The Great Mental Models, Volume 2: Physics, Chemistry and Biology

by Shane Parrish

This is a problem in democracies, as Aristotle pointed out over 2,000 years ago. For all their political attractiveness, they are essentially governed by millions of people acting in their own self-interest. And those interests tend to be driven by incentives that offer immediate rewards. Voters want to hear about policies that will have an immediate, positive impact on their lives. Most have less interest in policies that won’t have any obvious benefits for years or even generations. As Niall Fergusson writes in Civilization, “We love our grandchildren. But our great-great-grandchildren are harder to relate to.”3 Politicians have no choice but to respond to the incentives to think short-term; otherwise, they won’t gain voter support. They therefore present platforms highlighting the benefits that will miraculously occur should they win. Due to the relatively short term that people tend to hold political office, it’s difficult for any particular politician to make significant positive change in that time. They’re surrounded by rapid feedback loops that depend on them showing fast results—short election cycles, frequent opinion polls, media reports every minute of the day, and instant social media chatter. The result is a system where politicians have little incentive to think beyond the current election cycle. In a similar manner, publicly traded companies are incentivized to sacrifice long-term growth in the interest of showing profits on quarterly reports. The short tenu...