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To conclude the book guide, we’ll cover a variety of topics mentioned through Poor Charlie’s Almanack that didn’t fit cleanly into the previous chapters.
If you want people to do something, often asking them to do it won’t get the best results. You may have to take a more oblique path, especially leveraging the psychological biases we covered. We’ll cover two examples.
First, Munger gives the example of Captain Cook, who knew his sailors suffered from scurvy. He learned that Dutch ships had less scurvy, and also noticed that they ate lots of sauerkraut (which, possibly unknown to him, contained vitamin C). But touch, ornery English sailors were unlikely to eat sauerkraut, given the rivalry with the Germans and Dutch. Cook also knew he couldn’t tell them to eat sauerkraut to prevent scurvy, since this would tip them into thinking the voyage would be so long they had to mutiny instead. So he relied on social proof and exclusivity—he gave sauerkraut to the officers’ table only, but not to the main crew. The crew looked on enviously, until Cook relented, allowing the crew to eat sauerkraut one day a week. Soon he had the entire crew eating sauerkraut happily.
Second, suppose you’re advising clients who are prone to breaking laws and committing fraud. You have two typical options: 1) decide to quit and not work for him any further, 2) decide that you’re not morally culpable given that he’s doing the cheating, and acquiesce to work for the sake of your mortgage. Instead, Munger argues for a more convincing third option—appeal to his self-interest. Tell him that he can’t commit his widespread fraud without other people knowing about it, and so he’s making himself vulnerable to blackmail and scandal, which will ruin his company, his money, and his family. Appealing to self-interest can often work far better than rationalization.
(Shortform note: For more on appealing to a person’s self-interest, check out the advice in the classic How to Win Friends & Influence People.)
Psychological tricks like this can be powerful, but there is a line at which it can become immoral. And if you do this too transparently, using tools that the other person is aware of, he won’t trust you again.
Munger believes that the most fundamental disciplines—say, math and physics—are much more rigorous than the soft sciences like economics and psychology. The soft sciences tend to be unorganized in their thinking and relish in complexity instead of elegant fundamentals.
Munger argues that soft sciences should integrate the ethos of hard sciences: