Plain English with Derek Thompson - What Most People Get Wrong About Wealth, Fame, and Happiness

Episode Date: November 10, 2023

Morgan Housel, the author of 'The Psychology of Money' and a partner at Collab Fund, talks about his new book, 'Same as Ever,' on the virtues of ancient truths in a world where everything seems to be changing. We also talk about why so many successful people are miserable, why great ideas don't scale, the difference between happiness and contentment, the wisdom of a Snickers bar, the downsides of fully optimized culture, and how to write. If you have questions, observations, or ideas for future episodes, email us at [e-mail].  Host: Derek Thompson Guest: Morgan Housel Producer: Devon Manze Learn more about your ad choices. Visit podcastchoices.com/adchoices

What would you do if you got scammed? Would you suffer in silence, or would you do something about it? Well, I got scammed once, and this is the story of what I did. I'm Justin Sales, the host of the Wedding Scammer, a true crime podcast from The Ringer. And for seven episodes, we're hunting a comment. A guy with a lot of aliases, a guy who's ruined a lot of weddings. And with the help of some friends, I just might be able to catch him. Listen to The Wedding Scammer on Spotify or wherever you get your podcasts.

Today's episode is a conversation with the finance author Morgan Housel. I want to get us started here with three stories, three very short stories, and they have a theme that you'll probably pick up on faster than I can even say it. Story one is Starbucks. In 1994, Starbucks had been around for a little more than 20 years. They had about 400, 420 stores. It was growing slowly. This was back, of course, when Americans were still learning how to pronounce the word capital. Aquino. In the late 1990s, something happened. In 99 alone, Starbucks opened 600 new stores. In 2007,

Starbucks opened 2,500 new stores. That's one new Starbucks every four hours. And then the deluge. In 2008, the economy crashed, and Starbucks was one of the most blatantly over-extended retailers in America. The stock fell 73%. As Howard Schultz wrote, quote, when undisciplined growth became a strategy, we lost our way. End quote. A company that grows quickly, sometimes crashes quickly. Two.

Trees. Most young tree saplings spend their early decades under the shade of a mother's canopy. With limited sunlight, the bark grows slowly. The wood develops hard and a solid density. Plant the same tree in an open field, and the sapling absorbs so much sunlight

that it's as if the tree grows in hyperspeed. Without time to densify, the bark develops an airy softness. Fungus and disease find their way into the wood. A tree that grows quickly tends to rot quickly. Three. Fish. Take two identical trout.

Put one in abnormally cold water. Put the other in abnormally hot water. And the trout in cold water will grow slowly while the trout in hot water will grow faster than normal. Take the two fish, return them to regular water, and their sizes will converge to normal. But inside, they won't be normal. The hot water fish, the one with sped up growth in his early years,

will live significantly shorter life. That's because, as a team of biologists at Glasgow University found, just as a machine put together in haste tends to break down upon where. bodies that grow too fast fail to devote the necessary resources to maintaining health. An animal that grows quickly tends to die quickly.

For Morgan Housel, the finance writer and the author of the new book Same as Ever, where these three stories are located, these three stories have a very specific lesson. Actually, they have two lessons. The first lesson is the obvious lesson. Patience is a virtue.

Haste makes weight. You can't make a baby in one month by getting nine women pregnant, et cetera, et cetera. Pick your cliche. They're all true. Across business, biology, ecology, there is such a thing as going too fast. But there is another lesson here, I think, a subtler lesson, a lesson that, be quite honest, I kind of prefer. We sometimes fall prey to the belief that any virtue, any idea, can scale infinitely. we say, okay, if growth is good, then surely 1,000-x growth is 1,000 times better.

And therein lies the problem. In education policy discussions, sometimes a magical-seeming education intervention will succeed in some small classroom, and well-intended reformers will urge the entire state to adopt the same reform only to recognize that when you scale certain public policies, what worked at the scale of 20 does not work at the level of 20 million. The history of business, of ecology, shows that the principles of success do not scale infinitely.

Sometimes a good idea on steroids becomes a terrible idea. Today's episode is about that principle, the dark side of optimization in finance and in life. It's also about so many other things, money, success, happiness, fame, luck, writing advice. Some of the conversations we have on this show are deliberately organized.

I tell myself, I want to review five risks to economic growth. Let's go one through five. Or maybe I'll say I want to review a history of Israel from 1870 to 1967 with one historian guiding us hand in hand and chronological order. This episode is the absolute opposite of all of that. This episode is deliberately smorgasbordy. And my guest host at the smorgasbord table is Morgan Housel. He is a partner at Collaborative Fund.

He's the author of the Psychology of Money. And his new book is same as ever on the virtue and the power of ancient truths in a world where everything seems to be changing. I'm Derek Thompson. This is plain English. Morgan Housel, welcome back to the show. So good to see you, Derek. How are you? I'm doing great. Your book is great. I'm so excited to talk to you about it.

Thank you. Let's start where the book starts. What did Warren Buffett say about Snickers? This is a year or two ago. I was having lunch with a guy who was very close with Warren Buffett, and he was telling me a bunch of stories. Not a lot of Buffett stories that are not already well-known and well-played out, but this is the one that I had never heard. It was an experience that he had. And this guy was driving around Omaha with Warren Buffett in 2009. And during that period, the economy is like in wreckage. And because from the housing bus, the Great Recession, and my friend says to Warren, he says, Warren,

how are we ever going to get out of this? The economy is such a mess. Like how does this ever change? And Warren says, do you know what the best selling candy bar was in 1962? And my friend says, no. And Warren says, Snickers. And the Warren says, do you know what the best selling candy bar is today? And my friend says, no.

And Warren says, Snickers. And he said, that was it. That was the end of the conversation. The obvious takeaway is just like, something's never change. You don't have to sit here and say, what's going to change in the future? Something's never change, and that's what you pay attention to. And I think Buffett, as an investor, that's when he's done it. And that was one of many little stories that I came across where I was like, yes, that's how you see the future is by predicting what's not going to change.

