All right, let's have a conversation about cause and effect in complex systems. This title might seem a little verbose. I promise it's not, it is an accurate description of what we're going to talk about. But I also promise that this matters way more than it might seem. Which is ironic because as you'll
see, that's one of the features of our world today is that things that don't seem important can be immensely important. And uh at the, at the end of this slide show, we're going to go through some um there aren't that many slides, we're, but we're going to go through some examples and we're going to
focus on some takeaways. That's the point of all of this. But before we get there, I kind of have to throw some ideas at you that you may never have thought of before or heard of before. OK. So one thing I could do if I want to make this a much longer presentation is tell you what complexity is. I don't
want to do that. But um needless to say, just look around because that's the way the world is today. So here are some uh some features of causes in a complex system, in a simple system, that's the opposite of complex. So um simple things are easy to predict. They are uh reliable. They are well known
, they are um uniform complex systems are none of those things. One of the aspects of a complex system is that the causes uh in cause effect pairs, the causes are highly sensitive to slight change. So if you are thinking about hitting a nail with a hammer, that's a simple situation. And you don't have
to hit that nail just right every single time. There's a lot of um a lot of give in that situation. However, if you are hitting something with a laser beam and you know, you're trying to hit one gold atom with a laser beam or something, it has to be exactly correct or uh maybe a more apt comparison is
if you're trying to hammer two boards together, um you don't have to be very precise. But if you're building a mile high skyscraper, you have to be very precise. So the bricks need to go exactly where they need to be and there's not a lot of latitude for error. So complex systems are very sensitive to
slight changes in their inputs. And so the causes, in complex cause effect pairs, the causes matter a lot in, in surprising ways. Um And those systems break down very quickly when things are no longer exactly the same as they were before and, and I do mean exactly. So just one little thing changing can
mess up the whole situation. So, um, if, if you, if you want another way of thinking about this, if you've got something that's spinning very slowly on an axle, it doesn't matter if that axle is perfectly straight or not, or if the thing is perfectly balanced or not. But if the, uh, if the object is
very heavy, uh and the axle spinning fast, some combination of those two things, all of a sudden, the balance of the system matters a lot. And if it's not well balanced, it's gonna wobble and break and probably someone is going to get hurt. And this is the idea, it's like cranking up the RP MS on a motor
all of a sudden, the the small imperfections in that they start to matter a lot. So, um also if a little piece broke off while I was spinning that fast, it would cause a lot of problems. So, um another property of causes in uh complex cause effect pairs is that they don't tend to be just one thing. They
tend to actually stem from a network of causes, not just one cause but a whole set of them where each of those things is interrelated in some way and, and usually a varying degree. So the relationships, the the causes are not evenly important, which makes it even more complicated. So, um a great example
of this is like the question, what makes a successful marriage? Uh, it's not a simple answer. If you are trying to make a test, a litmus test to hand to a young person to say this is what you should look for. And if you check all of these boxes, you'll have a successful marriage. That is not going to
be a simple document. It's, uh, it's going to be complex and, um, in that it's, it's not going to be a checklist at all. It's just going to be a list of a whole bunch of things that matter. And then the objective would be to do the best you can. So um we could get deeper into that. But, but let's just
leave it at that. This is, there's a lot to all of these ideas. I'm, I'm intentionally making this as brief as I possibly can to get to the points that I would like to make. I'm writing a lot more about this and that will come in books later. OK? The effects list is a little longer. So, but this is these
are the two main slides and then after that, we're going to example. So if you've hung up with me this far, you're, you're almost there effects in a, in a complex system, so complex cause and effect pairs. Um here are some of the properties and they might surprise you, although they're all around you
and increasing delayed consequences. So, in a simple system, you push a button and the light turns on and that's all there is to it. In a complex system, there are, as we said, a whole network of inputs and the output, it might not happen right away can be delayed. And actually later on this list, I
have intermittent consequences. They could also be in intermittent. So um in the, in the simple example, if you push a button and the light turns on, well, um, what if it's really complicated, you still have a light, which is a simple output, but maybe one of the inputs is whether the day is odd or even
. And if you didn't know that, uh, you'd be at a loss as to why this thing wasn't working every other day and eventually you might figure it out. But suppose that it's even more complicated than that. And, um, it's not intermittent, uh, every other day, but uh multiple times a day, the behavior of the
system changes. So how would you parse out what is causing these changes? It would be very difficult. Uh Another simple example of this is if you build a house on a floodplain, it's not going to flood every day. And in fact, it's not even going to flood every time it rains, it's just gonna flood every
