is a right understanding, a faculty of discerning good from evil, what is to be chosen and what rejected; a judgment grounded upon the value of things, and not the common opinion of them. It sets a watch over our words and deeds, and makes us invincible by either good or evil fortune. It has for its object things past and things to come, things transitory and things eternal. It examines all the circumstances of time, and the nature and operation of the mind. It stands to philosophy as avarice to money — the one desires and the other is desired; the one is the effect and the reward of the other. To be wise is the use of wisdom, as seeing is the use of eyes, and speaking of the tongue. He that is perfectly wise is perfectly happy; nay, the very beginning of wisdom makes life easy to us. It is not enough to know this; we must print it in our minds by daily meditation, and so bring a good will to a good habit.

Philosophy, after all, is a guide to living your life.

We must practise what we preach, for philosophy is not a subject for popular ostentation, nor does it rest in words, but in deeds. It is not an entertainment to be taken up for delight, or to give a taste to our leisure, but it should fashion the mind, govern our actions, and tell us what we are to do and what avoid. It sits at the helm and guides us through all hazards; nay, we cannot be safe without it, for every hour gives us occasion to use it. It informs us in all the duties of life : piety to our parents, faith to our friends, charity to the poor, judgment in counsel; it gives us peace by fearing nothing, and riches by coveting nothing.

A wise man, will always be happy …

… for he subjects all things to himself, submits himself to reason, and governs his actions by counsel, not by passion. He is not moved with the utmost violences of fortune, nor with the extremities of fire and sword; whereas a fool is afraid of his own shadow, and surprised at ill accidents, as if they were all levelled at him. He does nothing unwillingly, for whatever he finds necessary, he makes it his choice. He propounds’ to himself the certain scope and end of human life: he follows that which conduces to it, and avoids that which hinders it. He is content with his lot, whatever it be, without wishing for what he has not, though of the two, he had rather abound than want.

The business of his life, like that of nature, is performed without tumult or noise: he neither fears danger nor provokes it; but from caution, not from cowardice; for captivity, wounds, and chains he looks upon as unreal terrors. He undertakes to do well that which he does. Arts are but the servants whom wisdom commands. He is cautious in doubtful cases, in prosperity temperate, and resolute in adversity; still making the best of every condition, and improving all occasions to make them serviceable to his fate.

Some accidents there are which, I confess, may affect him, but they cannot overthrow him; such as bodily pains, loss of children and friends, or the ruin and desolation of his country. One must be made of stone or iron not to be sensible of these calamities; and besides, it were no virtue to bear them if one did not feel them.

There are three degrees of proficiency in the school of wisdom:

The first are those that come within the sight of it, but not up to it: they have learned what they ought to do, but they have not put their knowledge into practice; they are past the hazard of a relapse, but they are still in the clutches of disease; by which I mean an ill habit, that makes them over-eager upon things which are either not much to be desired, or not at all. A second sort are those that have conquered their appetite for a season, but are yet in fear of falling back. A third sort are those that are clear of many vices, but not of all. They are not covetous, but perhaps they are passionate; firm enough in some cases, but weak in others; perhaps despise death, and yet shrink at pain. There are diversities in wise men, but no inequalities; — one is more affable, another more ready, a third, a better speaker; but the felicity of them all is equal.

Read more: Seneca’s Morals: Of a Happy Life, Benefits, Anger, and Clemency which is available online for free.

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