The laws of nature are pretty straightforward, and while they may be *[[risk|risky]]* the are not uncertain: gravity works consistently, the seasons change with regularity, and new life and death continue unabated. The complexity of the world comes from us humans. Our very nature is complex in that we have this innate desire for something bigger than us. This makes us restless and its the effort that derives from that restlessness which is the seed of the complexity and chaos of the world >**Complexity is like energy.** It cannot be created or destroyed, only moved somewhere else. >-[Why Life Can't Be Simpler](https://fs.blog/why-life-cant-be-simpler/) As our population grows and we advance technologically the world increases in complexity and we must make decisions every day to survive. We have [[Thinking Fast and Slow#Chapter 7 A Machine for Jumping to Conclusions|evolved to make fast judgments]] based on abstractions of the complex reality we perceive. This introduces a lot error into our decision-making but we gain speed and decisiveness. >This cognitive glitch, she reasons, is not a personal failing of the individual but a fossil of the evolutionary history of our species --- a species that survived by dealing with the immediate threats of particular environments, mistaking those isolated incidents for statistically representative distributions of common experience, mistaking in turn anecdote for data --- a misapprehension that scars us modern humans with everything from [the mental machinery of stereotypes](https://brainpickings.us2.list-manage.com/track/click?u=13eb080d8a315477042e0d5b1&id=35d6aef701&e=201e871fac) to the crooked inner calculus of gambling. >-[Maria Popova's Review of the Biggest Bluff](https://www.themarginalian.org/2020/12/08/the-biggest-bluff-maria-konnikova/) We communicate with each other through speech and writing which are both [abstractions of the spatial world](https://fs.blog/knowledge-project-podcast/barbara-tversky/). An Eagle is a predatory bird to someone from Europe, a symbol of Freedom to someone from the US, and a symbol of a Super Bowl Champion football team to someone living in Philadelphia. Words are models for physical things and how they make us feel, and the models are not exact, otherwise [they wouldn’t be very useful](https://fs.blog/map-and-territory/). ## Reductive Effort We exert so much effort to reduce complexity so that we can gain an understanding of the world around us. >In [Living with Complexity](https://www.amazon.com/gp/product/0262528940/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=farnamstreet-20&creative=9325&linkCode=as2&creativeASIN=0262528940&linkId=5f03db00d696ce0edd9f2159f613c425), Donald A. Norman explains that complexity is all in the mind. Our perception of a product or service as simple or complex has its basis in the conceptual model we have of it. Norman writes that _“A conceptual model is the underlying belief structure held by a person about how something works . . . Conceptual models are extremely important tools for organizing and understanding otherwise complex things.”_ >--[Why Life Can't Be Simpler](https://fs.blog/why-life-cant-be-simpler/) The problem with this effort is not only the toll it takes on us, but the simple fact that to do difficult things we need more options. Reducing complexity removes functionality. **Case Studies** - [CHG Issue #148: Unpacking Investment Vehicles](https://cedarshillgroup.substack.com/p/chg-issue-148-unpacking-investment) - [CHG Issue #118: The Principle-Agent Problem](https://cedarshillgroup.substack.com/p/chg-issue-118-the-principal-agent) - [CHG Issue #115: Prediction](https://open.substack.com/pub/cedarshillgroup/p/chg-issue-115-prediction) - [CHG Issue #93: Berkson's Paradox](https://cedarshillgroup.substack.com/p/chg-issue-93-berksons-paradox) Explore Further: [[Simple versus Simplistic]] | [[Occam's Razor]] | [[Risk]] | [[Jensen's Inequality]] Tags: #Concepts Your support for Cedars Hill Group is greatly appreciated <form action="https://www.paypal.com/donate" method="post" target="_top"> <input type="hidden" name="hosted_button_id" value="74PGN8ZXHQVHS" /> <input type="image" src="https://www.paypalobjects.com/en_US/i/btn/btn_donate_LG.gif" border="0" name="submit" title="PayPal - The safer, easier way to pay online!" alt="Donate with PayPal button" /> <img alt="" border="0" src="https://www.paypal.com/en_US/i/scr/pixel.gif" width="1" height="1" /> </form>