once in a while. So we've lived in our current location for about eight years. Uh I guess we're, we're approaching nine now. In fact, we might have elapsed nine anyway, whatever it is. A little less than a decade. And there's one spot that we drive by fairly regularly and, uh, one time for what seemed
like about a month, a bunch of houses were underwater in that spot. It's only happened one time in a decade. Or what about, uh, a big old earthquake in the Seattle region? Um, seismologists say that that's going to happen and, uh, they didn't know that at the time that the city was built or built up
, but they know it now. And so you look at things like that and you say, well, it's not happening today. No, but it's an intermittent consequence. Ok. And that's a good segue into an outsized consequence. This is another frequent staple of complex systems. So we were just talking about a massive earthquake
in the Seattle area. So what would happen if that hit? Well, it would be catastrophic for everyone who is there and everyone who's involved in any business that's there, which by the way, there are some very notable businesses that are headquartered in Seattle. So uh these consequences, they tend to
be much larger than anyone anticipates. It's shocking when it happens. So, uh COVID is a great example of that. More and more people are saying that that happened because something made in a lab got out whether that was intentional or not, it seems like it's still an open question, but there are labs
all over the world doing that sort of thing or worse, uh, all the time, that kind of research and, um, one little slip up can cause massive consequences worldwide and so outsized consequence. Now those are global things. But in your own life, are there outsized consequences with some decisions? Absolutely
. You know, you mess around to get a lifelong STD. That's a lifelong outsized consequence. For one choice, one, potentially one interaction with a human, perhaps one night. That's an immense consequence. Um You get drunk and drive one time you could kill somebody, you could kill yourself. Um That's an
outsized consequence, right? So those sorts of things happen more often in complex systems. So if you're a caveman, you don't have a car and you don't have alcohol either. Although that's pretty simple to make. Um So to have a car, it, there are a lot of inputs to that system. It, it's very complicated
before you, you have the ability to encounter these outsized consequences. But that's the system we live in. We're surrounded by things like that. So, outside consequences are all around us. But people don't think like that and they don't anticipate them, they don't accurately see them. OK? Um Now we
have to use a, a math term. Unfortunately, I don't know how else to describe this, but we're going to talk about this idea of geometric consequences over time. So, what does geometric mean? Well, you've probably heard the phrase exponential. And the thing is is that, that word is used, I, I use it all
the time as well in this way, it's, it's abuse because it's a specific function. But that it's from a class of functions called geometric functions whose property is basically that they grow at an increasing rate. So it's not a line that grows at a constant rate. It's something that grows geometrically
. Uh There's a really famous example of geometric growth in, in this idea of a, a drop of water being placed on the field in a stadium. And then if it doubles once a minute, how many minutes does it take to fill the stadium? The answer is somewhere around 49. It it depends on the particulars of the stadium
. But the point is that uh 49 steps is not a lot of steps to go from one drop of water to a stadium full of water. And yet that's the way these things work. And humans are notoriously poor at perceiving or responding to this kind of growth. So what's interesting about geometric consequences which over
time, which is to say that the effect of the cause, it's um it grows in magnitude in, in something like a doubling pattern over time. And so it gets better and better or worse and worse over time at an increasing rate, kind of like that drop, doubling to fill a whole stadium. But the interesting thing
about this is that humans have this weird inverse, um, relationship with geometric consequences in that we're particularly terrible at noticing them in any of the first, I said it takes about 49 steps, the 1st 42 or so steps that it takes to fill up in the, in the analogy. Or, I guess the example, uh
, the water to the, the base of the first row of the stadium, no one would even really notice it until very late in the game. But, uh the number of steps from that point until it's full, it's only a few more. It's something like three more. Uh just depending on the, the particulars of the, the example
. And so as a percent, you know, you have something like 90% of the time where this thing is not perceptible. And then in what seems like all of the sudden kind of growth, it fills the whole stadium. And so this is where I've spoken a bit about this idea of all of the sudden. Well, if God operates or
I should say, if the universe operates according to cause and effect, you, you don't even have to make a, um, a religious argument about this. So I'll try to keep it more general than that if the universe operates according to laws of cause and effect, uh that would mean that nothing happens all of a
sudden there, that every single situation is one specific link in a chain that extends infinitely in either direction. And so everything is a sequence and this is another point on the slide, sequential consequences. And this means that even if something seems like it's happening all of a sudden, it just
