The Psychology of Human Misjudgment the attitude of Diogenes when he asked: “Of what use is

by Charles T. Munger a philosopher who never offends anybody?”

My third and final reason is the strongest. I have
PREFACE fallen in love with my way of living out psychology be-
When I read transcripts of my psychology talks given cause it has been so useful for me. And so, before I die,
about fifteen years ago, I realized that I could now cre- I want to imitate to some extent the bequest practices of
ate a more logical but much longer “talk,” including three characters: the protagonist in John Bunyan’s Pil-
most of what I had earlier said. But I immediately saw grims Progress, Benjamin Franklin, and my first em-
four big disadvantages. ployer, Ernest Buffett. Bunyan’s character, the knight
First, the longer “talk,” because it was written out wonderfully named “Old Valiant for Truth,” makes the
with more logical completeness, would be more boring only practical bequest available to him when he says at
and confusing to many people than any earlier talk. This the end of his life: “My sword I leave to him who can
would happen because I would use idiosyncratic defini- wear it.” And like this man, I don’t mind if I have mis-
tions of psychological tendencies in a manner reminis- appraised my sword, provided I have tried to see it cor-
cent of both psychology textbooks and Euclid. And who rectly, or that many will not wish to try it, or that some
reads textbooks for fun or revisits Euclid? who try to wield it may find it serves them not. Ben
Second, because my formal psychological knowl- Franklin, to my great benefit, left behind his autobiogra-
edge came only from skimming three psychology text- phy, his Almanacks, and much else. And Ernest Buffett
books about fifteen years ago, I know virtually nothing did the best he could in the same mode when he left
about any academic psychology later developed. Yet, in behind “How to Run a Grocery Store and a Few Things
a longer talk containing guesses, I would be criticizing I Have Learned about Fishing.” Whether or not this last
much academic psychology. This sort of intrusion into a contribution to the genre was the best, I will not say.
professional territory by an amateur would be sure to be But I will report that I have now known four genera-
resented by professors who would rejoice in finding my tions of Ernest Buffett’s descendants and that the results
errors and might be prompted to respond to my pub- have encouraged my imitation of the founder.
lished criticism by providing theirs. Why should I care I have long been very interested in standard think-
about new criticism? Well, who likes new hostility from ing errors. However, I was educated in an era wherein
articulate critics with an information advantage? the contributions of non-patient-treating psychology to
Third, a longer version of my ideas would surely an understanding of misjudgment met little approval
draw some disapproval from people formerly disposed from members of the mainstream elite. Instead, interest
to like me. Not only would there be stylistic and sub- in psychology was pretty well confined to a group of
stantive objections, but also there would be perceptions professors who talked and published mostly for them-
of arrogance in an old man who displayed much disre- selves, with much natural detriment from isolation and
gard for conventional wisdom while “popping-off” on a groupthink. And so, right after my time at Caltech and
subject in which he had never taken a course. My old Harvard Law School, I possessed a vast ignorance of
Harvard Law classmate, Ed Rothschild, always called psychology. Those institutions failed to require knowl-
such a popping-off “the shoe button complex,” named edge of the subject. And, of course, they couldn’t inte-
for the condition of a family friend who spoke in oracu- grate psychology with their other subject matter when
lar style on all subjects after becoming dominant in the they didn’t know psychology. Also, like the Nietzsche
shoe button business. character who was proud of his lame leg, the institutions
Fourth, I might make a fool of myself. Despite were proud of their willful avoidance of “fuzzy” psy-
these four very considerable objections, I decided to chology and “fuzzy” psychology professors.
publish the much-expanded version. Thus, after many I shared this ignorant mindset for a considerable
decades in which I have succeeded mostly by restricting time. And so did a lot of other people. What are we to
action to jobs and methods in which I was unlikely to think, for instance, of the Caltech course catalogue that
fail, I have now chosen a course of action in which (1) I for years listed just one psychology professor, self-
have no significant personal benefit to gain, (2) I will described as a “Professor of Psychoanalytical Studies,”
surely give some pain to family members and friends, who taught both “Abnormal Psychology” and “Psycho-
and (3) I may make myself ridiculous. Why am I doing analysis in Literature”?
this? Soon after leaving Harvard, I began a long struggle
One reason may be that my nature makes me in- to get rid of the most dysfunctional part of my psycho-
cline toward diagnosing and talking about errors in con- logical ignorance. Today, I will describe my long struggle
ventional wisdom. And despite years of being smoothed for elementary wisdom and a brief summary of my end-
out by the hard knocks that were inevitable for one with ing notions. After that, I will give examples, many quite
my attitude, I don’t believe life ever knocked all the vivid and interesting to me, of both psychology at work
boy’s brashness out of the man. and antidotes to psychology-based dysfunction. Then, I
A second reason for my decision is my approval of will end by asking and answering some general questions
raised by what I have said. This will be a long talk. just a neck that had haired over.”
Pure curiosity, somewhat later, made me wonder
When I started law practice, I had respect for the power how and why destructive cults were often able, over a
of genetic evolution and appreciation of man’s many single long weekend, to turn many tolerably normal
evolution-based resemblances to less cognitively-gifted people into brainwashed zombies and thereafter keep
animals and insects. I was aware that man was a “social them in that state indefinitely. I resolved that I would
animal,” greatly and automatically influenced by behav- eventually find a good answer to this cult question if I
ior he observed in men around him. I also knew that could do so by general reading and much musing.
man lived, like barnyard animals and monkeys, in limited I also got curious about social insects. It fascinated
size dominance hierarchies, wherein he tended to re- me that both the fertile female honeybee and the fertile
spect authority and to like and cooperate with his own female harvester ant could multiply their quite different
hierarchy members while displaying considerable dis- normal life expectancies by exactly twenty by engaging
trust and dislike for competing men not in his own hier- in one gangbang in the sky. The extreme success of the
archy. ants also fascinated me-how a few behavioral algorithms
But this generalized, evolution-based theory struc- caused such extreme evolutionary success grounded in
ture was inadequate to enable me to cope properly with extremes of cooperation within the breeding colony and,
the cognition I encountered. I was soon surrounded by almost always, extremes of lethal hostility toward ants
much extreme irrationality, displayed in patterns and outside the breeding colony; even ants of the same spe-
subpatterns. So surrounded, I could see that I was not cies.
going to cope as well as I wished with life unless I could Motivated as I was, by midlife I should probably
acquire a better theory-structure on which to hang my have turned to psychology textbooks, but I didn’t, dis-
observations and experiences. By then, my craving for playing my share of the outcome predicted by the Ger-
more theory had a long history. Partly, I had always man folk saving: “We are too soon old and too late
loved theory as an aid in puzzle solving and as a means smart.” However, as I later found out, I may have been
of satisfying my monkey-like curiosity. And, partly. I had lucky to avoid for so long the academic psychology that
found that theory-structure was a superpower in helping was then laid out in most textbooks. These would not
one get what one wanted. As I had early discovered in then have guided me well with respect to cults and were
school wherein I had excelled without labor, guided by often written as if the authors were collecting psychol-
theory, while many others, without mastery of theory, ogy experiments as a boy collects butterflies-with a pas-
failed despite monstrous effort. Better theory, I thought. sion for more butterflies and more contact with fellow
had always worked for me and, if now available, could collectors and little craving for synthesis in what is al-
make me acquire capital and independence faster and ready possessed. When I finally got to the psychology
better assist everything I loved. And so I slowly devel- texts, I was reminded of the observation of Jacob Viner,
oped my own system of psychology. more or less in the the great economist, that many an academic is like the
self-help style of Ben Franklin and with the determina- truffle hound, an animal so trained and bred for one
tion displayed in the refrain of the nursery story: “`Then narrow purpose that it is no good at anything else. I was
I’ll do it myself,’ said the little red hen.” also appalled by hundreds of pages of extremely nonsci-
I was greatly helped in my quest by two turns of entific musing about comparative weights of nature and
mind. First, I had long looked for insight by inversion in nurture in human outcomes. And I found that introduc-
the intense manner counseled by the great algebraist, tory psychology texts, by and large, didn’t deal appropri-
Jacobi: “Invert, always invert.” I sought good judgment ately with a fundamental issue: Psychological tendencies
mostly by collecting instances of bad judgment, then tend to be both numerous and inseparably intertwined,
pondering ways to avoid such outcomes. Second, I be- now and forever, as they interplay in life. Yet the com-
came so avid a collector of instances of bad judgment plex parsing out of effects from intertwined tendencies
that I paid no attention to boundaries between profes- was usually avoided by the writers of the elementary
sional territories. After all, why should I search for some texts. Possibly the authors did not wish, through com-
tiny, unimportant, hard-to-find new stupidity in my own plexity, to repel entry of new devotees to their discipline.
field when some large, important, easy-to find stupidity And, possibly, the cause of their inadequacy was the one
was just over the fence in the other fellow’s professional given by Samuel Johnson in response to a woman who
territory? Besides, I could already see that real-world inquired as to what accounted for his dictionary’s misde-
problems didn’t neatly lie within territorial boundaries. finition of the word “pastern.” “Pure ignorance,” John-
They jumped right across. And I was as dubious of any son replied. And, finally, the text writers showed little
approach that, when two things were inextricably inter- interest in describing standard antidotes to standard
twined and interconnected, would try and think about psychology-driven folly, and they thus avoided most
one thing but not the other. I was afraid, if I tried any discussion of exactly what most interested me.
such restricted approach, that I would end up, in the But academic psychology has some very important
immortal words of John L. Lewis, “with no brain at all, merits alongside its defects. I learned this eventually, in
the course of general reading, from a book, Influence, genes, sometimes walk round and round until they per-
aimed at a popular audience, by a distinguished psychol- ish.
ogy professor, Robert Cialdini, at Arizona State, a very It seems obvious, to me at least, that the human
big university. Cialdini had made himself into a super- brain must often operate counterproductively just like
tenured “Regents’ Professor” at a very young age by the ant’s, from unavoidable oversimplicity in its mental
devising, describing, and explaining a vast group of process, albeit usually in trying to solve problems more
clever experiments in which man manipulated man to difficult than those faced by ants that don’t have to de-
his detriment, With all of this made possible by man’s sign airplanes.
intrinsic thinking flaws. Naturally, the simple ant behavior system has ex-
I immediately sent copies of Cialdini’s book to all treme limitations because of its limited nerve system
my children. I also gave Cialdini a share of Berkshire repertoire. For instance, one type of ant, when it smells
stock [Class A] to thank him for what he had done for a pheromone given off by a dead ant’s body in the hive,
me and the public. Incidentally, the sale by Cialdini of immediately responds by cooperating with other ants in
hundreds of thousands of copies of a book about social carrying the dead body out of the hive. And Harvard’s
psychology was a huge feat, considering that Cialdini great E.O. Wilson performed one of the best psychol-
didn’t claim that he was going to improve your sex life ogy experiments ever done when he painted dead-ant
or make you any money. pheromone on a live ant. Quite naturally; the other ants
Part of Cialdini’s large book-buying audience came dragged this useful live ant out of the hive even though
because, like me, it wanted to learn how to become less it kicked and otherwise protested throughout the entire
often tricked by salesmen and circumstances. However, process. Such is the brain of the ant. It has a simple pro-
as an outcome not sought by Cialdini, who is a pro- gram of responses that generally work out all right, but
foundly ethical man, a huge number of his books were which are imprudently used by rote in many cases.
bought by salesmen who wanted to learn how to be- Another type of ant demonstrates that the limited
come more effective in misleading customers. Please brain of ants can be misled by circumstances as well as
remember this perverse outcome when my discussion by clever manipulation from other creatures. The brain
comes to incentive-caused bias as a consequence of the of this ant contains a simple behavioral program that
superpower of incentives. directs the ant, when walking, to follow the ant ahead,
and when these ants stumble into walking in a big circle.
With the push given by Cialdini’s book, I soon skimmed The perception system of man clearly demonstrates just
through three much used textbooks covering introduc- such an unfortunate outcome. Man is easily fooled, ei-
tory psychology. I also pondered considerably while ther by the cleverly thought out manipulation of man, by
craving synthesis and taking into account all my previ- circumstances occurring by accident, or by very effective
ous training and experience. The result was Munger’s manipulation practices that man has stumbled into dur-
partial summary of the non-patient-treating, non-nature ing “practice evolution” and kept in place because they
vs. nurture weighing parts of nondevelopmental psy- work so well. One such outcome is caused by a quantum
chology. This material was stolen from its various dis- effect in human perception. If stimulus is kept below a
coverers (most of whose names I did not even try to certain level, it does not get through. And, for this rea-
learn), often with new descriptions and titles selected to son, a magician was able to make the Statue of Liberty
fit Munger’s notion of what makes recall easy for disappear after a certain amount of magician lingo ex-
Munger, then revised to make Munger’s use easy as he pressed in the dark. The audience was not aware that it
seeks to avoid errors. was sitting on a platform that was rotating so slowly,
I will start my summary with a general observation below man’s sensory threshold, that no one could feel
that helps explain what follows. This observation is the acceleration implicit in the considerable rotation.
grounded in what we know about social insects. The When a surrounding curtain was then opened in the
limitations inherent in evolution’s development of the place on the platform where the Statue had earlier ap-
nervous-system cells that control behavior are beauti- peared, it seemed to have disappeared.
fully demonstrated by these insects, which often have a And even when perception does get through to
mere 100,000 or so cells in their entire nervous systems, man’s brain, it is often misweighted, because what is
compared to man’s multiple billions of cells in his brain registered in perception is in shockingness of apparent
alone. contrast, not the standard scientific units that make pos-
Each ant, like each human, is composed of a living sible science and good engineering against often-wrong
physical structure plus behavioral algorithms in its nerve effects from generally useful tendencies in his percep-
cells. In the ant’s case, the behavioral algorithms are few tion and cognition.
in number and almost entirely genetic in origin. The ant A magician demonstrates this sort of contrast based
learns a little behavior from experiences, but mostly it error in your nervous system when he removes your
merely responds to ten or so stimuli with a few simple wristwatch without your feeling it. As he does this, he
responses programmed into its nervous system by its applies pressure of touch on your wrist that you would
sense if it was the only pressure of touch you were ex- how life will fool one. This can occur, through deliberate
periencing. But he has concurrently applied other in- human manipulation or otherwise, if one doesn’t take
tense pressure of touch on your body, but not on your certain precautions.
wrist, “swamping” the wrist pressure by creating a high- Man’s often wrong but generally useful psychologi-
contrast touch pressure elsewhere. This high contrast cal tendencies are quite numerous and quite different.
takes the wrist pressure below perception. The natural consequence of this profusion of tendencies
Some psychology professors like to demonstrate is the grand general principle of social psychology: cog-
the inadequacy of contrast-based perception by having nition is ordinarily situation-dependent so that different
students put one hand in a bucket of hot water and one situations often cause different conclusions, even when
hand in a bucket of cold water. They are then suddenly the same person is thinking in the same general subject
asked to remove both hands and place them in a single area. With this introductory instruction from ants, magi-
bucket of room temperature water. Now, with both cians, and the grand general principle of social psychol-
hands in the same water, one hand feels as if it has just ogy; I will next simply number and list psychology-based
been put in cold water and the other hand feels as if it tendencies that, while generally useful, often mislead.
