Food for Thought

I. The indifferent spectator

“The economist (and philosopher) Adam Smith had a theory for how wise and good people evaluate their actions: There are two different occasions upon which we examine our own conduct, and endeavour to view it in the light in which the impartial spectator would view it: first, when we are about to act; and secondly, after we have acted. Our views are apt to be very partial in both cases; but they are apt to be most partial when it is of most importance that they should be otherwise. When we are about to act, the eagerness of passion will seldom allow us to consider what we are doing, with the candour of an indifferent person. . . . When the action is over, indeed, and the passions which prompted it have subsided, we can enter more coolly into the sentiments of the indifferent spectator. This ‘indifferent spectator’ is a sort of guide with which we can judge our behavior, as opposed to the groundless applause that society so often gives out. Not that it’s just about validation, though.
“Think of all the people who excuse their behavior—politicians, powerful CEOs, and the like—as ‘not technically illegal.’ Think of the times that you’ve excused your own with ‘no one will know.’ This is the moral gray area that our ego loves to exploit. Holding your ego against a standard (inner or indifferent or whatever you want to call it) makes it less and less likely that excess or wrongdoing is going to be tolerated by you. Because it’s not about what you can get away with, it’s about what you should or shouldn’t do. It’s a harder road at first, but one that ultimately makes us less selfish and self-absorbed. A person who judges himself based on his own standards doesn’t crave the spotlight the same way as someone who lets applause dictate success. A person who can think long term doesn’t pity herself during short-term setbacks. A person who values the team can share credit and subsume his own interests in a way that most others can’t. Reflecting on what went well or how amazing we are doesn’t get us anywhere, except maybe to where we are right now. But we want to go further, we want more, we want to continue to improve. Ego blocks that, so we subsume it and smash it with continually higher standards. Not that we are endlessly pursuing more, as if we’re racked with greed, but instead, we’re inching our way toward real improvement, with discipline rather than disposition.” — From Ego is the Enemy by Ryan Holiday (view my three takeaways).

The successful CEO who was ensnared in a fraud case often causes one to ponder their foolishness. But such situations don’t arise from one impulsive judgment - it's a process that begins with small, seemingly insignificant decisions. With little to incentivize the CEO to cling to integrity, their ethical scope broadens until a crime is committed.

The enlargement of one's morality arises from the need to rationalize their actions. This is known as cognitive dissonance, which we discussed in issue 20:

"The engine that drives self-justification, the energy that produces the need to justify our actions and decisions—especially the wrong ones—is an unpleasant feeling that Festinger called ‘cognitive dissonance.’ Cognitive dissonance is a state of tension that occurs whenever a person holds two cognitions (ideas, attitudes, beliefs, opinions) that are psychologically inconsistent, such as ‘Smoking is a dumb thing to do because it could kill me’ and ‘I smoke two packs a day.’
"Dissonance produces mental discomfort, ranging from minor pangs to deep anguish; people don't rest easy until they find a way to reduce it. In this example, the most direct way for a smoker to reduce dissonance is by quitting. But if she has tried to quit and failed, now she must reduce dissonance by convincing herself that smoking isn't really so harmful, or that smoking is worth the risk because it helps her relax or prevents her from gaining weight (and after all, obesity is a health risk, too), and so on. Most smokers manage to reduce dissonance in many such ingenious, if self-deluding, ways." — From Mistakes Were Made (But Not by Me) by Carol Tavris and Elliot Aronson.

The CEO's internal rationalization could be thus:

“I’ve siphoned a thousand dollars into an untraceable account and haven’t been caught; another nine thousand is little more than pittance. Our investors have been exploiting me for years. Compounded by the additional demands on my home life, I deserve whatever recompense is in my power. Ten thousand dollars should barely register on the corporation's financial ledger; at worst, it’ll be treated as a rounding error. Besides, this sort of thing is widespread throughout the business world; I am being quite mild compared to others. If I were to invest the funds in that new start-up opportunity, I could then pay them back if I were discovered. In a sense, this money constitutes a loan, being the least amount I’m owed for all my years of sacrifices.”

Quickly the sum swells from a thousand to ten thousand, then multiplies to one hundred thousand. Soon after, the CEO is marched out of the offices in cuffs, having fleeced $1 million from the company's coffers. As Arthur Schopenhauer wrote:

“Wealth is like sea water; the more we drink, the thirstier we become; and the same is true of fame."

The ease with which morals can be massaged indicates the need for an external system of ethics. Other than dedicating ourselves to a certain belief system or following an imposed moral code, another choice to govern our behavior is to take counsel from mentors. Below, I have compiled a broad range of quotations which, albeit differ in detail, are linked in spirit.

"Live your life as though every act were to become a universal law." — Immanuel Kant (German philosopher).

“Don’t complain about the snow on your neighbor’s roof when your own doorstep is unclean.” — Confucius (Chinese philosopher and founder of Confucianism).

“Why do you see the speck in your neighbor’s eye, but do not notice the log in your own eye? … You hypocrite, first take the log out of your own eye, and then you will see clearly to take the speck out of your neighbor’s eye.” — MATTHEW 7:3– 5 (Matthew the Apostle from the New Testament).

“It is easy to see the faults of others, but difficult to see one’s own faults. One shows the faults of others like chaff winnowed in the wind, but one conceals one’s own faults as a cunning gambler conceals his dice.” – Siddhārtha Gautama (The Buddha, founder of Buddhism).