And a lot of this was my background as a writer, as a financial writer. And I'm sure you can relate to this as well of one thing that's always bothered me is how bad we are as an industry at predicting recessions, bear markets, nobody can do it. Nobody can do it. And there's two things you can do with that information. One is you can just become kind of a cynic and say nobody knows anything, don't even try. Or what I kind of started leaning towards was, let's try to find the things that never change and focus all of our attention on those and not pretend like we can focus on and predict the things that are going to change. That was like some of the genesis of this book. And not just the book, but how I've changed my thinking over the last decade.

The idea that there is wisdom and paying very close attention to what does not change, despite so many market forces and cultural forces trying to get us to pay attention to things that just changed, I think it's a really sneaky, powerful idea. It's powerful at the level of individuals. It's powerful at the level of the collective. It applies so powerfully to our business, the news.

I mean, the words right there, the news, the age adjusts, you have this fact in the book, that the age-adjusted death rate from heart disease has declined 70% in the last 70 years. So roughly a negative 1.5 percentage decline on an annualized basis. There is no headline in any newspaper or any magazine that points out the annual decrease in age-adjusted death rate from heart disease. And yet its decline might be one of the most powerful stories in the world. And I am constantly on the lookout for ideas like this, finding ways to,

to make interesting that which is more important than it is new. Does that make sense, right? And that's what this book is about, it seems to me, trying to get us to see that there is so much value in that which is old. It reminds me there's a line from the British author Martin Amos, where he's describing writing, where he says writing is a war against cliche. And I love that idea. But in a way, living is a war against the war against cliche.

Like there's so much in life that's like trying to get us to forget the oldest wisdom. There's so much that's competing for our attention that's trying to get us to lose grip of that, which is those ideas that have stood the test of time. And so much of a good life is staying in touch with those ideas despite the chaos that's swirling around us. I mean, both you and I are writers. I heard this idea from Nassim Taleb recently where he was like, if you're a writer today and you want to be read in the future, like you're writing a book and you hope that people will read it 20 years from now,

write a book that people would have read 20 years ago. That's how you do it. And if your book is not timeless in the past, if it wouldn't have been relevant to somebody 20 years ago, it's probably not going to be relevant to somebody 20 years from now. I thought that was just such a great way to put this. And that's what I want to do with my writing. I was always, so years ago, I was a columnist at the Wall Street Journal.

And whenever I would write a column, sometimes the editors would say, hey, good column, but what does this have to do with this week's news? and I understood why they did that, but I always wanted to push back and say, I think it should be the opposite. I think if an article is only relevant this week, it's not relevant at all.

And I only want to read things that I'm still going to care about five, ten, fifty years in the future because those are things that I know I can put a lot of emphasis into. And that's, I mean, like one other cliche here, one of the things that's really hard with writing is that the style of writing changes over time.

So there's a lot of books that were, so popular 100 years ago that if you tried to read them today, it's written in like not quite old English, but it's just like it's so hard to read. But the best books, like the most important truths, people have been saying forever. There's this great quote that I love from,

oh, who was it who said this? May have been Voltaire. He says, the wise have always said the same things and fools have always done just the opposite. And he says it's like, you know, thousands of years ago. Like these things have always been true.

of like how to live a good life, how to invest your money appropriately. So many of these things don't change over time. The details change. The characters change, but it's the same movie over and over and over again. One of the things that really got me into the idea for this book, too, is my favorite finance book that's ever been written is a book called The Great Depression, A Diary. I may have talked about it with you on this show before. It's just sensational. And it's this guy, it's this lawyer in Ohio named Benjamin Roth, who kept a diary during the Depression. And during that, there's an entry in there from 1932 where I read it. And I thought to myself, if you change the dates on this post to 2008, everything he said

would have fit right into what happened in 2008. And then like two pages later, he writes in his diary in 1932. He says, if you change the dates from 1932 to 1894, everything would have fit in. It's the exact same thing that happened in 1932 as happened in 1894. So then it was like, yeah, see, it's the same movie. over and over and over again. The characters change about like who's causing the financial crisis, but how people react to greed and fear and uncertainty never changes. And it won't change 100 years from now. So let's put all of our focus into that. And let's not pretend that we know what GDP and

Q4 of next year is going to do. Let's just focus on the things that never change. Your book is about all of these ideas across money and power and fame and happiness. And so we're going to talk about money, power, fame, happiness. And at the end, we'll talk a little bit about your writing process. Let's start with money and happiness. I had a podcast a few weeks ago about a paper that came out looking at general social survey data from Americans over the last 50 years that showed that the relationship between more money and more happiness was basically linear. Happier people tend to have more money. Now, this is going to sound like maybe one of the dumbest questions I've ever asked in the show, but I'm going to ask it anyway because I think

the question itself might sort of hide some false assumptions we have. Why do you think people with more money tend to be happier. I think there's a lot of nuance in here but I actually think for most of these surveys

and this is why they tend to be controversial. Happiness is the wrong word. The word that should be used is contentment. Now contentment, those are subtly different things but it's really important.

And I think a lot of what money can do is not so much that it makes you happier even if that is what comes through in the measurements. But what it does is it's reducing misery. And that's a great

thing. That's something that you should strive for that's going to give you a better life, but it's not necessarily happiness. People assume that happiness is like waking up grinning ear to ear. And by and large, wealthier people are not doing that. But if it can remove the stress and uncertainty of medical bills, if it can give you a shorter commute, if it can give you just more leeway to deal with a recession, whatnot, that's a life improvement. I just don't know if I would call it happiness. So most of that is like, that's what we know about, about, it's like, it's really hard to understand what's going to make you happy, but you know a certainty what's going to make you miserable. And if you can use your money to reduce those things, you move the needle a lot in terms of life, well-being. And but I think a lot of people, if they do get become wealthy, and wealthy might be the wrong word.

Just, just you get a raise. You have some sort of, your net worth is going up. Why doesn't it make you as happy as you thought? It's because happiness is the wrong variable to track. But are those people, I've noticed this for myself as I get older and have built up a little bit more net worth. Am I happier? Like, no, probably not.

Am I less stressed than I was 10 years ago? Yes, probably. Do I have less career anxiety? Yes. All of those are very good things, but it's not happiness. I don't know if I smile and laugh more today than I did 10 years ago. So to me, that's the biggest nuance in these studies. I think I said this with you before.