has just been placed in hot water. When one thus sees Discussion of errors from each tendency will come later,
perception so easily fooled by mere contrast, where a together with description of some antidotes to errors,
simple temperature gauge would make no error, and followed by some general discussion. Here are the ten-
realizes that cognition mimics perception in being mis- dencies:
led by mere contrast, he is well on the way toward un-
derstanding, not only how magicians fool one, but also

1. Reward and Punishment Superresponse Tendency

2. Liking/Loving Tendency
3. Disliking/Hating Tendency
4. Doubt-Avoidance Tendency
5. Inconsistency-Avoidance Tendency
6. Curiosity Tendency
7. Kantian Fairness Tendency
8. Envy/Jealousy Tendency
9. Reciprocation Tendency
10. Influence-from-Mere Association Tendency
11. Simple, Pain-Avoiding Psychological Denial
12. Excessive Self-Regard Tendency
13. Overoptimism Tendency
14. Deprival Superreaction Tendency
15. Social-Proof Tendency
16. Contrast-Misreaction Tendency
17. Stress-Influence Tendency
18. Availability-Misweighing Tendency
19. Use-It-or-Lose-It Tendency
20. Drug-Misinfluence Tendency
21. Senescence-Misinfluence Tendency
22. Authority-Misinfluence Tendency
23. Twaddle Tendency
24. Reason-Respecting Tendency
25. Lollapalooza Tendency – The Tendency to Get Extreme Confluences of Psychological
Tendencies Acting in Favor of a Particular Outcome
1. Reward and Punishment Superresponse We should also remember how a foolish and willful
Tendency ignorance of the superpower of rewards caused Soviet
I place this tendency first in my discussion because al- communists to get their final result as described by one
most everyone thinks he fully recognizes how important employee: “They pretend to pay us and we pretend to
incentives and disincentives are in changing cognition work.” Perhaps the most important rule in management
and behavior. But this is not often so. For instance, I is “Get the incentives right.”
think I’ve been in the top five percent of my age cohort But there is some limit to a desirable emphasis on
almost all my adult life in understanding the power of incentive superpower. One case of excess emphasis
incentives, and yet I’ve always underestimated that happened at Harvard, where B. F. Skinner, a psychology
power. Never a year passes but I get some surprise that professor, finally made himself ridiculous. At one time,
pushes a little further my appreciation of incentive su- Skinner may have been the best-known psychology pro-
perpower. fessor in the world. He partly deserved his peak reputa-
One of my favorite cases about the power of incen- tion because his early experiments using rats and pi-
tives is the Federal Express case. The integrity of the geons were ingenious, and his results were both counter-
Federal Express system requires that all packages be intuitive and important. With incentives, he could cause
shifted rapidly among airplanes in one central airport more behavior change, culminating in conditioned re-
each night. And the system has no integrity for the cus- flexes in his rats and pigeons, than he could in any other
tomers if the night work shift can’t accomplish its as- way. He made obvious the extreme stupidity, in dealing
signment fast. And Federal Express had one hell of a with children or employees, of rewarding behavior one
time getting the night shift to do the right thing. They didn’t want more of. Using food rewards, he even
tried moral suasion. They tried everything in the world caused strong superstitions, predesigned by himself, in
without luck. And, finally, somebody got the happy his pigeons. He demonstrated again and again a great
thought that it was foolish to pay the night shift by the recurring, generalized behavioral algorithm in nature:
hour when what the employer wanted was not maxi- “Repeat behavior that works.” He also demonstrated
mized billable hours of employee service but fault-free, that prompt rewards worked much better than delayed
rapid performance of a particular task. Maybe, this per- rewards in changing and maintaining behavior. And,
son thought, if they paid the employees per shift and let once his rats and pigeons had conditioned reflexes,
all night shift employees go home when all the planes caused by food rewards, he found what withdrawal pat-
were loaded, the system would work better. And, lo and tern of rewards kept the reflexive behavior longest in
behold, that solution worked. place: random distribution. With this result, Skinner
Early in the history of Xerox, Joe Wilson, who was thought he had pretty well explained man’s misgambling
then in the government, had a similar experience. He compulsion whereunder he often foolishly proceeds to
had to go back to Xerox because he couldn’t understand ruin. But, as we shall later see when we discuss other
why its new machine was selling so poorly in relation to psychological tendencies that contribute to misgambling
its older and inferior machine. When he got back to compulsion, he was only partly right. Later, Skinner lost
Xerox, he found out that the commission arrangement most of his personal reputation by overclaiming for
with the salesmen gave a large and perverse incentive to incentive superpower to the point of thinking he could
push the inferior machine on customers, who deserved a create a human utopia with it and by displaying hardly
better result. any recognition of the power of the rest of psychology.
And then there is the case of Mark Twain’s cat that, He thus behaved like one of Jacob Viner’s truffle
after a bad experience with a hot stove, never again sat hounds as he tried to explain everything with incentive
on a hot stove, or a cold stove either. effects. Nonetheless, Skinner was right in his main idea:
We should also heed the general lesson implicit in Incentives are superpowers. The outcome of his basic
the injunction of Ben Franklin in Poor Richard’s Alma- experiments will always remain in high repute in the
nack: “If you would persuade, appeal to interest and not annals of experimental science. And his method of
to reason.” This maxim is a wise guide to a great and monomaniacal reliance on rewards, for many decades
simple precaution in life: Never, ever, think about some- after his death, did more good than anything else in im-
thing else when you should be thinking about the power proving autistic children.
of incentives. I once saw a very smart house counsel for When I was at Harvard Law School, the professors
a major investment bank lose his job, with no moral sometimes talked about an overfocused, Skinner-like
fault, because he ignored the lesson in this maxim of professor at Yale Law School. They used to say: “Poor
Franklin. This counsel failed to persuade his client be- old Eddie Blanchard, he thinks declaratory judgments
cause he told him his moral duty, as correctly conceived will cure cancer.” Well, that’s the way Skinner got with
by the counsel, without also telling the client in vivid his very extreme emphasis on incentive superpower. I
terms that he was very likely to be clobbered to smither- always call the “Johnny-one-note” turn of mind that
eens if he didn’t behave as his counsel recommended. eventually diminished Skinner’s reputation the man-
As a result, both client and counsel lost their careers. with-a-hammer tendency, after the folk saying: “To a
man with only a hammer every problem looks pretty procurement history. After the Defense Department had
much like a nail.” Man-with-a-hammer tendency does much truly awful experience with misbehaving contrac-
not exempt smart people like Blanchard and Skinner. tors motivated under contracts paying on a cost-plus-a-
And it won’t exempt you if you don’t watch out. I will percentage-of cost basis, the reaction of our republic
return to man-with-a-hammer tendency at various times was to make it a crime for a contracting officer in the
in this talk because, fortunately, there are effective anti- Defense Department to sign such a contract, and not
dotes that reduce the ravages of what pretty much ru- only a crime, but a felony.
ined the personal reputation of the brilliant Skinner. And, by the way, although the government was
One of the most important consequences of incen- right to create this new felony, much of the way the rest
tive superpower is what I call “incentive caused bias.” A of the world is run, including the operation of many law
man has an acculturated nature making him a pretty firms and a lot of other firms, is still under what is, in
decent fellow, and yet, driven both consciously and sub- essence, a cost-plus-a-percentage-of-cost reward system.
consciously by incentives, he drifts into immoral behav- And human nature, bedeviled by incentive-caused bias,
ior in order to get what he wants, a result he facilitates causes a lot of ghastly abuse under these standard incen-
by rationalizing his bad behavior, like the salesmen at tive patterns of the world. And many of the people who
Xerox who harmed customers in order to maximize are behaving terribly you would be glad to have married
their sales commissions. into your family, compared to what you’re otherwise
Here, my early education involved a surgeon who likely to get.
over the years sent bushel baskets full of normal gall Now there are huge implications from the fact that
bladders down to the pathology lab in the leading hospi- the human mind is put together this way. One implica-
tal in Lincoln, Nebraska, my grandfather’s town. And, tion is that people who create things like cash registers,
with that permissive quality control for which commu- which make dishonest behavior hard to accomplish, are
nity hospitals are famous, many years after this surgeon some of the effective saints of our civilization because,
should’ve been removed from the medical staff, he was. as Skinner so well knew, bad behavior is intensely habit-
One of the doctors who participated in the removal was forming when it is rewarded.
a family friend, and I asked him: “Did this surgeon And so the cash register was a great moral instru-
think, `Here’s a way for me to exercise my talents’” – ment when it was created. And, by the way, Patterson,
this guy was very skilled technically – “‘and make a high the great evangelist of the cash register, knew that from
living by doing a few maimings and murders every year his own experience. He had a little store, and his em-
in the course of routine fraud?’” And my friend an- ployees were stealing him blind, so that he never made
swered: “Hell no, Charlie. He thought that the gall blad- any money. Then people sold him a couple of cash reg-
der was the source of all medical evil, and, if you really isters, and his store went to profit immediately. He
loved your patients, you couldn’t get that organ out rap- promptly closed the store and went into the cash register
idly enough.” business, creating what became the mighty National
Now that’s an extreme case, but in lesser strength, Cash Register Company, one of the glories of its time.
the cognitive drift of that surgeon is present in every “Repeat behavior that works” is a behavioral guide that
profession and in every human being. And it causes really succeeded for Patterson, after he applied one
perfectly terrible behavior. Consider the presentations of added twist. And so did high moral cognition. An eccen-
brokers selling commercial real estate and businesses. tric, inveterate do-gooder (except when destroying com-
I’ve never seen one that I thought was even within hail- petitors, all of which he regarded as would-be patent
ing distance of objective truth. In my long life, I have thieves), Patterson, like Carnegie, pretty well gave away
never seen a management consultant’s report that didn’t all his money to charity before he died, always pointing
end with the same advice: “This problem needs more out that “shrouds have no pockets.” So great was the
management consulting services.” Widespread incentive- contribution of Patterson’s cash register to civilization,
caused bias requires that one should often distrust, or and so effectively did he improve the cash register and
take with a grain of salt, the advice of one’s professional spread its use, that in the end, he probably deserved the
advisor, even if he is an engineer. The general antidotes epitaph chosen for the Roman poet Horace: “I did not
here are: completely die.”
1) especially fear professional advice when it is espe- The strong tendency of employees to rationalize
cially good for the advisor; bad conduct in order to get rewards requires many anti-
2) learn and use the basic elements of your advisor’s dotes in addition to the good cash control promoted by
trade as you deal with your advisor; and Patterson. Perhaps the most important of these anti-
3) double check, disbelieve, or replace much of what dotes is use of sound accounting theory and practice.
you’re told, to the degree that seems appropriate af- This was seldom better demonstrated than at Westing-
ter objective thought. house, which had a subsidiary that made loans having no
The power of incentives to cause rationalized, terrible connection to the rest of Westinghouse’s businesses.
behavior is also demonstrated by Defense Department The officers of Westinghouse, perhaps influenced by
envy of General Electric, wanted to expand profits from Somehow incentive-caused bias and its antidotes pretty
loans to outsiders. Under Westinghouse’s accounting well escaped the standard survey courses in psychology,
practice, provisions for future credit losses on these even though incentive-caused bias had long been dis-
loans depended largely on the past credit experience of played prominently in much of the world’s great litera-
its lending subsidiary, which mainly made loans unlikely ture, and antidotes to it had long existed in standard
to cause massive losses. business routines. In the end, I concluded that when
Now there are two special classes of loans that something was obvious in life but not easily demonstra-
naturally cause much trouble for lenders. The first is ble in certain kinds of easy, repeatable academic experi-
ninety-five percent-of-value construction loans to any ments, the truffle hounds of psychology very often
kind of real estate developer, and the second is any kind missed it.
of construction loan on a hotel. So, naturally, if one In some cases, other disciplines showed more inter-
were willing to loan approximately ninety-five percent of est in psychological tendencies than did psychology, at
the real cost to a developer constructing a hotel, the loan least as explicated in psychology textbooks. For instance,
would bear a much higher-than-normal interest rate economists, speaking from the employer’s point of view,
because the credit loss danger would be much higher have long had a name for the natural results of incen-
than normal. So, sound accounting for Westinghouse in tive-caused bias: “agency cost.” As the name implies, the
making a big, new mass of ninety-five percent-of-value economists have typically known that, just as grain is
construction loans to hotel developers would have been always lost to rats, employers always lose to employees
to report almost no profit, or even a loss, on each loan who improperly think of themselves first. Employer
until, years later, the loan became clearly worth par. But installed antidotes include:
Westinghouse instead plunged into big-time construc- 1) tough internal audit systems,
tion lending on hotels, using accounting that made its 2) severe public punishment for identified miscreants,
lending officers look good because it showed extremely as well as
high starting income from loans that were very inferior 3) misbehavior-preventing routines and such machines
to the loans from which the company had suffered small as cash registers.
credit losses in the past. This terrible accounting was From the employee’s point of view, incentive-caused
allowed by both international and outside accountants bias quite naturally causes opposing abuse from the em-
for Westinghouse as they displayed the conduct pre- ployer: the sweatshop, the unsafe work place, etc. And
dicted by the refrain: “Whose bread I eat, his song I these bad results for employees have antidotes not only
sing.” in
The result was billions of dollars of losses. Who 1) pressure from unions, but also in
was at fault? The guy from the refrigerator division, or 2) government action, such as wage and hour laws,
some similar division, who as lending officer was sud- workplace safety rules, measures fostering unioniza-
denly in charge of loans to hotel developers: Or the ac- tion, and workers’ compensation systems.
countants and other senior people who tolerated a Given the opposing psychology-induced strains that
nearly insane incentive structure, almost sure to trigger naturally occur in employment because of incentive-
incentive-caused bias in a lending officer: My answer caused bias on both sides of the relationship, it is no
puts most blame on the accountants and other senior wonder the Chinese are so much into Yin and Yang.
people who created the accounting system. These peo- The inevitable ubiquity of incentive-caused bias has
ple became the equivalent of an armored car cash carry- vast, generalized consequences. For instance, a sales
ing service that suddenly decided to dispense with vehi- force living only on commissions will be much harder to
cles and have unarmed midgets hand-carry its custom- keep moral than one under less pressure from the com-
ers’ cash through slums in open bushel baskets. pensation arrangement. On the other hand, a purely
I wish I could tell you that this sort of thing no commissioned sales force may well be more efficient per
longer happens, but this is not so. After Westinghouse dollar spent. Therefore, difficult decisions involving
blew up, General Electric’s Kidder Peabody subsidiary trade-offs are common in creating compensation ar-
put a silly computer program in place that allowed a rangements in the sales function.
bond trader to show immense fictional profits. And The extreme success of free-market capitalism as an
after that, much accounting became even worse, perhaps economic system owes much to its prevention of many
reaching its nadir at Enron. of bad effects from incentive-caused bias. Most capitalist
So incentive-caused bias is a huge, important thing, owners in a vast web of free market economic activity
with highly important antidotes, like the cash register are selected for ability by surviving in a brutal competi-
and a sound accounting system. But when I came years tion with other owners and have a strong incentive to
ago to the psychology texts, I found that, while they prevent all waste in operations within their ownership.
were about one thousand pages long, there was as little After all, they live on the difference between their com-
therein that dealt with incentive-caused bias and no petitive prices and their overall costs and their busi-
mention of Patterson or sound accounting systems. nesses will perish if costs exceed sales. Replace such
owners by salaried employees of the state and you will tives force themselves daily to first do their unpleasant
normally get a substantial reduction in overall efficiency and necessary tasks before rewarding themselves by
as each employee who replaces an owner is subject to proceeding to their pleasant tasks. Given reward super-
incentive-caused bias as he determines what service he power, this practice is nice and sound. Moreover, the
will give in exchange for his salary and how much he will rule can also be used in the nonbusiness part of life. The
yield to peer pressure from many fellow employees who emphasis on daily use of this practice is not accidental.
do not desire his creation of any strong performance The consultants well know, after the teaching of Skin-
model. ner, that prompt rewards work best.