means that you missed all of the stuff that led to this in the network of causes that preceded it. Does that make sense? Because if you saw the first drop on the field, you'd know that the stadium is going to be filled with water eventually. You know, or, or if you accurately plotted the first two doublings
, so you could, you could um very easily extrapolate those data points and know exactly when the stadium will be full. And if you warn people in the stadium to get out before they got drowned, they'd all think you were crazy and they'd probably hate you and most of them would die. So this is very important
and explains an awful lot. Um, finally, unpredictable consequences. Uh Complexity is synonymous with unpredictability, but um, it's just, it's just that it's difficult to predict not impossible that the average normal approaches to these kinds of problems will not work, they will not work um to finish
out the thoughts about geometric consequences. The fact is that by the time normal people notice that something geometric is happening, the cost to do anything about it will far exceed what any normal person is willing to do. And that's a problem. It's a very strong argument for heroic people or wise
people and the society that notices and aligns with those ideas rather than demonizes them. So, uh these are things to think about. Ok. So if you want, if you want a really mundane example of this idea, once the terrorists take over the building, you need a John mclean, you can't just be some normal
office worker and expect to get out of that situation alive without some kind of John mclean, right? Who's doing things that no normal person would do, even normal police officers, right? So um that's I'm just sprinkling things here that, that are worthy of much deeper thought and conversation, but here's
some takeaways and uh you can take this stuff to the bank. These are very, very firm principles. This is not a doom and gloom presentation. I'm trying to help you with actionable items. But one thing that you should catch on to is that the way things are and the way they're becoming, you need to change
, you need to change in the way that you see things and the way that you respond to things because people are not wired for complex problems. Normal people cannot handle complexity and uh they never will, you have to rise above that and be better than average or your life is going to get really terrible
really quickly. So um and it's not just about you, your ability to help others will be severely a restricted if you don't develop these capabilities. But um, the guiding point here is that where we're headed, you're, you're going to need to have a very clear idea of what you want in your life and why
you want it. The reason for that is because the cost to keep it or to get it if you don't have it yet is exploding in real time. It's geometric, it's, it's increasing geometrically and um the cost to get it or keep it is going to be very high compared to what you think it is right now. Now, whether that's
good news or bad news, whatever, I think any normal person would sort of see that as bad news, but it's going to happen. And so the good news is you're hearing about it now and you get to make the changes early if you're wise and so your, your end will be much better than it would otherwise be. There
are other pieces of good news in that, but I don't know how to explain them simply and I want to keep this very short so well, actually I'll just, I'll just go ahead and give you one chunk of that. Um The truth is that what you value is very much intertwined with what you pay for it. And uh although
it doesn't seem like a good thing, it is very necessary for all of us to come to pay much more for things that are actually good. And as we do that the amount of joy that we have will vastly increase, believe it or not. Um It turns out that, that we are the societal version of a bunch of spoiled rich
kids. And as the cost of things explodes, it will help us. Uh and it's exploding toward reality by the way, um What we're coming out of is artificial, um mostly fueled by oil, cheap energy. But what we're headed towards is more real. And so as things explode in value, you will uh of necessity because
you won't have enough to, to retain everything that you currently think you have, but you will allocate your resources to what you want the most. And so the value of those things will increase and um it will become much easier to see what is actually not valuable and to let go of those things and all
of that is essential for us to get to where we need to go. So as you expand your ideas of what things are worth into, greater accuracy, you will allocate your limited resources to those things that actually have greater worth, but that's going to require you to pay more for them than you do right now
. And this isn't speaking strictly in monetary terms, although that, that's the most obvious application, but your attention, your time, your desire, all of that is limited and you will have to allocate it to things that you really care about because everything will require more of it. So as a specific
example of this, which I've got a bunch of examples on the next and final slide. Um, but getting married was the easiest thing to do in the past. And now it's really hard, it's really hard to find someone who's interested. It's really hard to be a person who's worth marrying. Uh, because modern society
cranks out terrible people. And, uh, it's really hard to persuade someone to marry you and it's really hard to find someone worth marrying. At least one of those I repeated. But hopefully the set is there. And so if you really care about that, then you're going to have to do things to encounter that
outcome that people didn't have to do 1020 3050 years ago. But if it's, if it's worth it to you, you'll find it and it will be that much more valuable to you. Ok. So here's some principles. If you, if you don't already have it, whatever it is, you won't be able to get it. So, what do I mean by this?