It's maybe more appropriate to think of money like a vaccine. against misery than a performance enhancing drug for joy. You and I did a show when you said that, and I just wanted to drop my pen and be like, I don't know why I try to come up with these phrases. That was so brilliant how you put it. I do wonder, though, do you think there are certain kinds of people

for whom more money doesn't make them happy? We always talk about this idea of, yes, happiness scales linearly with money, but you're a fan of biographies, of big, famous, rich luminaries from the past. And in so many ways, these biographies are very often stories of quiet misery that loudly to the public they give off this sense of, oh, my God, the Vanderbilt's and the Gettys and Philip Roth and Elon Musk, like, they're so incredibly powerful.

And then you look a little bit underneath the hood in these biographies. And it's like, wow, there's a lot of pain here, even though we're looking at the richest people in the world. So how do you square that? I think at a macro level you can summarize it as there's two things that you can do with money. You can use it as a tool to give yourself a better life or you can use it as a yardstick for other people to measure you by. And I think the latter is where you get rich people who are kind of miserable. They're not using their money to give themselves independence or autonomy or privacy or even luxury and comfort.

They're using it as something for other people to gauge their usefulness in the world by. And I think a lot of them super mega wealthy fall into that trap. And like there's also a lot of super mega wealthy, you know, the DECA or cent of billionaires who, you know, they're building their companies because that's their obsession. Their obsession, you know, Jeff Bezos's obsession was figuring out retail and figuring out AWS. Bill Gates' obsession is software. Warren Buffett's is picking stocks.

But their net worth is the measurement of how well they're doing at that. And so if you're if that's if that's the purpose of your money. that I think is always going to be kind of a miserable thing, if only because there's probably somebody else who's making more money than you. So if you use your net worth as a yard as a as a as a guidepost for how people should measure you by, well then by definition, that guy and that guy and this woman have more than you, so they're doing better. But the people who can use their money to just give themselves independence, autonomy, quiet time, health, that those are the people who actually use money to have a better life. And I think I think you can

really distinguish it between one of those two camps when you dig into these people. Yeah, comparison is very much the thief of joy. I feel like when you're talking about yardsticks and you're talking about status, you're circling this concept of fame. And I've been thinking a lot about the intersection of fame and the world we inhabit on the internet. I feel like the feeling of fame, the search for fame, the desire for some kind of public attention and notoriety, has clearly been democratized by social media and the internet.

the ability to feel 15 seconds of fame, that little burp of mass attention, this was once a precious asset. Now it's practically debased as a currency. Everyone can feel it at some point. And I don't feel like we as a society have reckoned with just how strange fame is. And I'm talking about fame both in like the big picture,

Beyonce Taylor Swift's definition of fame, but also that feeling of mass attention when a little thing that you write seems to go viral on like a subreddit, or on X or Twitter or Instagram. Like, there is so much that seems to be telling us that fame is like this product that everybody wants. And if you look at the reviews of the product, everybody hates it at some point in their life. You know, you have this.

What's your Will Smith quote again? I love this idea. He says, becoming famous is the best feeling in the world. Being famous is okay. and losing fame is abject misery. When I heard that, I was like, oh, that is so true. I also think that's the same for becoming wealthy. Getting wealthier is great.

Being wealthy is okay, and losing wealth is miserable. I think that really plays up. I was talking to not a friend, just someone who I met recently who has a very large online presence. And I asked him, I said, how often do you get recognized in public? And he said, roughly every 30 seconds. And I said, my response was, that's off, that sounds awful.

And he responded and said, yeah, it is. You can't go grocery shopping without people just wanting a picture. And that sucks. That is miserable. If you think about one of the things that money can do to you to give yourself a better life, it's independence, autonomy, privacy you can put in that bucket, fame is the opposite. It's like this, it's like this social debt that's weighing you down.

In terms of people always paying attention to you, thinking that you're somebody that you're not. And you're right that since we have democratized fame with social media, it's now a more tangible goal for everybody in the way that when you and I were kids in the 1990s, we may have dreamed about becoming the next Tom Cruise, but realistically, it's never going to happen. Whereas today, if you upload to TikTok every day, decent chance that one of those is going to hit eventually. Like, you actually have a fighting chance of becoming quote-unquote famous. And you had a stat one time. I forget what it was about the number of TikTok videos that had, I think, 10 million views compared to the number of like blockbuster videos or

it's like 200 to one or something. That like there's literally just like for lack of a better word, nobody's who are getting more attention than Tom Cruise was getting, you know, 20 years ago. I often think too that and this is maybe pretty obvious that in the next generation, there's not going to be the Tom Cruise kind of celebrity. It's going to be the Mr. Beast kind of celebrity where it's not going to be like, oh, you are selected by the Hollywood studio and you got through all the hurdles to get there, it's just going to be like, if you upload a video, that's awesome, like, boom,

it's so, it's such a meritocracy in a way that it wasn't, which is great. That's amazing. That's how it should be. That's a great world. But it also makes fame more tangible and more feasible than it ever was. And with fame is also like some form of infamy about sometimes you're going to go viral for ways that you didn't intend or they're going to twist it and manipulate it for ways you didn't intend. And when that happens when you're 15, I can't fathom what that does to your psyche.

Yeah, it really does feel like with fame. Imagine a product. Imagine a watch that everybody wanted. Everybody wanted this watch. And if you went online to look at the reviews of the watch among people who had lived with the watch for five years, it had 0.5 out of five stars. Everyone was like, this thing is so annoying. It keeps breaking down. It is a constant burden on my life. It doesn't last. As it falls apart on my hand,

it's ripping it my skin. It is the experience of wearing it. Is that a physical pain? That's a fucking weird watch. But that is a lot of people's relationship with the concept of fame. That watch is sold out. Everybody wants it.

