MONTHLY MULLING 💡
How IKEA Fools You & Can You Become The Next Einstein?
Hi👋 Tapan here.
Monthly Mulling is a bi-monthly newsletter curating the best ideas from the web to your inbox for free. High signal. Low noise. Join now👇🏽
Note: If my emails end up in the ‘promotions’ tab, please move them to the inbox so you don’t miss out.
Happy Sunday y’all!
📖 Currently, I am reading: The Thomas Sowell Reader by Thomas Sowell
Thomas Sowell is an American author and economist. I was surprised to see that all of his books on Amazon have a 5⭐️ rating which made me pick this book in particular as it covers a wide range of essays from him on social, economic, educational, and political issues. A bit of a heavy read though.
💡Today, we will talk about: 🥲 How IKEA Fools You! - The Diderot Effect, 🤓 Can You Become The Next Einstein?, 🧠 The Subtle Art of Denial - Munger’s Most Challenging Bias
🥲 How IKEA Fools You! - The Diderot Effect
Last week, I got myself a new TV - a stunning 55-inch QLED screen with thin bezels 😍
I also connected my old XBOX One, but its controllers wouldn't work, so I ordered a couple of new ones.
As I watched the latest season of Drive to Survive (🏎️) yesterday, I noticed that the TV's sound quality was mediocre at best. There was no bass. Naturally, I started looking for soundbars that would complement my TV, and the SONOS Beam caught my eye. It costs about £499 and will work well with my SONOS Play:1 👀
And then, came the realisation - was I making the same mistake that Mr. Diderot made in 1769? 🤦🏽♂️
You see, French philosopher Denis Diderot wrote an essay called "Regrets On Parting With My Old Dressing Gown," in which he described a new beautiful scarlet dressing gown that was gifted to him.
The gown put everything else that he owned, all his possessions, to shame. “All is now discordant. No more coordination, no more unity, no more beauty”, said Diderot.
So, he replaced all his old possessions with new things to create a sense of harmony with his new gown. He bought a new rug from Damascus, a leather chair to replace an old straw chair, intricate sculptures, an expensive clock, and so on.
He did this to create a sense of unity with his new gown. But, eventually, he went bankrupt!
I was the absolute master of my old robe. I have become the slave of my new one.
- Denis Diderot
This is the Diderot Effect.
It is a social phenomenon, mostly related to consumer goods based on two ideas:
😎 Goods purchased by consumers will align with their sense of identity, and, as a result, will complement one another.
😍 The introduction of a new possession that deviates from the consumer's current complementary goods can result in a process of spiralling consumption.
Our identities are tied to material things - clothes, furniture, house, cars… our possessions.
These possessions should not be seen in isolation but they belong in sets tied together by the Diderot Effect. At its core, the Diderot Effect is about the need for harmony between our sense of self and our external environment
🥲 The possessions reflect our identity and place in society.
Diderot Effect is the reason you see IKEA products grouped into brands. You go in to replace an old wardrobe, find the HEMNES 3-drawer chest, and end up buying the HEMNES side table, table, lamp, TV stand, shoe rack, and of course, new plants! 🪴
What I found most surprising about Denis Diderot's essay was how it changed the perception of his identity and the things he enjoyed. It made him realize how happy he was before his gift of the scarlet gown.
So, the question is - does buying new items provide us with freedom and security or trap us in misery?
🤓 Can You Become The Next Einstein?
Imagine being tasked by your manager to create a new dashboard at work using Tableau. You are excited about the new project but there’s just one problem: you have never used Tableau before 🙃
So, you quickly start learning about it by watching a few YouTube videos, reading a couple of articles, and practising for a few weeks. Finally, the time comes to put your newly acquired knowledge into action and start creating the dashboard.
But wait… it’s not as easy as the YouTuber made it look in the video. You are struggling.
So, what do you do?
🥺 Do you accept defeat, be convinced that you’re just not cut out for it, and tell your manager that you want a new project?
OR
🫡 Do you rise to the challenge, acknowledging that with more effort and practice, you could master it?
Your answer to this conundrum is based on the implicit theory of intelligence, which Josh Waitzkin explores in his book, The Art of Learning.
There are two mindsets regarding intelligence:
🧐 Entity Theorists: They believe that success or failure hinges on something static and implicit in who they are as people.
💪🏼 Incremental Theorists: They believe that success or failure is dependent on actions and processes.
In a difficult situation, an entity theorist would think, “I’m not smart enough for this.” Conversely, an incremental theorist would say, “If I work hard enough, I might get it.”
Very smart kids with entity theories tend to be far more brittle when challenged than kids with learning theories who would be considered not quite as sharp.
In fact, some of the brightest kids prove to be the most vulnerable to becoming helpless, because they feel the need to live up to and maintain a perfectionist image that is easily and inevitably shattered.
- Josh Waitzkin, The Art of Learning
Incremental theorists “don't necessarily believe that anyone can become an Einstein or Mozart, but they do understand even Einstein and Mozart had to put in years of effort to become who they were".
Unfortunately, I have grown to adopt the entity theorist mindset. I tend to give up after a few attempts and switch to something new if I don't find immediate success.
However, I am slowly working to change my perspective to that of an incremental theorist. I am trying to analyse my success and failures based on the process and inputs instead of something inherent.
I know that I can never be the next Einstein (or Charlie Munger 🤩) but I can put in years of effort.
🧠 The Subtle Art of Denial - Munger’s Most Challenging Bias
I recently read an article by my friend Thomas Chua about Charlie Munger's talk at the 2023 Daily Journal meeting. Munger discussed the most difficult bias to overcome, which is denial.
Question: Mr. Munger, you’ve spoken about the importance of avoiding mental biases in decision-making, in your experience, what’s the most challenging bias to overcome? And how do you personally guard against it?
Munger: If I had to name one factor that dominates human bad decisions, it would be what I call denial. If the truth is unpleasant enough, their mind plays tricks on them, and they can think, it isn’t really happening.
And if you want an example of how denial was affecting things, take the world of Investment Management. How many managers are going to beat the indexes, all costs considered? I would say, maybe 5%, consistently beat the averages.
Everybody else is living in a state of extreme denial. They’re used to charging big fees and so forth, for stuff that isn’t doing their clients any good.
We will all do dumb things. We can’t help it. We are wired that way.
However, we are not doomed to live in denial or keep striving to justify our actions.
We always have the choice to correct our tendencies, once we recognize them.
- Shane Parrish, Bias from Self-Interest
BTW, if you’re interested in investing, you MUST follow Thomas! Thomas has summarised the entire Daily Journal chat with Munger in his article👇🏽
Thanks for reading 🙏🏽 Do you think any of your friends will like Monthly Mulling like you? Please share!😇
If you have any comments, you can connect with me on Instagram, Twitter, LinkedIn, or reply to this email!