How can we develop the same?
By starting early and taking advantage of the Matthew effect.
The Matthew Effect in Knowledge Acquisition
Imagine that you and Buffett are reading the latest issue of The Economist magazine. Who do you think will end up with greater insight at the end of this reading session?
The answer is obvious, isn’t it? And for good reason.
Buffett is eighty-nine years old and, even at this age, he continues to be a relentless learning machine. He not only started learning early but also has been accumulating knowledge for more than three-quarters of a century.
The Matthew effect, in this context, refers to a person who has more expertise and thus has a larger knowledge base. This larger knowledge base allows that person to acquire greater expertise at a faster rate. So, the amount of useful insight that Buffett can draw from the same reading material would be quite high compared with most any other person, and again, Buffett would end up becoming smarter at a faster rate.
As you read increasingly more, your capacity to read and absorb more knowledge increases rapidly. During the initial days of inculcating my reading habit, I found it difficult to grasp the deep significance of many of the concepts in the books I read. Gradually, over time, I started discovering connections between the ideas that spread across different books. It is these connections that lead to the development of the “tapestry of the psyche,” which in turn deepens our understanding of the big ideas coming from the key disciplines. This deep understanding makes the brain more efficient and smarter and better able to make sense of new information. None of us can know everything, but we can work to understand the big important models at a basic level across a broad range of disciplines so they can collectively add value in the decision-making process. Deep reading of the fundamentals enables us to understand the world for what it is. This is how we learn to reason from first principles.
First Principles Thinking
As to methods, there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.
—Harrington Emerson
When you first start to study a field, it seems like you have to memorize a zillion things. You don’t. What you need is to identify the core principles—generally three to twelve of them—that govern the field. The million things you thought you had to memorize are simply various combinations of the core principles.
—John Reed
The best way to achieve wisdom is to learn the big ideas that underlie reality…. Even people who aren’t geniuses can outthink the rest of mankind if they develop certain thinking habits.
—Charlie Munger
Five words separate the good from the great: flawless execution of the fundamentals. Boiling things down to their most fundamental truths, that is, to first principles (deconstructing), and then reasoning up from there (reconstructing) enables us to look at the world from the perspective of physics. This type of reasoning removes complexity from the decision-making process so that we can focus on the most important aspects that pertain to the decision at hand. Reasoning from first principles removes the impurity of assumptions and conventions. Instead, what remains is the essential information. First principles are the origins or the main concepts that cannot be reduced to anything else. Over two thousand years ago, Aristotle defined a first principle as “the first basis from which a thing is known.” These are the fundamental assumptions that we know are true.
When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it.
—Jeff Bezos
First principles thinking is a way of saying, “Think like a scientist.” Scientists don’t assume anything. They start with questions like “What are we absolutely sure is true?” or “What has been proven?” When Jeff Bezos started Amazon.com, in 1995, he clearly identified the first principles that would guide his business philosophy—that is, long-term thinking and a relentless focus on the customer rather than on the competition. This led Amazon to focus on things that don’t change, such as customers’ preference for low prices, fast delivery, and wider product selection, rather than on things that can and do change. Bezos has continued to focus relentlessly on these first principles until this date, and this line of thinking has made him one of the richest people in the world.
According to James Clear:
In theory, first principles thinking requires you to dig deeper and deeper until you are left with only the foundational truths of a situation. Rene Descartes, the French philosopher and scientist, embraced this approach with a method now called Cartesian Doubt in which he would “systematically doubt everything he could possibly doubt until he was left with what he saw as purely indubitable truths.”
In practice, you don’t have to simplify every problem down to the atomic level to get the benefits of first principles thinking. You just need to go one or two levels deeper than most people. Different solutions present themselves at different layers of abstraction.11
By focusing on the fundamental questions and then, while answering these questions, going two or three levels deeper by asking at every step “and then what?” we can arrive at the truth. This is the art of “reductionism.” Less is more. When we remove the things that aren’t truly representative of reality, we get closer to the ultimate truth. Michelangelo was once asked by the pope about the secret of his genius, particularly with regards to the statue of David, one of the greatest sculpting masterpieces of all time. Michelangelo responded by saying, “David was always there in the marble. I just took away everything that was not David.”
Nassim Taleb calls this “subtractive epistemology.” He argues that the greatest contribution to knowledge consists of removing what we think is wrong. We know a lot more about what is wrong than what is right. What does not work (i.e., negative knowledge) is more robust than positive knowledge. This is because it is a lot easier for something we know to fail than it is for something we know isn’t so to succeed. Taleb dubs this philosophy “via negativa,” employing a Latin phrase used in Christian theology to explain a way of describing God by focusing on what he is not, rather than on what he is. The absence of evidence doesn’t qualify as the evidence of absence. In other words, just because all of the swans that have been observed to date are white, doesn’t prove that all swans are white. One small observation (i.e., spotting a black swan) can conclusively disprove the statement “all swans are white” but millions of observations can hardly confirm it. Thus, disconfirmation is more rigorous than confirmation.
Elon Musk once referred to knowledge as a semantic tree: “Make sure you understand the fundamental principles, i.e., the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang onto.”12 When you want to learn a new subject, first identify the fundamental principles and learn those in a clear and deep manner. Is there a way for us to do this effectively?
It turns out that, indeed, a simple way to do this exists.
It’s simple but not easy.
The Feynman Technique
The Feynman technique, named after Nobel Prize–winning physicist Richard Feynman, is a great method for learning anything in a clear and deep manner and for improving retention.
The Feynman technique has four simple steps: