A common criticism of people who vote straight down the party line is that they are not thinking. They are brainwashed.
This criticism fails for 2 reasons:
1. The greedy outsourcing algorithm
A voter may be lazy or just self-aware that they aren't going to be informed on every topic. A party-line vote is a greedy algorithm for solving their decision by relying on the judgement of the like-minded. I'm sympathetic to this strategy especially if you build your own cabinet. Its failure mode is the voter forgets that their stance was a surrogate's, not their own, then defends it like it's blood.
2. Stances are signals.
Criticizing the person's judgement misses the point. The actual stance and its reasons are irrelevant. This person is just putting on their team's jersey. It's very much like sports. When the star player defects to another team it may as well be treason. Allegiance is to the colors not the players. Republicans used to be about fiscal sobriety. Democrats valued free speech.
To call deeply partisan thinking "brainwashed" does not give people enough credit. I'll walk you through a thought that has been lingering lately.
Many lament the feeling that facts appear as negotiable as a watch on Canal Street. This is especially true at the extremes of the political spectrum. Many mock extreme views as stupid. I disagree. That view only makes sense if you think extreme positions are about logic. Logic is not something used to build up these stances. I'm sorry, but it is post-fit. Not even as a sincere rationalization. It's just playing along with the delusion that logic ever mattered.
How do I know?
Imagine regurgitating the NRA's logic as if it wasn't propaganda.
Imagine watching an anti-vaxxer explain how injecting a small dose of a virus into their body is unnatural while they smoke cigarettes and put pasteurized milk into their bowl of Lucky Charms.
Imagine taking 'slippery slope' arguments seriously.
The extremes give reasons for their behavior but only because we still pretend reasons matter. So they feel compelled to speak in those terms. But they know the reasons don't matter. Politics are an expression of their chaotic alignments. Politics' function is to advance their abject desires. Not for good reasons but simply because their desires exist. So when you argue with an extreme point of view, you're wasting your time. Sociopaths are cosplaying a debate, but understand it's a charade. Meanwhile useful idiots try to recycle the sociopaths' logic in earnest debates.
The sociopath is honest to themselves and purposely dishonest to others. The useful idiots are dishonest to themselves and don't even know it. They are not so much brainwashed as willing to play along if that will get them what they want. Self-deception only makes them more effective. Neither their urges or reasons are brainwashed. They are simply convenient.
David Hume wrote "reason is slave to the passions". We fancy ourselves civil by requiring justifications, not might. But the object of might in the first place is self-interest. The self-interest still rules but we require the theater of reasons. The sociopaths supply the script, the sheep supply the numbers.
The grand delusion is that Hume is wrong.
My feeling that the invisible hand of sociopaths is heavier than we might think is inspired by Venkatesh Rao's Gervais Principle which has haunted me for a few years. My feeling that dumb arguments are a distraction or a form of talk traces its roots back to Rao.
The Gervais Principle recently re-surfaced in Alex Danco's post The Michael Scott Theory Of Social Class where he juxtaposes Rao's model on another piece I keep saved...Michael Church's Ladders of Social Class.
Highlights from Danco's juxtaposition:
The Office Model
So, twelve years ago, Venkatesh Rao wrote a lengthy and fascinating series of essays called “The Gervais Principle”, which walked through the NBC show The Office, an American adaptation to Ricky Gervais’ original British series. The essays go after a particular aspect of organizational behavior, around how organizations that survive tend to self-stratify into three predictable layers.
The Language Focus
- In the bottom layer, you have around 80% of the office, who occupy the rank-and-file roles. They are the losers. Rao carefully notes that “losers” does not mean uncool, or unworthy; he specifically means “economic losers.” Losers are the people who are set in roles or stations in life where the output of their effort is wholly realized by someone else. As they learn throughout their careers, their skill or engagement might lead to incremental career progress, but no real leverage of any kind. Hence, they are “economic losers”, and they know it. They see the world through clear eyes, and cope.
- At the top you have Corporate. These are the sociopaths; the economic winners. They are smart, they care about getting power, and little else.
- The losers and the sociopaths are actually pretty alike. They are alike in that they both see the world through clear eyes, as it actually is. The losers basically understand how the world works, and how their role fits within it. So do the sociopaths.
