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Podcast Summary: The James Altucher Show - Episode with Steven Pinker
Episode Overview
- Title: I Know that She Knows that I Know that She Knows: Steven Pinker on the Mysteries of Money, Power, and Everyday Life
- Host: James Altucher
- Guest: Steven Pinker
- Focus: Exploration of common knowledge, social interactions, and the implications for communication, relationships, and society at large.
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Key Themes and Concepts
- Common Knowledge
- Definition: Shared understanding among individuals about what everyone knows that everyone else knows.
- Example: The dynamics in a poker game where players assess bluffs and anticipate others' thoughts and actions.
- Social Communication
- Indirect Communication: The tendency to hint at intentions rather than stating them outright (e.g., asking for “coffee” after a date implies romantic interest).
- Weasel Words: Language that avoids directness to maintain relationship stability and avoid confrontation.
- Relationship Dynamics
- Importance of Subtlety: Being too direct can alter the nature of relationships, while indirect communication allows for flexibility and preservation of social bonds.
- Role of Laughter: Acts as a social bond and a mechanism for establishing common knowledge, reinforcing relationships through shared humor.
- Game Theory and Recursive Thinking
- Recursive Thinking: The mental process of considering what others think about what you think, often seen in negotiations and social interactions.
- Implications in Everyday Life: Understanding how this recursive thought process applies to dating, workplace negotiations, and more.
- Rational Hypocrisy
- Concept: The idea that complete honesty can be detrimental to relationships; sometimes, maintaining a fiction is essential for social cohesion.
- Example: The notion that relationships thrive on certain unspoken norms that individuals might not want to challenge openly.
- Behavioral Economics
- Market Behavior: Discusses how common expectations drive behaviors in markets (e.g., stock market fluctuations as people respond to public knowledge and speculation).
- Hoarding Behavior: The toilet paper shortage during the COVID-19 pandemic illustrates how fear-based reactions can create actual shortages based on perceived shortages.
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Insights and Learnings
- Subtle Signals: Understanding the nuances of communication can enhance social skills and improve negotiations.
- Cognitive Awareness: Recognizing common knowledge can help individuals navigate social interactions more effectively.
- Social Flexibility: Being adaptable in communication styles can help maintain relationships and facilitate successful interactions.
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Timestamped Highlights
- [00:00] - Introduction to common knowledge.
- [03:00] - Discussion on Pinker's optimism regarding historical violence.
- [10:00] - Exploration of indirect communication and weasel words.
- [27:00] - Insights into bluffing behavior in poker.
- [42:00] - The concept of rational hypocrisy versus radical honesty.
- [56:00] - Discussion on hoarding behaviors during crises.
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Recommended Reading
- [When Everyone Knows That Everyone Knows: Common Knowledge and the Mysteries of Money, Power, and Everyday Life](https://www.amazon.com/When-Everyone-Knows-That-Knowledge/dp/1668011573/)
- [The Better Angels of Our Nature: Why Violence Has Declined](https://www.amazon.com/Better-Angels-Our-Nature-Violence/dp/0670022950/)
- [Rationality: What It Is, Why It Seems Scarce, Why It Matters](https://www.amazon.com/Rationality-What-Seems-Scarce-Matters/dp/0525561994)
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Conclusion This episode with Steven Pinker offers profound insights into the complexities of human communication and interaction. By understanding common knowledge and the subtleties of social dynamics, individuals can navigate their relationships and negotiations more effectively, creating a more nuanced approach to everyday life.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:00Being an entrepreneur is a 24-7 job. And when you're hiring, you need a partner that works as hard as you do. That hiring partner is LinkedIn Jobs. When you clock out, LinkedIn clocks in. LinkedIn makes it easy to post your job for free, share with your network, get qualified candidates that you can manage all in one place. For one thing, you can post a job. LinkedIn's new feature can help you write job descriptions and then quickly get your job in front of the right people. You get qualified candidates. At the end of the day, the most important thing to your business is the quality of the candidates.
0:30And with LinkedIn, of course, you can feel confident that you're getting the best. Based on LinkedIn data, 72 % of small and medium businesses say using LinkedIn helps them find high-quality candidates. Find out why more than 2.5 million small businesses use LinkedIn for hiring today. Find your next great hire on LinkedIn. Post your job for free at linkedin.com slash altature. That's linkedin.com slash altature to post your job for free. Terms and conditions apply. What can 160 years of experience teach you about the future? A lot, especially when it comes to protecting what matters. At Pacific Life, we've helped people and businesses confidently embrace the future with life insurance, retirement income, and employee benefits with strategies built on strength and trust and a promise to be here for you today and tomorrow.
1:21Ask a financial professional how Pacific Life can help you today. Pacific Life Insurance Company, Omaha, Nebraska, and in New York. Pacific Life and Annuity, Phoenix, Arizona. Today on The James Altucher Show. You want it to be obvious enough that a person who is willing knows that they're being propositioned. You don't want to be like George Costanza in Seinfeld, where his date invites him up for coffee. He says, no, the caffeine will keep me up. And then on the way out, he realizes coffee doesn't need coffee. Coffee needs sex. The main idea is that laughter, it generates common knowledge. When you're laughing, you know it because it's interrupting your breathing.
1:59And everyone around you knows it because it's noisy. Laughter can also be used aggressively, as when the whole room starts to jeer, laugh at something stupid. You know, when you make fun of the preacher, the teacher, the politician, the blowhard, late night TV, where most of the monologues now are jokes at the expense of Donald Trump. It's a way of taking someone down. There, it's taking someone down aggressively. That's why a shared sense of humor is one of the keys to romantic attraction and also the keys to friendship.
2:33This isn't your average business podcast and he's not your average host. This is the James Altucher Show.
2:51I first got really impressed with Steven Pinker when he wrote the book, The Better Angels of Our Nature, Why Violence Has Declined. And he basically shows in there that over the past 10 ,000 years, basically, every single century has been less violent than the century before it. And you might think, oh my gosh, you can't include the 20th century. We had World War I, World War II, atomic bombs, flu pandemic of 1920, Vietnam War, all these wars. How could that have been less violent than the 1800s? Well, it was actually. When you look at per capita, like violent deaths per thousand people, it was actually a much less violent century than the 1800s, which is a much less violent century than the 1700s.
3:39and on and on back through history. And it's a real nice book of using history to demonstrate optimism. But it's his latest book that is so fascinating that I had to talk to him about it. And it's called, When Everyone Knows That Everyone Knows, Common Knowledge and the Mysteries of Money, Power, and Everyday Life. First off, that subtitle, Common Knowledge and the Mysteries of Money, Power, and Everyday Life. You can't just skip over that. You have to find out more. But what he's talking about, what everyone knows that everyone knows. I'll just give an example. In poker, if someone bluffs you, you have to say to yourself, are they bluffing me?
4:18Or are they making me think that they're bluffing, but they're not actually bluffing? Or are they bluffing because they know that I might be thinking that they're faking their bluff? And on and on. So there's a lot of interactions in life when there's sort of partial information that each side gives. So an example might be, you know, if you're on a date and you say to the girl, hey, you know, you want to have a cup of coffee up in my apartment just at the end of the date. That's kind of like commonly accepted. That means the guy wants to fool around with the girl. They're not really going to have a cup of coffee.