Another generalized consequence of incentive Punishments, of course, also strongly influence
caused bias is that man tends to “game” all human sys- behavior and cognition, although not so flexibly and
tems, often displaying great ingenuity in wrongly serving wonderfully as rewards. For instance, illegal price fixing
himself at the expense of others. Antigaming features, was fairly common in America when it was customarily
therefore, constitute a huge and necessary part of almost punished by modest fines. Then, after a few prominent
all system design. Also needed in system design is an business executives were removed from their eminent
admonition: dread, and avoid as much you can, reward- positions and sent to federal prisons, price-fixing behav-
ing people for what can be easily faked. Yet our legisla- ior was greatly reduced.
tors and judges, usually including many lawyers educated Military and naval organizations have very often
in eminent universities, often ignore this injunction. And been extreme in using punishment to change behavior,
society consequently pays a huge price in the deteriora- probably because they needed to cause extreme behav-
tion of behavior and efficiency, as well as the incurrence ior. Around the time of Caesar, there was a European
of unfair costs and wealth transfers. If education were tribe that, when the assembly horn blew, always killed
improved, with psychological reality becoming better the last warrior to reach his assigned place, and no one
taught and assimilated, better system design might well enjoyed fighting this tribe. And George Washington
come out of our legislatures and courts. hanged farm-boy deserters forty feet high as an example
Of course, money is now the main reward that to others who might contemplate desertion.
drives habits. A monkey can be trained to seek and work
for an intrinsically worthless token, as if it were a ba- 2. Liking/Loving Tendency
nana, if the token is routinely exchangeable for a banana. A newly hatched baby goose is programmed, through
So it is also with humans working for money – only the economy of its genetic program, to “love” and fol-
more so, because human money is exchangeable for low the first creature that is nice to it, which is almost
many desired things in addition to food, and one ordi- always its mother. But, if the mother goose is not pre-
narily gains status from either holding or spending it. sent right after the hatching, and a man is there instead,
Moreover, a rich person will often, through habit, work the gosling will “love” and follow the man, who be-
or connive energetically for more money long after he comes a sort of substitute mother.
has almost no real need for more. Averaged out, money Somewhat similarly, a newly arrived human is “born
is a mainspring of modern civilization, having little to like and love” under the normal and abnormal trig-
precedent in the behavior of nonhuman animals. Money gering outcomes for its kind. Perhaps the strongest in-
rewards are also intertwined with other forms of reward. born tendency to love – ready to be triggered – is that of
For instance, some people use money to buy status and the human mother for its child. On the other hand, the
others use status to get money, while still others sort of similar “child-loving” behavior of a mouse can be elimi-
do both things at the same time. nated by the deletion of a single gene, which suggests
Although money is the main driver among rewards, there is some sort of triggering gene in a mother mouse
it is not the only reward that works. People also change as well as in a gosling.
their behavior and cognition for sex, friendship, com- Each child, like a gosling, will almost surely come to
panionship, advancement in status, and other nonmone- like and love, not only as driven by its sexual nature, but
tary items. also in social groups not limited to its genetic or adop-
“Granny’s Rule” provides another example of re- tive “family.” Current extremes of romantic love almost
ward superpower, so extreme in its effects that it must surely did not occur in man’s remote past. Our early
be mentioned here. You can successfully manipulate human ancestors were surely more like apes triggered
your own behavior with this rule, even if you are using into mating in a pretty mundane fashion.
as rewards items that you already possess! Indeed, con- And what will a man naturally come to like and
sultant Ph.D. psychologists often urge business organi- love, apart from his parent, spouse and child? Well, he
zations to improve their reward systems by teaching will like and love being liked and loved. And so many a
executives to use “Granny’s Rule” to govern their own courtship competition will be won by a person display-
daily behavior. Granny’s Rule, to be specific, is the re- ing exceptional devotion, and man will generally strive,
quirement that children eat their carrots before they get lifelong, for the affection and approval of many people
dessert. And the business version requires that execu- not related to him.
 One very practical consequence of Liking/Loving get the extreme popularity of very negative political ad-
Tendency is that it acts as a conditioning device that vertising in the United States.
makes the liker or lover tend: At the family level, we often see one sibling hate his
1) to ignore faults of, and comply with wishes of, the other siblings and litigate with them endlessly if he can
object of his affection, afford it. Indeed, Warren Buffett has repeatedly ex-
2) to favor people, products, and actions merely asso- plained to me that “a major difference between rich and
ciated with the object of his affection (as we shall poor people is that the rich people can spend their lives
see when we get to “Influence-from-Mere- suing their relatives.” My father’s law practice in Omaha
Association Tendency,” and was full of such intrafamily hatreds. And when I got to
3) to distort other facts to facilitate love. the Harvard Law School and its professors taught me
There are large social policy implications in the amaz- “property law” with no mention of sibling rivalry in the
ingly good consequences that ordinarily come from family business, I appraised the School as a pretty unre-
people likely to trigger extremes of love and admiration alistic place that wore “blinders” like the milk-wagon
boosting each other in a feedback mode. For instance, it horses of yore. My current guess is that sibling rivalry
is obviously desirable to attract a lot of lovable, admira- has not yet made it into property law as taught at Har-
ble people into the teaching profession. The phenome- vard.
non of liking and loving causing admiration also works Disliking/Hating Tendency also acts as a condition-
in reverse. Admiration also causes or intensifies liking or ing device that makes the disliker/hater tend to:
love. With this “feedback mode” in place, the conse- 1) ignore virtues in the object of dislike,
quences are often extreme, sometimes even causing de- 2) dislike people, products, and actions merely associ-
liberate self-destruction to help what is loved. ated with the object of his dislike, and
Liking or loving, intertwined with admiration in a 3) distort other facts to facilitate hatred.
feedback mode, often has vast practical consequences in Distortion of that kind is often so extreme that miscog-
areas far removed from sexual attachments. For in- nition is shockingly large. When the world Trade Center
stance, a man who is so constructed that he loves admi- was destroyed, many Muslims immediately concluded
rable persons and ideas with a special intensity has a that the Hindus did it, while many Arabs concluded that
huge advantage in life. This blessing came to both Buf- the Jews did it. Such factual distortions often make me-
fett and myself in large measure, sometimes from the diation between opponents locked in hatred either diffi-
same persons and ideas. One common, beneficial exam- cult or impossible. Mediations between Israelis and Pal-
ple for us both was Warren’s uncle, Fred Buffett, who estinians are difficult because facts in one side’s history
cheerfully did the endless grocery-store work that War- overlap very little with facts from the other side’s.
ren and I ended up admiring from a safe distance. Even
now, after I have known so many other people, I doubt 4. Doubt-Avoidance Tendency
if it is possible to be a nicer man than Fred Buffett was, The brain of man is programmed with a tendency to
and he changed me for the better. quickly remove doubt by reaching some decision. It is
easy to see how evolution would make animals, over the
3. Disliking/Hating Tendency eons, drift toward such quick elimination of doubt. Af-
In a pattern obverse to Liking/Loving Tendency, the ter all, the one thing that is surely counterproductive for
newly arrived human is also “born to dislike and hate” a prey animal that is threatened by a predator is to take a
as triggered by normal and abnormal triggering forces in long time in deciding what to do. And so man’s Doubt
its life. It is the same with most apes and monkeys. Avoidance Tendency is quite consistent with the history
As a result, the long history of man contains almost of his ancient, nonhuman ancestors.
continuous war. For instance, most American Indian So pronounced is the tendency in man to quickly
tribes warred incessantly, and some tribes would occa- remove doubt by reaching some decision that behavior
sionally bring captives home to women so that all could to counter the tendency is required from judges and
join in the fun of torturing captives to death. Even with jurors. Here, delay before decision making is forced.
the spread of religion, and the advent of advanced civili- And one is required to so comport himself, prior to
zation, much modern war remains pretty savage. But we conclusion time, so that he is wearing a “mask” of ob-
also get what we observe in present-day Switzerland and jectivity. And the “mask” works to help real objectivity
the United States, wherein the clever political arrange- along, as we shall see when we next consider man’s In-
ments of man “channel” the hatreds and dislikings of consistency-Avoidance Tendency.
individuals and groups into nonlethal patterns including Of course, once one has recognized that man has a
elections. strong Doubt-Avoidance Tendency, it is logical to be-
But the dislikings and hatreds never go away com- lieve that at least some leaps of religious faith are greatly
pletely. Born into man, these driving tendencies remain boosted by this tendency. Even if one is satisfied that his
strong. Thus, we get maxims like the one from England: own faith comes from revelation, one still must account
“Politics is the art of marshalling hatreds.” And we also for the inconsistent faiths of others. And man’s Doubt-
Avoidance Tendency is almost surely a big part of the with a tendency to resist any change in that conclusion,
answer. will naturally cause a lot of errors in cognition for mod-
What triggers Doubt-Avoidance Tendency? Well, ern man. And so it observably works out. We all deal
an unthreatened man, thinking of nothing in particular, much with others whom we correctly diagnose as im-
is not being prompted to remove doubt through rushing prisoned in poor conclusions that are maintained by
to some decision. As we shall see later when we get to mental habits they formed early and will carry to their
Social-Proof Tendency and Stress-Influence Tendency, graves.
what usually triggers Doubt-Avoidance Tendency is So great is the bad-decision problem caused by
some combination of puzzlement and stress. Both of Inconsistency-Avoidance Tendency that our courts have
these factors naturally occur in facing religious issues. adopted important strategies against it. For instance,
Thus, the natural state of most men is in some form of before making decisions, judges and juries are required
doubt-removing religious faith. to hear long and skillful presentations of evidence and
argument from the side they will not naturally favor,
5. Inconsistency-Avoidance Tendency given their ideas in place. And this helps prevent consid-
The brain of man conserves programming space by be- erable bad thinking from “first conclusion bias.” Simi-
ing reluctant to change, which is a form of inconsistency larly, other modern decision makers will often force
avoidance. We see this in all human habits, constructive groups to consider skillful counterarguments before
and destructive. Few people can list a lot of bad habits making decisions.
that they have eliminated, and some people cannot iden- And proper education is one long exercise in aug-
tify even one of these. Instead, practically everyone has a mentation of high cognition so that our wisdom be-
great many bad habits he has long maintained despite comes strong enough to destroy wrong thinking, main-
their being known as bad. Given this situation, it is not tained by resistance to change. As Lord Keynes pointed
too much in many cases to appraise early-formed habits out about his exalted intellectual group at one of the
as destiny. When Marley’s miserable ghost says, “I wear greatest universities in the world, it was not the intrinsic
the chains I forged in life,” he is talking about chains of difficulty of new ideas that prevented their acceptance.
habit that were too light to be felt before they became Instead, the new ideas were not accepted because they
too strong to be broken. were inconsistent with old ideas in place. What Keynes
The rare life that is wisely lived has in it many good was reporting is that the human mind works a lot like
habits maintained and many bad habits avoided or the human egg. When one sperm gets into a human egg,
cured. And the great rule that helps here is again from there’s an automatic shut-off device that bars any other
Franklin’s Poor Richard’s Almanack: “An ounce of preven- sperm from getting in. The human mind tends strongly
tion is worth a pound of cure.” What Franklin is here toward the same sort of result.
indicating, in part, is that Inconsistency-Avoidance Ten- And so, people tend to accumulate large mental
dency makes it much easier to prevent a habit than to holdings of fixed conclusions and attitudes that are not
change it. often reexamined or changed, even though there is
Also tending to be maintained in place by the anti- plenty of good evidence that they are wrong.
change tendency of the brain are one’s previous conclu- Moreover, this doesn’t just happen in social science
sions, human loyalties, reputational identity, commit- departments, like the one that once thought Freud
ments, accepted role in a civilization, etc. It is not en- should serve as the only choice as a psychology teacher
tirely clear why evolution would program into man’s for Caltech. Holding to old errors even happens, al-
brain an anti-change mode alongside his tendency to though with less frequency and severity, in hard science
quickly remove doubt. My guess is the anti-change mode departments. We have no less an authority for this than
was significantly caused by a combination of the follow- Max Planck, Nobel laureate, finder of “Planck’s con-
ing factors: stant.” Planck is famous not only for his science but also
1) It facilitated faster decisions when speed of decision for saying that even in physics the radically new ideas are
was an important contribution to the survival of seldom really accepted by the old guard. Instead, said
nonhuman ancestors that were prey. Planck, the progress is made by a new generation that
2) It facilitated the survival advantage that our comes along, less brain-blocked by its previous conclu-
ancestors gained by cooperating in groups, which sions. Indeed, precisely this sort of brain-blocking hap-
would have been more difficult to do if everyone pened to a degree in Einstein. At his peak, Einstein was
was always changing responses. a great destroyer of his own ideas, but an older Einstein
3) It was the best form of solution that evolution never accepted the full implications of quantum me-
could get to in the limited number of generations chanics.
between the start of literacy and today’s complex One of the most successful users of an antidote to
modern life. first conclusion bias was Charles Darwin. He trained
It is easy to see that a quickly reached conclusion, trig- himself, early, to intensively consider any evidence tend-
gered by Doubt-Avoidance Tendency, when combined ing to disconfirm any hypothesis of his, more so if he
thought his hypothesis was a particularly good one. The ists as a consequence of the guards’ reciprocation of
opposite of what Darwin did is now called confirmation hostility from prisoners who are treated like animals.
bias, a term of opprobrium. Darwin’s practice came Given the psychology-based hostility natural in prisons
from his acute recognition of man’s natural cognitive between guards and prisoners, an intense, continuous
faults arising from Inconsistency-Avoidance Tendency. effort should be made to prevent prisoner abuse from
He provides a great example of psychological insight starting and to stop it instantly when it starts because it
correctly used to advance some of the finest mental will grow by feeding on itself, like a cluster of infectious
work ever done. disease. More psychological acuity on this subject, aided
Inconsistency-Avoidance Tendency has many good by more insightful teaching, would probably improve
effects in civilization. For instance, rather than act in- the overall effectiveness of the U.S. Army.
consistently with public commitments, new or old pub- So strong is Inconsistency-Avoidance Tendency
lic identities, etc., most people are more loyal in their that it will often prevail after one has merely pretended
roles in life as priests, physicians, citizens, soldiers, to have some identity, habit, or conclusion. Thus, for a
spouses, teachers, employees, etc. while, many an actor sort of believes he is Hamlet,
One corollary of Inconsistency-Avoidance Ten- Prince of Denmark. And many a hypocrite is improved
dency is that a person making big sacrifices in the course by his pretensions of virtue. And many a judge and ju-
of assuming a new identity will intensify his devotion to ror, while pretending objectivity, is gaining objectivity.
the new identity. After all, it would be quite inconsistent And many a trial lawyer or other advocate comes to
behavior to make a large sacrifice for something that believe what he formerly only pretended to believe.
was no good. And thus civilization has invented many While Inconsistency-Avoidance Tendency, with its
tough and solemn initiation ceremonies, often public in “status quo bias,” immensely harms sound education, it
nature, that intensify new commitments made. also causes much benefit. For instance, a near-ultimate
Tough initiation ceremonies can intensify bad con- inconsistency would be to teach something to others
tact as well as good. The loyalty of the new, “made- that one did not believe true. And so, in clinical medical
man” mafia member, or of the military officer making education, the learner is forced to “see one, do one, and
the required “blood oath” of loyalty to Hitler, was then teach one,” with the teaching pounding the learn-
boosted through the triggering of Inconsistency- ing into the teacher. Of course, the power of teaching to
Avoidance Tendency. influence the cognition of the teacher is not always a
Moreover, the tendency will often make man a benefit to society. When such power flows into political
“patsy” of manipulative “compliance-practitioners,” and cult evangelism, there are often bad consequences.
who gain advantage from triggering his subconscious For instance, modern education often does much
Inconsistency-Avoidance Tendency. Few people dem- damage when young students are taught dubious politi-
onstrated this process better than Ben Franklin. As he cal notions and then enthusiastically push these notions
was rising from obscurity in Philadelphia and wanted the on the rest of us. The pushing seldom convinces others.
approval of some important man, Franklin would often But as students pound into their mental habits what they
maneuver that man into doing Franklin some unimpor- are pushing out, the students are often permanently
tant favor, like lending Franklin a book. Thereafter, the damaged. Educational institutions that create a climate
man would admire and trust Franklin more because a where much of this goes on are, I think, irresponsible. It
nonadmired and nontrusted Franklin would be inconsis- is important not to thus put one’s brain in chains before
tent with the appraisal implicit in lending Franklin the one has come anywhere near his full potentiality as a
book. rational person.
