🤯Unknown Unknowns #84 - Happy New Year!

Jan 22, 2023

新年快樂! 恭喜發財! These are the most popular greetings for the new year (click the links for pronunciation - These are in Cantonese - can’t find a video in my family’s dialect, Toisan). Chinese New Year is a time for gathering with family and all the cooking and eating that goes with it.

Random Rant of the Week:

There's no such thing as "Lunar New Year". There are many "lunar new years," like Chinese New Year, Korean New Year, Japanese New Year, Tet, Diwali, Rosh Hashanah, Mongolian New Year. Some of these happen to fall on the same date. But “lunar new year” merely means the first day of a new year using a lunar calendar. The above celebrations all have their own specific traditions.

Writing of the Week:

I know I wrote about writing just two weeks ago, but that essay made me think again about why I write.

My Twitter is full of threads pushing the benefits of writing ad nauseum lately. But after writing with some regularity for the last two years, I have a more nuanced take. Writing helps both externally and internally. What everyone focuses on are the external benefits of writing, writing as communication. You can persuade, explain, and entertain, all in service of gaining an audience.

But less obvious are the internal benefits. Writing helps you develop ideas. By putting pen to paper, logical gaps are revealed and connections are made between ideas. I feel better too, as exploring ideas through writing puts me in a flow state where ideas constantly well up. For the past two months, I’ve been writing at least one hundred words every weekday. Some of these mini-essays have been the basis of the writing of this newsletter. As this experiment has continued, coming up with ideas to write about has become easier. Now, I often have multiple ideas to write about each day.

Because of the focus on external benefits, the internal benefits can get lost by the wayside. I’ve seen many people give up writing because they don’t feel they have the skills to benefit externally. They don’t write because they feel they no one will read it. But they don’t realize writing skills aren’t needed for the internal benefits.

The diaries of Leonardo da Vinci and Marcus Aurelius weren’t written for public consumption. They were private, meant for their own use. In fact, private writing used to be commonplace and these internal benefits were well known. While da Vinci and Marcus Aurelius are excellent writers, these skills aren’t necessary for the ideation to occur. But as an added bonus, your writing skills will improve as you write for the inner benefits.

There is a giant group of people who do not write because they are concerned with the craft while neglecting the upside of ideas. Focusing on the craft of writing is superfluous if you're not trying to communicate with other people. There's no point in polishing words when the ideas are undeveloped. Your writing will naturally improve as you write and read more and especially as your ideas are clarified on paper.

Write for the sole purpose of getting your ideas on paper, as a private memorandum. Don't worry if it sounds good. After you write your idea out, go over it and make sure it makes sense. Fill in the gaps.

Blast From the Past:

A moral hazard is when the consequences are no longer tied to a decision. The classic example is when someone buys insurance. Because the negative consequences are covered, you will be more likely to take a risky action. For example, if you have health insurance, you're more likely to go horseback riding. Put simply, moral hazard distorts decision-making.

Another way to look at moral hazard is to invert the idea. Nassim Taleb talks about "Skin in the Game." In other words, when you fail, you suffer the consequences. Taleb claims that "Skin in the game is necessary for fairness, commercial efficiency, and risk management." Skin in the game aligns interests - and fairness is getting proportional benefit for your contribution.

Skin in the game is important. You don't want to work with anyone who won't have any downside if they fail. And on a societal level, moral hazard leads to the wrong actions being taken. Take for instance the 2008 financial crisis. The crisis resulted from risk being disintermediated from stakeholders. Everyone thought their downside was a lot lower than in reality and took huge risks because of it.

On a personal level, you might not think you want skin in the game. Who wants downside? Another way to think of skin in the game is responsibility. You might not think you want responsibility, but being responsible brings out the best in yourself and leads to growth. If you don’t take responsibility, you won’t put in the effort to achieve anything. Example, with medical insurance, most people delegate their health to their doctor, blindly following their directives. An alternative would be to advocate for your own health.

You can find more of my writing at chr.iswong.com.

Questions, suggestions, complaints? Email me at [email protected]. Feedback welcome.

If you enjoyed this newsletter, please share it with a friend or two. And feel free to send anything you find interesting to me!

Leaving you in peace,

Chris