Everyone, everywhere, at some point in their lives, has believed something that was wrong. This isn’t new. People used to think the Earth was flat. Or that the Earth was the center of the universe. Or that bloodletting was an effective medical practice. And so on.
Let’s look at a few stories about misbeliefs.
A Few Stories About Misbeliefs
Walter Isaacson shares this story in his book Benjamin Franklin: An American Life.
For centuries, the devastating scourge of lightning had generally been considered a supernatural phenomenon or expression of God’s will. At the approach of a storm, church bells were rung to ward off the bolts. “The tones of the consecrated metal repel the demon and avert storm and lightning,” declared St. Thomas Aquinas. But even the most religiously faithful were likely to have noticed this was not very effective. During one thirty-five-year period in Germany alone during the mid-1700s, 386 churches were struck and more than one hundred bell ringers killed. In Venice, some three thousand people were killed when tons of gunpowder stored in a church was hit. As Franklin later recalled to Harvard professor John Winthrop, “The lightning seems to strike steeples of choice and at the very time the bells are ringing; yet still they continue to bless the new bells and jangle the old ones whenever it thunders. One would think it was now time to try some other trick.”
Adam Grant shares a story about the rise and fall of BlackBerry in his book Think Again: The Power of Knowing What You Don’t Know.
When Mike [Lazaridis] created the BlackBerry, he was thinking like a scientist. Existing devices for wireless email featured a stylus that was too slow or a keyboard that was too small. People had to clunkily forward their work emails to their mobile device in-boxes, and they took forever to download. . . . What if people could hold the device in their hands and type with their thumbs rather than their fingers? What if there was a single mailbox synchronized across devices? What if messages could be relayed through a server and appear on the device only after they were decrypted?
As other companies followed BlackBerry’s lead, Mike would take their smartphones apart and study them. Nothing really impressed him until the summer of 2007, when he was stunned by the computing power inside the first iPhone. “They’ve put a Mac in this thing,” he said. What Mike did next might have been the beginning of the end for BlackBerry. If the BlackBerry’s rise was due in large part to his success in scientific thinking as an engineer, its demise was in many ways the result of his failure in thinking as a CEO.
As the iPhone skyrocketed onto the scene, Mike maintained his belief in the features that had made the BlackBerry a sensation in the past. He was confident that people wanted a wireless device for work emails and calls, not an entire computer in their pocket with apps for home entertainment. . . . He didn’t test the alternative hypothesis.
By 2008, the company’s valuation exceeded $70 billion, but the BlackBerry remained the company’s sole product, and it still lacked a reliable browser. In 2010, when his colleagues pitched a strategy to feature encrypted text messages, Mike was receptive but expressed concerns that allowing messages to be exchanged with competitors’ devices would render the BlackBerry obsolete. As his reservations gained traction within the firm, the company abandoned instant messaging, missing an opportunity that WhatsApp later seized for upwards of $19 billion. As gifted as Mike was at rethinking the design of electronic devices, he wasn’t willing to rethink the market for his baby.
Ray Dalio shares his personal experience with a costly misbelief in his book Principles.
In August 1982, Mexico defaulted on its debt. By then, it was clear to most everyone that a number of other countries were about to follow. This was a huge deal, because U.S. banks had lent about 250 percent of their capital to other countries just as at risk as Mexico. Business loan activity in the U.S. ground to a halt.
Because I was one of the few people who had seen these things coming, I started to get a lot of attention. Congress was holding hearings on the crisis and wanted me to testify; in November I was the featured guest on Wall $treet Week with Louis Rukeyer, the must-watch show for anyone in the markets. In both appearances, I confidently declared that we were headed for a depression and explained why.
After Mexico’s default, the Fed responded to the economic collapse and debt defaults by making money more readily available. This caused the stock market to jump by a record amount. While that surprised me, I interpreted it as a knee-jerk reaction to the Fed’s move. After all, in 1929 a 15 percent rally was followed by the greatest crash of all time. In October, I laid out my prognosis in a memo. As I saw it, there was a 75 percent chance the Fed’s efforts would fall short and the economy would move into failure; a 20 percent chance it would initially succeed at stimulating the economy but still ultimately fail; and a 5 percent chance it would provide enough stimulus to save the economy but trigger hyperinflation. To hedge against the worst possibilities, I bought gold and T-bill futures as a spread against eurodollars, which was a limited-risk way of betting on credit problems increasing.
I was dead wrong. After a delay, the economy responded to the Fed’s efforts, rebounding in a noninflationary way. In other words, inflation fell while growth accelerated. The stock market began a big bull run, and over the next eighteen years the U.S. economy enjoyed the greatest noninflationary growth period in its history.
[ … ]
My experience over this period was like a series of blows to the head with a baseball bat. Being so wrong—and especially so publicly wrong—was incredibly humbling and cost me just about everything I had built at Bridgewater. I saw that I had been an arrogant jerk who was totally confident in a totally incorrect view.
