How is it that basic economic literacy has so fallen by the wayside for our young people? This 15-minute cartoon can’t have a target audience older than 10 (in it’s time), but the majority of adults I know don’t possess even this level of knowledge on the subject.

I don’t claim to have a perfect explanation for why that is. Have we outsourced our critical thinking to a dangerous degree? Have we become reliant on a one-size-fits-all education system to be the source of all knowledge, and then ignored any oversight? Is it simply a matter of rational ignorance, or has entertainment grown so robust that kids no longer have the attention span for cartoon ducks talking about Rai stones?

The great likelihood is that there are many factors, some benign and some less so, that combine to shift our culture. And of course, I have no real evidence that our current generation is any less economically literate than the generation that watched this cartoon – for all I know, the words of Scrooge McDuck fell on deaf ears even then, and the reason we’ve stopped making cartoons like this is because people realized they didn’t work.

Regardless, I was pleased to stumble across this little gem. And whether in the interest of economic or historical literacy, I’m happy to pass it on.

My oldest daughter, thankfully, is not very “stuff-motivated.”

She’s much more in favor of experiences. She loves money, but mostly out of the sense of accomplishment she gets from earning it – she almost never spends any. She’s just thrilled to have it, like points in a game, representing a tangible manifestation of her effort. I strongly encourage this.

Any time she wants an item like a toy, I tell her she’s perfectly allowed to spend her own money on whatever she likes. But the idea of spending her own money usually puts a big damper on her desire for that moment’s impulse. As a result, she almost never spends.

She loves experiences. If she’s earned a reward for something due to some particular piece of good behavior, her requests are almost always a trip somewhere or the right to choose our dinner menu or permission to stay out later than usual, something like that. I love it. She’s an adventurer and explorer, and I’ll never discourage that.

There are definitely lessons to take there. My daughter’s savings rate is incredible. She’s very good with money; at 7 years old she makes change effortlessly, has amazing sales skills, and is a motivated hustler. Her friends want to play video games; she drags them outside to explore. (By the way, I’m not a vehement anti-video-game person or anything. I played plenty as a kid and turned out okay. But I’m happy that she doesn’t prefer them.)

At the same time, she has a full life with tons of experiences. Her legs are constantly covered in bruises and her fingernails are filled with dirt. She jumps at any chance to earn money and balks at foolish expenditures.

I think she’s going to do just fine in life. There are lessons to take from all this, but mostly I just wanted to brag about how awesome my kid is.

I’m feeling very ill today. I don’t know if I’ve caught something or if it’s just a very bad case of seasonal allergies, but I’m wiped out. It makes me grateful.

Things could be a lot worse. Not only am I in relatively good health despite this minor incident, but even this is easily handled with modern conveniences and medicine. I have a comfortable couch to lay on and whine. There’s a roof over my head.

It’s a good habit to get in – when something bad happens, train yourself to be grateful for all the good things, and to be happy that much worse things didn’t happen. Some bad things are preventable or fixable, and keeping your mind clear of negative clutter will help you find solutions.

And if all you can do is take some medicine and sit down with a bowl of soup and a good book – well, it’s better to be cheerful doing that than miserable, isn’t it?

Picture a single piece to a jigsaw puzzle.

No edges, just the various curves that will allow it to fit with other pieces along any side. You’ve got no picture to work with, so you don’t know what it will be when it’s done. But there are plenty of other pieces around. Amazingly, almost any of them will fit with that first one.

So your picture begins to expand. It starts to take shape, but with every new piece the image changes a little, so while you were certain it was going to be a train, now it turns into a airport, but then it’s a solar system and then it’s a library. The puzzle keeps expanding.

Sometimes there are gaps, and sometimes you find a piece way later that fit with a gap you had long ago, and you get a great satisfaction filling it. Sometimes you find a piece that actually fits in a spot that’s already filled, but it fits better or makes the picture look nicer, so you swap it out.

Sometimes you find pieces that don’t fit at all, or that don’t look good with your picture. You discard them; or maybe you stick them in your pocket and hope they’ll find a spot later. No matter how far you expand, you never find an edge piece. Sometimes you think you do, but you’re always wrong. The puzzle keeps going.