4:55But is that what he means? If she says no, okay, she just didn't want to have a cup of coffee. So like partial information is given. People don't directly say what they mean. And sometimes it's better that way for a lot of reasons. When you're asking your salary for a raise, sometimes you say, hey, I'd be willing to take on more responsibilities. Can we discuss what this means? So you're not directly asking for a raise, in which case they might directly say no. You're kind of conveying partial information and then he can decide whether, or she can decide whether to convey partial information back or give you the salary raise or whatever.
5:33It's kind of a safer way to communicate. In lots of areas of life, we want to play it safe for good reason. And Stephen and I speak about that. Like, what are these common areas where everybody socially knows what the other person means, what they don't fully say? And how can you take advantage of the fact that there's this mysterious information being left out? Again, whether it's an everyday life discussion, a discussion about money, a discussion about power, and so on. By the way, Steven Pinker If you've never seen a picture of him He looks like an academic Like Jay, don't you think he like looks If he told you he was like a plumber You wouldn't believe him But if he tells you, oh I'm a professor at Harvard You completely believe him, right?
6:19Yeah, he looks exactly like Einstein He kind of looks like you too No, no, he's got that long white hair He's got big blue eyes He's like a beautiful looking male academic Like, it's like the best looking academic I've ever seen Yeah, he could be one of the two Either academic or crazy musicians Yeah, he could be a crazy musician Right, he almost Would you say he looks a little like Jimmy Page, almost? He does, he almost also looks like Beethoven That's how I imagine Beethoven would be Yeah, yeah, okay, I could see that Beethoven maybe looks a little heavier Pinker is kind of thin But who knows, I don't know Maybe Beethoven was thin too, I don't know So we'll do that.
6:59It'll be the subject of another podcast. Meanwhile, when everyone knows that everyone knows common knowledge and the mysteries of money, power, and everyday life with my good friend, Steven Pinker, here we go.
7:18Have you been very busy promoting the book? Oh, yes. Yeah. Three weeks of touring, continuing, plus a bunch of podcasts. This is such a fascinating topic because it's almost a topic about common sense. Okay. You know, with common sense, it's the same idea that everybody knows this is the thing you do in this situation. If you're riding on a bus and a bunch of seemingly violent people come onto the bus, it's common sense to get off the bus. That's my example. Okay. And everyone is thinking that on the bus. Another thing I was thinking was a potential title for this book. it's almost like communicating with less information.
7:58If a man winks at a woman or a woman winks at a man, it's not necessarily saying, hey, I want to date you or have sex with you, but it's like partial information towards that. And so this book is a lot about how people communicate with partial information because the remainder of the information is common sense. Yes. Well, there's a chapter in the book called Weasel Words about why we don't blurt out our feelings in black and white. We hint, we wink, we shilly-shally. We use innuendo, euphemism. We want to come up for Netflix and chill. Gee, officers, is there some way we could sell a ticket here without going to court and doing a lot of paperwork?
8:41So a lot of it is about testing the situation. For instance, we all know what these things mean, but we don't know what each other's boundary is. and we're trying to find out what those boundaries are. Is the officer willing to take a bribe or is he not? And you don't want to directly say, hey, will you take a bribe? Because that might be an illegal statement or it might be too much. You know, we might go over the boundary. So a lot of this partial information when everyone knows that everyone knows is about testing those boundaries. Yes, when we don't know the values of the person that we're dealing with, it's what game theorists call a game of imperfect information.
9:15You just don't know what the other guy wants or likes. The case of a fraught proposition, like a male bribe, a male threat, a sexual come on, you want it to be obvious enough that a person who is willing knows that they're being propositioned. You don't want to be like George Costanza in Seinfeld, where his date invites him up at the end of a meal for coffee. He says, no, the caffeine will keep me up. And then on the way out, he realizes coffee doesn't mean coffee. Coffee means sex. So you don't want it to be so subtle that it It goes over the head of someone like George Costanza. On the other hand, you don't want to be so obvious that if the person does reject the offer, it changes the nature of the relationship.
9:58In the obvious case of bribing a police officer, it's literally illegal to bribe a cop. And so you don't want the statement to be provable in a court beyond a reasonable doubt that you bribed the officer. In the case of an ordinary social circumstance, there's no law against, say, bribing a maitre d' to be seated immediately if you don't have a reservation at a restaurant. Or there's no law against inviting a proposition to someone for sex as long as they don't work for you. But still, what I emphasize in the book is that our social relationships are grounded in common knowledge. What does it mean for two people to be friends?
10:36Each one knows that the other one knows that the first one knows that the second one knows that they're friends. Likewise, lovers or co-workers or boss and a subordinate and common knowledge, which is what direct, blurted out speech generates, can challenge the nature of a relationship. And so if one person and a date says you want to have sex and the other one turns them down, they really can't go back to just being platonic friends or a professor and a student or a boss and an employee. whereas if it's stated subtly enough that it can't be shown to be common knowledge, then they can go back to the relationship.
11:13This is particularly relevant to cases where, unlike bribing the cop, where it's just against the law or sexual harassment, but even in everyday life when there's no cop who's going to frog march us off in handcuffs, we still care about the nature of our relationship. And that's the bottom line. Relationships are matters of common knowledge, what I know that you know that I know that you know. Blurted out speech generates common knowledge. Hints, innuendos can convey the message, but without the common knowledge. And so the relationship can survive. Yeah. And it's also could be the case that this idea of conveying partial information or not blurting out the full honest truth, that the partial information is what everybody is fine with.
12:00Maybe the two colleagues who want to have sex with each other, they're fine knowing that each feels that way, but just not saying it. Because like you say, then it changes the nature of the relationship. Maybe there's other things going on in their life, so they can't explicitly say it, even though they both know it. That's right. Our social relationships are matters of common knowledge. We don't sign a contract to become friends or lovers. I usually sign confidentiality agreements and things like that. Entried up. I mean, the time may come for that, but it's not usually, generally not how the relationship is formed.
12:37When we don't want to change the nature of a relationship, there are some things we just don't say out loud if they challenge the common knowledge that props the relationship up. Conversely, sometimes to establish a relationship, you want to generate the common knowledge. So in the case of lovers, it's the ritual, I love you, and the return, I love you. That's not ordinary language. You're not negotiating something. But just the ritual of each one saying it in turn means that's it from now on we're lovers. Whereas if one person were to say it wasn't reciprocated, it's a situation also from Seinfeld that I analyze in the book.
13:15Jerry warns George who's contemplating saying I love you to a woman he's been dating for a while. It says, if you say I love you, you don't get that I love you return. That's a big matzo ball hanging out there. And that's a metaphor, a big matzo ball hanging out there. Anything that you describe as if it's visible, obvious, salient, conspicuous, self-evident in your face, that's the way we talk about common knowledge. And getting back to common sense, the metaphors for a conspicuous, salient object is the way we talk about common knowledge, because generally we don't use the language of game theory.
