Powerful second-order effects

I started reading Scott Adams’ new book yesterday. One of his main points struck a chord with me. Adams makes a big deal about managing one’s attitude and energy. These factors are so powerful that improving them will lead to cascade effects of benefits throughout one’s life. The best part is there are neat tricks (in the BuzzFeed sense) one can use to control these knobs. Things like exercising, faking a positive mood, eating well, etc. The power of these mechanisms, in my eyes, comes from second-order effects, i.e. the direct result of the result of a change. Often times, first-order effects dominate for a given action and so we can safely ignore higher levels as insignificant or unpredictable. But when you can identify actions that have powerful and predictable second-order effects, especially when they overwhelm seemingly negative first-order effects, you have identified a power move. Taking advantage of these can make you seem like a superhero to others that are not aware of these mechanisms.

Consider a simple one such as not eating simple carbs (an example cited by Adams). The hungrier we get, the more we crave simple carbs. It would seem intuitive that eating them would sate us and resolve the hunger. Anecdotally, this doesn’t seem to be the case. Eating simple carbs seems to make us even more hungry, sooner, than other sources of calories. Not to mention the deleterious effects on body and brain function from the insulin spike. On the other side, you have something like exercise. Intuitively one could reason that exercise requires energy and time, and hence will drain one’s ability to perform afterward. In practice, it seems that exercise, or perhaps the consequences of exercising regularly, increases our overall energy level, focus, etc.

Adams provides a list of the simple, obvious actions that have predictable and powerful second-order effects that we can all take advantage of. What is fascinating is this concept can likely be extended to higher levels of decision making and coordination. Consider something like unwanted immigration, especially by low skilled laborers. The first order effects seem relatively straightforward and negative: the immigrants replace citizens in low skilled jobs, increasing unemployment, the load on the welfare system and sparking racial/cultural tensions. But what about second order effects? From the economics literature, it seems almost unanimous that immigration is net beneficial in the long run for the recipient state. New, better jobs are created and wealth increases; everyone is better off. The second-order effects, of positive outcomes, overwhelm the first-order negative effects. Is the effect powerful and reliable enough? Maybe. It is possible that the research is flawed or there are other caveats. But one can also imagine a world where policy makers become aware of and confident in this mechanism, and others.

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