Lots of other people are working on their own puzzles. Sometimes you trade pieces – sometimes you even connect your puzzles, and now you’ve got even more space and even more edges you can attach new pieces to. On rare occasions you pick up whole sections of your puzzle and discard them. Other times they fall away themselves, but there are always more.

Though you never reach an edge and you never finish, and though the image keeps changing and it isn’t always neat and simple, it’s beautiful. The larger it gets the more fun it is; every new piece adds three new spots where a piece could go, three new ways the image could change. You’ll never finish, but you’ll also never run out of room. You can keep on adding pieces as long as you want. And as you go, you get better and better at picking out the pieces that will make the image the way you like, that will shape the puzzle to your satisfaction.

Sometimes you even make the pieces yourself. Those are the best ones; they fit any way you like and they go anywhere you want. Sometimes you change them and sometimes you don’t care for them, but often other people will pick up pieces just like them and they’ll fit wonderfully in their puzzles.

Sometimes you’ll meet people who are convinced they’ve found the edges of their puzzle. They’ll point with pride at what is obviously a notched, jagged line but swear it’s a clear, unassailable border. You’ll shake your head at how proud they are of creating an imaginary cage around themselves while you go on happily expanding your infinity.

When I’m finally tired and I’ve laid my last piece, I hope I won’t regret how many pieces I didn’t find. After all, the puzzle is infinite; you’ll never find them all. I hope instead that I can be happy with the picture I’ve made, and that maybe it made other people happy, too. I’ll leave my puzzle as it is, but I’ll make no effort to guard it after I’m done. Instead, I hope to leave a little sign in front of all those pieces, saying “Free – Please Take As Many As You Like.”

I loved this blog post, and I started to respond on Twitter but it rapidly became a blog-length thought, so here we are.

People hate simple rules and meritocracy for a lot of reasons. Some thoughts:

• By definition, the majority of people will be outworked and outperformed by a small minority. The majority don’t like the constant arms race of hard work; they’d rather use their mass influence to cap the benefits of it. That’s why 40-hour work weeks exist. Because if you can get ahead of me by working 50 hours, then I’ll have to work 50 hours to keep up, and I don’t want to. I’d rather force you to only work 40.
• Clear rules eliminate excuses, and people cling to their excuses like a security blanket. If the rules are murky and I don’t get what I want, I can cry “Injustice!” or “Bias!” and sometimes it will even work – and if it doesn’t, I can count on a lot of sympathy. Or at least I can be righteously indignant. But if the rules were simple and fair from the start, I have no excuse when I break them or fail. I think this is the biggest contributing factor.
• People think they’re more deserving than others, and also that they have good reasons for doing bad things that others do for bad reasons. Example: “I smoke marijuana because I have chronic back pain and it helps me be a more productive worker, but they smoke marijuana because they’re worthless pot heads.” People want the ability to enforce laws on others but skate themselves because they legitimately believe that’s just.
• Many rules can’t be objective. Especially in things like college admissions or tenure considerations, it’s often a matter of relative ranking rather than objective standard, which makes fair rules nearly impossible. The real standard is “better than X% of your peers,” which means it’s malleable.
• My (totally anecdotal) observation: The people who most want clear rules are the people that would excel in a meritocracy. They want clear rules because they don’t expect to need special consideration, and don’t want special consideration for someone else getting in the way of their earned success.
• Conversely to the last point, some people want clear rules so they know the bare minimum they need to do.

The ultimate example of the downside of unclear rules:

I care about being right.

I care about the truthfulness of my statements, for many reasons. I want to know that people that may take my advice find that advice genuinely helpful to them. I care about my professional reputation, and don’t want it sullied if I’m wrong too often. I care about knowledge, and the don’t like the idea of walking around with a bunch of incorrect information taking up limited space in my brain.

But there’s so much to know! So much to potentially be wrong about. How do you make sure you’re right?

There’s no certain way to always be right, but there’s definitely a method that helps improve your record: make sure you suffer a cost if you’re wrong.

Or to put it another way: get some skin in the game!

Let’s say you’re a sports fan. You’d like to make predictions about sports, and you’d like those predictions to be right. If that’s the case, you should bet. Bet money, and bet a decent amount. If you consistently put money on your own decisions, you’ll work a lot harder to be right than if you were just making predictions with no cost attached to them. For instance, if you’re an Eagles fan, you might be tempted to say “The Birds are going all the way this year! I’m 100% sure of it!” But you’re really just signaling loyalty to your team; the decision comes from hope and love, not from actual information – even if in the heat of the moment you truly believe what you say. Now if someone responded to that statement with “If you’re 100% sure, how about putting your money where your mouth is? Want to bet?” Suddenly you’re no longer 100% sure, and before you put real money on it, you might take some time to do a little real research.