During the Korean War, this technique of Frank-
lin’s was the most important feature of the Chinese 6. Curiosity Tendency
brainwashing system that was used on enemy prisoners. There is a lot of innate curiosity in mammals, but its
Small step by small step, the technique often worked nonhuman version is highest among apes and monkeys.
better than torture in altering prisoner cognition in favor Man’s curiosity, in turn, is much stronger than that of
of Chinese captors. his simian relatives. In advanced human civilization,
The practice of Franklin, whereunder he got ap- culture greatly increases the effectiveness of curiosity in
proval from someone by maneuvering him into treating advancing knowledge. For instance, Athens (including
Franklin favorably, works viciously well in reverse. its colony, Alexandria) developed much math and sci-
When one is maneuvered into deliberately hurting some ence out of pure curiosity while the Romans made al-
other person, one will tend to disapprove or even hate most no contribution to either math or science. They
that person. This effect, from Inconsistency-Avoidance instead concentrated their attention on the “practical”
Tendency, accounts for the insight implicit in the saying: engineering of mines, roads, aqueducts, etc. Curiosity,
“A man never forgets where he has buried the hatchet.” enhanced by the best of modern education (which is by
The effect accounts for much prisoner abuse by guards, definition a minority part in many places), much helps
increasing their dislike and hatred for prisoners that ex- man to prevent or reduce bad consequences arising
from other psychological tendencies. The curious are or some professor in surgery, gets annual compensation
also provided with much fun and wisdom long after in multiples of the standard professorial salary. And in
formal education has ended. modern investment banks, law firms, etc., the
envy/jealousy effects are usually more extreme than they
7. Kantian Fairness Tendency are in university faculties. Many big law firms, fearing
Kant was famous for his “categorical imperative,” a sort disorder from envy/jealousy, have long treated all senior
of a “golden rule” that required humans to follow those partners alike in compensation, no matter how different
behavior patterns that, if followed by all others, would their contributions to firm welfare. As I have shared the
make the surrounding human system work best for eve- observation of life with Warren Buffett over decades, I
rybody. And it is not too much to say that modern ac- have heard him wisely say on several occasions: “It is
culturated man displays, and expects from others, a lot not greed that drives the world, but envy.”
of fairness as thus defined by Kant. And, because this is roughly right, one would ex-
In a small community having a one-way bridge or pect a vast coverage of envy/jealousy in psychology
tunnel for autos, it is the norm in the United States to textbooks. But no such vast coverage existed when I
see a lot of reciprocal courtesy, despite the absence of read my three textbooks. Indeed, the very words “envy”
signs or signals. And many freeway drivers, including and “jealousy” were often absent from the index.
myself, will often let other drivers come in front of Nondiscussion of envy/jealousy is not a phenome-
them, in lane changes or the like, because that is the non confined to psychology texts. When did any of you
courtesy they desire when roles are reversed. Moreover, last engage in any large group discussion of some issue
there is, in modern human culture, a lot of courteous wherein adult envy/jealousy was identified as the cause
lining up by strangers so that all are served on a “first- of someone’s argument? There seems to be a general
come-first-served” basis. taboo against any such claim. If so, what accounts for
Also, strangers often voluntarily share equally in the taboo?
unexpected, unearned good and bad fortune. And, as an My guess is that people widely and generally sense
obverse consequence of such “fair-sharing” conduct, that labeling some position as driven by envy/jealousy
much reactive hostility occurs when fairsharing is ex- will be regarded as extremely insulting to the position
pected yet not provided. taker, possibly more so when the diagnosis is correct
It is interesting how the world’s slavery was pretty than when it is wrong. And if calling a position “envy-
well abolished during the last three centuries after being driven” is perceived as the equivalent of describing its
tolerated for a great many previous centuries during holder as a childish mental basket case, then it is quite
which it coexisted with the world’s major religions. My understandable how a general taboo has arisen.
guess is that Kantian Fairness Tendency was a major But should this general taboo extend to psychology
contributor to this result. texts when it creates such a large gap in the correct, psy-
chological explanation of what is widespread and impor-
8. Envy/Jealousy Tendency tant? My answer is no.
A member of a species designed through evolutionary
process to want often-scarce food is going to be driven 9. Reciprocation Tendency
strongly toward getting food when it first sees food. The automatic tendency of humans to reciprocate both
And this is going to occur often and tend to create some favors and disfavors has long been noticed as it is in
conflict when the food is seen in the possession of an- apes, monkeys, dogs, and many less cognitively gifted
other member of the same species. This is probably the animals. The tendency facilitates group cooperation for
evolutionary origin of the Envy/Jealousy Tendency that the benefit of members. In this respect, it mimics much
lies so deep in human nature. Sibling jealousy is clearly genetic programming of the social insects. We see the
very strong and usually greater in children than adults. It extreme power of the tendency to reciprocate disfavors
is often stronger than jealousy directed at strangers. in some wars, wherein it increases hatred to a level caus-
Kantian Fairness Tendency probably contributes to this ing very brutal conduct. For long stretches in many
result. wars, no prisoners were taken; the only acceptable en-
Envy/jealousy is extreme in myth, religion, and emy a dead one. And sometimes that was not enough, as
literature wherein, in account after account, it triggers in the case of Genghis Khan, who was not satisfied with
hatred and injury. It was regarded as so pernicious by corpses. He insisted on their being hacked into pieces.
the Jews of the civilization that preceded Christ that it One interesting mental exercise is to compare Gen-
was forbidden, by phrase after phrase, in the laws of ghis Khan, who exercised extreme, lethal hostility to-
Moses. You were even warned by the Prophet not to ward other men, with ants that display extreme, lethal
covet your neighbor’s donkey. hostility toward members of their own species that are
And envy/jealousy is also extreme in modern life. not part of their breeding colony. Genghis looks sweetly
For instance, university communities often go bananas lovable when compared to the ants. The ants are more
when some university employee in money management, disposed to fight and fight with more extreme cruelty.
Indeed, E. O. Wilson once waggishly suggested that if ciously steers you into a comfortable place to sit and
ants were suddenly to get atom bombs, all ants would be gives you a cup of coffee, you are very likely being
dead within eighteen hours. What both human and ant tricked, by this small courtesy alone, into parting with an
history suggest is extra five hundred dollars. This is far from the most
1) that nature has no general algorithm making intra- extreme case of sales success that is rooted in a salesman
species, turn-the-other-cheek behavior a booster of dispensing minor favors. However, in this scenario of
species survival; buying a car, you are going to be disadvantaged by part-
2) that it is not clear that a country would have good ing with an extra five hundred dollars of your own
prospects were it to abandon all reciprocate- money. This potential loss will protect you to some ex-
disfavor tendency directed at outsiders; and tent.
3) if turn-the-other-cheek behavior is a good idea for a But suppose you are the purchasing agent of some-
country as it deals with outsiders, man’s culture is one else – a rich employer, for instance. Now the minor
going to have to do a lot of heavy lifting because his favor you receive from the salesman is less opposed by
genes won’t be of much help. the threat of extra cost to you because someone else is
I next turn to man’s reciprocated hostility that falls well paying the extra cost. Under such circumstances, the
short of war. Peacetime hostility can be pretty extreme, salesman is often able to maximize his advantage, par-
as in many modern cases of “road rage” or injury- ticularly when government is the purchaser.
producing temper tantrums on athletic fields. Wise employers, therefore, try to oppose recipro-
The standard antidote to one’s overactive hostility cate-favor tendencies of employees engaged in purchas-
is to train oneself to defer reaction. As my smart friend ing. The simplest antidote works best: Don’t let them
Tom Murphy so frequently says, “You can always tell accept any favors from vendors. Sam Walton agreed
the man off tomorrow, if it is such a good idea.” with this idea of absolute prohibition. He wouldn’t let
Of course, the tendency to reciprocate favor for purchasing agents accept so much as a hot dog from a
favor is also very intense, so much so that it occasionally vendor. Given the subconscious level at which much
reverses the course of reciprocated hostility. Weird Reciprocation Tendency operates, this policy of
pauses in fighting have sometimes occurred right in the Walton’s was profoundly correct. If I controlled the
middle of wars, triggered by some minor courtesy or Defense Department, its policies would mimic Walton’s.
favor on the part of one side, followed by favor recipro- In a famous psychology experiment, Cialdini bril-
cation from the other side, and so on, until fighting liantly demonstrated the power of “compliance practi-
stopped for a considerable period. This happened more tioners” to mislead people by triggering their subcon-
than once in the trench warfare of World War I, over scious Reciprocation Tendency.
big stretches of the front and much to the dismay of the Carrying out this experiment, Cialdini caused his
generals. “compliance practitioners” to wander around his cam-
It is obvious that commercial trade, a fundamental pus and ask strangers to supervise a bunch of juvenile
cause of modern prosperity, is enormously facilitated by delinquents on a trip to a zoo. Because this happed on a
man’s innate tendency to reciprocate favors. In trade, campus, one person in six out of a large sample actually
enlightened self-interest joining with Reciprocation agreed to do this. After accumulating this one-in-six
Tendency results in constructive conduct. Daily inter- statistic, Cialdini changed his procedure. His practitio-
change in marriage is also assisted by Reciprocation ners next wandered around the campus asking strangers
Tendency, without which marriage would lose much of to devote a big chunk of time every week for two years
its allure. to the supervision of juvenile delinquents. This ridicu-
And Reciprocation Tendency, insomuch as it causes lous request got him a one hundred percent rejection
good results, does not join forces only with the super- rate. But the practitioner had a follow-up question: “Will
power of incentives. It also joins Inconsistency- you at least spend one afternoon taking juvenile delin-
Avoidance Tendency in helping cause: quents to a zoo?” This raised Cialdini’s former accep-
1) the fulfillment of promises made as part of a bar- tance rate of 1/6 to ½ – a tripling.
gain, including loyalty promises in marriage cere- What Cialdini’s “compliance practitioners” had
monies, and done was make a small concession, which was recipro-
2) correct behavior expected from persons serving as cated by a small concession from the other side. This
priests, shoemakers, physicians, and all else. subconscious reciprocation of a concession by Cialdini’s
Like other psychological tendencies, and also man’s abil- experimental subjects actually caused a much increased
ity to turn somersaults, reciprocate-favor tendency oper- percentage of them to end up irrationally agreeing to go
ates to a very considerable degree at a subconscious to a zoo with juvenile delinquents. Now, a professor
level. This helps make the tendency a strong force that who can invent an experiment like that, which so power-
can sometimes be used by some men to mislead others, fully demonstrates something so important, deserves
which happens all the time. much recognition in the wider world, which he indeed
For instance, when an automobile salesman gra- got to the credit of many universities that learned a great
deal from Cialdini. by reciprocate favor tendency and in the opposite direc-
Why is Reciprocation Tendency so important? Well, tion by Reward Superresponse Tendency pushing one to
consider the folly of having law students graduate, and enjoy one hundred percent of some good thing. Of
go out in the world representing clients in negotiations, course, human culture has often greatly boosted the
not knowing the nature of the subconscious processes genetic tendency to suffer from feelings of guilt. Most
of the mind as exhibited in Cialdini’s experiment. Yet especially, religious culture has imposed hard-to-follow
such folly was prevalent in the law schools of the world ethical and devotional demands on people. There is a
for decades, in fact, generations. The correct name for charming Irish Catholic priest in my neighborhood who,
that is educational malpractice. The law schools didn’t with rough accuracy, often says, “The old Jews may have
know, or care to teach, what Sam Walton so well knew. invented guilt, but we Catholics perfected it.” And if
The importance and power of reciprocate-favor you, like me and this priest, believe that, averaged out,
tendency was also demonstrated in Cialdini’s explana- feelings of guilt do more good than harm, you may join
tion of the foolish decision of the attorney general of the in my special gratitude for reciprocate-favor tendency;
United States to authorize the Watergate burglary. no matter how unpleasant you find feelings of guilt.
There, an aggressive subordinate made some extreme
proposal for advancing Republican interests through use 10. Influence-from-Mere-Association
of some combination of whores and a gigantic yacht.