There's a line out the door for that watch. It goes even deeper than fame, though. I think some people listening this far in the show, it might have like a little voice in their head that's like, I'm not really motivated by fame at all. Or, Derek, of all the things to do a podcast on in this troubled world, why are we evaluating the happiness of Will Smith from afar? And I want to be clear about two reasons why I think the false promise of fame is broadly important. One is, as I just said, the fact that the search for fame has so clearly been democratized. And two, I think this

question goes to the deeper concept of admiration. Who do we choose to look up to and why? Whose lives do we seek to emulate? And why? Who are our heroes? And what about them makes them heroic to us? And I think one of the underrated benefits of reading the biographies of really successful people is seeing with crystal clarity, 4K definition, how horrible some of them are, how toxicly

obsessive, how lonely, how tortured. There is something, I think, sneaky, profound about the idea that the history of greatness is so often a co-history of quiet misery. Whenever I read a biography of a very successful person, I don't think there are any exceptions to this, not a single one. At the end of the biography, I think to myself, I'm so glad this person exists. I'm glad for what they created and their new inventions, new companies, and never in a million years what I want their life. Because when you dig into the biography, not the headline of what their net worth is or how big their house is, but the biography of what it took to get there, you realize that most of that mega success, and this is not just true in business. I'm sure it's true in acting and music.

The mega success comes from just a completely fanatical devotion to one thing. And that fanatical devotion comes at the expense of everything else. Usually your family, your friends, your sanity, your sleep, your health, whatever it would be. And so that's why I'm like, I'm glad they exist. but I think it was Patrick O'Shaughnessy who said, who's asked, if you had to describe the super successful people with one word, what would it be? And he said, tortured. And I thought that's, I think that's so, I think they wake up every morning tortured, that they have this mega goal that they're chasing that they haven't accomplished yet. And that's too, that's another one of like, I'm glad you exist, but why would I want that? Why would I aspire to that? So this is where

people go astray a lot. It's easy to say, I want Warren Buffett's net worth. Of course. I want Bill Gates of House. Of course, I want his private Jeff. Of course, that looks amazing. But you have to take the full package and what got them there. This is true if you study Kobe Bryant or Michael Jordan. Of course, like, who would not want to be the next Kobe Bryant or Michael Jordan? Like, amazing. But you realize the devotion and the pain of what got them there. And all of a sudden, you're like, no, actually, I don't, I don't want that for one second. So I heard this thing recently of somebody, this is from Mr. Beast. Someone, when another YouTuber comes to Mr. beast and says, hey, I want feedback on my videos. Like, I made a video or two. Give me feedback on how it was.

He tells them, he says, go make a hundred videos, and then I'll give you feedback. And he said, one of two things happens. Either they give up after four videos. They're not going to make 100 videos, or if they actually do it, they don't need his help anymore. And that's what it is. Like, if you actually want to get good at these things, do the extremely hard thing that no one else is willing to do. And they're not willing to do it because it sucks. It's miserable. It hurts. it's painful. And so that's like, well, I think one way to sum this up. I forget who said this quote recently, but it's so great. They said, people are not wired for happiness. They're wired for status. That I think is like, that's a really important part of this. And that's why we still keep

chasing the watch, even though it's getting bad reviews, is that we are wired, maybe from evolution just to like the goal is that is that I need to have more than you. It doesn't matter if it's making me happy to get there. The goal is that you have X and I want, I need X plus one. in order to get ahead in the world. I think that's what a lot of it is. And it's just like it's a status game that's so disconnected from happiness. And of course that's what it is,

but then we become dumbfounded at why chasing that status is not making us happier. Do you believe in luck? Oh, absolutely. Not only do I believe it. I think it's one of the main drivers in the world. Bill Gates went to one of the only high schools

in America that had a computer. And look, there were other students who went to that high school who did not go on to build a trillion dollar company. So it's not to say that he was, was not smart and talented at hardworking. But there's all these, whenever you look at it, there's always an element of something that that person had absolutely no control over

whatsoever that they could not influence in any direction that had not just some, but an incredible influence on that success. Daniel Kahneman, the Nobel Prize winning psychologist, has said, he just put it really bluntly. And he said, the more outsized the success, the more luck played a role. And it's usually not 100%. But when we look at the Buffets, the Bezos is the must. the mega success, it's easier to look at the abnormal talent they have. But in all those

situations, there is a more abnormal element of luck that played a role. It's an issue to me that when we talk about luck, we tend to talk about luck as it is related to financial success, wealth, status, accomplishments. The way that luck has played maybe the biggest part of my life when I think about just the most bizarre serendipitous thing to happen to me other than just like the fact of my genetic existence. It's my marriage. So I met my wife on Bumble. And what happened is we were both living in Manhattan in 2015. We did not know each other. We did not have any common friends. Our common friends did not share common friends. We were four degrees separate, we were probably four degrees separated from each other. We're both on Bumble. And my wife is

doing the thing where she's, you know, swiping right and left on faces that appear to her on the phone, she sees my face and she swipes left. She rejects me. But there was a new program that had just been loaded onto Bumble for that iPhone, which allowed you to shake the phone and get back the face that you just swipe left on. And something in my wife's brain thought, you know what, maybe I wasn't initially attracted to this guy's face, but there was something maybe about it that I might be attracted to in the longer run. She shakes her phone, I come back into the picture, very literally.

She swipes right, the rest is history. And I think sometimes, like our marriage, my daughter's life, her existence, the genetic fact of my daughter's existence, her every breath, the texture of every day that I spend with Laura, hangs on the tenuous thread of a software developer at Bumble, who decided someday I will never know to add a feature that allows people to shake their phone and get back a face that you've just rejected. Like that's so incredible. That is life.

Like this idea that like, oh, like life is just, you know, opportunity preparation. I don't know. I think sometimes life is just like a software developer you'll never know to add a program that created your marriage. Yeah. That created your, that created your new daughter. Congratulations, by the way. Thank you. And I'll tell you my very quick version of this too, because I think Everyone has some version of the story. When I started college, I was a business major, and during orientation, you sat at a table by your major. And I walked into orientation.