We’re flawed beings. We’re not computers, and we’re subject to all sorts of biases. Those biases are usually the reasons we’re wrong about stuff. So the way to be right more often is to give our brains a reason to put those biases aside. Put simply, we’re biased because being biased is often either free or has costs we don’t see and thus don’t respond to. If we put the cost front and center, suddenly we’ll be less biased.

There are many, many ways to bet, to get skin in the game. The traditional “bet” is only one of them. If you find yourself saying, “that company is going to crash and burn, mark my words,” then there’s a way to make money from that! Get that ball rolling and suddenly you have a much higher incentive to be guided by actual information instead of hunches. There are companies that will allow you to bet on yourself losing weight – you give them money and a weight loss goal. If you succeed you get extra money back, but if you fail you lose your stake.

This extends to the political realm, too. Politics is mostly about people with no skin in the game and no incentive to be right trying to impose rules and regulations on people that do. Industry regulations always crack me up, being written by people who have never even used the product or service in question (let alone provided it) trying to tell an entire market what’s best for them.

One of the reasons I talk confidently about things like career coaching is that I have skin in the game. That’s my profession, and if I’m wrong about it I lose income and career potential. I have an incentive to be right, and that motivates me to constantly learn, improve, and be careful with my advice. It might not make you right about everything, but people with skin in the game are right more often than people without.

If you don’t believe me – want to bet?

Companies love a yes man.

I don’t mean a spineless sycophant, though of course some organizations and their leaders like those, too. I just mean that in general, optimism tends to be rewarded. And with good reason! Optimists are the risk-takers, the innovators, the ones that make the world move.

But there’s absolutely a role for informed pessimism in some cases. Sometimes ideas are just bad. The closer you are to something, the harder it can be to see the bad ideas. Unfortunately, that can sometimes mean that the leader of a project or even head of a company can be the person most blind to the realities of a particular project.

Good leaders try to avoid this problem by actively encouraging their teams to give honest feedback, and not to just tell the leader what they want to hear. But even good leaders that do this run into a problem: even if they want honest feedback, people can be afraid to give it for a variety of reasons.

First, no one wants to be unpopular. If everyone is excited about a new initiative, being the one voice saying “I think our budget projections are way too conservative and this is going to cost us 3x as much as we think, thus rending the project a huge loss instead of a modest win” isn’t winning any popularity contests. If the project moves forward anyway and the pessimist was right, he’ll win no extra friends saying “I told you so,” and people might even blame the pessimist, accusing him of anything from not being invested enough to outright sabotage. If the project goes forward anyway and the pessimist was wrong, he’ll lose credibility and social capital. If the project doesn’t move forward due to his opinion, people will never be sure if the project might not have succeeded, and many will think he crushed a good idea. In short, there’s no hero’s path for the pessimist, even if he’s totally correct.

Smart people know that, and often keep their mouths shut even when the leader is insistent that they want honest feedback. If you’re a leader, you don’t want your smart people keeping their mouths shut! So how do you make it safe for them to give you their specialized knowledge without it possibly hurting the social capital they’ve built in their team?

A research psychologist named Gary Klein invented a spectacular technique for overcoming this problem, and if you’re a team, project, or company leader this is something you should definitely have in your toolbox. It’s called the “Pre-Mortem.”

A “post-mortem” is an examination of a dead body to determine the cause of death, and from that the Pre-mortem gets its name; it’s an examination to determine how a project is going to die. It works like this: When a major decision hasn’t yet been made but is near to the deadline for an answer, you get the team together – everyone who has or might have valuable input. You say, “Okay everyone. We’re nearing the time where we have to make a firm call on going ahead with Project X. Let’s assume we say yes, and now it’s one year from today. I want everyone to start with the assumption that Project X was an unmitigated disaster. Went down in flames. In front of you is a piece of paper – write down the history of that disaster. Explain how it all went wrong.”

