How Stupid Are You?
Bruce Lee, Ray Dalio, Rearview history, and Stupid People
Neil Timmons has a great podcast, The Real Grit podcast. One of his highest ranking episodes were he and I free-wheeling about my book, A CEO Only Does Three Things. Give it a listen and subscribe to Real Grit to hear how other entrepreneurs and thought-leaders have weathered the storms in their lives and careers.
“Workaholics try to fix problems by throwing sheer hours at them. They try to make up for intellectual laziness with brute force. This results in inelegant solutions.” — Jason Fried
Ray Dalio, founder of the second largest hedge fund in the world, and famed investor and thinker has identified three problems facing America and the world:
First, the creation of enormous amounts of debt and the printing of a lot of money. This results in inflation, which takes buying power away from people.
Second, internal conflicts. Political conflict between the left and the right, the haves and the have-nots, and people with different values.
And third, a great power conflict on a global stage. In 1945, the US had 80% of the world’s gold, and we [accounted for] 50% of the world’s economy. And we had a monopoly on military power. And now that gap has narrowed.
Dalio is smart. So smart. And yet … I’m not sure he’s going far enough here. Taking an assessment of where we are is sort of valuable, but venturing educated guesses as to where that takes us would be better.
One always hate to be the Herald of Doom (sounds like a good Marvel movie), but the last time we had runaway inflation across the world, really divided politics, and friction between great powers, a World War erupted.
Those who study History develop a sense of how things felt to those living before things came to pass. The summer before the First World War people around the world were wondering if it would happen, seeing all the right markers, eventually concluding that it was inevitable but that it would be short and not accomplish much. More than any other armed conflict, I think WWI changed the world more in social, financial and political terms than any other conflict. We are still a post-WWI generation.
When WWII was in its beginning phases, no one could believe how little fighting was going on. Very little armed conflict in places that Americans and Brits cared about. All of it was in far off places with funny sounding names that surely weren’t important enough to spill over to become something grander and conflagutory. The considered opinion was that Hitler would spend his energy enlarging Germany and be done. That didn’t happen and many of us still have WWII legacies we honor.
Are were there now? History doesn’t repeat itself, people just prefer the easy way of life in the hopes that things take care of themselves. They don’t really, but that doesn’t mean that the rational choice for most people isn’t to still hope against hope that we dodge this bullet, too.
Policymakers and public intellectuals, however, should have a different charge. The conversation in the public square needs to be: “This is about to be worse than we currently think is possible unless we start drawing bright lines about what must be done.” And the let the debate ensue.
“The Righteous Man shall fall seven times and yet rise again.”
— Psalms 24:16
I’m really fortunate to be acquainted with mostly intelligent people. I would hazard a guess and say that my ratio of smart to dumb to stupid people is higher than the average person’s. That isn’t accidental, it’s the result of constructing a world around me that rewards intelligence and ignores anything else.
In that world, it can be a shock to encounter someone who isn’t playing with the same faculties as others. I’m sometimes struck by the idea of “Oh! This guy is dumb,” and it’s always a bit of a shock when that happens.
Two weeks ago I was having a conversation with a new acquaintance and it struck me that this person is not smart. There’s nothing mentally wrong with him, he forms opinions and sentences, cares about ideas, but just doesn’t exhibit the spark of intelligence that most of my friends have. Nothing wrong with that, we had a fun conversation that was kind of like eating a Publix cake … all frosting and sugar but nothing valuable or nourishing to take with me after it was gone.
Dumb people are fine. They are often pleasant, they do the best with what they have, they like to participate and can recognize the fireworks that intelligence brings to the party, even if they can’t supply them much. A lot of dumb people even know they’re dumb, and are ok with it.
Stupid people on the other hand … Just no. Stupid people are convinced that they are intelligent but never connect intelligence to the quality of their decisions-based outcomes. Ever notice how everybody you know thinks they are great drivers? Or great kissers? Or great dancers? It’s the same with decision-making. We all believe we are really good at making decisions.
Hardly anyone thinks they make bad decisions, they just believe in bad outcomes that come from those decisions. And that makes them dangerous because decisions don’t happen in a vacuum. They affect others, too.
One of my favorite economic historians is an Italian named Carlo Cipolla who wrote a wonderful essay under the title Allegro, ma non troppo or "Happy, but not too much," playing off the musical meaning of Allegro, "Quickly, but not too quick"). He also wrote a treatise called The Basic Laws of Human Stupidity in which he concluded:
Everyone underestimates the number of stupid individuals among us;
The probability that a certain person is stupid is independent of any other characteristic of that person;
A stupid person is a person who causes losses to another person while deriving no gain and even possibly incurring losses;
Non-stupid people always underestimate the damaging power of stupid individuals;
A stupid person is the most dangerous type of person.
Ultimately he asserts that stupid decisions are actions that are bad for you and damaging to others.
With that definition in mind, how stupid are you?