I think I was late, and there were no more seats at the business table. But there was an empty seat at the economics table. So I was like, oh, I'll just sit there. I sat next to this girl who became one of my inseparable best friends. She and I were just, we just saw eye to eye on everything. She was great. And she introduced my wife and I on a blind date. She was a coworker with my wife and she was a friend of mine. She introduced us. So I often think,

like, if there was an empty chair at the business table during orientation, I would not have met her and I would not have met my wife. I would not have had this career. I wouldn't have had my two kids. So for both you and I, what we just explained, that element of pure dumb luck was not just some element of our life. It's arguably the most important thing that's ever happened to us. And it was utterly out of our control. So I and you and everyone goes through their day trying to plan and predict and prepare. And the most important things are. completely and utterly out of our control. I think when you look at how fragile the world is in that sense, I wrote about insane as ever, one of, like a macro version of this. And it was from the historian,

David McCullough, who was just an absolute gem of a historian and writer died not too long ago. But one of his books is on the Revolutionary War. And he's writing about the scene during the Battle of Long Island, when George Washington and his troops are cornered just outside of Long Island. And all the British have to do is sail up the East River and corner George Washington. then it's all over. It's done. The Revolutionary War would have been over. The British would have won. But it didn't happen because the winds were blowing in the wrong direction that night. And so the British could not sail up the river because the winds were blowing the other direction, which gave George Washington just enough time to regroup and get away. And Charlie Rose, the interviewer,

asked Dave McCullough, he said, if the winds were blowing in the other direction that night, would there have been a United States of America? And David McCullough says no. The entire existence of the United States of America is, we're only here because the winds were blowing in the wrong direction during this night in the late 1700s. Like, how do you look at something like that and not, A, believe in luck, but how do you have any confidence in your ability to predict what industries are going to be dominating or what countries are going to be dominating 20 or 30 years in the future? So so much of that is just like a plea for humility. Let's talk about my favorite chapter in this book, which is called Too Much, Too Soon, Too Fast. This is one of many, like, five, six-page

chapters that contains like a library of wisdom. What is this chapter about? At a very high level, it's about almost everything in life, whether it's our bodies or industries and the stock market has a convenient size and like a natural growth rate. And if you push things beyond that natural growth rate or that natural size, it all breaks down. So it's very common in any career or in any investing plan to say, this looks good, but how can I get it faster? How can I have more of And that's when you need to be careful. Some things do not scale perfectly. And if you try to double their speed, double their size, it all breaks down.

The example that I opened this chapter with, which personally I just loved, is the story of a guy named Robert Wadlow, who was the largest human to ever live. He was, by the time he died, he was only in his 20s when he died, but he was, I think, just a little bit over eight feet tall. He wore a size 22 shoe. His hand was like 16 inches across. It was just an absolute giant. He had a pituitary gland disorder that bombarded his body with growth hormone. And if he had lived longer than his 20-some-odd years, he would have kept growing. There was no limit to how large he was going to grow.

And you would think somebody like that, if you just explain that to someone, it's like a real-life example of Paul Bunyan. Like he must have been like the best basketball player, the best, he was enormous. And the truth was no, the guy could barely walk. He was using can't. And the videos, if you look at him, not only can he barely walk, he can barely stand up. his body just doesn't really function. And the reason he died is because his heart had so much trouble pumping blood throughout

his enormous body that he had extremely high blood pressure. And it gave him an ulcer in his legs and he kind of got an infection and died. But before he died, the doctors told him that if he grew, I think it was six inches taller than he was, just walking would have snapped his leg bones. Because it's just like you can't double the size of a human and expect double the output. there's a very natural size. And most animals that are very, very large, either have very long, skinny legs like a giraffe or very short stubby legs like a hippo. But if you take a human size legs and double the size, the mechanics just don't work. It just runs down. So that was an example

of like you can't double the size of something and expect double the output. And I think that is very true for companies and industries and businesses where there is a normal size. And if you push too hard, everything breaks. You can't just say, let's get twice of this. This is really true for a lot of startups where you can have a system that works very good, very well with 50 or 100 employees. And then you try to make it work with 500 employees and everything stops. Everything breaks down. The system just doesn't like communication doesn't work anymore. Culture doesn't work anymore. I use the example of Uber where in the early days, Uber founder and CEO Travis Kalenik, like nobody was better at scaling Uber when it was a startup. Nobody could.

could have done it better than Travis. But then when Uber was a mature company and had thousands of employees and needed the input from regulators, nobody was worse at running that company than Travis Kalanik. Like what works at one phase is not going to work at another. One little anecdote here that I loved. It's another quote from Nassin Talab. He says, I might be getting some of this wrong, but he says, at the federal level, I'm a libertarian. At the state level, I'm a Republican. at the local level I'm a Democrat and at the household level I'm a communist and I just love that

when something scales to a different size you need to have a completely different plan a completely different tactic you should not expect that if you scale the size of you know go from your local government to the national government that you're going to have the same even philosophies about what government is

and how it should work. So that's like that's like too soon, too much too soon, too fast is the core of almost every investing in business problem of just you're trying to push something beyond the natural limits of what it's capable of.

And I would add to the Nassim comment, which I think is so clever, even if you disagree politically, I think you would have to agree historically that communism has worked very well at the family level. There's lots of functionally communist socialist families where just everyone gets what they deserve.

And communism does not have a very good track record at the state level. This at least suggests that there are certain ideologies that even if they are, undergirded by a kind of consistent morality have trouble to scale as you go from four to 400 million people. The piece that I, so what I loved about this chapter was it, it spun off from one of my favorite essays that I wrote in the last year called the Dark Side of Moneyball, which I found myself thinking about a lot. And this was a piece about the fact that if you look

at the Moneyball revolution in baseball, it coincided with the number of hits per game falling to an all-time low, the number of strikeouts per game falling to an all-time high, and the game becoming dominated by what's called the three true outcomes, strikeouts, walks, and home runs. You could argue, I think, that as baseball got smarter, the game got worse. And I think that this phenomenon of smartness and optimization creating worse outcomes extends beyond baseball. There's certainly lots of people who are tired of three-point shots in basketball, who think that as basketball got smarter, the game got more standardized. There's a lot of people looking at blockbusters in Hollywood

in an era where Hollywood knows more about audience preferences and they ever had before who think that as Hollywood got smarter, they became overly obsessed with sequels, adaptations, and reboots. Once again, they would say, I think, as this industry got smarter, the industry got worse. And there was a religious scholar named James Kars, who wrote a book called Finite and Infinite Games. And his observation was that life is divided

between games that are played to win, which are finite games, and games that are played to keep playing, which are infinite games. And there is a tremendous amount of pain and suffering in the world from people misunderstanding what game they're playing. So, for example, a debate is a finite game. A marriage is an infinite game. If you treat every marriage squabble as a finite game, you will lose the infinite game of the marriage.

