Wisdom is a system of *correct* mental models regarding the most important things in life

Wisdom is to intuition as knowledge is to learning, and as crystallized intelligence is to fluid intelligence.

A mental model has three parts: 1) an object in 2) a situation, and 3) the object’s expected behaviors in that situation. I press the gas pedal and my car accelerates, I throw a rock in the air and it follows a parabolic trajectory back to the ground, those sorts of things. These is not typically conscious thought processes unless our expectations are violated (like if the rock moved in a sinusoidal trajectory instead). We don’t have to reason our way through them. However, we often can give reasons for the behaviors we expect, by relating them back to the way we initially learned them (“I think I read a study that said…”).

This is something we rely upon heavily for daily functioning. Much more so than rational thought. We call upon these models for the purpose of visualizing plausible imaginary scenarios. Mental simulations are practically impossible without referring to previous experience. In the world of math, a mental model is called a concept image.

Relation to previous Aeolitalk: These mental models apply to objects that are either simple or complex instinctual archetypes, which we expect to behave in certain ways. “Discernment” is the mental process by which we recognize these instinctual archetypes, so as to apply the correct predictions of their behaviors. Intuition is the process of creating of new mental models.

A distinction must be made between correct and incorrect models. Unfortunately, much of what constitutes “received wisdom” today is incorrect and misleading. For instance, received wisdom would have us believe that women have a difficult time getting into the IT field, when the fact is that a woman has twice the chance of getting a job as a man with the same experience and credentials. This is an example of an incorrect mental model. It would be a mistake to call all of these received broken mental models “wisdom”.

Fortunately, the heavy lifting of illustrating all this has been done for me by Warren Buffett’s business partner, Charlie Munger (courtesy Josh Kaufman).

“What is elementary, worldly wisdom? Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ’em back. If the facts don’t hang together o­n a latticework of theory, you don’t have them in a usable form.”

“You’ve got to have models in your head. And you’ve got to array your experience both vicarious and direct o­n this latticework of models. You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and in life. You’ve got to hang experience o­n a latticework of models in your head.”

“What are the models? Well, the first rule is that you’ve got to have multiple models because if you just have one or two that you’re using, the nature of human psychology is such that you’ll torture reality so that it fits your models, or at least you’ll think it does…”

“It’s like the old saying, “To the man with only a hammer, every problem looks like a nail.” And of course, that’s the way the chiropractor goes about practicing medicine. But that’s a perfectly disastrous way to think and a perfectly disastrous way to operate in the world. So you’ve got to have multiple models.”

“And the models have to come from multiple disciplines because all the wisdom of the world is not to be found in o­ne little academic department. That’s why poetry professors, by and large, are so unwise in a worldly sense. They don’t have enough models in their heads. So you’ve got to have models across a fair array of disciplines.”

“You may say, “My God, this is already getting way too tough.” But, fortunately, it isn’t that tough because 80 or 90 important models will carry about 90% of the freight in making you a worldly wise person. And, of those, only a mere handful really carry very heavy freight.”

Charlie Munger, vice-president of Berkshire Hathaway and business partner of Warren Buffett
On Mental Models

Wisdom is pretty much all you have to go on after your frontal lobe crystallized and your fluid intelligence tanks. I think that’s why the book of Proverbs is constantly trying to hammer the advice into the young man’s head “seek wisdom like your life and fortune depend on it”. Look at a guy like Munger at the age of 92. He’s probably been coasting on crystallized intelligence since World War 2, and yet he’s clearly adapted to the new world just fine. He knows that the important things in life don’t change: people, money, real estate, commodities, information, understanding, etc.

From this observation, we have the last piece of the puzzle: true wisdom is a system of mental models concerned with understanding the most important things in life. A system of mental models for particle physics is a good thing, and maybe even useful, but it’s not wisdom. That said, I’ll end this whole thing with a link to a collection of biblical proverbs that Buffett and Munger would agree with.

Joyful is the person who finds wisdom, the one who gains understanding. For wisdom is more profitable than silver, and her wages are better than gold.

101 Biblical Proverbs About Money

About Aeoli Pera

Maybe do this later?
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9 Responses to Wisdom is a system of *correct* mental models regarding the most important things in life

  1. Aeoli Pera says:

    You should get drunk and rant more often, I agree with everything you said here.

    …Er, I mean, I wouldn’t exploit your health like that!

    Very curious though…after reading this I bet you’d score higher on an IQ test while drunk. If we could verify that (two extreme associative horizon examples), we might have the beginning of a theory.

    • The idea that anyone could possibly score higher on an IQ test while drunk is completely ludicrous.

    • To elaborate, you only believe that Lazer is smarter than usual while he is drunk because he is expressing more narcissism than usual, and you have the tendency to perceive narcissism as intelligence. Obviously, more than 2% of people understand that money is just a tool. Obviously, the realization of this is not in perfect correspondence with IQ. Thus, obviously, we could never presume that a person is in the top 2% of IQ (or expressing Edenic genes, for that matter) just because they understand that money is a tool. Lazer’s implication is that he/we are somehow special 98th percentile super thalz just for having very basic wisdom. I don’t believe he normally expresses this attitude, so you are seeing a new side of him. I must inform you that delusions of grandiosity will never equate to high performance on an IQ test.

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  5. bones says:

    i would guess it’s just lowered inhibition…the fog of war (the anxiety of taking the test) is muted

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