13:54We don't say, well, I know this, you know this, and I know you know that I know that you know that I know you know this. That's not the way we usually talk, but we do talk in terms of something that is out there. So the whole idea is, like in the emperor, the emperor wears no clothes. Everybody knows this, but everybody watching knows that the emperor's wearing no clothes, but everybody also knows they shouldn't say anything or they might get killed. So they all kind of keep it to themselves. And this is where the game theory comes in. You have a goal and sometimes even when you know everybody knows what your goal is and you know what everyone else's goal is, not acknowledging it is sometimes the best way to achieve either your goal or close to your goal.
14:38So for instance, in the Seinfeld example, they really are saying in, you know, sort of subtly, I know that she knows that I know that she knows. Because if George says, I love you, they both know if she doesn't say, I love you back, then that's a bad thing for the relationship. And so they are strategizing, you know, offline. Let's say online is when George is actually talking to the woman and saying, I love you. So now they're strategizing offline, whether this is a good approach to achieve the goal. And the goal is George wants to have a relationship, perhaps have sex with this girl, whatever.
15:17And you use this idea that I know that she knows that I know that she knows. You use this idea when strategizing to achieve a goal. That's why that Seinfeld example is so good. Yes, that's right. There are many levels of awareness, of awareness, of awareness. And that's what makes social life so interesting. That's why we have sitcoms and and murder mysteries, and spy thrillers. We exercise our ability to get inside each other's heads as others are getting inside our heads or inside the heads of a third party. It's that cognitive skill that makes social life possible. And we sometimes exercise it through fiction and plays and comedies.
16:02Well, you have a chapter on laughter in here, and I think that's so interesting because so much of humor is about breaking the pattern. Everyone knows that, you know, she knows that I know that she knows that I know. Breaking that pattern somewhere in the middle is funny. So if George says to the girl, I love you, and she says, we'll talk to you soon, and that, right, you just laughed because breaking, doing a pattern disrupt like that, breaking that social norm that is embedded into us for whether it's dozens of years or hundreds of thousands of years, breaking that norm is funny or it's a failed negotiation.
16:44Well, in social life, I mean, when you're watching a comedy, you know, often you're watching it alone or one other person. So it's not part of your social life. I talk about why we laugh in the first place, just in ordinary social settings. And the main idea is that laughter generates common knowledge. When you're laughing, you know it because it's interrupting your breathing. And everyone around you knows it because it's noisy. And you know that they know that you know it and so on. So you're creating common knowledge of something. What is it? Generally in humor, there's someone whose dignity has been taken down a notch.
17:18That can be done aggressively when you make fun of a boss behind his back or you take someone down the neighborhood gas bag or pompous jerk. But it can also be used convivially when you use self-deprecating humor, you tease yourself, you josh your friends, and it's very enjoyable. Generally, it's not terribly funny out of context. You kind of had to be there. In fact, I cite a guy, a pathologist named Robert Provine, actually went out and got records of what makes people laugh in ordinary social settings. That is, as opposed to comedy clubs and sitcoms and so on. which are very special kind of laughter.
17:55Most of the time when we laugh, it's not because someone told a funny joke. It's because there's some everyday social interaction and someone says, oh, what is that supposed to mean? Or you can't be serious. Or you'll never believe what happened when I tried such and such. That's what laughter is like in real life. And I think what it's doing in convivial settings, not when you're taking someone down, but when you're reinforcing a friendship, is you're saying, we're all equals. even though one of us might be better looking or smarter or richer or more powerful than the other that's not the way we relate with each other we relate as equals and so i'm going to make fun of myself i'm going to gently make fun of you just to re-establish that that's what we're all about we're all equals in a compact of mutual helping it enjoyment right so it's sort of like a negotiation like if you're in a group of people and you make a joke let's say even a mildly self-deprecating joke, you're expressing this vulnerability.
18:55And vulnerability is often currency in a social situation. And everyone sort of knows that. That's a way to kind of everybody becomes equals. I would say it's currency, but it's more signaling. It's announcing your intent, your understanding of the relationship. Namely, that I'm not going to lord anything over you. I'm not going to pretend to be superior. I'm not going to flaunt what's so great about me. There might be other circumstances where I want to do that, but not in this circle. In this circle, we're all friends. And laughter helps to do that. Laughter can also be used aggressively, as when the whole room starts to jeer and laugh at something stupid someone said.
19:34You know, when you make fun of the preacher, the teacher, the politician, the blowhard, late night TV, where most of the monologues now are jokes at the expense of Donald Trump. It's a way of taking someone down. So there it's taking someone down aggressively. When it's among friends, it's taking us down so that we all are at the same level. We're all equals. We're all friends. You know, but it's interesting you bring up the politics. I find that a lot of conversations now are, let's say it's two people talking and they're meeting for the first time. They don't really know a lot about each other.
20:08They know the social norms, but they don't know about each other. And I find that a lot of this innuendos and partial information is, for instance, there's a whole kind of subtext of you don't know if someone's for Trump or against Trump. So there's a lot of back and forth as people try to figure out who each other are until they can have a real conversation about politics. And so there are these times when not everyone knows that everyone knows. So they do various signals and coded language with each other until everyone knows where they stand with each other politically. Yes, that's exactly right.
20:44That, of course, is one of the features of everyday social life, for which humor can help. If you laugh at the same things, you're making common knowledge what was previously an assumption that you shared, and you may or may not have shared. A way of establishing whether you share it is, when you make a common knowledge, do you both laugh? And that's one of the things that laughter does. That's why a shared sense of humor is one of the keys to romantic attraction and also the keys to friendship. Laughing at the same things establishes that your background assumptions have been shared all along.
21:19And what is it, like, and you mentioned Darwin in the, I'm pretty sure it's the chapter on laughter. What is it about laughter specifically that kind of lends itself to sexual selection? I think that in terms of mating, it's what we were just saying, namely that because laughter is a signal that when it is reciprocated, when it spreads contagiously, and we know that laughter is contagious. It's a signal that background assumptions that you carry with you are the same as everyone else's, particularly the background assumptions about someone's lack of prestige, dignity, standing, dominance. Since a romantic relationship involves shared interests, you're in it together, what's good for me is good for her and vice versa, laughing at the same things establishes that our understanding of the world overlaps a lot.
22:10do you think it is about shared interests or do you think like looking back to evolution and biology i know this has been an interest of yours for many books is it that laughter somehow signifies that let's say it's the man making the woman laugh does that sort of signal maybe the man has enough intelligence to be the protector to be the hunter whatever i'm just making this up i'm not an evolutionary psychologist, but what's the connection there? Yeah, anything that flaunts a talent, a virtue, an asset can be sexually attractive. Not necessarily for a man protecting the woman against kidnapping or predators, but it's also the quality of the person's genes.
22:52Your kids are going to be 50 % from them and 50 % from you. You want to make sure that the 50 % that isn't you are the best genes possible. And so that's why each member of a couple values positive traits in the other, together with the fact that those positive traits can actually affect them as they're being exercised in everyday life, whether it's for protection or solving problems, or life presents lots of conundrums, and if you have a partner who's good at solving them, that helps both of you. Together, and protection, when that is necessary, but it isn't just for protection. It doesn't have to be that simple.