When this ridiculous request was rejected, the subordi-
Tendency
nate backed off, in gracious concession, to merely asking In the standard conditioned reflexes studied by Skinner
for consent to a burglary, and the attorney general went and most common in the world, responsive behavior,
along. Cialdini believes that subconscious Reciprocation creating a new habit, is directly triggered by rewards
Tendency thus became one important cause of the res- previously bestowed. For instance, a man buys a can of
ignation of a United States president in the Watergate branded shoe polish, has a good experience with it when
debacle, and so do I. Reciprocation Tendency subtly shining his shoes, and because of this “reward,” buys the
causes many extreme and dangerous consequences, not same shoe polish when he needs another can.
just on rare occasions but pretty much all the time. But there is another type of conditioned reflex
Man’s belief in reciprocate-favor tendency, follow- wherein mere association triggers a response. For in-
ing eons of his practicing it, has done some queer and stance, consider the case of many men who have been
bad things in religions. The ritualized murder of the trained by their previous experience in life to believe
Phoenicians and the Aztecs, in which they sacrificed that when several similar items are presented for pur-
human victims to their gods, was a particularly egregious chase, the one with the highest price will have the high-
example. And we should not forget that as late as the est quality. Knowing this, some seller of an ordinary
Punic Wars, the civilized Romans, out of fear of defeat, industrial product will often change his product’s trade
returned in a few instances to the practice of human dress and raise its price significantly hoping that quality-
sacrifice. On the other hand, the reciprocity-based, relig- seeking buyers will be tricked into becoming purchasers
ion-boosting idea of obtaining help from God in recip- by mere association of his product and its high price.
rocation for good human behavior has probably been This industrial practice frequently is effective in driving
vastly constructive. up sales and even more so in driving up profits. For
Overall, both inside and outside religions, it seems instance, it worked wonderfully with high-priced power
clear to me that Reciprocation Tendency’s constructive tools for a long time. And it would work better yet with
contributions to man far outweigh its destructive effects. highpriced pumps at the bottom of oil wells. With lux-
In cases of psychological tendencies being used to ury goods, the process works with a special boost be-
counter or prevent bad results from one or more other cause buyers who pay high prices often gain extra status
psychological tendencies – for instance, in the case of from thus demonstrating both their good taste and their
interventions to end chemical dependency – you will ability to pay.
usually find Reciprocation Tendency performing Even association that appears to be trivial, if care-
strongly on the constructive side. fully planned, can have extreme and peculiar effects on
And the very best part of human life probably lies purchasers of products. The target purchaser of shoe
in relationships of affection wherein parties are more polish may like pretty girls. And so he chooses the pol-
interested in pleasing than being pleased – a not un- ish with the pretty girl on the can or the one with the
common outcome in display of reciprocate favor ten- pretty girl in the last ad for shoe polish that he saw.
dency. Advertisers know about the power of mere associa-
Before we leave reciprocate-favor tendency, the tion. You won’t see Coke advertised alongside some
final phenomenon we will consider is widespread human account of the death of a child. Instead, Coke ads pic-
misery from feelings of guilt. To the extent the feeling of ture life as happier than reality.
guilt has an evolutionary base, I believe the most plausi- Similarly, it is not from mere chance that military
ble cause is the mental conflict triggered in one direction bands play such impressive music. That kind of music,
appearing in mere association with military service, helps
to attract soldiers and keep them in the army. Most ar- this “eyes-half-shut” solution is about right, but I favor a
mies have learned to use mere association in this suc- tougher prescription: “See it like it is and love anyway.”
cessful way. Hating and disliking also cause miscalculation trig-
However, the most damaging miscalculations from gered by mere association. In business, I commonly see
mere association do not ordinarily come from advertis- people underappraise both the competency and morals
ers and music providers. of competitors they dislike. This is a dangerous practice,
Some of the most important miscalculations come usually disguised because it occurs on a subconscious
from what is accidentally associated with one’s past suc- basis.
cess, or one’s liking and loving, or one’s disliking and Another common bad effect from the mere associa-
hating, which includes a natural hatred for bad news. tion of a person and a hated outcome is displayed in
To avoid being misled by the mere association of “Persian Messenger Syndrome.” Ancient Persians actu-
some fact with past success, use this memory clue. ally killed some messengers whose sole fault was that
Think of Napoleon and Hitler when they invaded Russia they brought home truthful bad news, say, of a battle
after using their armies with much success elsewhere. lost. It was actually safer for the messenger to run away
And there are plenty of mundane examples of results and hide, instead of doing his job as a wiser boss would
like those of Napoleon and Hitler. For instance, a man have wanted it done.
foolishly gambles in a casino and yet wins. This unlikely And Persian Messenger Syndrome is alive and well
correlation causes him to try the casino again, or again in modern life, albeit in less lethal versions. It is actually
and again, to his horrid detriment. Or a man gets lucky dangerous in many careers to be a carrier of unwelcome
in an odds-against venture headed by an untalented news. Union negotiators and employer representatives
friend. So influenced, he tries again what worked before often know this, and it leads to many tragedies in labor
– with terrible results. relations. Sometimes lawyers, knowing their clients will
The proper antidotes to being made such a patsy hate them if they recommend an unwelcome but wise
by past success are: settlement, will carry on to disaster. Even in places well
1) to carefully examine each past success, looking for known for high cognition, one will sometimes find Per-
accidental, noncausative factors associated with sian Messenger Syndrome. For instance, years ago, two
such success that will tend to mislead as one ap- major oil companies litigated in a Texas trial court over
praises odds implicit in a proposed new undertak- some ambiguity in an operating agreement covering one
ing, and of the largest oil reservoirs in the Western hemisphere.
2) to look for dangerous aspects of the new undertak- My guess is that the cause of the trial was some general
ing that were not present when past success oc- counsel’s unwillingness to carry bad news to a strong-
curred. minded CEO.
The damage to the mind that can come from liking and CBS, in its late heyday, was famous for occurrence
loving was once demonstrated by obviously false testi- of Persian Messenger Syndrome because Chairman Bill
mony given by an otherwise very admirable woman, the Paley was hostile to people who brought him bad news.
wife of a party in a jury case. The famous opposing The result was that Paley lived in a cocoon of unreality,
counsel wanted to minimize his attack on such an admi- from which he made one bad deal after another, even
rable woman yet destroy the credibility of her testimony. exchanging a large share of CBS for a company that had
And so, in his closing argument, he came to her testi- to be liquidated shortly thereafter.
mony last. He then shook his head sadly and said, The proper antidote to creating Persian Messenger
“What are we to make of such testimony? The answer Syndrome and its bad effects, like those at CBS, is to
lies in the old rhyme: develop, through exercise of will, a habit of welcoming
bad news. At Berkshire, there is a common injunction:
As the husband is, So the wife is. “Always tell us the bad news promptly. It is only the
She is married to a clown, good news that can wait.” It also helps to be so wise and
And the grossness of his nature Drags her down.” informed that people fear not telling you bad news be-
cause you are so likely to get it elsewhere.
The jury disbelieved the woman’s testimony. They Influence-from-Mere-Association Tendency often
easily recognized the strong misinfluence of love on her has a shocking effect that helps swamp the normal ten-
cognition. And we now often see even stronger misin- dency to return favor for favor, [especially when the
fluence from love as tearful mothers, with heartfelt con- favor recipient’s] condition is unpleasant, due to pov-
viction, declare before TV cameras the innocence of erty, sickness, subjugation, or something else. Some-
their obviously guilty sons. times, when one receives a favor, the favor may trigger
People disagree about how much blindness should an envy-driven dislike for the person who was in so
accompany the association called love. In Poor Richard’s favorable a state that he could easily be a favor giver.
Almanack Franklin counseled: “Keep your eyes wide Under such circumstances, the favor receiver, prompted
open before marriage and half shut thereafter.” Perhaps partly by mere association of the favor giver with past
pain, will not only dislike the man who helped him but In chemical dependency, wherein morals usually
also try to injure him. This accounts for a famous re- break down horribly, addicted persons tend to believe
sponse, sometimes dubiously attributed to Henry Ford: that they remain in respectable condition, with respect-
“Why does that man hate me so? I never did anything able prospects. They thus display an extremely unrealis-
for him.” tic denial of reality as they go deeper and deeper into
I have a friend, whom I will now call “Glotz,” who deterioration. In my youth, Freudian remedies failed
had an amusing experience in favor-giving. Glotz owned utterly in reversing chemical dependency, but nowadays
an apartment building that he had bought because he Alcoholics Anonymous routinely achieves a fifty percent
wanted, eventually, to use the land in different develop- cure rate by causing several psychological tendencies to
ment. Pending this outcome, Glotz was very lenient in act together to counter addiction. However, the cure
collecting below-market rents from tenants. When, at process is typically difficult and draining, and a fifty per-
last, there was a public hearing on Glotz’s proposal to cent success rate implies a fifty percent failure rate. One
tear down the building, one tenant who was far behind should stay far away from any conduct at all likely to
in his rent payments was particularly angry and hostile. drift into chemical dependency. Even a small chance of
He came to the public hearing and said, “This proposal suffering so great a damage should be avoided.
is outrageous. Glotz doesn’t need any more money. I
know this because I was supported in college by Glotz 12. Excessive Self-Regard Tendency
fellowships.” We all commonly observe the excessive self-regard of
A final serious clump of bad thinking caused by man. He mostly misappraises himself on the high side,
mere association lies in the common use of classification like the ninety percent of Swedish drivers that judge
stereotypes. Because Pete knows that Joe is ninety years themselves to be above average. Such misappraisals also
old and that most ninety-year-old persons don’t think apply to a person’s major “possessions.” One spouse
very well, Pete appraises old Joe as a thinking klutz even usually overappraises the other spouse. And a man’s
if old Joe still thinks very well. Or, because Jane is a children are likewise appraised higher by him than they
white-haired woman, and Pete knows no old women are likely to be in a more objective view. Even man’s
good at higher math, Pete appraises Jane as no good at it minor possessions tend to be overappraised. Once
even if Jane is a whiz. This sort of wrong thinking is owned, they suddenly become worth more to him than
both natural and common. Pete’s antidote is not to he would pay if they were offered for sale to him and he
believe that, on average, ninety-year-olds think as well as didn’t already own them. There is a name in psychology
forty year-olds or that there are as many females as for this overappraisal-of-our-own-possessions phe-
males among Ph.D.’s in math. Instead, just as he must nomenon: the “endowment effect.” And all man’s deci-
learn that trend does not always correctly predict des- sions are suddenly regarded by him as better than would
tiny, he must learn that the average dimension in some have been the case just before he made them.
group will not reliably guide him to the dimension of Man’s excess of self-regard typically makes him
some specific item. Otherwise Pete will make many er- strongly prefer people like himself. Psychology profes-
rors, like that of the fellow who drowned in a river that sors have had much fun demonstrating this effect in
averaged out only eighteen inches deep. “lost-wallet” experiments. Their experiments all show
that the finder of a lost wallet containing identity clues
11. Simple, Pain-Avoiding Psychological will be most likely to return the wallet when the owner
Denial most closely resembles the finder. Given this quality in
This phenomenon first hit me hard in World War II psychosocial nature, cliquish groups of similar persons
when the superathlete, superstudent son of a family will always be a very influential part of human culture,
friend flew off over the Atlantic Ocean and never came even after we wisely try to dampen the worst effects.
back. His mother, who was a very sane woman, then Some of the worst consequences in modern life
refused to believe he was dead. That’s Simple, Pain- come when dysfunctional groups of cliquish persons,
Avoiding Psychological Denial. The reality is too painful dominated by Excessive Self-Regard Tendency, select as
to bear, so one distorts the facts until they become bear- new members of their organizations persons who are
able. We all do that to some extent, often causing terri- very much like themselves. Thus if the English depart-
ble problems. The tendency’s most extreme outcomes ment at an elite university becomes mentally dysfunc-
are usually mixed up with love, death, and chemical de- tional or the sales department of a brokerage firm slips
pendency. into routine fraud, the problem will have a natural ten-
Where denial is used to make dying easier, the con- dency to get worse and to be quite resistant to change
duct meets almost no criticism. Who would begrudge a for the better. So also with a police department or
fellow man such help at such a time? But some people prison-guard unit or political group gone sour and
hope to leave life hewing to the iron prescription, “It is countless other places mired in evil and folly, such as the
not necessary to hope in order to persevere.” And there worst of our big-city teachers’ unions that harm our
is something admirable in anyone able to do this. children by preventing discharge of ineffective teachers.
Therefore, some of the most useful members of our late, dynamic Carly Fiorina in its search for a new CEO.
civilization are those who are willing to “clean house” And I believe that Hewlett-Packard made a bad decision
when they find a mess under their ambit of control. when it chose Ms. Fiorina, and that this bad decision
Well, naturally, all forms of excess of self-regard would not have been made if Hewlett-Packard had taken
cause much error. How could it be otherwise? the methodological precautions it would have taken if it
Let us consider some foolish gambling decisions. In knew more psychology.
lotteries, the play is much lower when numbers are dis- There is a famous passage somewhere in Tolstoy
tributed randomly than it is when the player picks his that illuminates the power of Excessive Self-Regard
own number. This is quite irrational. The odds are al- Tendency. According to Tolstoy, the worst criminals
most exactly the same and much against the player. Be- don’t appraise themselves as all that bad. They come to
cause state lotteries take advantage of man’s irrational believe either (1) that they didn’t commit their crimes or
love of self-picked numbers, modern man buys more (2) that, considering the pressures and disadvantages of
lottery tickets than he otherwise would have, with each their lives, it is understandable and forgivable that they
purchase foolish. behaved as they did and became what they became.
Intensify man’s love of his own conclusions by The second half of the “Tolstoy effect,” where the
adding the possessory wallop from the “endowment man makes excuses for his fixable poor performance,
effect,” and you will find that a man who has already instead of providing the fix, is enormously important.
bought a pork-belly future on a commodity exchange Because a majority of mankind will try to get along by
now foolishly believes, even more strongly than before, making way too many unreasonable excuses for fixable
in the merits of his speculative bet. poor performance, it is very important to have personal
And foolish sports betting, by people who love and institutional antidotes limiting the ravages of such
sports and think they know a lot about relative merits of folly. On the personal level a man should try to face the
teams, is a lot more addictive than race track betting – two simple facts:
partly because of man’s automatic overappraisal of his 1) fixable but unfixed bad performance is bad charac-
own complicated conclusions. ter and tends to create more of itself, causing more
Also extremely counterproductive is man’s ten- damage to the excuse giver with each tolerated in-
dency to bet, time after time, in games of skill, like golf stance, and
or poker, against people who are obviously much better 2) in demanding places, like athletic teams and
players. Excessive Self-Regard Tendency diminishes the General Electric, you are almost sure to be dis-
foolish bettor’s accuracy in appraising his relative degree carded in due course if you keep giving excuses in-
of talent. stead of behaving as you should.