This solves all of the problems detailed above. First, it makes everyone the voice of opposition instead of a lone pessimist or small group, so no one loses social capital for stating their opinion. Second, because it was specifically requested, the dissent can’t be seen as any level of disloyalty. It gets your smart people talking instead of keeping quiet, and best of all it puts them all in a room together to brainstorm ideas.

The end result: if there are any problems with the upcoming project that anyone can see, you’ll know about them! It doesn’t even have to spell doom for the project; in many cases, catching and talking about these problems early is exactly the thing that saves the project, because they can be corrected for before they’re an issue. And it builds great trust with your team – it’s one thing to say you want honest feedback, but too many people have had leaders that said that with one side of their mouth, and then scolded an employee for disloyalty with the other side.

It’s good to be an optimist. But when it comes time for really big decisions, take a little time to listen to the pessimists, and let them stress-test your ideas. If you surround yourself with smart people but don’t create an environment where they can disagree with you, you’re wasting them.

I was once advising a small-business client on her pricing models. She had purchased the business from someone else, and wanted to revisit prices that hadn’t been touched in some time.

As part of the adjustment, she wanted to eliminate a product line entirely. It was already a product they didn’t make in-house, but rather farmed out and resold when ordered. She didn’t think it was worth the hassle.

“At that price,” I said.

She asked what I meant. “You don’t think it’s worth the hassle at that price. So raise the price; don’t eliminate the product. If you eliminate the product you never make money from that customer demo. If you just raise the price to a level where you’d be happy to do it, you might make something.”

She said at the price point she’d be happy with, no one would buy. But so what? No one will buy if you don’t offer it at all either, and since you farm this product out it doesn’t cost you anything to offer it; there’s no stock or overhead. Plus just offering it can have some fringe benefits like showing up in Google searches for that item, etc.

The lesson is: it’s better to set a price than to say no. Prices say you’re open for business, and that’s ultimately the message businesses want to send.

If you’re not familiar with it, Social Desirability Bias is the tendency for people to slightly exaggerate or outright lie in the direction of socially-acceptable answers. For instance, if you talk to your mother once a month, and someone asks how often you call your mom, you might fudge a little and say “every week” or “a few times a month.” You’re very unlikely to lie in the other direction – you’re not likely to lie and say “only twice a year,” because why would you?

Social Desirability Bias explains a LOT of stuff, by the way. It’s definitely one of those things where once you learn about it, you see it everywhere. One version of it that almost everyone is aware of is the “follow the money” thought process, where we sort of inherently distrust people that stand to make money if we believe them. Think of TV salesmen on infomercials. We take what they say with a grain of salt, because there’s an obvious incentive for them to lie in a particular direction.

The reverse of that, of course, is that you can be much more certain that someone is telling the truth if they’re saying something you don’t want to hear, or that damages their reputation in some way. If I tell you that the product I’m selling is bad for you and you shouldn’t buy it, you have an easier time trusting that because I have no obvious incentive to lie about that.

I think about SDB a lot. As someone who communicates for a living, who is sort of geeky about politics, and who reads lots of economics and social science books for fun, I end up thinking about it almost daily.

There’s a big negative side effect to that. I’m overly critical of the things I say, no matter how sincere.

For instance, a very true fact about myself (almost core to my personality) is that I get enormous pleasure out of watching other people succeed. Other people’s thrill at their accomplishments is really contagious to me, and it improves by a factor of ten when I was involved. Seeing someone I coached accomplish the thing I was coaching them on might be my favorite thing in the world.

But if that wasn’t true, it would still be socially desirable for me to say it. If I said “I hate other people’s success, and I want everyone else to fail,” few people would think I was lying. They would think I was a jerk, but an honest jerk.

But when I say “I love other people’s success,” it sounds hollow to me. No matter how true I know it is, I know that talk is cheap. You shouldn’t just believe me because I say it.

But here’s the positive: That gives me a huge bias for action. How do you counter someone else’s Social Desirability Bias? You follow their actions, not their words. Someone who talks a lot about the plight of the homeless but never donates a dollar isn’t being sincere. But if they donate a huge chunk of their income to causes they believe will help, then you can be more sure they mean what they say.

So I don’t just say I love other people’s success. I help them accomplish it. I am terrified of becoming a hypocrite, and that motivates me to make sure my deeds match my words. I am certain I will fall short at times, but it won’t ever be for lack of sincerity in my attempt.