23:29But in general, anything positive, athletic ability, musical ability, intelligence, health is desirable in a mate. So I guess health is something that's very plain and easy to see for the large part. And humor, I guess, is something that's plain and easy to see. I don't need to carry around a musical instrument everywhere. I just can make someone laugh. Yes. And someone who's quick-witted, there is a certain intelligence underlying wit as opposed to just slapstick or crude scatological or sexual humor. Although that can be clever too, depending on how it's wielded. But yeah, humor can be a sign of someone's intelligence.
24:06A lot of us prize witticism from someone like Oscar Wilde or Bertrand Russell or even clever comedians. And we use that as an assay of other people's intelligence in shopping for partners, mates, spouses as well.
24:51So I have started many companies. Some did well, some did not do as well. I've also run many companies. I've advised many companies and I've been involved in all aspects of the hiring process, whether sometimes I would have to hire a CEO, but sometimes software developers, sometimes designers, sometimes head of sales or business development. I've been involved in basically every aspect of running a business. And hiring is maybe the most important thing you could do when you start a business. So I'm gonna give you one piece of advice and it's related to what I'm talking about here. You know, I used to think I was frugal because I would try to find employees as cheaply as possible.
25:30You know, someone young, just starting out, whatever. But what I've learned is you do so much better as a business finding the best person in your field. If you want a head of sales, find the best head of sales. If you want a software developer, hire the best software developer. It ultimately will save you money, but it'll also save you so much time, so much aggravation, so much anxiety. These are all things you need to preserve. It's really important to hire correctly. When you're running a business, your mind is on your business 24 hours a day, seven days a week. That's the problem with being an entrepreneur is you never leave the work at the office.
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26:39Post your job for free or you pay to promote it. Promoted jobs get three times more qualified candidates. You get qualified candidates. At the end of the day, this is the most important thing to your business is the quality of those candidates. Based on LinkedIn data, 72 % of small and medium businesses using LinkedIn say that LinkedIn helps them find high quality candidates. That's good information. You share with your network. So when you're on LinkedIn, your whole business network knows you're hiring. So find out now why more than 2.5 million small businesses use LinkedIn for hiring today. Find your next great hire on LinkedIn.
27:13You can post your job for free at linkedin.com slash Altature. That's linkedin.com slash Altature to post your job for free. Terms and conditions apply.
27:29Being an entrepreneur is a 24 seven job. And when you're hiring, you need a partner that works as hard as you do. That hiring partner is LinkedIn jobs. When you clock out, LinkedIn clocks in. LinkedIn makes it easy to post your job for free, share it with your network, get qualified candidates that you can manage all in one place. For one thing, you can post a job. LinkedIn's new feature can help you write job descriptions and then quickly get your job in front of the right people. You get qualified candidates. At the end of the day, the most important thing to your business is the quality of the candidates.
28:00And with LinkedIn, of course, you can feel confident that you're getting the best. Based on LinkedIn data, 72 % of small, medium businesses say using LinkedIn helps them find high quality candidates. Find out why more than 2.5 million small businesses use LinkedIn for hiring today. Find your next great hire on LinkedIn. Post your job for free at linkedin.com slash altature. That's linkedin.com slash altature to post your job for free. Terms and conditions apply. This message comes from Capital One. With the Spark Cash Plus card from Capital One, you earn unlimited 2 % cash back on every purchase and get big purchasing power so your business can spend more and earn more.
28:43Steven, Brandon, and Bruno, the business owners of SandCloud, reinvested their 2 % cash back to help build the company's retail presence. Capital One, what's in your wallet? Find out more at CapitalOne.com slash Spark Cash Plus Term Supply. so you know the concept of thinking in this i know you've used the word recursive i'm trying to avoid that word but the concept of just because like most people don't think like that this is you know because it could go on forever oh he knows that she knows that he knows that she knows it it could go on forever so that's what people mean when they say this is recursive but like a classic example maybe the most practical example in real life is something like poker where someone's bluffing and you think to yourself, are they bluffing?
29:31Or do they think that I think that they're bluffing? Or do they think that I think that they're bluffing? So now they really are bluffing. And then it can get recursive where it could go on forever where you're trying to determine if the person's bluffing or not, but it depends on how much they're thinking about whether you're thinking about their bluffing. So that's when it can go on forever. And there's no real answer to how to solve that problem other than observation. Like, Is that how this person plays poker? Or the same, you know, even simpler, rock, paper, scissors. If I do rock two times in a row, you could think, is he just doing rock forever?
30:06Or now does he think, I think he's doing rock forever, so now he's going to do paper? Or, you know, whatever. Yeah, I do analyze those, particularly in the previous book called Rationality, where I have a chapter on game theory. I talk about what are called outguessing standoffs. But I talk about them again in this book, because as you note, they do pop up and they do involve, again, to use the fancy schmancy word, recursive mentalizing. That just means trying to get inside someone's head as they're trying to get inside someone's head, maybe yours, maybe someone else's. So that's recursive mentalizing, but it's just getting inside, reading the mind of a mind reader is the way I put it.
30:43And indeed, poker is an example. Rock, paper, scissors is another one. In sports, the penalty kicker wants to know whether the goalie is going to guard left or right, and the goalie wants to know whether the kicker is going to kick left or right. Each one of them is trying to get inside the head of the other one getting inside their head. The solution in those cases is to be random. That is, if you have some predictability, as you noted, or if there's some tell, if you give away your intention by leaning, twitching, then you give your opponent an advantage. That's why we, of course, have the expression a poker face.
31:19That is, you don't give away, even in a micro expression, the kind of hand you're holding. And randomness is essential. So in poker, you can't bluff all the time because then your opponent will call your bluff. You can't bluff none of the time because then you won't be pressing your advantage. And so a skilled poker player bluffs not like mentally flipping a coin. It can't be 50-50. It really does depend on the value of the hand that you have. But depending on the payoff of being wrong in each direction, you randomize. And that's the optimal strategy in an outguessing standoff. And so given that, let's say given your book, given that you wrote this book, how can one take this information and maybe use it in a setting like poker or rock, paper, scissors?
32:09And the reason why I'm asking about those two games is games in general are a safe way to practice life's more difficult situations. So poker might be like a game-like simulation of real-life negotiation, for instance. So that's why these concepts are so important for very important things like two countries negotiating nuclear weapons. So given what you write in this book, how can one use this knowledge and information to better themselves, to deal with life situations? Well, it's not directly a kind of how-to book or a lifestyle. Yeah. But I think every social interaction involves either creating or denying common knowledge.
32:54And just to be aware of how that goes on can give you more insight. I think probably can be parlayed into greater, you know, we have the expression social skill, savoir faire, not being too far along the spectrum, being savvy. And so I like to think that the book gives you a way of thinking about what actually social skill is. A lot of it is either negotiations like the one we talked about in terms of a veiled bribe, the veiled sexual come on, veiled threat. That is, how subtle versus blatant do you make your propositions so that they don't go over the head of someone who really wants to accept them, but they don't offend or insult someone who doesn't want to go along with them.