The same issue for democracy, a midterm election, or a presidential election. That's a finite game. There's a winner and a loser. Democracy is an infinite game. The game is to be played to continue playing. And if you treat every single election as an overly finite game, you can ruin the infinite game. And it just goes to this idea that great ideas don't necessarily scale because as you optimize around a single principle, it falls apart the larger the system gets. I just thought it was a beautiful little, it's like a five-page chapter. and it just touched upon what I think is such an important point to both culture and politics right now. It's so important, and not to get too technical about it, but I wonder with the baseball example of money ball kind of ruined baseball, I don't think you can put the tooth face back in the tube.

Like, I don't know if we could go back to playing baseball in a more artistic way rather than a statistical way. Like, once the teams and the coaches and the managers understand the math behind, like, how, like to get what they want, I don't know if we can go back. No, the even better example is basketball. I mean, the fact that three points are worth 50% more than two points is something that no one will ever forget in the history of the game. It is impossible to forget the fact that three is worth more than two and therefore all sorts of players, whether you're six feet or seven foot five like Wembe, you should specialize or at least practice a lot of three-point shots because they're just worth more. Like once Darrell Mori started Mori ball and people realized that it was possible for all sorts of people who weren't previously thought of as three-point shooters to become good three-point shooters, you know, the Shaquille O'Neal, who's born in 2005, is going to be taken threes when he enters the league. So there's definitely no going back from that optimization.

I think you're absolutely right. I think what you have to do is recognize that, like, okay, by playing this finite game, we have ruined something about the infinite game. So what can we do to make the infinite game healthier, even as we recognize the teams are going to continue to try to win the zero-come contest of the games themselves? I'm Derek. I'm not a sports guy. Have we money-balled football, or is that still kind of played like it always has been? Do you know?

There is, I kind of want to do an episode about the fact that if you look at the year-by-year data, the average number of yards per reception is at an all-time low, but the number of passes per game is essentially near an all-time high. So you could say essentially that within football, the money-balling of football has turned the passing game into a running game, if that makes sense. There used to be a huge difference between a run and a pass, The passes would go for 15 yards, the runs would go for three or four yards.

Now the average pass goes for like 10, 10.7 yards, and the average run goes for five yards. So the difference between a run in the pass has shrunk a little bit. And as a result, you're just having a lot of teams recognize that it's more efficient to have essentially high probability passes that are shorter passes in order to get more first downs and move the sticks over a longer period of time. That seems to me to be sort of like what the money balling of football is done. and there's ways in which I think that aspect of the game has made some kinds of big plays a little bit harder to come by and might have made the game of football a bit more boring too. Moving off of finite and infinite games, because I actually think I might want to do a whole show about that. That's good. I want to talk about expectations.

So there is this term that happiness is reality minus expectations, right? Is that the proper statement of the term? And this is one of these terms that comes up a lot in books like this and in conversations like ours. And I was thinking that on the one hand, I absolutely understand this idea at a gut level, that of course being disappointed is the feeling of unhappiness. But at the same time, I've always hated this phrase. I think I've hated it because it implicitly suggests that we should expect less. And expecting less as a general rule seems like a terrible way to go through life. even if it's a recipe for never being disappointed.

Like, should be really optimized for the variable of reducing disappointment. And to go back to sports, and hopefully you can still play with in the metaphor here, even if you're not a huge sports fan, the vast majority of defending champions do not repeat as champions. It is almost certain that the vast majority of sports champions, therefore, are setting themselves up for disappointment. But nobody says, and practically nobody thinks, that it's bad to win a championship on account of, you'll be filled with these unreasonable expectations

that will set you up for sadness within 12 months. So how do you think about this idea that on the one hand, there is very clearly this relationship between high expectations and the possibility of disappointment and the fact that, yeah, but trying your best is good. It's good for society. I don't disagree with a single word that you said.

And the reason why I included this idea in the book, same as ever, things that never change is because the idea that society will very likely improve in terms of wealth and technology and medicine, and we will not feel any better off at it because our expectations will grow in lockstep, if not faster, is something that I think will always be the case. You can easily imagine a world in which our grandkids are twice as wealthy, live much longer, live more comfortable material lives, and they're no happier for it because their expectations came by just as much. So we will never live in a world where at least at the society level, or even very many people at the individual level, will be able to keep their expectations

low enough to really gain the benefit from the new technologies that they're getting. So this is less a prescription about what you should do and more an observation about something that will never change. It's an explanation of why I think by and large we're not that much happier today than we were in the 1950s when the median household adjusted for inflation was earning half as much. And we don't feel that much better off at it. It's because expectations have grown just by just as much. I also think there's something to be said. I think you and I've talked about this before, and you are, you've dug into this quite a bit of what social media does to expectations. I've often, I've noticed just in the last couple weeks that there are a growing number

of AI Instagram accounts that will show you pictures of beautiful homes, even beautiful people, and it's all AI generated. And I keep thinking like, what is that going to do to expectations, where now we are not even comparing ourselves to other real people's lives, but just like the perfect algorithmically curated, perfect house, perfect body, perfect car, whatever it would be. Then, like, our expectations just get completely thrown for a loop. So I think you're right that there is something to be said about the feeling of inadequacy of people waking up and saying this isn't enough I want more is one of, if not the key drivers

of progress and growth and technology. like that tends to be a great thing. I do think there are some people who at the margins at least can go out of their way to keep their expectations low without it inhibiting their drive. Their drive to get ahead.

I think some people can do it. I think someone like Buffett and Charlie Munger have talked quite a bit how they've done this. I mean, one tangible way that Buffett has done it, not for his own expectations, but others, is that if you read the Berkshire Hathaway annual shareholder letters. Since the 1970s, Warren Buffett has been telling his shareholders, our returns going forward are not going to be as good as they were in the past. Do not expect

the same returns in the fore. He's been saying this for 50 years. I think he's just going out of his way to set expectations low so that the actual results that are going to be good feel incredible. So I do think there are some people who at the margins can kind of manage their expectations. But to me, the bigger point for including this in the book was it's always how it's been. that's always how I think it will be. Well, it's also worth pointing out that you mentioned social media and expectations. When Instagram, Netta, did their research on teen girl unhappiness on the platform, the watchword that came out was negative social comparison that young girls looking at the lives

of other young girls or, you know, their friends, their vacations, their possessions, their bodies, they're feeling worth about their own, their own bodies, wealth, house, possessions, status, friendships. It was negative social comparison. And so that is exactly to the point of this combination of social media, this universal window into the lives of others, plus this sort of steroidal expectation

that you should have what other people have, that together can be this thief of joy. I want to end with talking about writing and advice for writers. Your friend Jason Zweig at the Wall Street, and all has this incredible line where he says there are three ways to be a professional writer. Number one, you can lie to people who want to be lied to and you'll get rich. Number two, tell the truth to those who want the truth and you'll make a living.

