History is useless except……….
“History is a vast early warning system.” — Norman Cousins
One of the contemporary wise people, Charlie Munger, was once invited to give a graduation speech at Harvard School. When he researched all the previous twenty speeches, the one students seemed to have liked the most was Johnny Carson’s speech on prescription for guaranteed misery in life. He chose to follow Johnny’s footsteps and spoke on seven prescriptions for guaranteed misery in life.
Munger could have spoken on how to achieve success but he chose to speak on what causes failure. This makes sense because every success story is a result of a unique set of circumstances whereas most failures are caused by a limited set of common factors.
“Those who cannot learn from history are doomed to repeat it.” — George Santayana
History is meant to be the record of successes and failures of the past and hence it could serve as a great resource in vicarious learning from the experiences of people before us.
One problem, however, is that recorded history suffers heavily from survivorship bias. History is written by victors or chroniclers who see through the victors’ eyes. Consequently, in history, luck tends to get dressed up as skill.
(Also many times, history is written with an agenda — to wrongly project certain rulers, personalities and kingdoms in either good light or bad light — this is besides the point for this article, though)
Because of this, history is handicapped in teaching us lessons on how to succeed against an objective. Most success stories are results of distinct circumstances. Each success story is unique. Each success story is an experiment of one. A particular series of happenstances would have eventually led to success. It is not possible for one to replicate such a specific series of happenstances.
History, however, has great value in what it teaches us about failure. Almost all stories of failure are caused by a relatively small number of causes.
“Fellow citizens, we cannot escape history.” — Abraham Lincoln
I’m currently reading a book called “The four pillars of investing” by William Bernstein where among a plethora of valuable insights, the author brings out a great piece of practical wisdom — history teaches us a lot about risk but very little about return.
Distilling this further — there is a lot to be gained from history in terms of learning what to avoid but it could be perilous to learn specific strategies for success. Even without reference to learning from history, in general, it is much harder to predict which strategy is going to succeed when compared to predicting which strategy may fail.
Outcome of any pursuit, whether success or failure, is eventually a result of skill and luck. Skill or capability is controllable (to an extent) whereas luck is largely uncontrollable. In general, there are a large number of variables in any pursuit. Most of these variables have to work out well for the outcome to be favourable. By definition, probability of getting a variable to attain a certain specific value (which is required for success) is much lower than probability for that variable to take on any number of other values (that will lead to failure). So, by definition and design, probability of success is much lower than probability of failure.
Failure is more deterministic and less probabilistic whereas success is more probabilistic. Given the disproportional contribution from luck to success, it is harder to replicate someone’s success mantra but it is easier to avoid others’ paths to failure.
“History is a gallery of pictures in which there are few originals and many copies.” — Alexis de Tocqueville
Bottomline
“In history, a great volume is unrolled for our instruction, drawing the materials of future wisdom from the past errors and infirmities of mankind.” — Edmund Burke
If we were to learn only by firsthand experience, one lifetime will not yield much learning. Luckily for us, many have graced this earth before us and experiences of a few of them are chronicled in the form of history, biographies and autobiographies. There is great value in being an ardent student of history, mainly in learning what behaviours to avoid and what risks to anticipate. This value can take on disproportionate scale when dealing in the domain of complex systems like wars, stock markets, health, entrepreneurship, leadership roles in corporate, politics etc
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