Well, more and more, what you're going to see is things that are taken for granted will be out of the reach of normal people, like owning a home or even owning a car or working at a place that you actually want to work or being able to, um, eat three meals a day maybe. Right. So, things that are considered
normal, um, if you're not already there in life, it's gonna be really hard to get there. Like the, the housing costs are exploding. Um, the opportunities to train for a career or to have a career that pays well, they're falling apart. And so it's harder and harder to get into things for the first time
. We'll get more into that with the specific examples. If you already have it, it will cost a lot more to keep it. So it's not going to be the case that, you know, used to be, buy a quality car. You've got a car, car for 20 years. If you bought it new nowadays, uh they're cranking out junk, you know
, you buy a washer and dryer, maybe the last two years, refrigerator, you get it home and the doors start falling off, right? So it costs a lot more to keep things again, those are monetary, but there are other things too like it used to be really easy to keep a marriage compared to today. Today. You
need to be superman or superwoman to hold it together and there are reasons for that. Ok. What else? Something simply won't be worth it. So as your valuation is, is morphing around, you're gonna find that um you're gonna find that that a lot of things that people thought were worth it just aren't worth
it. And maybe for you having a boat just isn't worth the cost or it's a maybe an overused example or um, maybe to you having five kids, like your parents did just isn't worth it, or maybe to you having a home isn't worth it. Maybe. Um, well, I'll get into that in a second. There's all kinds of things
that, that, uh, just aren't worth the cost anymore, you know, like going to college, for example, that's a great one. Um, other things that, that you don't presently seem as valuable, they're gonna become much more valuable. Uh But by comparison, so compared to uh what they used to cost what they used
to provide and benefit, how things are today, make them um much more valuable than you would have seen them 5, 1015, 20 years ago. So some examples here, I keep seeing so many people living in their vehicles and for now they're nice vehicles, right? They're very expensive, converted vans or whatever
, but you're going to see tons more people living in vehicles, not just fancy vehicles, either tons more people. You're also going to see a whole lot of people choose to move in with their parents or vice versa or even just multiple families living in the same house, whether they're family or not. Um
Why are people renting out rooms to folks? They're not related to, to get some extra money because it's getting crazy expensive to have a house to keep on, to get one or to keep one another example is subsistence farming. Now this one might take a little longer, but you're going to see people growing
a lot more food. And I don't just mean, let's see, how can I say this briefly? Almost everybody who gardens today in the United States, it's like window dressing. I mean, um, they'll grow a couple of zucchini or something, but they're not growing, you know, 5060 90% of what they eat. They still go to
the store all the time and they're relying on all that to be in place. Um That's the lifestyle they're living. But what you're going to see is a reversion towards subsistence farming where people aren't buying chips and soda and a, you know, cheese just even staples. They're, they're just growing and
eating things they can produce at home. And obviously that's not going to be on any huge scale because the vast majority of people in North America live in places where you can't do that. You can't do that on one acre of land. I think you'd struggle to do it on five. And that's even in a place with really
good soil. Uh I think 10 is what you would need for that and really good soil. But um anyway, you'll see more people moving towards that at least. OK. So now let's talk about some examples and I have an empty bullet here. I don't know what that's for one for my homies. So, um here are some delayed consequence
examples. I think I had an idea to put more examples on the slide and then I called it quits. Anyway, I've ranted and raved about public schools. But if you need me to do so yet again, think about how uh ubiquitous it was for kids to be publicly educated 30 years ago. And think about the mass exodus
from public schools today. I heard Houston is firing massive amounts of teachers and administrators um from their school system because in spite of having an influx of move ins from places like California, the uh number of students in their system is dropping like a stone and people are pulling their
kids out of public schools because they don't want them to be part of the 38% that don't know if they're boys or girls or um if they should like boys or girls or the uh to be exposed to pornographic textbooks or drag drag queen library hour or whatever else. Um And they're seeing how many of these kids
harm themselves or, or off themselves or are just uh plain useless at life because they never learn to take criticism or uh think about reality objectively and, and craft a course to be successful. But these are delayed consequences because the writing was on the wall a long time ago and people are just
now starting to wake up probably in large part thanks to COVID. So they wouldn't have even done this if they weren't forced to have their kid at home uh for one or more years. And so it takes a while to see the consequences of these things because your kid has to grow up a bit. But the problem is like
I showed you on the previous slide by the time you see the problems, it's way too late to fix them and in any kind of reasonable effort. And if you're the kind of person that wasn't willing to make reasonable efforts way earlier in the game, you're probably not the kind of person to make reasonable efforts
or whatever it would take this late in the game. It's funny how that works, right? All right. So if you want an example of network causes, think about housing costs. This is, I probably stopped because I could have made more bullets and I just didn't wanna punish you so, so much. So, have you heard the
