Saturday Serendipity
Quote, Mental Model, Interesting find.
Hi!
Reading time: About 5 minutes
Quote
“Life's barely long enough to get good at one thing. So be careful what you get good at.” - Rust Cohle from True Detective
Mental Model
Mutually assured destruction
Today we will see a mental model from the field of warfare.
What is mutually assured destruction?
Mutually assured destruction is a military mental model with powerful applications in life and business. It refers to a situation where two parties are in a stalemate, and neither can make a move without causing their own destruction. Here’s why this happens and how we can avoid putting ourselves in situations where playing means losing.
“A strange game. The only winning move is not to play.”
— Professor Falken in the 1983 Movie War Games
In Warfare
For most of the time that humans have been alive we have seen violence. For some reason or the other there has been a reason for fights to happen. As time went on the scale of fights also increased. First there would be hand to hand combat between two people or a small group of people. Then as time went on there were wars. What is interesting to note is that the level of violence has always increased.
Buffet has a wonderful quote,
You know, thousands of years ago we had psychotics and we had religious fanatics and we had megalomaniacs. But about the most they could do was throw a stone at somebody if they wished evil on them. Today, since 1945, the ability to inflict evil, or harm, on other people in huge numbers has grown exponentially.
The second world war saw the use of nuclear weapons. Many people believe that if there is a third world war it will be the end of humanity. This is true. Nuclear weapons are mutually assured destruction. If one country uses it, so will the other and this results in only one thing. End of humanity.
This is what the Japanese said when they surrendered after the nuclear bombings,
The enemy now possesses a new and terrible weapon with the power to destroy many innocent lives and do incalculable damage. Should we continue to fight, not only would it result in an ultimate collapse and obliteration of the Japanese nation, but also it would lead to the total extinction of human civilization.
The development of new weapons never stopped. Russia came up with the hydrogen bomb 8 years later. The nuclear bombs of today are even better than they were in 1945. The only reason that these weapons have not been used is because the countries who have rivalries know that if they use it they themselves might go extinct. Extinction is a real possibility for both parties and hence the best idea is to not participate.
What is concerning for all of us is the fact that we could be one lunatic away from the end of humanity. If one person in power comes and decides to use a nuclear weapon due to some controversy or problem it could prove catastrophic.
“Thankfully, we do not have a clear picture of the potential consequences of MAD playing out. We do have an idea of what they would be – a nuclear apocalypse. Although the concept of a nuclear apocalypse has become almost comical due to its prevalence in science fiction, it is important to understand that it remains a very real possibility.” - Farnam Street
In Business
Mutually Assured Destruction can be seen in business as well. Many businesses have a big rivalry with their competition. Many times they go on a pricing war. If one of them reduces their prices the other one has no option but to follow otherwise they will lose market share. If this results in a cycle of price reduction both companies might end up losing as their margins fall. More often than not instead of going on a business war it is better to coexist in a market.
Currently in India, Jio has entered the streaming services and they streamed IPL for free. This caused other platforms who stream matches to do the same. So for the world cup even Disney Hotstar did the same. It was completely free.
Now this will last for some time, but if it continues for long enough both will go bankrupt. But based off history what Jio needs to do is simply wait out till Hotstar gives up. In this case there is a winner due to excess of capital but if there was a case of Jio not having the kind of money that they do it would have been a case of mutually assured destruction.
In Life
Consider most fraudulent activities. For instance let’s say that you are in engaging in some sort of illegal activity with one of your friends. You realise that you are in too deep. So you want to ‘rat out’. Now even if you negotiate somehow to get a reduced sentence you will ensure that you and your friend both are destroyed. Mutually assured destruction. Even though it is the right thing, because of there being a consequence on your side you mostly would not do it.
It is better to avoid situations like these in the first place.
We can see that Mutually assured destruction can be a good thing and a bad thing. So beware.
Reference:
Interesting find
John Collision with Charlie Munger podcast
That’s it!
Enjoy your weekend!
Samvit.