More counterproductive yet are man’s appraisals, The main institutional antidotes to this part of the
typically excessive, of the quality of the future service he “Tolstoy effect” are:
is to provide to his business. His overappraisal of these 1) a fair, meritocratic, demanding culture plus person-
prospective contributions will frequently cause disaster. nel handling methods that build up morale, and
Excesses of self-regard often cause bad hiring deci- 2) severance of the worst offenders.
sions because employers grossly overappraise the worth Of course, when you can’t sever – as in the case of your
of their own conclusions that rely on impressions in own child – you must try to fix the child as best you can.
face-to-face contact. The correct antidote to this sort of I once heard of child-teaching method so effective that
folly is to underweigh face-to-face impressions and the child remembered the learning experience over fifty
overweigh the applicant’s past record. years later. The child later became Dean of the USC
I once chose exactly this course of action while I School of Music and then related to me what father said
served as chairman of an academic search committee. I when he saw his child taking candy from the stock of his
convinced fellow committee members to stop all further employer with the excuse that he intended to replace it
interviews and simply appoint a person whose achieve- later. The father said, “Son, it would be better for you to
ment record was much better than that of any other simply take all you want and call yourself a thief every
applicant. And when it was suggested to me that I time you do it.”
wasn’t giving “academic due process,” I replied that I The best antidote to folly from an excess of self-
was the one being true to academic values because I was regard is to force yourself to be more objective when
using academic research showing poor predictive value you are thinking about yourself, your family and friends,
of impressions from face-to-face interviews. your property, and the value of your past and future
Because man is likely to be overinfluenced by face- activity. This isn’t easy to do well won’t work perfectly,
to-face impressions that by definition involve his active but it will work much better than simply letting psycho-
participation, a job candidate who is a marvelous “pre- logical nature take its normal course.
senter” often causes great danger under modern execu- While an excess of self-regard is often counterpro-
tive-search practice. In my opinion, Hewlett-Packard ductive in its effects on cognition, it can cause some
faced just such a danger when it interviewed the articu- weird successes from overconfidence that happens to
cause success. This factor accounts for the adage: man frequently incurs disadvantage by misframing his
“Never underestimate the man who overestimates him- problems. He will often compare what is near instead of
self.” what really matters. For instance, a man with $10 million
Of course, some high self-appraisals are correct and in his brokerage account will often be extremely irritated
serve better than false modesty. Moreover, self-regard in by the accidental loss of $100 out of the $300 in his wal-
the form of a justified pride in a job well done, or a life let.
well lived, is a large constructive force. Without such The Mungers once owned a tame and good-natured
justified pride, many more airplanes would crash. dog that displayed the canine version of Deprival Super-
“Pride” is another word generally left out of psychology reaction Tendency. There was only one way to get bitten
textbooks, and this omission is not a good idea. It is also by this dog. And that was to try and take some food
not a good idea to construe the bible’s parable about the away from him after he already had it in his mouth. If
Pharisee and the Publican as condemning all pride. you did that, this friendly dog would automatically bite.
Of all forms of useful pride, perhaps the most de- He couldn’t help it. Nothing could be more stupid than
sirable is a justified pride in being trustworthy. More- for the dog to bite his master. But the dog couldn’t help
over, the trustworthy man, even after allowing for the being foolish. He had an automatic Deprival Superreac-
inconveniences of his chosen course, ordinarily has a life tion Tendency in his nature.
that averages out better than he would have if he pro- Humans are much the same as this Munger dog. A
vided less reliability. man ordinarily reacts with irrational intensity to even a
small loss, or threatened loss, of property, love, friend-
13. Overoptimism Tendency ship, dominated territory, opportunity: status, or any
About three centuries before the birth of Christ, other valued thing. As a natural result, bureaucratic in-
Demosthenes, the most famous Greek orator, said, fighting over the threatened loss of dominated territory
“What a man wishes, that also will he believe.” often causes immense damage to an institution as a
Demosthenes, parsed out, was thus saying that man whole. This factor among others, accounts for much of
displays not only Simple, Pain-Avoiding Psychological the wisdom of Jack Welch’s long fight against bureau-
Denial but also an excess of optimism even when he is cratic ills at General Electric. Few business leaders have
already doing well. ever conducted wiser campaigns.
The Greek orator was clearly right about an excess Deprival Superreaction Tendency often protects
of optimism being the normal human condition, even ideological or religious views by triggering and hatred
when pain or the threat of pain is absent. Witness happy directed toward vocal nonbelievers. This happens, in
people buying lottery tickets or believing that credit- part, because the ideas of the nonbelievers, if they
furnishing, delivery-making grocery stores were going to spread, will diminish the influence of views that are now
displace a great many superefficient cash-and-carry su- supported by a comfortable environment including a
permarkets. strong relief-maintenance system. University liberal arts
One standard antidote to foolish optimism is departments, law schools, and business organizations all
trained, habitual use of the simple probability math of display plenty of such ideology-based groupthink that
Fermat and Pascal, taught in my youth to high school rejects almost all conflicting inputs. When the vocal
sophomores. The mental rules of thumb that evolution critic is a former believer, hostility is often boosted both
gives you to deal with risk are not adequate. They re- by:
semble the dysfunctional golf grip you would have if you 1) a concept of betrayal that triggers additional De-
relied on a grip driven by evolution instead of golf les- prival Superreaction Tendency because a colleague
sons. is lost, and
2) fears that conflicting views will have extra persua-
sive power when they come from a former col-
14. Deprival Superreaction Tendency league.
The quantity of man’s pleasure from a ten dollar gain The foregoing considerations help account for the old
does not exactly match the quantity of his displeasure idea of heresy, which for centuries justified much killing
from a ten-dollar loss. That is, the loss seems to hurt of heretics, frequently after torture and frequently ac-
much more than the gain seems to help. Moreover, if a complished by burning the victim alive.
man almost gets something he greatly wants and has it It is almost everywhere the case that extremes of
jerked away from him at the last moment, he will react ideology are maintained with great intensity and with
much as if he had long owned the reward and had it great antipathy to non-believers, causing extremes of
jerked away. I include the natural human reactions to cognitive dysfunction. This happens, I believe, because
both kind of loss experience – the loss of the possessed two psychological tendencies are usually acting concur-
reward and the loss of the almost-possessed reward – rently toward this same sad result: Inconsistency-
under one description, Deprival Superreaction Ten- Avoidance Tendency, plus Deprival Superreaction Ten-
dency. dency.
In displaying Deprival Superreaction Tendency,
 One antidote to intense, deliberate maintenance of machines enable these creators to produce a lot of
groupthink is an extreme culture of courtesy, kept in meaningless bar-bar-lemon results that greatly increase
place despite ideological differences, like the behavior of play by fools who think they have very nearly won large
the justices now serving on the U.S. Supreme Court. rewards.
Another antidote is to deliberately bring in able and ar- Deprival Superreaction Tendency often does much
ticulate disbelievers of incumbent groupthink. Successful damage to man in open-outcry auctions. The “social
corrective measures to evil examples of groupthink proof’ that we will next consider tends to convince man
maintenance have included actions like that of Derek that the last price from another bidder was reasonable,
Bok when, as president of Harvard, he started disap- and then Deprival Superreaction Tendency prompts him
proving tenure appointments proposed by ideologues at strongly to top the last bid. The best antidote to being
Harvard Law School. thus triggered into paying foolish prices at open-outcry
Even a one-degree loss from a 180-degree view will auctions is the simple Buffett practice: Don’t go to such
sometime create enough Deprival Superreaction Ten- auctions.
dency to turn a neighbor into an enemy, as I once ob- I myself, the would-be instructor here, many dec-
served when I bought a house from one of two ades ago made a big mistake caused in part by subcon-
neighbors locked into hatred by a tiny tree newly in- scious operation of my Deprival Superreaction Ten-
stalled by one of them. dency. A friendly broker called and offered me 300
As the case of these two neighbors illustrated, the shares of ridiculously underpriced, very thinly traded
clamor of almost any group of neighbors displaying Belridge Oil at $115 per share, which I purchased using
irrational, extreme deprival superreaction over some cash I had on hand. The next day, he offered me 1,500
trifle in a zoning hearing is not a pretty thing to watch. more shares at the same price, which I declined to buy,
Such bad behavior drives some people from the zoning partly because I could only have made the purchase had
field. I once bought some golf clubs from an artisan I sold something or borrowed the required $173,000.
who was formerly a lawyer. When I asked him what kind This was a very irrational decision. I was a well-to-do
of law he had practiced, I expected to hear him say, “di- man with no debt; there was no risk of loss; and similar
vorce law” But his answer was, “zoning law.” no risk opportunities were not likely to come along.
Deprival Superreaction Tendency has ghastly ef- Within two years, Belridge Oil sold out to Shell at a
fects in labor relations. Most of the deaths in the labor price of about $3,700 per share, which made me about
strife that occurred before World War I came when em- $5.4 million poorer than I would have been had I then
ployers tried to reduce wages. Nowadays, we see fewer been psychologically acute. As this tale demonstrates,
deaths and more occasions when whole companies dis- psychological ignorance can be very expensive.
appear, as competition requires either takeaways from Some people may question my defining Deprival
labor – which it will not consent to – or death of the Superreaction Tendency to include reaction to profit
business. Deprival Superreaction Tendency causes much barely missed, as in the well-documented responses of
of this labor resistance, often in cases where it would be slot machine players. However, I believe that I haven’t
in labor’s interest to make a different decision. defined the tendency as broadly as I should. My reason
In contexts other than labor relations, takeaways are for suggesting an even broader definition is that many
also difficult to get. Many tragedies, therefore, occur that Berkshire Hathaway shareholders I know never sell or
would have been avoided had there been more rational- give away a single share after immense gains in market
ity and less subconscious heed of the imperative from value have occurred. Some of this reaction is caused by
Deprival Superreaction Tendency. rational calculation, and some is, no doubt, attributable
Deprival Superreaction Tendency and Inconsis- to some combination of (1) reward superresponse, (2)
tency-Avoidance Tendency often join to cause one form “status quo bias” from Inconsistency-Avoidance Ten-
of business failure. In this form of ruin, a man gradually dency, and (3) “the endowment effect” from Excessive
uses up all his good assets in a fruitless attempt to rescue Self-Regard Tendency. But I believe the single strongest
a big venture going bad. One of the best antidotes to irrational explanation is a form of Deprival Superreac-
this folly is good poker skill learned young. The teaching tion Tendency. Many of these shareholders simply can’t
value of poker demonstrates that not all effective teach- stand the idea of having their Berkshire Hathaway hold-
ing occurs on a standard academic path. ings smaller. Partly they dislike facing what they consider
Deprival Superreaction Tendency is also a huge an impairment of identity, but mostly they fear missing
contributor to ruin from compulsion to gamble. First, it out on future gains from stock sold or given away.
causes the gambler to have a passion to get even once he
has suffered loss, and the passion grows with the loss. 15. Social-Proof Tendency
Second, the most addictive forms of gambling provide a The otherwise complex behavior of man is much simpli-
lot of near misses and each one triggers Deprival Super- fied when he automatically thinks and does what he
reaction Tendency. Some slot machine creators are vi- observes to be thought and done around him. And such
cious in exploiting this weakness of man. Electronic followership often works fine. For instance, what sim-
pler way could there be to find out how to walk to a big sion targets.
football game in a strange city than by following the Because both bad and good behavior are made con-
flow of the crowd. For some such reason, man’s evolu- tagious by Social-Proof Tendency, it is highly important
tion left him with Social-Proof Tendency, an automatic that human societies stop any bad behavior before it
tendency to think and act as he sees others around him spreads and foster and display all good behavior.
thinking and acting. My father once told me that just after commencing
Psychology professors love Social-Proof Tendency law practice in Omaha, he went with a large group from
because in their experiments it causes ridiculous results. Nebraska to South Dakota to hunt pheasants. A South
For instance, if a professor arranges for some stranger to Dakota hunting license was, say, $2 for South Dakota
enter an elevator wherein ten “compliance practitioners” residents and $5 for nonresidents. All the Nebraska resi-
are all silently standing so that they face the rear of the dents, one by one, signed up for South Dakota licenses
elevator, the stranger will often turn around and do the with phony South Dakota addresses until it was my fa-
same. The psychology professors can also use Social- ther’s turn. Then, according to him, he barely prevented
Proof Tendency to cause people to make large and ri- himself from doing what the others were doing, which
diculous measurement errors. was some sort of criminal offense.
And, of course, teenagers’ parents usually learn Not everyone so resists the social contagion of bad
more than they would like about teenagers’ cognitive behavior. And, therefore, we often get “Serpico Syn-
errors from Social-Proof Tendency. This phenomenon drome,” named to commemorate the state of a near-
was recently involved in a breakthrough by Judith Rich totally corrupt New York police division joined by
Harris who demonstrated that superrespect by young Frank Serpico. He was then nearly murdered by gunfire
people for their peers, rather than for parents or other because of his resistance to going along with the corrup-
adults, is ordained to some considerable extent by the tion in the division. Such corruption was being driven by
genes of the young people. This makes it wise for par- social proof plus incentives, the combination that cre-
ents to rely more on manipulating the quality of the ates Serpico Syndrome. The Serpico story should be
peers than on exhortations to their own offspring. A taught more than it now is because the didactic power of
person like Ms. Harris, who can provide an insight of its horror is aimed at a very important evil, driven sub-
this quality and utility, backed by new reasons, has not stantially by a very important force: social proof.
lived in vain. In social proof, it is not only action by others that
And in the highest reaches of business, it is not all misleads but also their inaction. In the presence of
uncommon to find leaders who display followership doubt, inaction by others becomes social proof that
akin to that of teenagers. If one oil company foolishly inaction is the right course. Thus, the inaction of a great
buys a mine, other oil companies often quickly join in many bystanders led to the death of Kitty Genovese in a
buying mines. So also if the purchased company makes famous incident much discussed in introductory psy-
fertilizer. Both of these oil company buying fads actually chology courses.
bloomed, with bad results. In the ambit of social proof, the outside rectors on
Of course, it is difficult to identify and correctly a corporate board usually display the near ultimate form
weigh all the possible ways to deploy the cash flow of an of inaction. They fail to object to anything much short
oil company. So oil company executives, like everyone of an axe murder until some public embarrassment of
else, have made many bad decisions that were quickly the board finally causes their intervention. A typical
triggered by discomfort from doubt. Going along with board-of-directors’ culture was once well described by
social proof provided by the action of other oil compa- my friend, Joe Rosenfield, as he said, “They asked me if
nies ends this discomfort in a natural way. I wanted become a director of Northwest Bell, and it
When will Social-Proof Tendency be most easily was the last thing they ever asked me.”
triggered? Here the answer is clear from many experi- In advertising and sales promotion, Social-Proof
ments: Triggering most readily occurs in the presence of Tendency is about as strong a factor as one could imag-
puzzlement or stress, and particularly when both exist. ine. “Monkey-see, monkey-do” is the old phrase that
Because stress intensifies Social-Proof Tendency, reminds one of how strongly John will often wish to do
disreputable sales organizations, engaged, for instance, something, or have something, just because Joe does or
in such action as selling swampland to schoolteachers, has it. One interesting consequence is that an advertiser
manipulate targets into situations combining isolation will pay a lot to have its soup can, instead of someone
and stress. The isolation strengthens the social proof else’s, in a movie scene involving soup consumption
provided by both the knaves and the people who buy only in a peripheral way.
first, and the stress, often increased by fatigue, augments Social-Proof Tendency often interacts in a perverse
the targets’ susceptibility to the social proof. And, of way with Envy/Jealousy and Deprival Superreaction
course, the techniques of our worst “religious” cults Tendency. One such interaction amused my family for
imitate those of the knavish salesmen. One cult even years as people recalled the time when my cousin Russ
used rattlesnakes to heighten the stress felt by conver- and I, at ages three and four, fought and howled over a
single surplus shingle while surrounded by a virtual sea awful houses at ridiculously high prices. Then he shows
of surplus shingles. him a merely bad house at a price only moderately too
But the adult versions of this occasion, boosted by high. And, boom, the broker often makes an easy sale.
