“You can't think without risk” ~ Jordan Peterson Is there risk inherent in thought? Are you a risky person or do you prefer to identify as risk adverse? If you were a master of risk are there things you would approach differently? There are strategies to maximize returns given risk, can those same strategies be applied to thought? Is it true that "You can't think without risk"?
Hunter Powers: Welcome to The One. I'm your host, Hunter Powers broadcasting live from our nation's capital, DC proper, Washington DC. Today's one idea is, "You can't think without risk." This quote comes from Jordan Peterson, a controversial clinical psychologist who Rose to fame from the University of Toronto, where as a professor, he made a number of videos criticizing various political legislation, primarily around gender identity. He wrote the best selling book, 12 Rules for Life, an Antidote to Chaos. Today we will examine his quote that, "You can't think without risk." What does it mean? Do we agree with it and how can we use it? You can't think. You can't think without risk. What does it mean?
Hunter Powers: First, just a little bit of context on where this quote came from, and also as a preview, I think we might be taking it in a slightly different direction than Jordan was, although it's all related. This was a small excerpt from a speech he gave where the words around it were, "I don't think you can do anything worthwhile without risk. And I can bloody well tell you that you can't think without risk. That's for sure. Because if you're thinking without risk, then you're not thinking about anything important. And if you're not thinking about anything important, well the first issue is why the hell bother then? Why bother thinking? And second, you're not thinking if you're not thinking about something important and if it's going to be important, it's going to be contentious."
Hunter Powers: He then goes on to make an argument about why free speech is so important, and he uses this idea that you can't think without risk. Because you can't think without risk, we need to have free speech as an underlying principle to everything. Because if we didn't have free speech, we would not be able to think. That's his thesis. And he is someone who has gotten into a lot of trouble, or at a minimum controversy, over his thinkings.
Hunter Powers: So now taking it back and focusing in, you can't think without risk. So what is it to think, to direct your mind towards something, to try and find the connection between different ideas, to build opinions or beliefs for something or against something? So if you can't think, you can't direct your mind towards something you can't form new ideas, new beliefs, new opinions without risk. And I think we most commonly associate risk with danger, hazard, the possibility that something might go very, very wrong. It's important to note that it is not a guarantee, right? It's not punishment. It's not that you can't think without punishment, but it's that you can't think without the possibility of punishment, without the possibility of negative consequences.
Hunter Powers: While we often think of risk in very large acts, say a risk of death is probably the one that that comes to the front of mind, the biggest risk, risk can also be quite small, right? The risk that your soda will be flat, the risk that your bread will be stale, the risk that it might rain today. I think I would sum up the definition as a possibility of negative consequences or a slight alternative of a probability greater than zero of negative consequence. You can't direct your mind at something and guarantee no negative consequence. A slight retelling of you can't think without risk. That danger is inherent in original thought.
Hunter Powers: So do we agree with it? Is it true that you can think without risk, that there's always the possibility when you start thinking about something, when anyone starts thinking about something, that it could go off the rails, that danger could becoming, that there could be negative consequences of merely pointing your mind at some abstract notion? It sounds a little bit absurd. I'm not instantly sold on it. I feel like I can think about what it is I'm going to wear to work today without great consequence.
Hunter Powers: Now, obviously there are choices that I could make about what I'm going to wear to work today that could have great consequences, that could have great risk, but I feel confident, confident enough in my thought process that I will be able to come to a conclusion on what to wear to work today with very, very, very little risk. But I guess I would agree that there is some level of risk, it's just incredibly small, so small that it's not really worth thinking about. But I don't think it's a technical violation of this idea.
Hunter Powers: And again, if we remind ourselves of the greater context of this initial quote, Jordan does qualify it later on as thinking about something important. You can't think about something important without risk, and he qualifies thinking as thinking about something important because again, according to him, if you're not thinking about anything important, why bother? And if we think about thinking as the thought that goes before the decision, then I suppose the idea is if the decision doesn't really matter, if you already know everything, for example, what you're going to wear to work today, then don't bother thinking about it. Just decide, move on and spend your time thinking, thinking about something important.