And number three, tell the truth to those who want to be lied to and you'll go broke. I read that in your book and I was pretty jealous of that one. How do you fold that piece of wisdom into your own philosophy of what the point of your writing is four. I think if there is one amendment to that, that phrase, which is so, so genius. I think Jason actually, I learned afterwards, he attributes that to his father who told him that. It's so smart. I would say that to get rich in the short term, you lie to those who want to be lied to. To get rich in the longer term, to actually maximize wealth, you tell the truth to people who want the truth. The people who make the most money in the short term writing are the people

who write doom and gloom newsletters. And that business, the margins, the amount of money you can make from that is completely sensational. But will those people have 50-year careers? Probably not. Like, at some point, that might catch up to you. And even if it doesn't, I couldn't, and you couldn't sleep with yourself if you were doing something like that.

So to me, like, there's, like, I always think about Ed as, I want to be a writer, I've been a writer for 17 years. I hope to do it for the rest of my career. And there's not, to state the obvious, nothing is more important than your reputation in there. And look, I could get more page views next week by lying and saying something that was sensational,

saying things that I don't believe, but I know we'll catch your attention. And that would, I could double my page views next week. But it's going to come explicitly at the cost of endurance and longevity. And it's going to decrease the odds that I can be a writer 10 years from now. And so that's something I think a lot about too. It's just the classic, you know, maximizing long-term game by going out of your way to not maximizing your short-term returns. To use a Morganism, I think what you're saying is that truth scales in a way that lies

don't. That's so, so true. I'm going to call that a derrickism because you came up with it. You're such a clear and efficient storyteller. Your books are like, they're like ultra marathon athletes. They're not a dollop of fat on them. I would love to know like what your writing process is like because you're wonderful at finding stories. You're wonderful at like digging into the heart of a story and pulling out the essence of what it means, at least as that fits into an essay. are you someone who writes drunk and then edits five times sober? How does it work for you? I've always been the, and I always have to preface this by saying this is probably the wrong way to write.

This is not what, this is not my advice to aspiring writers, because I think this is wrong, but it's always what's worked for me. I, rather than writing drunk and editing five times, when I get to the bottom of an article or a chapter, it's done. Not because my first draft was perfect, but every sentence that I wrote, After I wrote the sentence, I sat there and I reread it five times and I stared at it. And I thought to myself, oh, maybe I should change this one word. And then I looked at that sentence relative to the previous five sentences.

And I noticed that I repeated a word. Okay, so I need to change this word. And it's such a slow process that by the time I'm done with that sentence, in my mind, it's as good as it's going to get. And therefore, when I get to the bottom of the first draft, it's quote unquote done. And are you going linearly? Like, are you starting with sentence one and then going to sentence two and then going is sentence three and every sentence when it's finished is absolutely finished. Like you're like you're

building brick by brick or jenga block by jenga block the tower. And once it hits the top, you're just done. A hundred percent. And I don't know if I've, I don't know if I've ever met another writer that's that does that. And I know that every writing teacher would say that's the worst thing that you could do. But that's how it's always worked for me. I don't know if it's some form of impatience or if it's some sort of I can't leave a sentence if I know it's not already perfect in my own mind. I think that's, that's probably what it is. I can't. It feels, in my mind, it feels sloppy to write a paragraph and to think to myself, that's not good, but I got to move on to the next paragraph and I'll fix it later. I'm like, no, no, no, we got to

fix it now. Let's fix it right now. That's always how it's been for me. The way I write is the way I imagine a collage artist puts together a collage, like some Bob Rauschenberg painting. Like, I write in chunks and the chunks are not linearly organized. I have an idea, and that idea is explicated in a paragraph or two, and I put it in my notes. And then I have another idea, and I explicate it and fill it out with some facts, and then I put it in notes.

And then I need to organize all of the thoughts, and I come up with a lead, and then I sort of take all these pieces that are in different notes, and I pull it all together into one note. That's so interesting. It could not be a more different writing process. It's not linear at all,

and it's incredibly chunked. Like, I'll be on a walk. I'll be in the shower. I'll be, you know, feeding my daughter out of the bottle, and I'll think, oh my God, this is how I solve this little problem. And it'll just throw it in a note and it'll somehow find its way at the end of the day into the final collage of the piece. See, I think I have some version of that in terms of a lot of times I'll write a sentence or a

paragraph. And then I get so antsy at my desk. I can't sit for very long that after I write a paragraph, I'll get up to like walk my dog or get up to go do the dishes. And in that process, I'll be like, oh, that paragraph I just wrote, that reminds me of this other thing that I can pull in. But I'm not going to start writing that until I feel like what's already written above it is good enough to move on to the next topic. And are you writing all of these chapters discreetly? Or do you have a couple different fires going

and a couple different soups on top of the fires and you're adding different things to the soup? Yeah, see, I often talk to very good writers who I admire to and they'll say something the effect of, oh, I'm working on four different articles right now. And they're just kind of like swap. And that too, like I could never in a million years do that. Because I think getting back to the, like, I don't want to write a sloppy paragraph and come back to it later. If I write it now, I can't, I can't leave it alone until it's perfect. I can never write a half-ass draft and think, oh, I'll come back to this next week and try to fix it. If I sit down to start writing something, I'm not going to be able to get it out of my mind until until I hit publish. And this is one of

the things that's the difference between blogs and books for me is that a blog, is that a blog, especially because I run my own blog, no editor, it's just, it's just my own little canvas. If I start working on it, I can't, I can't leave it alone until I've actually published it. But for a book, you write it, and then six months later, you send it to the editor, and then six months later, they get the draft. It's such a long process, and that is agonizing for me. It's so, so agonizing, because I just want to write it and get it out to the world as fast as I can.