33:35So, you know, that kind of calibration. And it's a calibration, as we talked about before, not just in terms of concrete rewards and punishments, like being handcuffed or going free without a ticket, but also in terms of the, one of the things that the book tries to explain is what are the non-tangible social outcomes? What is it, why do we sometimes feel awkward? Why do we feel embarrassed? Why do we feel ashamed? Why do we feel guilty? Why do we feel outraged? Those are the rewards and punishments in everyday life that we're constantly negotiating when we calibrate our level of speech. Or it may not be just speech.
34:17It can also be, when do you laugh? When do you make eye contact? Also, in the final chapter of the book, which is called Radical Honesty, Rational Hypocrisy. So I take up the question, which all of us have to deal with, which is, when do we just kind of cut the crap and blurt out what we mean? Would it be good if we did that all the time? Should we dispense with the white lies and the genteel hypocrisy and the politeness and the beating around the bush and the shilly-shallying? and just kind of let it all hang out? And the answer is obviously no, we should not. There's a reason for hypocrisy. And in cases where people have to be brutally honest all the time, life is hell.
35:01There are fictional scenarios in which that's worked out for the amusement of the viewers, like the movie Liar, Liar. There's the case of a hedge fund, Bridgewater Associates, where the visionary boss, Ray Dalio, announced that from now on, we're all going to be completely honest with each other. If you think your co-worker is doing a lousy job, just tell them in so many words. If a boss is unhappy with an employee, he'll dress them down in public. It did not work out. People left the company. They had to change the policy. How come? Well, our relationships, as I mentioned, are our relationships of cooperation, of affection, of deference, of transactional exchanges, all depend on common knowledge of certain fictions.
35:49Friends will do anything for each other. Couples are loyal to each other in thought and deed. Bosses have the interests of their employees and of the organization at heart. And these are fictions. They're not true all the time. But if you challenge them too easily, then the basis of the relationship dissolves and you're no longer friends. You no longer have a stable chain of command. And so one always has to calibrate when are the benefits of preserving the relationship worth the costs of the hypocrisy of not saying what's on my mind. Yeah. So again, a lot of it is about negotiating a boundary.
36:30So for instance, you know, let's say the boss in general has the employee's emotions and success at heart. And that could be true part of the time. It's not going to be true all the time because the company is going to have some agenda that the employee might not like. But in general, the basic fiction that creates the relationship should be there maybe 80, 90 % of the time. And then it's a matter of just figuring out where those boundaries are. So you don't overstep. So you don't ask for a salary increase in the middle of a meeting where you're asked to take on more responsibilities. You don't tell the boss that he's an idiot.
37:07Even if he is an idiot, you're best off not saying that out loud. Because poker, you have a goal. In poker, your goal is to win the hand, to make money, or to get out of the hand so as to avoid losing money. And so you need to negotiate the boundary of what a bluff is and how much this person is willing to bluff. And deviating from that norm, from these social norms, like not calling your boss an idiot. If you deviate, it's got to have a purpose as well. Either you're making a joke or you want to get fired or you're creating content for a book or whatever. Yes. So another way of putting it is that communication often works at two levels.
37:46One of them is the actual content. The other is the relationship you have with the person. And since you have to keep both in mind, A lot of verbal communication, even a lot of nonverbal communication, consists of what to do when those are intention. A simple example is just a polite request, like if you could pass the guacamole, that would be awesome. That's kind of a weird thing to amuse about, a hypothetical world in which you would be past the guacamole, and awesome is a little bit of an exaggeration. Nonetheless, it's better than just barking a command at a stranger or a friend, give me the guacamole.
38:25Well, you know, then you're kind of treating them like a servant or an underling. You don't want to do that. So you calibrate the politeness so that what you want can be figured out, but you're not ruining the relationship by seeming to treat them like an employee or a servant. Likewise, with a lot of the requests that we have to make in life. Now, sometimes, you know, as any couples therapist would say, their couples can have a long history of preserving the peace in the home by one person deferring to the other you know some things are not worth fighting about i'll just let her have her way that that's more important it's more important that we be at peace than i get my way in this circumstance but if you um there's a long history where one member of the relationship is always getting their way and the other one is always getting the short end of the stick, that the subordinate always defers because they expect that the other partner will stand their ground and they stand their ground because they can count on their partner always giving way.
39:29You know, that can become pathological. It can lead to resentment and the time may come where you risk the conflict, the unpleasant feelings, you challenge the nature of the relationship if the terms have gotten too unfavorable. You know, it's interesting because you say this is not a self-help book, and obviously it isn't. I just want to repeat, there's so many interesting stories and examples, pieces of knowledge and history that you draw upon when writing this book. It's just a fascinating book to read. But I always wonder with these books, on the danger of being too academic, I always try to extract something where I could use in my life.
40:09And in this case, whether it's intended or not, What this tells me is having a catalog in my head of what the norms are in society, what are the different types of communication of partial information and how to understand those. Having more of a sense of that than the people I'm talking to gives me somewhat of an advantage in life. For instance, if I'm an employee asking for a salary from the boss, I might want to know what types of communication can elicit information from him that I could then make use of to later ask for a salary increase. Yes. So I like to think that people who read my book will just see social life, every aspect of social life in a different light.
40:52Hope that there's just more insight as to what's going on with all the rituals and the role-playing and the games people play. There is a logic to them. They're not just arbitrary rituals. You're not just like an actor assigned a role and you just read the lines. There's constant thinking negotiation. As we've discussed, there are outguessing standoffs where you want to be a little bit unpredictable or you don't want to have a tell that reveals your values. There are cases of calibrating the level of bluntness versus indirectness. There are cases of being aware what nonverbal signals like eye contact and blushing and tears can do.
41:31So I like to think that there's just, you'll never see social life the same way again once you understand the hidden logic behind them. And there is a hidden logic. It's not arbitrary. It's not irrational. I mean, it's irrational if you just write down what's happening. I think if you understand how our relationships depend on common knowledge, often unstated, that our communication either reinforces or challenges the common knowledge that establishes a relationship, then you're not just a spectator. You've got a kind of color commentary on social life in the back of your mind. Yeah, and there's also a certain flexibility in all this.
42:15So if any one of these sort of social norms or when everyone knows that everyone knows is too fixed in society, then it almost becomes useless because like you mentioned about poker, if I know you always bluff, then I'm going to wait to have a good hand and you're going to bluff and then I'll win the game. So there's always this unpredictability is a valuable skill also knowing when to be unpredictable. And we see it playing out right now as we're recording this in the stock market today or yesterday, the, you know, So Friday, Donald Trump said, oh, I'm going to put 100 % tariff on Chinese goods.
42:54And the stock market crashed. And the whole analysis over the weekend was, oh, here's the Donald Trump playbook. He announces some extreme tariff, and then he sees what happens, and then he backs off slightly. The market always falls, and then it goes up. So that's like the playbook. But if he always did that, if any negotiator was totally predictable, then he's useless as a negotiator. So then there's always the fact that, well, Donald Trump's also unpredictable. So is this one of those times when he means it or is he being unpredictable or, you know, there's a lot of analysis of these types of communications and it plays out.
43:33And then the stock market is an example of the world judging, you know, basically voting what it thinks. Is he being predictable or unpredictable? and then the market will go up or down accordingly. So this sort of stuff plays out in everyday real life and having kind of an understanding of how these rules work is very interesting. Yes, indeed. I mean, the stock market is a good example because it's aside from the actual productive value of stocks, namely you own a share of the factory and when the factory sells widgets at a profit, you get that percentage of the profit. That's technically what shares are or stocks are.