Hunter Powers: So are there important things, things of great substance that you can think about without risk, and what is risk in this context? What are we really talking about? There's the Bhagavad Gita quote, "Man is made by his belief. As he believes, so he is." I think that's where the danger comes in. I would suggest that that opinion, that as we believe so we are, is the overwhelming and census of the majority. So if your thoughts go to a place that the majority does not align with the fact that you had that thought must be as you are, you're really not allowed to explore the idea, explore the alternative.
Hunter Powers: And there's probably some good reason for that, some rationale. We need some order in society. We need a common set of beliefs and to threaten those beliefs could be to threaten the very fabric of our society, the order, the chaos. So there is danger, there is risk in thinking about something important.
Hunter Powers: Perhaps we could further qualify it as sharing the thought because the thought doesn't have to leave your mind or at least there's certainly greater risk in sharing the thought than simply having it, but there's probably is still risk in simply having it. You've probably heard the phrase did you ever stop and think or you've had some situation that you've been in for a while and then you take a moment and really think about it and it gives you a whole new perspective, either positive or negative, on what's been going on. And that whole new perspective, even if it isn't one that you share with others does impact you. So there is risk and thinking about it.
Hunter Powers: I'm sure you've also heard the statement, I'd rather not think about that. Why? Why would you rather not think about that? Not because there is no risk. It's because there's risk. It's because you can't think without risk.
Hunter Powers: So I think, and this is taking a risk, that we do believe in this idea. We agree. You can't think without risk. That's a little bit scary because it seems like I could think without acknowledging the risk, at least previously. Previously before this episode of the podcast, I was allowed to think without acknowledging the risk, but no more, no longer. I think I'll just be silent for the rest of the episode. It's much safer that way.
Hunter Powers: All right, part three. How do we use it? If you can't think without risk, how do we use this to our advantage? The interesting thing about redefining thought as a risky activity is that you can then apply the field of risk management to it.
Hunter Powers: The first thing that I will point out is you probably think of yourself as a risk adverse person. Most people do. Maybe you don't, but most people do. I don't take a lot of risk. I play it straight. I know my place. I've got a lot of confidence, something like that. I don't know. I don't really know what that voice is either by the way. Maybe it will save that for another episode.
Hunter Powers: But if all thought is risk than you actually are a fairly risky person, you just didn't know it. You are going out on the limb all the time, because I do guarantee that if you're listening to this show, you are a person who thinks about things. You believe in the value of important thought and therefore you believe in taking a lot of risk.
Hunter Powers: So what does it mean if you are actually a person who takes lots of risks, that you are not risk adverse, that you actually have a very high tolerance for risk? Are there other things that you've thought about doing but you don't because you're concerned with the risk? Now, hopefully these are things with a net positive outcome by the way. Hopefully we're not talking about robbing a bank. But what is the thing, the first thing that comes to your mind that you have been thinking about doing or have thought about doing but dismissed because it was too risky? And so now what happens when you re-examine that same idea within the context of you as a very risky person? Is it at least a new consideration? Is there something more there there?
Hunter Powers: The next interesting idea about putting thought into the category of risk is the idea of risk of ruin, or the idea of taking the appropriate amount of risk to maximize your path forward. There's a concept in probability theory called the Kelly Criterion. The Kelly Criterion is a bet size that maximizes the expected value of your wealth or maximizes the growth rate of your wealth. So imagine there is a bet and you have a 70% chance to win and you have some amount of money. Let's say you have $1, but this is all your life's money, your life's worth. It's all tied up in this $1 and you can't easily get the dollar back. But you have a bet in front of you and there's a 70% chance of winning this bet. How much should you bet?
Hunter Powers: I guess another important note is that you believe you're going to be able to bet on the situation over and over again for a while. You're not entirely sure how long, but this particular bet is going to come up again and again and you have $1 and your goal is to accrue the maximum amount of money or wealth or value. How much should you bet? And so the Kelly Criterion answers this question and provides a mathematical proof for the correct formula, to maximize the rate of growth.
