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The Big Lessons From History · Collaborative Fund

Important things rarely have one cause

An important lesson from history is that big events are more complicated. It makes forecasting difficult, politics nasty, and lessons to learn from it harder.

We may demand simple answers to explain outlier events. However, it's almost impossible for something big to happen because of one event, person, or group. Unrelated things often culminate into something significant. For example, the Great Depression was the result of a stock market crash, a banking crash, a real estate bubble, an agricultural disaster, and an inadequate policy response. When all these things happened at the same time, it was a catastrophe.

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SIMILAR ARTICLES & IDEAS:

Permanent Assumptions
Permanent Assumptions

In this world of uncertainties, nothing but death and taxes are sureshot in our lives.

There are however some assumptions that withstand the test of time. These assumptions take in...

The World We Live In
  • People generally want to solve problems than to create harm, but those who want to harm get a lot more attention.

  • While people can be taken advantage of, it can’t be done for an infinite period of time.

  • Every ten years or so, there has to be some economic, political, military or social breakdown, according to historical data.

Human Behaviour
  • Stories are more engaging than statistics. A thousand people dead evokes different emotions than the death of that one person whose story we all know.
  • The only thing constant is change, and nothing good or bad stays that way, ever. However, one can never find out what or when the change would be.
  • Incentives can make people do good and bad things. While a group of people can be made smarter, they cannot be made more patient, less greedy during uncertain periods.
Voltaire

“History never repeats itself. Man always does.”

Voltaire
History lessons
The most important lessons from history are the takeaways that are so broad they can apply to other fields, other historical times, and other people. 

The point is that the more specific a lesson of history is, the less relevant it becomes.

Adopting new views 

One of the interesting parts of the Great Depressions from history is not just how the economy collapsed, but how quickly and dramatically people’s views changed when it did.

People suffering from immediate, unexpected adversity are likely to adopt views they previously thought absurd. It’s not until your life is in full chaos (with your hopes and dreams your dreams unsure) that people begin taking ideas they’d never consider before seriously.

Some downsides are unavoidable
Some downsides are unavoidable

Life is a little easier if you expect a certain chunk of it to go wrong no matter how hard you try.

Smart people screw up. Good people have bad days. Nice people lose their temper....

How we think about risk and opportunity

It’s impossible to think about risk and opportunity without a reference point. And ours is at most incomplete (if not totally wrong).

Everything we think about risk and opportunity is shaped by our own specific situation and personal experience. So everybody has a view of risk shaped by narrow experiences but applied to the broad world.

Long-term and short-term thinking

Long-term thinking is difficult to put in action because the long run is a collection of short runs that have to be handled, displayed, and used as information to gauge whether a long-term reward still exists.

Short-term thinking can be the only way you’ll survive long enough to experience long-term results.