- In the middle, in between the losers and the sociopaths, is a very different group. That group is the middle managers: the clueless. In The Office this group is an iconic trio: in ascending order of cluelessness, Andy, Dwight, and of course – Michael. When it really comes down to it, The Office is a show about these three people.
There are many fascinating parts of Rao’s multi-chapter series. I recommend reading through them all. But the most interesting topic he dives into, by far, is language. If you look at the way everyone talks to each other, you’ll find five distinct ways that the characters speak both within and between the three groups.
Michael Church's 3 Ladder Class System
Posturetalk is everything said by Michael, Dwight and Andy, to anyone: the staff, the execs, or each other. Everything they say is some form or another of meaningless, performative babbling. This is the language of living inside a construct; where your entire world lives within arbitrarily drawn boxes, and you have nothing concrete to attach to. It’s the only language that Michael knows how to speak.
Babytalk is the language spoken from the literal, to the clueless. It’s placating, soothing, or often misdirection: “There, there. You have no idea what you’re saying. Why don’t I distract you with something over here.”
- Powertalk, Gametalk, and Straight Talk
The three other languages spoken, which don’t involve the Clueless, are Powertalk (the Sociopaths’ internal language, which is entirely about competitive information-gathering and retroactive deniability), Gametalk (The Losers’ internal language: recurring games or coded rituals to get through the day), and the rare instance where Corporate actually speaks directly with the losers: Straight Talk. It’s the one and only time where people actually speak directly, with zero encoding.
Michael Church wrote a neat summary of the American social class system, and how the traditional metaphor of “climbing the ladder of social class” is wrong in an important way. There isn’t one single ladder; there are three – each with different values, norms and goals. You have the first, and largest ladder, Labour. Next, you have the “Educated Gentry” ladder that corresponds to what we typically call the Upper Middle Class. And finally, you have the elite ladder. And the remarkable thing about these ladders is how perfectly they correspond to the three-tiered pyramid in The Office, of the losers, clueless, and sociopaths.
The Office Model Applied To Class Structure In The US
- The Labour Ladder
Climbing the labour ladder means making more money. At the bottom are really tough jobs, typically paid hourly, informally, or with tips. Above that there are stable, but modest blue collar jobs; then high-skilled or good Union-protected careers. Finally at the top you find “Labour leadership”, which doesn’t mean being a union boss, but means, “You’ve made it. You own stuff. You drive a new F-150, you have income properties, you enjoy nice things.”
But you have not actually escaped the category of “economic losers”, because the Labour ladder does not create paths to leverage. That is the fundamental difference between how the labour ladder works versus how the elite ladder works. The people on the labour ladder fully understand this.
- The Elite Ladder
The Elite ladder has a lot in common with the Labour ladder: it’s straightforward. You move up by getting more money and more power. The only fundamental difference is that you climb the Labour ladder by working hard, whereas you climb the Elite ladder by acquiring leverage.
- Middle Ladder
The middle ladder works completely differently from the other two. This ladder isn’t about money or power; it’s about being interesting. You climb this ladder by being more educated, and towards the top, by having costly habits and virtues.
Generally speaking, the farther you go up this ladder, the more detached from reality you get. Importantly, this isn’t seen as a problem: it’s actually a virtue, so long as you portray it correctly. Sixty years ago, this group sought refuge and status in the suburbs, explicitly detaching themselves from the reality of dirty, dangerous cities. Now, it’s fashionable to move back downtown, detaching ourselves from the reality of gas-guzzling, chain restaurant normie suburbs. The farther you go into expensive, performative habits (Doing triathlons, eating farm-to-table) and coastal echo chambers (“I don’t know a single person who voted for Trump”; “We should ban cars”), the farther you progress up this ladder.
Once you get familiar with [Rao's Office model], you start to see it in other places. One of the biggest stages on which you could argue it plays out pretty faithfully is social class structure in North America.
I want to highlight something Church never covers, but you can see clear as day by superimposing The Gervais Principle on top. And that’s how clearly this three-ladder structure reveals itself through language.
- The great irony of the Educated Gentry [the middle ladder] is that the more time you spend in it, and the more people talk to you with that language, the more you turn into Michael Scott. It’s a funny juxtaposition, because Michael Scott in the show is absolutely not in this economic class (he never went to college; his job falls solidly in the labour ladder), but his character is a bang-on portrayal of what’s like to aspire to Petite Bourgeoisie values.