psychological tendencies preserving ideologies, are not Contrast-Misreaction Tendency is routinely used to
funny – and can bring down whole civilizations. The cause disadvantage for customers buying merchandise
Middle East now presents just such a threat. By now the and services. To make an ordinary price seem low, the
resources spent by Jews, Arabs and all others over a vendor will very frequently create a highly artificial price
small amount of disputed land if divided arbitrarily that is much higher than the price always sought, then
among land claimants, would have made everyone better advertise his standard price as a big reduction from his
off, even before taking into account any benefit from phony price. Even when people know that this sort of
reduced threat of war, possibly nuclear. customer manipulation is being attempted, it will often
Outside domestic relations it is rare now to try to work to trigger buying. This phenomenon accounts in
resolve disputes by techniques including discussion of part for much advertising in newspapers. It also demon-
impacts from psychological tendencies. Considering the strates that being aware of psychological ploys is not a
implications of childishness that would be raised by such perfect defense. When a man’s steps are consecutively
inclusion, and the defects of psychology as now taught, taken toward disaster, with each step being very small,
this result may be sound. But, given the nuclear stakes the brain’s Contrast-Misreaction Tendency will often let
now involved and the many failures in important nego- the man go too far toward disaster to be able to avoid it.
tiations lasting decades, I often wonder if some day, in This happens because each step presents small a con-
some way, more use of psychological insight will even- trast from his present position.
tually improve outcomes. If so, correct teaching of psy- A bridge-playing pal of mine once told me that a
chology matters a lot. And, if old psychology professors frog tossed into very hot water would jump out, but that
are even less likely than old physics professors to learn the same frog would end up dying if placed in room-
new ways, which seems nearly certain, then we may, as temperature water that was later treated at a very slow
Max Planck predicted, need a new generation of psy- rate. My few shreds of physiological knowledge make
chology professors who have grown up to think in a me doubt this account. But no matter, because many
different way. businesses die in just the manner claimed by my friend
If only one lesson is to be chosen from a package for the frog. Cognition, misled by tiny changes involving
of lessons involving Social-Proof Tendency, and used in low contrast, will often miss a trend that is destiny.
self improvement, my favorite would be: Learn how to One of Ben Franklin’s best-remembered and most
ignore the examples from others when they are wrong, useful aphorisms is “A small leak will sink great ship.”
because few skills are more worth having. The utility of the aphorism is large precisely because the
brain so often misses the functional equivalent of a small
16. Contrast-Misreaction Tendency leak in a great ship.
Because the nervous system of man does not naturally
measure in absolute scientific units, it must instead rely 17. Stress-Influence Tendency
on something simpler. The eyes have a solution that Everyone recognizes that sudden stress, for instance
limits their programming needs: the contrast in what is from a threat, will cause a rush of adrenaline in the hu-
seen is registered. And as in sight, so does it go, largely, man body, prompting faster and more extreme reaction.
in the other senses. Moreover, as perception goes, so And everyone who has taken Psych 101 knows that
goes cognition. The result is man’s Contrast-Misreaction stress makes Social-Proof Tendency more powerful.
Tendency. Few psychological tendencies do more dam- In a phenomenon less well recognized, but still
age to correct thinking. Small-scale damages involve widely known, light stress can slightly improve perform-
instances such as man’s buying an overpriced $1,000 ance – say, in examinations – whereas heavy stress
leather dashboard merely because the price is so low causes dysfunction.
compared to his concurrent purchase of a $65,000 car. But few people know more about really heavy stress
Large-scale damages often ruin lives, as when a wonder- than that it can cause depression. For instance, most
ful woman having terrible parents marries a man who people know that an “acute stress depression” makes
would be judged satisfactory only in comparison to her thinking dysfunctional because it causes an extreme of
parents. Or as when a man takes wife number two who pessimism, often extended in length and usually accom-
would be appraised as all right only in comparison to panied by activity stopping fatigue. Fortunately, as most
wife number one. people also know, such a depression is one of mankind’s
A particularly reprehensible form of sales practice more reversible ailments. Even before modern drugs
occurs in the offices of some real estate brokers. A were available, many people afflicted by depression,
buyer from out of the city, perhaps needing to shift his such as Winston Churchill and Samuel Johnson, gained
family there, visits the office with little time available. great achievement in life.
The salesman deliberately shows the customer three Most people know very little about nondepressive
mental breakdowns influenced by heavy stress. But there should the law say about what parents could do to “de-
is at least one exception, involving the work of Pavlov program” children who had become brainwashed zom-
when he was in his seventies and eighties. Pavlov had bies. Naturally, mainstream law objected to the zombies
won a Nobel Prize early in life by using dogs to work being physically captured by their parents and subjected
out the physiology of digestion. Then he became world- to stress that would help to deprogram the effects of the
famous by working out mere-association responses in stress they had endured in cult conversions.
dogs, initially salivating dogs – so much so that changes I never wanted to get into the legal controversy that
in behavior triggered by mere-association, like those existed about this subject. But I did conclude that the
caused by much modern advertisement, are today often controversy couldn’t be handled with maximized ration-
said to come from “Pavlovian” conditioning. ality without considering whether as Pavlov’s last work
What happened to cause Pavlov’s last work was suggests, the heavy-handed imposition of stress might
especially interesting. During the great Leningrad Flood be the only reversal method that would work to remedy
of the 1920s, Pavlov had many dogs in cages. Their hab- one of the worst evils imaginable: a stolen mind. I have
its had been transformed, by a combination of his “Pav- included this discussion of Pavlov partly out of general
lovian conditioning” plus standard reward responses, antagonism toward taboos, partly to make my talk rea-
into distinct and different patterns. As the waters of the sonably complete as it considers stress and partly be-
flood came up and receded, many dogs reached a point cause I hope some listener may continue my inquiry
where they had almost no airspace between their noses with more success.
and the tops of their cages. This subjected them to
maximum stress. Immediately thereafter, Pavlov noticed 18. Availability-Misweighing Tendency
that many of the dogs were no longer behaving as they This mental tendency echoes the words of the song:
had. For example, the dog that formerly had liked his “When I’m not near the girl I love, I love the girl I’m
trainer now disliked him. This result reminds one of near.” Man’s imperfect, limited-capacity brain easily
modern cognition-reversals in which a person’s love of drifts into working with what’s easily available to it. And
his parents suddenly becomes hate, as new love has been the brain can’t use what it can’t remember or what it is
shifted suddenly to a cult. The unanticipated, extreme blocked from recognizing because it is heavily influ-
changes in Pavlov’s dogs would have driven any good enced by one or more psychological tendencies bearing
experimental scientist into a near-frenzy of curiosity. strongly on it, as the fellow is influenced by the nearby
That was indeed Pavlov’s reaction. But not many scien- girl in the song. And so the mind overweighs what is
tists would have done what Pavlov next did. easily available and thus displays Availability-
And that was to spend the rest of his long life giv- Misweighing Tendency.
ing stress-induced nervous breakdowns to dogs, after The main antidotes to miscues from Availability-
which he would try to reverse the breakdowns, all the Misweighing Tendency often involve procedures, in-
while keeping careful experimental records. He found cluding use of checklists, which are almost always help-
1) that he could classify dogs so as to predict how ful.
easily a particular dog would breakdown; Another antidote is to behave somewhat like Dar-
2) that the dogs hardest to break down were also the win did when he emphasized disconfirming evidence.
hardest to return to their pre-breakdown state; What should be done is to especially emphasize factors
3) that any dog could be broken down; and that don’t produce reams of easily available numbers,
4) that he couldn’t reverse a breakdown except by instead of drifting mostly or entirely into considering
reimposing stress. factors that do produce such numbers. Still another an-
Now, practically everyone is revolted by such experi- tidote is to find and hire some skeptical, articulate peo-
mental treatment of man’s friend, the dog. Moreover, ple with far-reaching minds to act as advocates for no-
Pavlov was Russian and did his last work under the tions that are opposite to the incumbent notions.
Communists. And maybe those facts account for the One consequence of this tendency is that extra
present extreme, widespread ignorance of Pavlov’s last vivid evidence, being so memorable and thus more
work. The two Freudian psychiatrists with whom I tried available in cognition, should often consciously be un-
many years ago to discuss this work had never heard of derweighed while less vivid evidence should be over-
it. And the dean of a major medical school actually weighed.
asked me, several years ago, if any of Pavlov’s experi- Still, the special strength of extra-vivid images in
ments were “repeatable” in experiments of other re- influencing the mind can be constructively used
searchers. Obviously, Pavlov is now a sort of forgotten 1) in persuading someone else to reach a correct con-
hero in medical science. clusion or
I first found a description of Pavlov’s last work in a 2) as a device for improving one’s own memory by
popular paperback, written by some Rockefeller- attaching vivid images, one after the other, to many
financed psychiatrist, when I was trying to figure out items one doesn’t want to forget.
how cults worked their horrible mischief and what Indeed, such use of vivid images as memory boosters is
what enabled the great orators of classical Greece and Old people like me get pretty skilled, without work-
Rome to give such long, organized speeches without ing at it, at disguising age-related deterioration because
using notes. social convention, like clothing, hides much decline.
The great algorithm to remember in dealing with Continuous thinking and learning, done with joy,
this tendency is simple: An idea or a fact is not worth can somewhat help delay what is inevitable.
more merely because it is easily available to you.
22. Authority-Misinfluence Tendency
19. Use-It-or-Lose-It Tendency Living in dominance hierarchies as he does, like all his
All skills attenuate with disuse. I was a whiz at calculus ancestors before him, man was born mostly to follow
until age twenty, after which the skill was soon obliter- leaders, with only a few people doing the leading. And
ated by total nonuse. The right antidote to such a loss is so, human society is formally organized into dominance
to make use of the functional equivalent of the aircraft hierarchies, with their culture augmenting the natural
simulator employed in pilot training. This allows a pilot follow-the-leader tendency of man.
to continuously practice all of the rarely used skills that But automatic as most human reactions are, with
he can’t afford to lose. the tendency to follow leaders being no exception, man
Throughout his life, a wise man engages in practice is often destined to suffer greatly when the leader is
of all his useful, rarely used skills, many of them outside wrong or when his leader’s ideas don’t get through
his discipline, as a sort of duty to his better self. If he properly in the bustle of life and are misunderstood.
reduces the number of skills he practices and, therefore, And so, we find much miscognition from man’s Author-
the number of skills he retains, he will naturally drift into ity-Misinfluence Tendency.
error from man with a hammer tendency. His learning Some of the misinfluences are amusing, as in a case
capacity will also shrink as he creates gaps in the lattice- described by Cialdini. A physician left a written order for
work of theory he needs as a framework for understand- a nurse treating an earache, as follows: “Two drops,
ing new experience. It is also essential for a thinking twice a day, r. ear.” The nurse then directed the patient
man to assemble his skills into a checklist that he rou- to turn over and put the eardrops in his anus.
tinely uses. Any other mode of operation will cause him Other versions of confused instructions from au-
to miss much that is important. thority figures are tragic. In World War II, a new pilot
Skills of a very high order can be maintained only for a general, who sat beside him in the copilot’s seat,
with daily practice. The pianist Paderewski once said was so anxious to please his boss that he misinterpreted
that if he failed to practice for a single day, he could some minor shift in the general’s position as a direction
notice his performance deterioration and that, after a to do some foolish thing. The pilot crashed the plane
week’s gap in practice, the audience could notice it as and became a paraplegic.
well. Well, naturally, cases like this one get the attention
The hard rule of Use-It-or-Lose-It Tendency tem- of careful thinkers like Boss Buffett, who always acts like
pers its harshness for the diligent. If a skill is raised to an overquiet mouse around his pilots.
fluency, instead of merely being crammed in briefly to Such cases are also given attention in the simulator
enable one to pass some test, then the skill (1) will be training of copilots who have to learn to ignore certain
lost more slowly and (2) will come back faster when really foolish orders from boss pilots because boss pilots
refreshed with new learning. These are not minor advan- will sometimes err disastrously. Even after going
tages, and a wise man engaged in learning some impor- through such a training regime, however, copilots in
tant skill will not stop until he is really fluent in it. simulator exercises will too often allow the simulated
plane to crash because of some extreme and perfectly
20. Drug-Misinfluence Tendency obvious simulated error of the chief pilot.
This tendency’s destructive power is so widely known to After Corporal Hitler had risen to dominate Ger-
be intense, with frequent tragic consequences for cogni- many, leading a bunch of believing Lutherans and
tion and the outcome of life, that it needs no discussion Catholics into orgies of genocide and other mass de-
here to supplement that previously given under “Simple, struction, one clever psychology professor, Stanley Mil-
Pain-Avoiding Psychological Denial.” gram, decided to do an experiment to determine exactly
how far authority figures could lead ordinary people into
21. Senescence-Misinfluence Tendency gross misbehavior. In this experiment, a man posing as
With advanced age, there comes a natural cognitive de- an authority figure, namely a professor governing a re-
cay, differing among individuals in the earliness of its spectable experiment, was able to trick a great many
arrival and the speed of its progression. Practically no ordinary people into giving what they had every reason
one is good at learning complex new skills when very to believe were massive electric shocks that inflicted
old. But some people remain pretty good in maintaining heavy torture on innocent fellow citizens. This experi-
intensely practiced old skills until late in life, as one can ment did demonstrate a terrible result contributed to by
notice in many a bridge tournament. Authority-Misinfluence Tendency, but it also demon-
strated extreme ignorance in the psychology professori- whom you appoint to power because a dominant au-
ate right after World War II. thority figure will often be hard to remove, aided as he
Almost any intelligent person with my checklist of will be by Authority-Misinfluence Tendency.
psychological tendencies in his hand would, by simply
going down the checklist, have seen that Milgram’s ex- 23. Twaddle Tendency
periment involved about six powerful psychological Man, as a social animal who has the gift of language, is
tendencies acting in confluence to bring about his ex- born to prattle and to pour out twaddle that does much
treme experimental result. For instance, the person damage when serious work is being attempted. Some
pushing Milgram’s shock lever was given much social people produce copious amounts of twaddle and others
proof from presence of inactive bystanders whose si- very little.
lence communicated that his behavior was okay. Yet it A trouble from the honeybee version of twaddle
took over a thousand psychological papers, published once demonstrated in an interesting experiment. A hon-
before I got to Milgram, for the professoriate to get his eybee normally goes out and finds nectar and then
experiment only about ninety percent as well understood comes back and does a dance that communicates to the
as it would have immediately been by any intelligent other bees where the nectar is. The other bees then go
person who used (1) any sensible organization of psy- out and get it. Well some scientist – clever, like B. F.
chology along the lines of this talk, plus (2) a checklist Skinner – decided to see how well a honeybee would do
procedure. This outcome displaying the dysfunctional with a handicap. He put the nectar straight up. Way up.
thinking of long-dead professors deserves a better ex- Well, in a natural setting, there is no nectar a long way
planation. I will later deal with the subject in a very hesi- straight up, and the poor honeybee doesn’t have a ge-
tant fashion. netic program that is adequate to handle what she now
We can be pleased that the psychology professori- as to communicate. You might guess that this honeybee
ate of a former era wasn’t quite as dysfunctional as the would come back to the hive and slink into a corner, but
angler in my next-to-last illustration of Authority- she doesn’t. She comes into the hive and does an inco-
Misinfluence Tendency. herent dance. Well, all my life I’ve been dealing with the
When I once fished in the Rio Colorado in Costa human equivalent of that honeybee. And it’s a very im-
Rica, my guide, in a state of shock, told me a story about portant part of wise administration to keep prattling
an angler who’d earlier come to the river without ever people, pouring out twaddle, far away from the serious
having fished for tarpon. A fishing guide like the one I work.
had runs the boat and gives fishing advice, establishing A rightly famous Caltech engineering professor,
himself in this context as the ultimate authority figure. exhibiting more insight than tact, once expressed his
In the case of this guide, his native language was Span- version of this idea as follows: “The principal job of an
ish, while the angler’s native language was English. The academic administration is to keep the people who don’t
angler got a big tarpon on and began submitting to matter from interfering with the work of the people that
many directions from this authority figure called guide: do.” I include this quotation partly because I long suf-
tip up, tip down, reel in, etc. Finally, when it was neces- fered from backlash caused by my version of this pro-
sary to put more pressure on the fish by causing more fessor’s conversational manner. After much effort, I was
bending of the angler’s rod, the guide said in English: able to improve only slightly, so one of my reasons for
“Give him the rod, give him the rod.” Well, the angler supplying the quotation is my hope that, at least in com-
threw his expensive rod at the fish, and when last seen, parison, I will appear tactful.
it was going down the Rio Colorado toward the ocean.
