The effects of effects #MentalModel

"You can never merely do one thing"

During India’s colonial rule, the British government became concerned about the number of venomous cobras in Delhi. They instituted a reward for every dead snake brought to officials in order to reduce the snake population.

It worked in the short-term but bombed big time in the long run. People started breeding snakes to slaughter and bring to officials! 😅

Because British officials did not think at the second level, the snake problem became worse than when it began.

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Well, that’s second order thinking, aka effects of effects.

Similarly, Elon Musk’s acquisition of Twitter has many after-effects:

• 50% layoffs and now, Twitter is facing class action lawsuit from ex-employees

• Advertisers are fleeing the platform, i.e. loss of revenue.

• US midterm elections are scheduled soon and there lies a massive probability of Twitter being abused by parties (and more legal troubles). Given that the team handling such tasks have been let got, it might be an operational challenge.

• Celebrities aren’t happy with paid Twitter blue decision as it will take away the novelty out of the system - if they leave, it will be end of the story.

In the race for subscription revenue, is Elon risking it all? If celebrities leave, so will others..and then, advertisers? So, you make money from one hand (subscription) and lose from another (ads)?

Do you think Elon Must has considered these effects of effects? Well, we don’t know yet, but let’s ensure we consider second order effects of our decisions.

Talking about second order effect, here is a quote that gives you a great intro into the second order mental model.

“You can never merely do one thing”
Garrett Hardin (economist)

That is, whatever your actions are, there will always be consequences of it (whether you like it or not).

Presenting an atomic idea from the book The Great Mental Models by Shane Parrish. We will explore what, when and how of second order thinking in this edition of the newsletter.

What’s second order thinking?

Almost everyone can anticipate the immediate results of their actions. This type of first-order thinking is easy and safe but it’s also a way to ensure you get the same results that everyone else gets.

Second-order thinking is thinking farther ahead and thinking holistically. It requires us to not only consider our actions and their immediate consequences, but the subsequent effects of those actions as well. Failing to consider the second- and third-order effects can unleash disaster.

Stupidity is the same as evil if you judge by the results: Margaret Atwood

Where to apply second order thinking?

Two areas where second-order thinking can be used to great benefit:

• Prioritizing long-term interests over immediate gains Second-order thinking involves asking ourselves if what we are doing now is going to get us the results we want.

• Constructing effective arguments Second-order thinking can help you avert problems and anticipate challenges that you can then address in advance.

When we try to pick out anything by itself, we find it hitched to everything else in the Universe.
- John Muir

If you want to better understand how the world works, include second and third order thinking in your process.

To summarize: Second-order thinking needs to evaluate the most likely effects and their most likely consequences, checking our understanding of what the typical results of our actions will be.

What’s one question that you should always answer?

And then what?

Yes. As simple as that.

But ensure you don’t get into overthinking mode. Finding the balance is what makes the process a lot more fun.

Happy thinking!

Sinha.