Hunter Powers: The simple answer is you multiply your percentage chance to win by two and then subtract one. So if we have a 70% chance to win, we multiply that by two, which gives us 1.4. We then subtract one and we're left with 0.4, which means that we should bet 40% of our available funds. So if we have $1, we should bet 40 cents on this bet. And again, it was a 70% chance of winning. So 30% of the time we're going to lose. We're going to lose our 40 cents. We'll be left with 60 cents. We will then do the exact same thing and bet 40% of our 60 cents. If we won the bet, which we're going to do 70% of the time, we would then have $1.40 and we would bet 40% the next time. This simple little formula maximizes our rate of growth of our total wealth. So if we want to be the richest possible over the long term, this is the answer.
Hunter Powers: So what's interesting is if all thought is risk or if risk is inherent in all thought, if we're taking a risk to try to get something, and it doesn't need to be money, but if there is a way to quantify the risk that we're taking for the reward, then we, in theory, should be able to adjust that risk to maximize the reward.
Hunter Powers: Now of course, that's where the complication comes in. How do you quantify the amount of risk you're taking in thought? It's a very challenging idea, but the idea is as you are having thought, if you can attempt to quantify the risk, then you can optimize the amount of belief that you put behind it. How far do you push the idea, what's really at play and what are you really going after?
Hunter Powers: In the last episode we talked about how you can't fail privately, and I think this comes into play. You can't think without risk. You have to understand that if you are going to get out there, if you are going to break through it all, if you're going to find that next level, that next state of being, then you are going to have to take a good amount of risk, perhaps a great amount of risk.
Hunter Powers: But because it's risk, you can also mitigate it. You can rig the odds in your favor. It is possible to play a rigged game. And it's not actually rigged, but it's being smart about the risk and it's not going into things blindly. And it's also understanding that risk management is something that you're already very comfortable with, far more comfortable than you ever imagined, and why? Because you can't think without risk and you think and think and think all day, every day. You just didn't realize that you were building this muscle of risk.
Hunter Powers: And so now that you've discovered it, that it's been manifested, you can use it and you can use it very explicitly instead of implicitly and you can manage it. And through creative and direct management of the risk, you will be able to get far further than everyone else.
Hunter Powers: Imagine you were driving in a car and inside of this car is a monstrous engine. It can go 300 miles an hour, but you always follow the speed limit and you've never taken this car above 60 miles an hour. And your assumption is it can probably only go 60 miles an hour, maybe a little bit more, maybe 65. It seems like there's a little rattle around when you get to 60, and you've seen some other similar cars go about 65. So you think perhaps it could do 65. What happens when you tell that person that the engine in their car is capable of 300 and all they need to do is push down on that gas pedal? That's it. Simple. You already have it. You've had it all this time. Does that change the person? I don't know, maybe, maybe not. And at a minimum , there's got to be a confidence that comes from it. Even if you're still going to obey the speed limit everywhere you go, you're going to have a greater confidence knowing that if I wanted to, I would push down on that pedal and fly past you.
Hunter Powers: And maybe there are now certain opportunities where you might break the speed limit. You might say, well here's the risk. I'm out in the desert. I've got clear line of sight two miles in front of me. There isn't a car or a person on the road, and if I could get to this destination just a little bit faster, things could happen for me. Perhaps you take the risk, perhaps you maximize the expected geometric growth rate using a Kelly Criterion.
Hunter Powers: My hope is that you at least think about it, that it's at least a discussion. What is the risk that I'm taking and what is the risk that I'm not taking? What is it I want? What is it I'm getting and what's required to get what I want? Or perhaps put better, what I have to have. Because if you can't think without risk, then you might as well get some real value out of it. And that is your one idea for today.
Hunter Powers: I am Hunter Powers, broadcasting live from our nation's capital, as we say in the city, D C proper. And until next time...