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Collective illusions

[YouTube 31-min video] Psychologist debunks 8 myths of mass scale | Todd Rose

What is a collective illusion?

A collective illusion is when most people believe incorrectly that most other people believe a certain thing.

A simple way to think about it is the following:

  1. You ask a person, what do you think that most other people think is a successful life?
  2. Then you ask the same person, what do you think is a successful life?

If on aggregate, the answer to question number two is significantly different from number one, you are finding a collective illusion. Most people are making the wrong assumption as to what most other people think.

Why is recognizing and surfacing collective illusions important?

The way that we behave is strongly influenced by what we think that others think. This is strongly embedded in us, since historically not believing the same things that others believe has made us vulnerable to exile and death.

8 collective illusions

  1. Myth: Other people can’t be trusted
    • Frederick Taylor started the management technique that seeks productivity by reducing trust in people, and more control.
    • Studies show that this is flawed, most people are trustable and care about being honest and trustable, even when others aren’t watching. Example of a German study – people were called and asked to flip a coin. If the coin landed on tails they get a prize. On aggregate, almost 50/50 heads and tails, as expected if everyone said the truth.
  2. Myth: Success is wealth, status, and power
    • In reality, most people think that a successful life is leading a fulfilling private life. No two people had the same answer to a successful life, so it’s very personal.
  3. Myth: Social media reveals what society thinks
    • 80% of all content on social media is generated by 10% of users, the 10% that tends to be the most radical.
    • Assuming that the 10% are representative of the population as a whole lead us to create new collective illusions. Fake bots liking content on Twitter has helped create these collective illusions, since people then start to accept that top-liked content is the truth of what others think and shy away from sharing their true thoughts.
    • Move from online to offline conversations to truly learn and understand what people around you think. Online expressions are rarely authentic.
  4. Myth: Group consensus is vetted and factual
    • Consensus is many times collective illusions, no one has challenged it, etc. In the 60s a majority of southern whites in the US no longer agreed with segregation, but most of them thought that most other people wanted segregation so they played along.
  5. Myth: Elite jobs matter to us
    • No, we want fulfilling work. We want to be trusted. We want to be treated as trusted employees.
  6. Myth: America is on the verge of civil war
    • In reality, Americans agree on most issues. There are only a few issues where we strongly disagree, but those are amplified.
    • Let’s not call for unity, call for treating each other with dignity and respect.
  7. Myth: People want university degrees
    • People want to be able to find a good job that is meaningful to them, without incurring debt.
    • Apprenticeships, etc. to be more qualified for jobs are key.
  8. Myth: Cultural norms exist to protect you
    • Cultural norms make life predictable for us and make life easier to get through (not as much thinking).
    • Since we are born into them, we think it represents something good. In reality, a lot of norms are arbitrary.
    • Vietnam used positive deviants to change society. Children were malnourished, but some mothers were supplementing food with shrimp, which was freely available. A norm in the communities said that shrimp were harmful, so these moms were doing this in private. When the government made these moms the positive deviants, they made a ton of progress in fixing malnutrition as more mothers followed.


The New American Aristocracy – the 9.9%

Reference: The Birth of the New American Aristocracy – The Atlantic

I want to re-read this article and reflect on it again, but what I recall from reading it 5 years ago and discussing it with a few friends was that:

  1. It was surprising to see how much wealth 9.9% of Americans hold. Probably a more important group to focus on than the 1%.
  2. It’d be silly to expect anyone to not try to do what’s best for their kids, even if it gives them an advantage that kids with fewer resources can’t get.
  3. We need to focus on education, not just universities but also trade schools, for everyone.
  4. The type of changes needed will need the population at large to buy into it, but those with the most resources stand to potentially lose the most.

Ovarian Lottery

It’s difficult to ignore how much harder life is for some, simply because of the family and environment that they are born into. What Warren Buffett calls “the Ovarian Lottery”.

When I was a kid, I got all kinds of good things. I had the advantage of a home where people talked about interesting things, and I had intelligent parents and I went to decent schools. I don’t think I could have been raised with a better pair of parents. That was enormously important. I didn’t get money from my parents, and I really didn’t want it. But I was born at the right time and place. I won the ‘Ovarian Lottery.’

Warren Buffett, from The Snowball by Alice Schroeder

Buffett talks more about it starting at 4:15 in this video below.

Capital gain taxes

After speaking about the Ovarian Lottery (see above), Buffett speaks about the 28% capital gain tax. He says that in this society he’d build if he didn’t know the results of the ovarian lottery he’d want two things:

  1. A system that produces a lot of the things that people want.
  2. A system where if you don’t win the ovarian lottery, your life isn’t drastically worse than those that do.

You want to incentivize the people with talent and abilities to put those abilities towards the production of goods and services wanted by society at large, but you want to somehow make it so that the unlucky ones at birth can live a good life.

How does that relate to a 28% capital gain tax?

I’ve been around a lot of people with money and talent over time, they don’t always go together but I’ve been around both classes, and I see very few of them that are turned off from using their talents by a 28% capital gain tax. It doesn’t happen… And I’ve seen a lot of people that pay taxes that are higher than 28% that are contributing more to society by some judgement other than a pure market system.

K-12 education disparities

Education is considered the most important investment towards a better life for the individual, and a key investment towards the health of a society. Yet, we have huge discrepancies in the quality of education that children have access to depending on where they are born and their parent’s wealth (relates to the Ovarian Lottery, see above).

I recall once talking to an executive who told me: “the easiest way to fix K-12 education in the United States is to ban private schools and make every kid attend a public school with the same resources as every other school”.

Radical? Maybe. But fairer than building a system in which people fight against taxes that go towards education because it’s easier for them to pay for private school. I have no children, but I happily pay taxes to improve schools. I want to live in a society where people are better educated and thus able to (1) produce more for society and (2) lead a better life.

Last Updated on February 12, 2023 by Omar Eduardo