44:10But of course, that's not the only reason people invest. They also hope that they can sell it at a profit in the future because they hope that other people might want to buy it and sell it to still other people in the future. Greater fools, as they sometimes call them. And so that's what speculation is. Or commodities like cryptocurrency or real estate. And as you note, in a market, because prices are common knowledge and prices reflect instantaneous supply and demand, it's a game that you can't win on average. Some people win some of the time, but to the extent that the market is efficient, if you think you've got a hot tip on a company that's going to make an insanely great new gadget or some commodity that you predict everyone's going to want more of tomorrow, probably everyone knows that as well.
45:04And so the price has already been bid up. If you buy it at that price, you're not going to rationally be able to sell it at a profit in the future. Sometimes you can, but just as often, the bubble will pop when the market starts running out of greater fools. That's why the standard advice for ordinary investors is buy an index fund, just a basket of securities. Don't think you're smarter than the market. Just be content to share in the overall appreciation of the market as productivity improves. Right. So again, I'm curious, like when you were, like I think of some of your books, The Better Angels of Our Nature, that one had such a beautiful and concise impact on me, actually, just this idea that's just so stunning that actually violence has decreased over the past every century, over the past several thousand years.
45:53And exactly at a point where you sort of feel looking at the newspaper, the violence has increased. Like it's a very contradictory kind of conclusion in the book, but it's, it's, it's beautiful and optimistic how you explain it. And I understand this is a message that I've been repeated to many other people and quoted your book and so on. And so with this one, I'm curious, what made you sit down and write this? Where I would say the conclusion from this is basically to become more aware as much as possible of all the hidden signals that exist in this universe of when everyone knows that everyone knows.
46:29Yeah, that would be the main practical goal. It's also, I like to think of it as a kind of mind candy. There's some ideas in there that are kind of mind-boggling when you're exposed to them. One of the privileges that I have as being an academic, a professor, a scientist, is that I just get to learn about these ideas that are sometimes buried in the academic literature. If you read them in the academic literature, you can't understand a word they're saying because it's so, you know, that the prose is so soggy and it's academese. And I often get a sense from the people in the field. Like this is really hot stuff.
47:04This is really a fascinating idea, but it's buried in academia. And what I, my niche is I try to explain them in a way that any curious person can understand. Because often the ideas are not, they're not impossible to understand. They just, it just takes someone to try to, to do the work of explaining them clearly. So that's what I try to do. And there are ideas, the idea of common knowledge itself, how it underlies coordination, how it's not just common sense. There are lots of surprising implications of common knowledge. How there are bits of game theory, which all of a sudden makes it sound like some kind of mathematical, academic, obscure subject that's impossible to understand.
47:45But a lot of it is just explaining the hidden logic of everyday life. And you suddenly, I hope, readers will just have all these aha moments like, ah, so that's why it works the way it does. That's why their Super Bowl ads are so often commented on. That's why people hoard toilet paper in an emergency. That's why the U.S. doesn't officially recognize Taiwan, even though it's a sovereign state. That's why we blush, even if we haven't done anything wrong, just because other people think we've done something wrong. I think there are all these mysteries where there really is a clear logic behind it.
48:21And I do my best to make that comprehensible to my readers. Can you explain your idea on why people hoard toilet paper?
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52:42Oh, yes. It's kind of like a bank run or speculative investing in crypto. That is, it's a matter of common expectation. You expect that other people will expect other people will expect something. So in the case of toilet paper, it turns out, you know, there really wasn't a shortage of toilet paper during the COVID pandemic, at least not at first. People stayed at home, so they were buying more consumer toilet paper instead of the big jumbo rolls of the office school. But the toilet paper companies quickly stepped up production to meet the demand. But what happened was people thought that there might be a shortage.
53:18So they ran out and they bought toilet paper and other people thought that other people were doing that. So they ran out and bought toilet paper and it became self-fulfilling. There really soon became a shortage because everyone was afraid of a shortage, which didn't exist beforehand. And that's what happens during a bank run. People will withdraw their savings from a bank, not necessarily because they think the bank is unsound, but they heard a rumor that other people are withdrawing their savings because they think that still other people are withdrawing their savings. As Roosevelt said, when that actually led to a Great Depression, the only thing we have to fear is fear itself.
53:55And that was literally true. Often in these cases, there is one public event that gets that ball rolling. In the case of a bank run, it could be just a rumor that the bank is in trouble. Even if the bank isn't in trouble, that could put the bank in trouble as it triggers a bank run. In the case of toilet paper, some popular historians trace it back to a monologue by Johnny Carson in 1973. at a time Johnny Carson had the talk show, The Tonight Show, which I think now is at Jimmy Fallon. Yeah. At the time, there were only three networks and Carson was by far the most popular. So when you're watching Johnny Carson, he generated common knowledge because you knew that a lot of other people in the country were watching him and they knew that still other people were watching it.
54:45So anything he said, you could kind of assume was common knowledge. One night he just made a joke about, He was in the middle of the oil crisis, and he said, oh, there's shortages of everything these days. There's shortages of oil. There's shortages of meat. Have you heard the latest? I read it in the papers. There's a shortage of toilet paper. Kind of got a laugh. It turned out it wasn't true at the time, but it actually became true after he made that joke, because everyone ran out to get toilet paper, because they thought everyone else was running out. And ever since then, there's been a public legend, a rumor, that toilet paper becomes scarce in an emergency.
55:18If it's a hurricane, if it's a blizzard. And so that just lodged it in popular consciousness. And the thing about common knowledge is if something is common knowledge, that makes it a reality. It becomes a reality if everyone believes that it's a reality. Right. So almost the rational thing to do is to go out and buy toilet paper. Because you know everyone's going to be scared about a toilet paper shortage. Well, that's the problem. And that's why stores would then post a sign that says, limit three packages per customer, not just because then no one could buy more than three packages, but because the sign was public, everyone knew that other shoppers saw the sign and they didn't have to worry about other shoppers stripping the shelves bare, which is why Roosevelt, in the midst of the Great Depression, declared a bank holiday.
56:10All the banks were shut for a period of time so that it didn't just prevent people from withdrawing their savings, but they knew that other people couldn't withdraw their savings. Now what we have is federal deposit insurance, where there's a big gold seal at the entrance of every bank or on the window, says that deposits are insured up to some cap. And so you don't have to worry about the bank running out of the ability to redeem its deposits because the federal government will bail it out. And so people don't withdraw their money. And that's why federal deposit insurance is almost never needed.
56:45But, you know, it's interesting when a store says only, you know, limit of three packages of toilet paper per customer. That actually makes me get more worried that there's going to be a panic, right? If you didn't know, yes, true. If you didn't know beforehand. So the point of posting those notices would be if it's become a common belief that there is a shortage. But yes, you're right. If there isn't that belief to begin with, that could generate the belief. Because what the store is basically signaling is that, look, we're having a problem right now. Yeah. So that's where we're doing this limit.