I think a lot of that reason is because it's never going to be perfect. Writing is an art. There's no such thing as a perfect piece of writing. And so if you're always sleeping on it, it's always going to be nagging at you. And so, but when you hit publish on a blog, it's like, okay, it's out there. For better or worse, it's out there. I just got to go let it live on its own now. And for a book, that one year period by the time, between the time that you're done writing the manuscript and the time the book is on the shelf, to me is kind of torturous because it's like, in my head, I'm like, oh, I should have changed that pair. I should have changed that chapter. and like I technically could change it at this point.

But like at some point you just have to let it go and just live on its own. Dude, I'm honestly blown away. I just at how different our process is. I honestly think that at any given time, and this is the opposite of bragging. This is a sign of my being a scattershot dilettan, probably have 10 articles, podcast book chapters going at the same time. That's astounding to me. I think what that shows.

And this is, this is, I mean, I am, I am confess. what might be like a chronic condition to be very, very clear to anyone who thinks like, oh, that's an impressively large number. No, it's a, it's a frighteningly large number. I cannot focus on one discrete task. And if I do, like during bookleaf, if I'm focusing on a specific chapter, even then as I'm confronting the news, as I'm reading Twitter, I'm thinking, oh, that's going to be such a great idea for chapter six. Oh, that's maybe more interesting explication of the sentence I wrote in chapter one, I cannot stay within a single chapter or single blog post or single podcast ever, ever, ever. See, two things stick out here. One is I think you are much

closer to the norm of writers. I think I'm the weirdo here in that process. But the second thing, more important, is that what we're highlighting is that writing is an art. It's not a science where you can figure out the best solution. My process works for me. It would not work for you and vice versa. But we're both figuring it out. We've both become professional writers. We both have some level of writing success. So like that's like writing is an art that's you can't just create a formula for how to do it. You have to figure out what works for the style and the process that works for you. The other thing that I've never been able to figure out is that well, two things. I am a morning person. I'm usually up at 430 or 5 every single morning. Every creative that I know,

not just writer, every creative that I know says that they do their best work first thing in the morning. Even though I'm up naturally at 430 or 5, I can't start writing until like 2 p.m. I just, I can't I can't do it. So I know I'm an oddball there. The other thing is that a lot of people will say that you can create the conditions for creativity, that you can create the time of your day, the space, the mental clarity, that you can create creativity. I can't. I've never been able to figure it out. I've always just had to take a leap of faith that creativity will hit me at some point. It'll hit me in the shower or when I'm driving my kids to school or when I'm picking up pizza. Then it'll hit me randomly. But I cannot create the conditions to say,

okay, at 10 o'clock on Monday morning, I'm going to be creative. It's never worked for me like that. We finally found a place of agreement. I do not do my best thinking at my desk. I do my best thinking anywhere about my desk. And if I knew where it was, I would tell you, but I have no idea where it is. It's three blocks away on a walk. It's in the car. It's in the shower. It's while watching football, playing with my dog. It's everywhere except my desk is where the ideas come. And then my desk is where I have to wrangle the beast into a sentence. One last question for you on the media beat. You write online, blogs, you write books, podcast.

How do you feel about the difference that these media forms have on the audience you want to reach? So I have a podcast now. It's, I don't know, six months old. And I put that off for many, many years because I thought one of the worst things you could do as a media person is to say, I'm going to be a jack of all trades.

I'm going to be a good writer and a good speaker and a good stage performer. Like, whatever it is. It's like, no, you should not pretend. Like, those are very different things, and you shouldn't pretend that you can be good at all of them. Some people, I think the best example in my mind is Michael Lewis, who is his writing is what it is, and his voice, just how he articulates is 10 out of 10 as well on his podcast. But that's very, very rare. For both of my books, I did not narrate the audiobooks because I knew somebody else would do

a much better job. I don't think I'm a terrible speaker, even though I'm kind of losing my voice right now, but I knew that other people would do a better job. So I didn't want to just say I'm going to do everything. But what I learned in the media space was that the biggest growth in the last five or ten years are people who get their content through their ears, not their eyes. It is massive. The potential market size for a podcast or an audiobook is way bigger than a blog or a newspaper or a physical book.

It's not just a little bigger. It's way, way bigger. I wonder if you agree with this idea I've been kicking around, which again gets us back to the subject of fame versus our impact on the world. And at this point, I'd say that if someone comes up to me at a party or some event and says, hey, I know your work, there is a more than 50% chance. They're going to talk about the podcast. But very few of them say, I want to ask you about this thing you or your guest said six months ago.

But when I write an idea down and I publish it in an article, a book, the half-life of that written idea feels longer in its specificity. People remember books and articles in a way that they don't remember the substance of podcasts, I think. That there's something about writing where print preserves, books live on shelves. And podcasts, a lot of them don't really live at all. They're actually designed to die. There's a stick of bubble gum.

There's something you chew while you're doing something else. And then, boop, the words evaporate and the relationship with the podcaster, the host or the guest, that is retained in some kind of way. But the idea itself somewhat evaporates. And I guess I'm starting to wonder whether ideas are more lost in audio than they are preserved by print. And maybe this is too simplistic. But I think it's because for myself as a reader, if I come across a profound idea in a book, I stop. and I think and I ponder and I highlight. And sometimes I close a chapter and go for a walk to think about it.

But in a podcast, it's much harder to pause and ponder. The host is going to keep talking. So when you're reading, you can go at your own pace. And that allows you to stop and reflect. Whereas a podcast, I have to go at your pace more or less. I think that's at least part of it. Morgan, this was a blast. The book is same as ever.

Fantastic to see you again. Be well. Good luck with this. Thanks, Derek. Thank you so much for listening. Plain English is hosted by me, Derek Thompson, and produced by Devin Manzi. Some great news for you all. As you probably know, we are returning, have returned back to our normal schedule of two pods a week. So be on the lookout for new episodes every Tuesday and Friday. If you like our podcast, please rate. Give us five stars. Subscribe wherever you listen.

And I'll see you later.