SDC Weekly 20; Tribalism & Nihilism; The Lollapalooza Effect

South Sea Company of 1720, Disinformation vs Misinformation, History of timekeeping devices, Squid Game Challenge, and the “Picasso of Counterfeiting”

“As the biggest library if it is in disorder is not as useful as a small but well-arranged one, so you may accumulate a vast amount of knowledge but it will be of far less value to you than a much smaller amount if you have not thought it over for yourself; because only through ordering what you know by comparing every truth with every other truth can you take complete possession of your knowledge and get it into your power.”

— Arthur Schopenhauer, Essays and Aphorisms

​Hello folks 👋

Welcome to this week’s SDC weekly! Great to have you here, thank you for taking the time. If you have not done so already, have a look at the previous editions here.

The section on tribalism started out as a short ‘forward’ to the rest of the newsletter, and ended up being a section all on its own… so there is no preamble, lets just start!

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Tribalism leads to… nihilism?

Humans have evolved over time (supposedly!), and in particular, over the last millennium we have made significant progress in improving our collective ability to think and reason. We have used writing and communication to preserve knowledge, and in more recent centuries we have collaborated across continents to create major societal progress.

The thing is, we cannot escape what is hard-wired into our DNA: survival instincts. Despite the fact we may no longer need these instincts in their purest form, there is no escaping the fact we have been programmed to protect ourselves and ensure survival. As a perfect example, as I wrote recently about tribalism:

“Band members regularly create and maintain egalitarian blueprints for social behavior, ‘plans’ that are implicit or (in part) explicit in the ethos and well understood by the rank and file who implement them. The political notions and dynamics involved are not restricted to mobile foragers, for tribesmen all over the world are similarly egalitarian.”

Tribalism is a key part of our existence as a species. It is the reason we tend to be loyal to people who are similar to us, and to be distrustful of people who are different from us. For much of our existence, this instinct was quite literally the difference between life and death; if you were cast out of your tribe, you would be left to fend for yourself and your survival rate would plummet... a true existential threat. If you were cast out, and then encountered a new tribe, you may never be trusted because you would not share anything in common with them… perhaps not even language¹.

Of course, we don’t live in such a time today, but tribalism remains a key part of our DNA. Humans today are still susceptible to the same sort of behaviour; we inherently want to belong, and going against our own tribe triggers a certain fear within us. This fear is less existential, and perhaps best described as intellectual or moral. Today, tribes are rarely defined by the communities we live in or the religions we follow (though these do apply!); instead, they are created in our minds, and we adjust our behaviours accordingly.

Regardless of which tribes you are a part of, there is usually a culture and a set of rules which govern the membership of each tribe. People who go against these frameworks are cast out, and usually nobody in the tribe will be willing to stand up for any dissenters. Think about Journe or MB&F; people being accepted into these circles would be shunned if they dared to openly flip watches for a profit. These are the tribes I refer to. It goes beyond watches too, iPhone vs Android, Rent vs Buy, Republicans vs Democrats, etc.

It has become increasingly easy to find and join new tribes due to social media and as a result, we have become less focused on the character of people and more focused on their tribal affiliations instead. The real shame is when we then find ourselves defying logic to defend the actions of people in our tribe, just because they are in our tribe - while ignoring the fact that we know, deep down, their actions are ‘wrong’. Affiliation becomes defense, no matter how illogical. What’s worse, is when we rush to criticise those who are not in our tribe, but easily and readily overlook the same flaws, faults and behaviours from people in our own tribe.

There are plenty of examples if you care to look closely. Think about a parent who refuses to denounce poor sportsmanship from a player on their own child’s team; or a company tolerating poor behaviour from a leader because he is really good at his actual job; or the police union defending a cop who has multiple reports of police brutality against them; or as we have seen recently… Advocates for the human rights of one group neglecting to call out that group’s human rights abuses against another group or, simply just holding each group to different standards.

This sort of dynamic fuels extreme cognitive dissonance² (which I have written about here) as we advocate for one set of values publicly, and then defend our tribe who are violating the very same values we have been advocating for. This not only weakens our own tribe, but completely destroys the quality of our own judgement as well as our ability to live in a society which functions via a set of shared principles.

You have undoubtedly seen these nasty tribal behaviours on full display in the last couple of weeks, and it is worth taking pause to consider how we think about tribalism. It would serve everyone to start relying more on their own values and morals, and less on the collective norms of their respective tribe on any particular issue.