- Language is the fundamental reinforcement mechanism of why arbitrarily constructed environments eventually turn you into Michael Scott. The more you have committed to being seen as interesting within your particular area, the more you detach from reality and move into a construct of your own creation. As this evolution takes place, more of your and your peers’ language will become Posturetalk, and more of the language that gets spoken to you by outsiders will become Babytalk.
Conclusion: The Michael Scott Theory of Social Class
The higher you ascend the Educated Gentry ladder, the more you become Michael Scott.
Serious Triathletes? Michael Scott.
PhD Students? Michael Scott.
Have an opinion on the right amount of hops? Michael Scott.
More than 10,000 followers on Twitter? Michael Scott.
Really into urbanism? Michael Scott.
NYT Op-ed? Definitely Michael Scott.
Reading these essays in their entirety is fun. I recommend starting with Danco and Church because they are relatively quick. The Gervais Principle is as long as a book but its detail offers the highest reward. If you want a digital copy with my highlights ping me.
Here's the links to the original essays:
Alex Danco's The Michael Scott Theory of Social Class (Link)
Michael Church's 3-Ladder System Of Social Class In The US (Link)
Venkatesh Rao's The Gervais Principle (Link)
The Money Angle
In last week's post What Does Rich Mean To You?, the median response to what people considered "rich" was $5mm. Mike sent me this short clip which cheekily makes you think twice. (Succession scene)
I had a recent discussion with a younger trader. His strategy was to sell options when IV was in the 100th percentile.
There are problems with this logic. And the problems with the logic extend to all types of investing. If a trade carries well, it's pricing carries a headwind. Expensive assets will most likely face a cheaper valuation (mean reversion headwind) in the future. But the growth of the underlying fundamentals (the carry) which are baked into the current high valuation may exceed expectations.
This is a very fundamental investing dynamic and a corollary to my "No Easy Trades" Principle.
You can read my explanation of the dynamic in options and beyond in Distributional Edge Vs Carry (Link)
It had been a couple years since I updated the list of online learning resources on my site. I asked the hivemind for suggestions and compiled common answers.
Here's the cleaned up resource (Link)
I call special attention to:
- Scott H Young's Top 10 Online Classes (Link)
Scott is one of my favorite productivity bloggers. He is also known for taking on major challenges to document and test methods. In 2012, he completed a 4 year MIT undergrad degree completely online in just 12 months. So when he published a list of his favorite courses, he gets my attention.
- OpenStax.org (Link)
Rice University's OpenStax project provides free online textbooks. They recently launched an online tutoring beta as well. We have not tried it but I encourage you click and explore on this awesome initiative.
From my actual life
St. Patrick's Day now reminds me of a story that is now 5 years old...
March 17, 2016. I flew into NYC for a 36 hour business trip. I was hopping around the city meeting with bank derivative sales desks. Routine relationship maintenance. I planned poorly. I was late to every meeting since you can't cross 5th Ave during the St Patty's parade.
Anyway, that evening I was at dinner as a client. When I went to the restroom I checked my phone . My family chat was blowing up.
My sister just had a baby.
I hadn't told my east coast fam I was in NYC because it was just a quick trip. But right then, I called my mom in NJ and stunned her with the knowledge that I was an hour away in NYC.
When I returned to the table, I excused myself from dinner, hopped on a bus to my childhood house in Hazlet, borrowed my mom's car and drove down to Jersey Shore Medical Center.
It was close to midnight.
When I walked into the hospital room I'll never forget my sister's look of 'what are you doing here?'
I got to meet my new nephew, spent an hour chatting with my sis and her husband, and made it back to NYC with enough time to grab my bags and get back to JFK.
Since then, St Patrick's Day has meant much more then day drinking.
Happy 5th birthday to my nephew!
(My second son was born 6 weeks later. Both of my sons are matched in age with my sister's boys which is super fun. We are gonna take the 4 boys to Disney this summer to mark an 18-month reunion since we last saw them.)
Want to learn more about a topic?
Don't hold back, let me know.
Thanks for reading and have an awesome week!
Be Groovy at the Moontower
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