"Conquering others takes force. Conquering yourself is true strength." ― Lao Tzu (Chinese philosopher and founder of Taoism)

“Would you have a great empire? Rule over yourself!” ― Publilius Syrus (former Roman slave, turned Latin writer).

“Man conquers the world by conquering himself.” ― Zeno of Citium (Greek philosopher and founder of Stoicism).

“For a man to conquer himself is the first and noblest of all victories.” ― Plato (Greek philosopher, student of Socrates).

Among all these minds exists a propensity to govern ourselves before attempting to fix others. To do so, we must adopt an external regulator to which we contrast ourselves, a standard composed of principles, ideals, and integrity that we endeavor to achieve.

In issue 53, we discussed the practical nature of Stoicism, a Greek philosophy, with the primary objective of developing an exceptional character. In particular, the Stoics aimed to obtain tranquility of mind and unimpeachable morality. The Roman Stoics embraced the practice of journaling in pursuit of this ideal. Every morning they would prepare themselves for the day ahead and, in the evening, assess their actions before bed. Seneca explains the practice in a letter to his friend Lucilius:

“I shall keep watching myself continually, and—a most useful habit—shall review each day. For this is what makes us wicked: that no one of us looks back over his own life. Our thoughts are devoted only to what we are about to do. And yet our plans for the future always depend on the past.”

In How to Think Like a Roman Emperor, author Donald J. Robertson provides a list of journal prompts based on the Stoic writings:

For the day’s preparation:

What tasks have I to complete, and what challenges must I overcome?
How would [my mentor] approach today? What virtues would he display that I wish to exhibit?

For the day's reflection:

What did you do badly? Did you allow yourself to be ruled by irrational fears or unhealthy desires? Did you act badly or allow yourself to indulge in irrational thoughts?
What did you do well? Did you make progress by acting wisely? Praise yourself and reinforce what you want to repeat.
What could you do differently? Did you omit any opportunities to exercise virtue or strength of character? How could you have handled things better?
What would [my mentor] say about how I fared today?

II. The Green Lumber Fallacy

“In one of the rare noncharlatanic books in finance, descriptively called What I Learned Losing a Million Dollars, the protagonist makes a big discovery. He remarks that a fellow named Joe Siegel, one of the most successful traders in a commodity called ‘green lumber,’ actually thought that it was lumber painted green (rather than freshly cut lumber, called green because it had not been dried). And he made it his profession to trade the stuff! Meanwhile the narrator was into grand intellectual theories and narratives of what caused the price of commodities to move, and went bust.
“It is not just that the successful expert on lumber was ignorant of central matters like the designation ‘green.’ He also knew things about lumber that nonexperts think are unimportant. People we call ignorant might not be ignorant.
“The fact is that predicting the order flow in lumber and the usual narrative had little to do with the details one would assume from the outside are important. People who do things in the field are not subjected to a set exam; they are selected in the most non-narrative manner—nice arguments don’t make much difference. Evolution does not rely on narratives, humans do. Evolution does not need a word for the color blue.
“So let us call the green lumber fallacy the situation in which one mistakes a source of necessary knowledge—the greenness of lumber—for another, less visible from the outside, less tractable, less narratable.” — From Antifragile by Nassim Nicholas Taleb.

Joe Siegel was oblivious to the most primitive properties of the commodity that had made him rich. How could someone unenlightened on such rudimentary knowledge in his profession become so affluent? This is The Green Lumber Fallacy, mistaking visible knowledge as necessary for success instead of something mysterious and further bewildering.

Siegel's unfamiliarity with the meaning of green lumber didn't prevent him from succeeding and, perhaps, even had the contrary result as he wasn't absorbed in superfluous aspects. He paid attention to the elements vital to success in his occupation, an expertise that is regularly neglected.

Contrast Siegel to the over-thinker, who attempts to comprehend every detail before acting. Siegel's propensity for plunging into situations and learning from his errors propelled him to the top of his field. The over-thinker, meanwhile, remains on the sidelines, relying on mere theories and abstract principles. The paralysis of perfection, necessitating all possible perspectives, is an illusion employed to conceal the trepidation of failure. It provides a shield to curl up within and proclaim to be hard at work while, in fact, being disabled by crippling self-doubt.

Despite the over-planning of his opponents, Siegel disregarded such notions and identified the essential components of success. With incredible velocity, he advanced to the highest echelon of commodity traders, as his adversaries could only jeer at his supposed naïveté and bemoan his prosperity. Perhaps then, we mustn’t be judgmental of others because of their perceived lack of knowledge in the wake of their success but rather evaluate our own obliviousness to the secrets of their accomplishments.

Quotes to Ponder

I. Lucius Annaeus Seneca on heralding truth:

“When truth is at stake, we must act more frankly; and when fear is to be combated, we must act more bravely.”

II. Leo Tolstoy on fighting the vices that live within:

“We would think a man insane who, instead of covering his house with a roof and putting windows in his window frames, goes out in stormy weather, and scolds the wind, the rain, and the clouds. But we all do the same when we scold and blame the evil in other people instead of fighting the evil which exists in us. It is possible to get rid of the evil inside of us, as it is possible to make a roof and windows for our house. This is possible. But it is not possible for us to destroy evil in this world, just as we cannot order the weather to change and the clouds to disappear. If, instead of teaching others, we would educate and improve ourselves, then there would be less evil in this world, and all people would live better lives.”

Thank you for reading,

Matthew Vere

Mind Macros

Mind Macros 56: How we justify wrongdoing…