, the buzz recently about the Biden administration's never ending uh crusade against appliances that work just fine. So, in the name of uh lower emissions and uh lower cost and both of those are a joke of reasons. They, they are complete lies. Um They're only true if you look at the tiniest sliver of
uh usage uh situations or lifetimes, if you completely ignore the cost to buy these things in the first place, remodel your house to meet the code to get them in or uh to repair them and they break earlier. So you're gonna have to replace them and they're going to a landfill and they'll have to be replaced
by something else that's, that's created. Um, everything is vastly more expensive. So when are you going to notice that this is another delayed consequence. Well, if your ac is working fine and you're already living in a house, good for you. The second you need your system recharged, you're going to
find out that there's a shortage of the refrigerant because of the new regulations trying to, to force a conversion to a new system that doesn't work as well. Um, and cost a fortune by artificially restricting the production of the refrigerant needed to maintain the old system. And so everything costs
way more. So if you're getting into a house, you're going to notice it costs a lot more. And if you don't believe me, drive around and look at houses that have been built in the last year and I promise you they're going to have really small ac units and it's not because they're magically more efficient
. It's just, they cost a fortune and people are looking at that and saying, well, it's not really worth it to me. So just like with the cost of building going through the roof, that's another bullet on this list. People are building smaller houses and they're building planer houses to try to get around
. Uh the increased property taxes that should have been a bullet here. Property taxes are going up and it's not just because of inflation, it's also because the counties and cities are increasing the percent. So it's a double, double whammy, they just keep expanding their, their programs. So you see
how this is a multi layer network, right? It's, it's uh got a bunch of inputs to the housing cost and the bunch of inputs going into those inputs. So here's, here's another one that, that you might not realize um banks, banks, the rules regulating banks have changed so that not only are they allowed
to loan money based on a multiple of the assets, the value of the assets that they have, but they also uh change the rules so that they're not required to mark their assets down to what they're actually worth. Um, so that used to be the rule and now they don't have to do that so much. And so there are
a lot of houses that would have been foreclosed 10 years ago because the bank is not going to sit on a loss, they want to liquidate it and move on, but they're sitting on all these houses that should be foreclosed and not bringing into the market because if a house is worth 500,000 on the books, they
can loan out the multiple of that, that they're allowed to legally in loans and make money on those loans. But if it's, if it's actually worth $300,000 and they sold it, they'd have to take a $200,000 loss. So they're just, they're just holding everything right now. And so you might know of houses around
you. I know of at least one that are vacant and then you get the problem with squatters and everything. But anyway, there's just, there's just thing on to, thing on to thing that's causing these problems. And so this is an interesting one because it's a great example of how the masses are completely
incapable of handling this. Because all they know and they find out unevenly, not all at the same time, all they know is things cost a heck of a lot more than they used to when it comes to housing. So then they, they uh cry out to the government to fix the problem. Well, the government caused the problem
, right? And it's, it's not gonna, it's not gonna solve the problem by adding more government to the equation. But the people are too simple to realize this because they can't understand network causes. And so they're actually digging their own ho hole deeper because then they vote for people and keep
people in power who multiply this problem by adding more things to the list. So, um you know, it's not going to get better. It's a terminal descent, there's, there's no getting out of this. OK. So what you need to do to make the best of it going back slide, you have to understand that this is the way
things are going. And if you can't afford a house today, you're not gonna be able to afford one tomorrow. It's not the way things used to work. Things are different today. So you could get ahead of the game by living in a van down by the river, right? And then start stacking your cash, do something else
with it. But, you know, it's really complicated because these things can change very quickly. That's another, um, unfortunate aspect of our society is we've centralized so much power into the hands of such foolish people that you can't rely on traditional solutions to problems because it, they can change
things in a heartbeat. I mean, just look at how quickly this has changed with the appliances and, and then all of a sudden you get into massive wastes of resources because I've heard stories, I've done this myself of people buying things they don't even need yet and just storing them because they know
it's gonna get worse over time. And so, um, that's, those are resources that can't be deployed. Uh, prosperously. You're just trying to minimize pain, you're not trying to make things better, you're just trying to minimize pain. And, uh, that, that's not the best for anybody. But anyway, I want to end
this on a high note, a positive note which you, it's probably impossible at this point. But, uh, we'll give it a shot. So you need to start to become much more sophisticated in how you see things increase your awareness, think about cause and effect effect, think about um sequences of cause and effect
, not just direct cause and effect. And then as you do really think about what you care about the most and double down on those things, reallocate your resources into a smaller set of things that matter more to you than they used to. And that's the path to get the most out of life as it is and as it