More importantly, people need to see the value in calling out the bad actors in their own tribe, because bad is bad, regardless of tribe. Such consistency requires strength, not because it is a genuinely perilous action, but because we’re literally going against our own genetic wiring, and risking our membership to a tribe.

The thing is, any perceived dangers of going against our tribe are not existential threats in the way our ancestors faced them. Quite frankly, the more I observe what is happening around the world, the more it feels like abandoning tribalism will bring more good than anything we gain by continuing to adopt this outdated genetic coding.

By the way, this isn’t just about politics, nationalist agendas or wars. Consider the recent update from OnlyWatch about the postponement of the 10th auction which was scheduled for 5th November 2023. Literally every single mainstream watch influencer and media house stayed completely silent on the issue despite it brewing for many weeks. On the day of the OW press release, Revolution published a story - likely because they already knew the news was about to break - which was the first time this hit ‘mainstream’ channels in the watch world. Not even after the Audemars Piguet left OnlyWatch a week ago, did any of them bother to talk about it, even when Yahoo! was covering it. How deep this tribalism goes!

While we may not be able to rewire our genetic predisposition to tribalism overnight, or at all, we must become better at relying on our own judgement and moral compasses to help us check the dangerous blind spots which are so often masked by tribalism.

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🍭 Lollapalooza Effect

Lollapalooza is an archaic word meaning “extraordinarily impressive.” Perry Farrell heard the word in a Three Stooges film and it inspired him to name a music festival after it. Much later, Charlie Munger coined the term “Lollapalooza Effect:”

I bought the three main text books for introductory psychology and I read through them. And of course being Charlie Munger, I decided that the psychologists were doing it all wrong, and I could do it better. And one of the ideas that I came up with which wasn’t in any of the books was that the Lollapalooza effects came when 3 or 4 of the tendencies were operating at once in the same situation. I could see that it wasn’t linear, you’ve got Lollapalooza effects. But the psychology people couldn’t do experiments that were 4 or 5 things happening at once because it got too complicated for them and they couldn’t publish. So they were ignoring the most important thing in their own profession.

—Charlie Munger

Lollapalooza effects occur when there are multiple forces or factors moving in the same direction. The key is that when forces combine, they don’t just add up; each force builds off of and strengthens the other, creating an explosive effect with huge results.

—Charlie Munger

I have previously discussed the Stanford Prison Experiment, and you may also have heard of the Milgram experiment which explores the authority bias; the point Munger observed is these experiments fail to consider how more than one bias impacts behaviour simultaneously.

What Munger was describing, was multiple forces which combine together to create something greater than the sum of each part. With that in mind, I was reading a piece recently which triggered a thought about watch buying; let’s look at how lollapalooza effects can be both positive and negative.

Positive Lollapalooza Effect: Alcoholics Anonymous

One example Munger has mentioned of the Lollapalooza effect having a positive impact is in Alcoholics Anonymous (AA). According to Munger, AA boasts a 50% success rate in situations where all other social and health-related variables fail to motivate alcohol abusers to quit. These are some of the factors which compound to help defy the industry's sobriety rate for alcoholics:

• Mimetic forces - The leader in the room you mimic is not the biggest alcoholic, it is the person with the longest clean streak.

• Anonymity - As you have no identity to protect, you have no shame to worry about, and are able to come clean to your heart’s content.

• Environmental change - No alcohol being available in the room, on a regular basis, gets you used to socialising without booze.

• Momentum - Each day you are sober adds momentum to being sober. A positive flywheel that compounds.

• Gamification - Having a 12-step program makes you feel incremental achievement as you level-up, and your reluctance to start from the beginning again discourages you from faltering.

• Skinner’s law³ - AA gets you to believe in a higher power, and letting down god is much worse than the pain of not drinking.

• Identity bias - Once you complete the AA program, they get you to help new alcoholics give up their addiction. The student becomes the teacher, and with that, a new identity to protect: the sober mentor.

Negative Lollapalooza Effect: Auctions

Auctions have been cited by Munger as a an illustration of the Lollapalooza effect in a negative way. He references the psychological concept of social proof which encourages people to mimic the behaviours of others. During auctions, bidders can get into bidding wars “because that’s what their peers are doing,” instead of simply pursuing an object of their desire or because they have calculated that their bid is a financially fair one. Some of the factors which compound to make people spend over the odds on an item they don’t need:

• Mimetic forces - Yet again, the leaders in the room are competing against you. As discussed in the last series, this directly challenges your status.