This example shows how powerful is the tendency to go 24. Reason-Respecting Tendency
along with an authority figure and how it can turn ones There is in man, particularly one in an advanced culture,
brain into mush. a natural love of accurate cognition and a joy in its exer-
My final example comes from business. A psychol- cise. This accounts for the widespread popularity of
ogy Ph.D. once became a CEO of a major company and crossword puzzles, other puzzles, and bridge and chess
went wild, creating an expensive headquarters, with a columns, as well as all games requiring mental skill.
great wine cellar, at an isolated site. At some point, his This tendency has an obvious implication. It makes
underlings remonstrated that money was running short. man especially prone to learn well when a would-be
“Take the money out of the depreciation reserves,” said teacher gives correct reasons for what is taught, instead
the CEO. Not too easy because a depreciation reserve is of simply laying out the desired belief ex cathedra with no
a liability account. reasons given. Few practices, therefore, are wiser than
So strong is undue respect for authority that this not only thinking through reasons before giving orders
CEO, and many even worse examples, have actually but also communicating these reasons to the recipient of
been allowed to remain in control of important business the order.
institutions for long periods after it was clear they No one knew this better than Carl Braun, who de-
should be removed. The obvious implication: be careful signed oil refineries with spectacular skill and integrity.
He had a very simple rule, one of many in his large, Teu- I will make a few tentative suggestions. Maybe
tonic company: You had to tell Who was to do What, many of the long-dead professors wanted to create a
Where, When, and Why. And if you wrote a communi- whole science from one narrow type of repeatable psy-
cation leaving out your explanation of why the addressee chology experiment that was conductible in a university
was to do what was ordered, Braun was likely to fire you setting and that aimed at one psychological tendency at a
because Braun well knew that ideas got through best time. If so, these early psychology professors made a
when reasons for the ideas were meticulously laid out. massive error in so restricting their approach to their
In general, learning is most easily assimilated and subject. It would be like physics ignoring astrophysics
used when, life long, people consistently hang their ex- because it couldn’t happen in a physics lab, plus all
perience, actual and vicarious, on a latticework of theory compound effects. What psychological tendencies could
answering the question: Why? Indeed, the question account for early psychology professors adopting an
“Why?” is a sort of Rosetta stone opening up the major over-restricted approach to their own subject matter?
potentiality of mental life. One candidate would be Availability-Misweighing Ten-
Unfortunately, Reason-Respecting Tendency is so dency grounded in a preference for easy-to-control data.
strong that even a person’s giving of meaningless or And then the restrictions would eventually create an
incorrect reasons will increase compliance with his or- extreme case of man with a hammer tendency. Another
ders and requests. This has been demonstrated in psy- candidate might be Envy/jealousy Tendency through
chology experiments wherein “compliance practitioners” which early psychology professors displayed some weird
successfully jump to the head of the lines in front of form of envy of a physics that was misunderstood. And
copying machines by explaining their reason: “I have to this possibility tends to demonstrate that leaving
make some copies.” This sort of unfortunate byproduct envy/jealousy out of academic psychology was never a
of Reason-Respecting Tendency is a conditioned reflex, good idea. I now quit claim of all these historical myster-
based on a widespread appreciation of the importance ies to my betters.
of reasons. And, naturally, the practice of laying out Well, that ends my brief description of psychologi-
various claptrap reasons is much used by commercial cal tendencies.
and cult “compliance practitioners” to help them get
what they don’t deserve. QUESTIONS AND ANSWERS
Now, as promised, I will ask and answer a few general
25. Lollapalooza Tendency – The Ten- questions.
dency to Get Extreme Consequences from
Q. Isn’t this list of psychological tendencies tauto-
Confluences of Psychological Tendencies logical to some extent compared to the system of
Acting in Favor of a Particular Outcome Euclid? That is, aren’t there overlaps in the tenden-
This tendency was not in any of the psychology texts I cies? And couldn’t the system be laid out just as
once examined, at least in any coherent fashion, yet it plausibly in a somewhat different way?
dominates life. It accounts for the extreme result in the The answers are yes, yes, and yes, but this matters only
Milgram experiment and the extreme success of some moderately. Further refinement of these tendencies,
cults that have stumbled through practice evolution into while desirable, has a limited practical potential because
bringing pressure from many psychological tendencies a significant amount of messiness is unfixable in a soft
to bear at the same time on conversion targets. The tar- science like psychology.
gets vary in susceptibility, like the dogs Pavlov worked
with in his old age, but some of the minds that are tar- Q. Can you supply a real world model, instead of a
geted simply snap into zombiedom under cult pressure. Milgram-type controlled psychology experiment,
Indeed, that is one cult’s name for the conversion phe- that uses your system to illustrate multiple psycho-
nomenon: snapping. logical tendencies interacting in a plausibly diag-
What are we to make of the extreme ignorance of nosable way?
the psychology textbook writers of yesteryear? How The answer is yes. One of my favorite cases involves the
could anyone who had taken a freshman course in phys- McDonnell Douglas airliner evacuation test. Before a
ics or chemistry not be driven to consider, above all, new airliner can be sold, the government requires that it
how psychological tendencies combine and with what pass an evacuation test, during which a full load of pas-
effects? Why would anyone think his study of psychol- sengers must get out in some short period of time. The
ogy was adequate without his having endured the com- government directs that the test be realistic. So you can’t
plexity involved in dealing with intertwined psychologi- pass by evacuating only twenty-year-old athletes. So
cal tendencies? What could be more ironic than profes- McDonnell Douglas scheduled such a test in a darkened
sors using oversimplified notions while studying bad hangar using a lot of old people as evacuees. The pas-
cognitive effects grounded in the mind’s tendency to use senger cabin was, say, twenty feet above the concrete
oversimplified algorithms? floor of the hangar and was to be evacuated through
moderately flimsy rubber chutes. The first test was made of wisdom and good conduct and facilitates the avoid-
in the morning. There were about twenty very serious ance of disaster. Tendency is not always destiny, and
injuries, and the evacuation took so long it flunked the knowing the tendencies and their antidotes can often
time test. So what did McDonnell Douglas next do? It help prevent trouble that would otherwise occur.
repeated the test in the afternoon, and this time there Here is a short list of examples reminding us of the
was another failure, with about twenty more serious great utility of elementary psychological knowledge:
injuries, including one case of permanent paralysis. 1) Carl Braun’s communication practices.
What psychological tendencies contributed to this
2) The use of simulators in pilot training.
terrible result? Well, using my, tendency list as a check-
list, I come up with the following explanation. Reward- 3) The system of Alcoholics Anonymous.
Superresponse Tendency drove McDonnell Douglas to
act fast. It couldn’t sell its airliner until it passed the test. 4) Clinical training methods in medical schools.
Also pushing the company was Doubt-Avoidance Ten- 5) The rules of the U.S. Constitutional Convention:
dency with its natural drive to arrive at a decision and totally secret meetings, no recorded vote by name
run with it. Then the government’s direction that the until the final vote, votes reversible at any time be-
test be realistic drove Authority-Misinfluence Tendency fore the end of the convention, then just one vote
into the mischief of causing McDonnell Douglas to on the whole Constitution. These are very clever
overreact by using what was obviously too dangerous a psychology-respecting rules. If the founders had
test method. By now the course of action had been de- used a different procedure, many people would
cided, so Inconsistency Avoidance Tendency helped have been pushed by various psychological tenden-
preserve the near idiotic plan. When all the old people cies into inconsistent, hardened positions. The elite
got to the dark hangar, with its high airline cabin and founders got our Constitution through by a whisker
concrete floor, the situation must have made McDonnell only because they were psychologically acute.
Douglas employees very queasy, but they saw other em-
ployees and supervisors not objecting. Social Proof 6) The use of Granny’s incentive-driven rule to ma-
Tendency, therefore, swamped the queasiness. And this nipulate oneself toward better performance of one’s
allowed continued action as planned, a continuation that duties.
was aided by more Authority Overinfluence Tendency. 7) The Harvard Business School’s emphasis on deci-
Then came the disaster of the morning test with its fail- sion trees. When I was young and foolish I used to
ure, plus serious injuries. McDonnell Douglas ignored laugh at the Harvard Business School. I said,
the strong disconfirming evidence from the failure of “They’re teaching twenty-eight year-old people that
the first test because confirmation bias, aided by the high school algebra works in real life?” But later, I
triggering of strong Deprival Superreaction Tendency wised up and realized that it was very important
favored maintaining the original plan. McDonnell Doug- that they do that to counter some bad effects from
las’ Deprival Superreaction Tendency was now like that psychological tendencies. Better late than never.
which causes a gambler, bent on getting even after a
huge loss, to make his final big bet. After all, McDonnell 8) The use of autopsy equivalents at Johnson & John-
Douglas was going to lose a lot if it didn’t pass its test as son. At most corporations, if you make an acquisi-
scheduled. More psychology-based explanation can tion and it turns out to be a disaster, all the people,
probably be made, but the foregoing discussion is com- paperwork, and presentations that caused the fool-
plete enough to demonstrate the utility of my system ish acquisition are quickly forgotten. Nobody wants
when used in a checklist mode. to be associated with the poor outcome by men-
tioning it. But at Johnson & Johnson, the rules
make everybody revisit old acquisitions, comparing
Q. In the practical world, what good is the thought
predictions with outcomes. That is a very smart
system laid out in this list of tendencies? Isn’t prac-
thing to do.
tical benefit prevented because these psychological
tendencies are so thoroughly programmed into the 9) The great example of Charles Darwin as he avoided
human mind by broad evolution [the combination confirmation bias, which has morphed into the ex-
of genetic and cultural evolution] that we can’t get treme anti-confirmation-bias method of the “dou-
rid of them? ble blind” studies wisely required in drug research
Well, the answer is that the tendencies are probably by the FDA.
much more good than bad. Otherwise, they wouldn’t be
there, working pretty well for man, given his condition 10) The Warren Buffett rule for open-outcry auctions:
and his limited brain capacity. So the tendencies can’t be Don’t go.
simply washed out automatically, and shouldn’t be. Nev-
ertheless, the psychological thought system described,
when properly understood and used, enables the spread
Q. What special knowledge problems lie buried in But ordinarily, when you try to use your knowledge of
the thought system demonstrated by your list? psychological tendencies in the artful manipulation of
Well, one answer is paradox. In social psychology, the someone whose trust you need, you will be making both
more people learn about the system the less it is true, a moral and prudential error. The moral error is obvious.
and this is what gives the system its great value as a pre- The prudential error comes because many intelligent
venter of bad outcomes and a driver of good outcomes. people, targeted for conscious manipulation, are likely to
This result is paradoxical, and doesn’t remind one of figure out what you are trying to do and resent your
elementary physics, but so what. One can’t get all the action.
paradox out of pure math, so why should psychology be
shocked by some paradox? Q. Aren’t there factual and reasoning errors in this
There is also some paradox in cognition change that talk?
works even when the manipulated person knows he is The answer is yes, almost surely yes. The final revision
being manipulated. This creates a sort of paradox in a was made from memory over about fifty hours by a man
paradox, but, again, so what. I once much enjoyed an eighty-one years old, who never took a course in psy-
occasion of this sort. I drew this beautiful woman as my chology and has read none of it, except one book on
dinner partner many years ago. I’d never seen her be- developmental psychology, for nearly fifteen years. Even
fore. She was married to a prominent Los Angeles man. so. I think the totality of my talk will stand up very well,
She sat down next to me, turned her beautiful face up, and I hope all my descendants and friends will carefully
and said, “Charlie, what one word accounts for your consider what I have said. I even hope that more psy-
remarkable success in life?” I knew I was being manipu- chology professors will join me in:
lated by a practiced routine, and I just loved it. I never 1) making heavy use of inversion;
see this woman without a little lift in my spirits. And, by 2) driving for a complete description of the psycho-
the way, I told her I was rational. You’ll have to judge logical system so that it works better as a checklist;
yourself whether that’s true. I may be demonstrating and
some psychological tendency I hadn’t planned on dem- 3) especially emphasizing effects from combinations
onstrating. of psychological tendencies.

Q. Don’t we need more reconciliation of psychol- Well that ends my talk. If in considering what I have
ogy and economics? said you had ten percent the fun I had saying it, you
My answer is yes, and I suspect that some slight progress were lucky recipients.
is being made. I have heard of one such example. Colin
Camerer of Caltech, who works in “experimental eco-
nomics,” devised an interesting experiment in which he
caused high I.Q. students, playing for real money, to pay
price A+B for a “security” they knew would turn into A Selections from three of Charlie Munger’s talks, combined into one
dollars at the end of the day. This foolish action oc- talk never made, after revisions by Charlie in 2005 that included
curred because the students were allowed to trade with considerable new material. The three talks were:
each other in liquid market for the security. And some
students then paid price A+B because they hoped to (1) The Bray Lecture at the Caltech Faculty Club, February 2,
unload on other students at a higher price before the day 1992;
was over. What I will now confidently predict is that,
despite Camerer’s experimental outcome, most econom- (2) Talk under the Sponsorship of the Cambridge Center for
ics and corporate finance professors who still believe in Behavioral Studies at the Harvard Faculty Club, October 6,
the “hard-form efficient market hypothesis” will retain 1994; and the extensive revision by Charlie in 2005, made from
their original belief. If so, this will be one more indica- memory unassisted by any research, occurred because Charlie
tion of how irrational smart people can be when influ- thought he could do better at age eighty-one than he did more than
enced by psychological tendencies. ten years earlier when he knew less and was more harried by a
crowded life and was speaking from rough notes instead of revising
Q. Don’t moral and prudential problems come with transcripts.
knowledge of these psychological tendencies?
The answer is yes. For instance, psychological knowl- (3) Talk under the Sponsorship of the Cambridge Center for
edge improves persuasive power and, like other power, Behavioral Studies at the Boston Harbor Hotel, April 24, 1995.
it can be used for good or ill. Captain Cook once played
a psychology-based trick on his seamen to cause them to
eat sauerkraut and avoid scurvy. In my opinion, this
action was both ethical and wise under the circum-
stances, despite the deliberate manipulation involved.
!