57:15So then the rational response is to get everyone in your family to come to the store and then each person buys three things. So it gets into that when everyone knows recursion. Yeah. So that goes back to kind of the central, I don't want to call it a conundrum or a paradox in the book. When you said, what are the lessons for everyday life? there isn't like kind of a guideline that you could write down a piece of paper and keep in your wallet exactly because other people are always kind of outguessing you and you're outguessing them and so any bit of any advice that you consistently follow will be kind of self-negating because other people will factor that in so that's why they kind of resisted giving someone a lesson well this is the way this is this is the takeaway because there can't be one takeaway because then other people will know that you're following that takeaway.
58:06So it's more like know the rules of the game that you're in. You know, one funny example you bring up that made me think was the Netflix policy. You mentioned there was a Netflix policy at one point that no employee is allowed to make eye contact with another employee for more than five seconds because that might constitute sexual harassment. And that's like a weird one where you're trying to legislate the social norm, essentially, which can't be legislated. I mean, there's so many things wrong with making a policy like that, it seems, that, for instance, what happens then if somebody stares for four seconds?
58:40Is that not sexual harassment or in six seconds they should get fired? So I didn't even believe that that was really a true thing, but I'm just assuming it is since you wrote it in the book. But do they still have that policy? This I don't know. Well, it's a case where Another example is when I think it was Antioch College gave their students a set of mandatory questions that they had to ask when escalating sexual intimacy. You have to actually say, can I unbutton your shirt? Can I loosen your belt? Can I put my hand on this body part? It was to make sure there couldn't be misunderstandings that could then later be used as charges of sexual assault or rape.
59:27The reason that it strikes a lot of people as violating common sense is that intimate relationships are not the kind of thing that we usually negotiate in so many words because our communal relationships, friendship, family, romance, sexuality, are things that we have to kind of feel in our bones. that they're a fusion of interests and values that if you have to say them out loud, then you're kind of not getting what a romance is or what a friendship is or what family consists of. It's got to be something you just feel. And if you have to say it, that means you don't get it. As with any kind of informal relationship, there is the possibility of exploitation.
1:00:10In a couple, one could do all the taking and the other, all the giving. in a sexual encounter, it can cross the line into assault. So sometimes there's a reason why you might want to or have to make it explicit. But when you do, it really goes against the deep-seated basis of that kind of relationship. You just don't negotiate things like a friendship or a romance. Again, that can lead to its own problems, which is why we have prenuptial agreements, while we have Netflix policies, Antioch College policies. There always is a tension. There's always a feeling that those things are ham-fisted, heavy-handed, can go against human nature.
1:00:53I think this is part of the point of the book, really, is to look at these extremes. Because a lot of these cases, they're interesting because they're extremes at either end of what you're discussing. And to look at these extremes and understand why they are extremes. and this helps to, again, further understand what these social norms are, why they exist, why something is an extreme. I think that does have practical use in life to understand what you just said, that, look, intimacy is not something that could be legislated. It's something that we've been doing for billions of years or millions of years and it is what it is.
1:01:28But then you have to kind of know your boundaries and all of this stuff is important for real living. Yeah, it's a case where there can't be a hard and fast rule. So in the case of, say, a relationship that's starting to get exploitative, there may come a time when the deference that the weaker party extends to the stronger party. It staves off constant fighting and bickering, and that's a good thing. But sometimes it gets to an extreme and you really have to bring it out into the open, whether we're a couples counselor or one of them just screws up the courage and says, we need to talk. In the case where the unstated rules, the unstated kind of logic of intimacy can then be exploited so that unless the one party screams no, they might be submitting to unwanted sexual advance.
1:02:18That could be very serious. So sometimes there are things that are uncomfortable that have to be said, and there's no hard and fast rule as to where that line is. but knowing that there is such a line, that there are trade-offs. Life is about trade-offs, which is why I often resist giving across-the-board advice. It's more, be aware of what the trade-offs are. More of this means less of that. And there's no rule that says you have to have all of this and none of that. But be aware of what you're trading off and realize when you're trading off too much of one thing for another thing. Now, let me ask you, in academia, it's often an unstated rule that academics should be as academic and scientific as possible and not write consumer, you know, academic psychology books or books oriented towards the consumer.
1:03:11And obviously you've made a career of writing very popular, very great, best-selling consumer books based on your knowledge in academia. Have any of your colleagues ever pushed back on you for doing this? Definitely not explicitly. I mean, they might get their digs in when they review one of my manuscripts or write a book review. There might be some resentment. But no department chair, no dean, no president. They've been completely supportive over a span now of more than 35 years, starting at MIT and now at Harvard. There used to be something called the Sagan curse, that Carl Sagan, brilliant astronomer, and in his time, probably the most famous scientist in the world.
1:03:52He had a TV series called Cosmos, watched enough that Johnny Carson, the talk show host, could regularly do an impression of Sagan that everyone would recognize. And there are even expressions like billions and billions of galaxies that Carson would make fun of Sagan for saying. And people would laugh because they all saw it. And Sagan, he wrote a column in Parade Magazine, which was the color insert to Sunday papers. He appeared as a guest on the Johnny Carson show constantly. So he was a popularizer and for good stuff, for scientific literacy, for evolution, for international cooperation, for climate change.
1:04:39He was one of the first for the threat of nuclear winter. So he was a really good guy and he was blackballed from the National Academy of Sciences, the prestigious national organization that sciences are elected to. And it was almost certainly because of jealousy and resentment. People warned me when I wrote my first popular book, The Language Instinct, after having been exclusively a good academic and written highly technical books that weren't sold in stores. They said, oh, look what happened to Carl Sagan. I think that has lessened. Not to boast, but I actually have been elected to the National Academy of Sciences.
1:05:17And I'm nowhere near as important a scientist as Sagan was in his day. So I think that taboo has weakened. I think I probably suffer it in less obvious ways. You know, who knows what happens when a manuscript is rejected or someone writes a nasty review. Are they motivated by jealousy? It's kind of, I'll never know. You know, how come people, it's one of the hardest things to recognize you're jealous as opposed to recognizing like, oh, you're in love or you're other emotions. Maybe because it's something shameful, so you don't want to admit something shameful about yourself. But why do you think jealousy is such a hard thing to recognize in yourself?
1:06:00I don't know if it's that hard. I mean, I think, you know, I kind of know when I'm jealous and, you know, it's a very unpleasant feeling. Sometimes it's necessary to safeguard a romantic relationship. to, you know, it's not okay for your partner to sleep with someone else, or even to divert attention and affection from you and lavish it on someone else. Signaling that isn't a bad thing, but of course, jealousy can become pathological. And there are causes who control every movement, every communication of their partner, making them prisoners. As with everything in life, there's kind of an optimal amount, and it's good to be aware of it, including in yourself.
1:06:39As you say, sometimes you're not aware maybe that you're motivated by jealousy. I think most often people are, but still you have to know when to control it, when to express it. If your partner laughs at someone else's joke, are you suddenly jealous? Because, well, maybe they'll end up sleeping together. And so I'm going to make sure that she or he is never in a social situation like that again. I mean, that could be suffocating. Again, it's a matter of calibration. Yeah, but it seems like when you inflict negative consequences on someone else because of that jealousy, but you rationalize it by saying, oh, this academic paper, for instance, is no good, so we're going to reject it.
