Biology Enables, Culture Forbids

Shane Parrish has collected, applied, and explained more mental models than anyone I know not named Charlie Munger. Below is a particularly fun part of the conversation I had with him on the podcast. I ask Shane to explain the idea that “biology enables and culture forbids,” and how this idea applies to our personal and business lives. At the end, I suggest some questions to ask yourself to apply what Shane and I are talking about to your life. You can listen to the entire conversation at the end.

 
Shane:

Biologically, we can do anything. It’s cultural that restricts us and culture that creates proper norms that shape behavior. Biologically, we have none of that. We have no restrictions on what we can do. We put these restrictions on through laws, through culture, through what’s acceptable societally, and what’s not. I think that’s an interesting concept. We are naturally very free but culturally we are not. What did you think when you read that?

Patrick:

My experience is through the lens of physical learning. For “biology enables,” I have typically learned the best lessons exploring some physical frontier. I run a lot. Understanding what it feels like physically to break down a barrier is an incredibly powerful bit of knowledge you can then port over to non-physical tasks.

I have a hill in the woods where I run every morning and I force myself to run harder up the hill than I do the rest of the time because I know that that daily reminder, that bit of physical learning of messing around at a frontier, mental and physical, then bleeds into the rest of my day.When I read that phrase “biology enables” I think of that hill.

When I read “culture forbids,” I think the phrase encapsulates in two words what I have realized about the working world and society in general as I’ve gotten older. There are more and more moments for me where I notice how much of my behavior, my friend’s behavior, and my family’s behavior is due to an external locus of control, or is based on this set of cultural norms we live with. It can be in your town, your country, whatever it is that drives so much of your behavior and that just strikes me as insane and so limiting.

Shane:

Think about that in the context of a business. Businesses have norms and it is deviating from those norms, from the standard practice, that moves you from the middle of the distribution to one of the tails. If you are deviating correctly that’s how you outperform. It’s very hard to outperform doing the same things everybody else does unless you are doing them at a lower cost or doing them better or faster.

If you are a textile company in the 60s, you will take the profits and reinvest them back in textiles. Then you have Buffett who deviated from that and created something great. There’s a lot of people who deviate and create something we don’t even know the name of today because it failed, but it’s that deviation that’s correct which is important.

From a biological perspective, nothing is unnatural. Nothing a company could do in that sense–relating it back to companies again–is unnatural, like investing in an insurance company. That’s not unnatural. We just have this cultural norm around not doing it.

I don’t want to get into too much religion, but one of the main things about religion and the value it has served (whether you believe in a God or whether you don’t is irrelevant for this argument), is it has shaped society and while it has caused a lot of suffering, it has also prevented a lot. It has shaped norms. It has helped move society forward. I think that’s an incredibly valuable thing, but it’s all cultural. It’s all something we have agreed to, whether we implicitly thought about it or not. A lot of what we think today is derived from that and a lot of how we behave is derived from that.

But in business, think about what’s the norm in the industry we are operating in. What do other people do and where do I think they are wrong? Those are great sources of “Oh, well maybe I can do this differently?” That’s a great place to explore improving your business.

Patrick:

You mentioned this idea of the Gaussian distribution, which you take every one of your talents or your inferiorities. You plot somewhere on a distribution, but obviously only 1% of people are in the top 1%, and I am probably not in the top 1% of any one individual thing.

I am the quant that thinks in multi-factor models. A stock might be in the second decile by a whole lot of different things, but it’s in the 1st percentile when you combine those things and re-rank. That’s one of the open questions in factor-based investing, but I think it applies personally, too, that if you are in the 15th percentile on three things, it’s likely if you did a three-factor model based on those three things you are in the 1st percentile. I think that’s an interesting source of personal competitive advantage and business competitive advantage and that time spent identifying that personal multi-factor model if you will, is time well spent.

Shane:

As you were saying that I was thinking one particular skill matters if you are in a niche and you want to be the expert, the domain expert on that. I want my brain surgeon in that niche. I want them in the top 1% of all brain surgeons. There are specialties where that matters. We want our pilots to be like that. We want our military to be like that.

But for most of us, we are not going to be in the 1%. I am never going to be in the top 1% of neurosurgery no matter how hard I try. I am never going to be an elite basketball player. But I can create a reasonable skill set that if aggregated combines to form something stronger than they would individually and then offers an advantage if I can apply it. That’s a great area for people to explore, which is why we are pursuing this worldly wisdom from multi-disciplines. If we up our game across the board,we can combine these things into something that is more than the sum of the parts.

Patrick:

It is such a neat way to view the world and is something that people can do. It requires effort, of course, and learning, but you can identify those strengths and combine them and yield unexpected results. There is a non-linear payoff to this that is really great … You have to do it. You have to get a little experience of those payoffs to appreciate them, but it works.

Shane:

That comes back to diverging as well. Non-linear can work both ways. It can work positively and negatively. It’s through divergence usually when you get these non-linear payoffs.

 

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Ever since our conversation, Shane has me thinking about divergence and using “biology” to figure out where I should diverge. One interpretation of biology is what I write about here: the obvious over the clever. Ask yourself, what doesn’t make sense? What am I really sick of? What would I do here if no one was watching? Try asking those questions in all aspects of your life and you’ll surprise yourself with some very interesting answers.