• Social status loss - Once you stop bidding, you have to concede defeat publicly, and surrender some status to the winner.

• Commitment bias - The moment you place a bid in an auction, you have declared your beliefs publicly.

• Contrast effect - Because the price goes up gradually, it becomes an incremental justification in your mind. “An extra $10,000” instead of “$200,000 total”.

• Loss aversion - The moment you stop, you lose the item for good.

• Scarcity - This particular item is only going to come up for sale in this auction once - if you don’t win it now, you lose it for good.

• Alcohol - Adding booze to the equation unsurprisingly compounds the above forces.

Takeaways

If you think about the watch market bubble which started just after the pandemic, you will realise this is a great example. Some people attributed it to the rise of social media, others said it was due to the free time available during lockdowns which allowed collectors to do more research, and many attribute it to the stimulus payments and excess disposable income which people had access to because of travel bans. The reality is probably a healthy mix of all these things and many others too (brands’ shenanigans with supply restriction, dealer shenanigans with price manipulation, new entrants who became overnight ‘dealers’, new customers who wanted to make easy money etc.).

So, whenever you find yourself trying to identify forces at play in any situation, it is quite likely there is more than one - there are hidden Lollapalooza's everywhere if you look hard enough.

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📌 Links of interest

The trailer for Netflix’s Squid Game: The Challenge, where real people try to win real money but only fake-die.

🌊 A look at the history of the Audemars Piguet Royal Oak Offshore through the archives of Europa Star.

😛 Disinformation vs. Misinformation: What’s the Difference?

📖 What are the least popular pages of Wikipedia?

💸 More Proof That Money Can Buy Happiness (or a Life with Less Stress).

⌛ History of timekeeping devices - Wikipedia

💀 Elon really f*cked Twitter up: Verified Accounts on X Spread 74% of Wartime Misinformation.

🗣️ How the Activist Left Turned On Israel.

⌛ The Gliding Seconds Hand … and how we experience time - by

Hamza Masood

👩 Women, on average, are less happy when they earn the same or more than their husbands.

🎵 TikTok Creators Call Out 'Bro-Lit' on BookTok. Honestly, this headline alone had me scratching my head!

🤪 Isaac Newton was a genius. Yet, even revolutionary thinkers make stupid mistakes.

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🔚 End note

The subject of genuine journalism in the watch industry has come up before, as I refer you back to SDC Weekly #9 - at this point, the concept of a watch journalist is something of a simulacra, a symbol that has been usurped by what it was originally intended to symbolise… a new symbol of what has never even existed. This is Jean Baudrillard’s idea, most famously covered in Simulacra & Sign. Baudrillard argues there are four phases of the original image - a faithful depiction of what it is supposed to represent, a false depiction, a cover-up depiction which aims to hide that there is nothing which is actually being depicted, and the simulacra… where nobody has any of the necessary understanding to even know what reality might be.

The lines between ‘journalism’ and ‘marketing’ have always been clear, and by way of historical association to a profession, journalists of the past have joined marketing organisations and perpetuated this lie about being journalists. Worst of all, I think they actually believe it themselves, hence the simulacra analogy.

Anyway, until next time!

F

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🎁 Bonus link: The “Picasso of Counterfeiting”

Here’s a fascinating 15-minute video narrated by the man himself! Jeff Turner has counterfeited over $1 million in US currency. He forged the 1996-series $100 bill and later the 2013 “blue note.” He was indicted on federal conspiracy charges in 2019 and cooperated with the Secret Service, eventually serving 10 months in prison. According to Turner, the Secret Service said the bills he was manufacturing were the highest quality they’d seen in over 25 years.

Turner speaks to Insider about the materials and processes required to make fake money. He talks through how to spot a fake bank note. He also discusses cartel forgeries from Colombia and Peru, and the supernotes the US has accused North Korea of making.

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1. Made me think of an old game: Age of Empires. What an epic game!

2. In the field of psychology, cognitive dissonance is the perception of contradictory information and the mental toll of it. Cognitive dissonance is typically experienced as psychological stress when persons participate in an action that goes against one or more of those things. Wikipedia

3. Skinner theorised if a behaviour is followed by a reward, that behaviour is more likely to be repeated, but added that if it is followed by some sort of punishment, it is less likely to be repeated.