1:07:19I feel like in those cases, if they recognize they're jealous, they'll say, oh, this academic paper is good, and so I shouldn't just let my jealousy reject it. I think those are more subtle examples of jealousy. No, that's a great example, and it is an important point. It gets to a whole phenomenon of self-deception, that you've got a motive that you don't want to confess to because you can't defend it. So you hide it maybe even from yourself. So first of all, so they know you don't give off any tells. Other people can't tell that you're acting out of an inappropriate motive, but you don't inhibit yourself either.
1:07:57And you're right that from the point of view of, you know, if I really am jealous of someone who's getting, you know, all the fame, all the attention, all the money, I have their anonymous manuscript to review. If I don't acknowledge, yeah, I'm jealous of that bastard, I might think, yeah, this paper is a piece of junk and not realize that that judgment is actually being contaminated by my jealous feelings. So you're absolutely right. Being aware of your own emotions so you can discount them when they contradict your values is just an important skill in being a mature, competent, effective adult.
1:08:33But a lot of people seem to not realize that is an important skill. And how do you practice that skill? No, it's true. And that's a lot of what goes into wisdom is what we call wisdom is acknowledging your own self-deception, trying to overcome it, trying to realize things about yourself and other people that were previously hidden from you that you may not be able to avoid altogether, but you can reflect on, you can take into account, you can compensate for. I think that's what goes into social skill when we deal with each other and it's what goes into wisdom when we deal with ourselves. Well, Steven Pinker, once again, such a great pleasure to have you on the podcast.
1:09:16This was such a fascinating book when everyone knows that everyone knows and the subtitles common knowledge and the mysteries of money, power, and everyday life. Who doesn't want to know the mysteries of money, power, and everyday life? If you're interested in the mysteries of money, power, and everyday life, you absolutely have to buy this book. What a great book. So thank you once again, Steven Pinker. And of course, you've written many great books, Enlightenment Now, Rationality, The Better Angels of Our Nature, on and on and on. These books are like 6 ,000 pages long each one. So you must spend all your time writing.
1:09:49I'm exaggerating. I'm exaggerating. But they're all great. I meant it in a very positive way. Each page is filled with so much knowledge. I really appreciate it. It's a fountain of knowledge for me. And once again, being able to ask you these questions and have you answer them in person is great for me. So, and hopefully for the listeners. So thanks once again, Stephen Baker. Been a pleasure, James. Thanks for having me on.
1:10:21This October, Fear is Free on Pluto TV with horror movie collections from Paranormal Activity, The Ring. You will die in seven days. Scream. And from dusk till dawn. This is my kind of place. And don't miss the man-made nightmares in Mary Shelley's Frankenstein. Or the world-ending chaos in 28 Days Later. There's something in the blood. All the scares. All for free. Pluto TV. Stream now. Pay never.
From the publisher
A Note from James
I first got really impressed with Steven Pinker when he wrote The Better Angels of Our Nature: Why Violence Has Declined. He basically shows that over the past 10,000 years, every single century has been less violent than the one before it. You might think, “That can’t include the 20th century,” right? We had World War I, World War II, atomic bombs, the flu pandemic of 1920, Vietnam—all these massive wars. But when you look at violent deaths per capita, the 20th century was actually less violent than the 1800s, which were less violent than the 1700s, and so on. It’s a beautiful, data-driven argument for optimism.
But it’s his latest book that really fascinated me: When Everyone Knows That Everyone Knows: Common Knowledge and the Mysteries of Money, Power, and Everyday Life. That subtitle alone—“common knowledge and the mysteries of money, power, and everyday life”—you can’t just skip past that. You have to know what it means.
Take poker, for example. If someone bluffs you, you have to think: are they bluffing? Or are they making me think they’re bluffing, but they’re not? Or do they know that I think they’re bluffing, so now they’re actually not bluffing at all? That kind of circular reasoning—what philosophers call “common knowledge”—shows up in real life all the time.
Like when you ask someone up for “a cup of coffee” after a date. You’re not really talking about coffee. But you’re also not saying what you actually mean. You’re hinting. You’re creating a safe, ambiguous space where both people know what’s being suggested without anyone having to say it outright. The same thing happens when you ask your boss, “Can we discuss taking on more responsibilities?” instead of saying “I want a raise.” We give partial information all the time, because being direct can change the relationship—or close off possibilities.
Steven and I talked about why we communicate this way, how shared knowledge shapes everything from flirtation to power to money, and what happens when that balance breaks down.
And by the way—if you’ve never seen Steven Pinker—he looks exactly like what you’d imagine a Harvard professor to look like. Long white hair, sharp blue eyes, and this kind of wild genius energy. Jay and I joked that he looks like Einstein meets Jimmy Page meets Beethoven. He’s the best-looking academic I’ve ever seen.
Anyway, here’s our conversation on When Everyone Knows That Everyone Knows: Common Knowledge and the Mysteries of Money, Power, and Everyday Life, with my good friend Steven Pinker.
Episode Description
In this conversation, James and Steven Pinker explore how much of life runs on signals, innuendo, and the unsaid. Pinker explains how “common knowledge”—what everyone knows that everyone else knows—shapes everything from romantic attraction to political polarization to financial panics.
They discuss why laughter matters, how game theory explains social awkwardness, and why being “brutally honest” all the time can destroy relationships. From Seinfeld to poker tables to the stock market, Pinker shows that our most human moments depend on the subtle art of leaving things unsaid.
What You’ll Learn
- Why subtle hints and shared assumptions keep relationships, negotiations, and societies stable
- How laughter creates “common knowledge” and strengthens social bonds
- The role of game theory and “recursive thinking” in everything from dating to diplomacy
- Why total honesty isn’t always a virtue—and how “rational hypocrisy” preserves relationships
- How stock market behavior, toilet paper hoarding, and bank runs all reflect the same hidden logic
Timestamped Chapters
- [00:00] Introduction – When everyone knows that everyone knows
- [03:00] A Note from James: Why Pinker’s optimism matters
- [08:00] The hidden rules of communication and “weasel words”
- [10:00] Why we hint, wink, and avoid blurting the truth
- [13:00] “I love you” and the creation of common knowledge
- [16:00] How humor and laughter level the playing field
- [20:00] Politics, laughter, and social signaling
- [27:00] Bluffing, poker, and recursive thinking
- [31:00] Negotiation, honesty, and the limits of directness
- [38:00] Rational hypocrisy vs. radical honesty
- [42:00] Stock markets, speculation, and public knowledge
- [47:00] The toilet paper paradox: when panic becomes reality
- [56:00] Why intimacy can’t be legislated
- [01:00:00] Trade-offs, awareness, and flexible social norms
- [01:01:00] The “Sagan Curse” and being a public intellectual
- [01:04:00] The logic behind life’s unspoken rules
Additional Resources
- Steven Pinker – When Everyone Knows That Everyone Knows: Common Knowledge and the Mysteries of Money, Power, and Everyday Life
- Steven Pinker – The Better Angels of Our Nature: Why Violence Has Declined
- Steven Pinker – Rationality: What It Is, Why It Seems Scarce, Why It Matters
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