Forming an incorrect belief isn’t a defect in humanity. But holding onto that belief is.
A belief is not dangerous until it turns absolute.
– Dee Hock, Founder of Visa
Mental Real Estate
In the Sherlock Holmes novels by Sir Arthur Conan Doyle, Sherlock refers to his mind (more accurately, his memory) as a “mind palace”. In this palace, he could “walk” about and revisit and organize his belongings (thoughts). Commandeering this analogy for our own usage, we can think of our minds as real estate such as a house. We can decorate this mental real estate as we see fit, just like we would our own homes. Like all properties, it requires maintenance, ensuring the proper functionality of all components. And the landscaping needs tending to as well. And over time, our decorations may fall out of favor.
It’s time for a remodel.
When it comes to change, our homes aren’t the only things we have experience with updating. We do this for our cars, wardrobes, and technology. Yet when it comes to updating our beliefs, we struggle. Why?
The attachment to beliefs is The greatest shackle. To be free is To know that One does not know.
– Hu Hsin
It’s Easier to Spot Thinking Defects in Others
First off, it’s not always obvious to us that our way of thinking is wrong. Much like the story of Benjamin Franklin commenting on the ringing of the church bells during a lightning storm, the dumb action was obvious to him but not to the church.
Secondly, we favor feeling right over being right. It’s much easier to accept information that reinforces our beliefs than it is to actively seek out information that discredits them. Yet this is exactly what is required. Much like how a company may hire a white hat hacker to assess and test the fortification of a website, so too must we forage for information to test the reality of our beliefs.
These two reasons make it challenging to realize it’s time for some mental remodeling. However, this (generally) isn’t true when it comes to assessing the beliefs of others. That’s because when we communicate with others, we assume the mindsets of either a preacher, a politician, or a prosecutor, according to social scientist Phil Tetlock. Here’s what each of those mindsets means.
- Preacher mode is when we promote our beliefs as facts.
- Politician mode is when we lobby for approval from our audience.
- Prosecutor mode is when we recognize and attack flaws in other people’s reasoning.
We don’t enter these modes as readily when it comes to our own beliefs. Yet we slip into them easily when it comes to the beliefs of others. Therefore, we’d benefit from having others provide feedback on our beliefs. And we’d benefit from having an open mind when receiving their feedback.
Misguided Beliefs About Beliefs
Another obstacle preventing us from remodeling our beliefs is that we are sold this narrative that it’s bad to change your mind. We are told people who change their minds have no conviction in their beliefs and they lack character. The facts of the matter couldn’t be further from the truth.
If all of our beliefs were correct from the start, and assuming things never changed, we’d never have to reconsider our beliefs. But just like with writing, our first draft is rarely our best. Good writing is good editing. Using this logic, good thinking is good rethinking.
So much of what people call “conviction” is actually a willful disregard for facts that might change their minds.
– Morgan Housel
Another deception is that misbeliefs belong to people who lack intelligence. It’s thought that smart people know more and don’t fall into these traps. In reality, research indicates the opposite is more likely to be true. There are at least two biases that support why smart people are more likely to be duped.
One is confirmation bias, where we see what we expect to see. The other is desirability bias, where we see what we want to see. People with high IQs tend to fall prey to these biases more readily than other people because high IQ people are generally quicker to spot patterns. In other words, high IQ people use more information as reasons to support their own beliefs. Their mental motor is like a horse without a jockey: it’s working hard for results but not necessarily in the direction it ought to go.
Conclusion
Beliefs are like so many things in our lives—homes, clothing, technology—that require remodeling or updating. We don’t keep the same wallpaper in a house past its time; wardrobes change at an even quicker rate.
Here’s a way to shift perspective on beliefs. Think of them like food. You go to the store and collect what you need to eat. But there is a finite amount of time in which you can use the food. There are expiration dates. Beliefs have expiration dates too. These expiration dates aren’t as solid as food expiration dates are, but they can be used in the same way. By assigning an expiration date to your beliefs, you are prioritizing and scheduling a time in which you revisit and reanalyze them. You may find that your beliefs still hold true. But you may find that they don’t. You can take comfort in both situations.
Pairing your efforts to reevaluate your beliefs with feedback from others is an effective combination to help you remodel your mind. Smarts won’t save you. Intentional rigor and humility are more important traits.
Where do you start in this remodeling process? What rooms are up to date? Which ones need some work? In truth, you can start anywhere. But one of the most effective—yet most difficult—spots to look is where you have the strongest convictions. They have formed deep roots in your mind, making them the toughest to remove. That also means they will likely make the biggest impact in your life.
It might sound crazy, but I think a good rule of thumb is that your strongest convictions have the highest chance of being wrong or incomplete, if only because they are the hardest beliefs to challenge, update, and abandon when necessary.
– Morgan Housel
