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Episode 32 Transcript

This is a transcript of episode #032 on Pascal pt. 2 – +EV your way to success! Check out the episode page HERE.

Blaise Pascal famously said that all of us living…and the condition that we find ourselves living through, this crazy roller coaster that we’re on, he refers to it as the “supreme paradox of creation”. Man is the great paradox of creation. He said that as humans, we constantly live in a state of the highest grandeur and the deepest misery. Simultaneously. But why? What is it about man that could possibly account for that sort of variance? I mean, he is obviously calling us out as a species. He didn’t say living creatures on planet earth are this way…he said Man is the great paradox of creation. Why did he say that? Well to fully understand where he is coming from, we need to set the stage and get a little perspective on what sort of world Pascal was living in and what sort of person Pascal was. We’ll gain that perspective through the show today and near the end of the show, we’ll come back to that famous quote and it will make a lot more sense to us.

So. Blaise Pascal. He invented the calculator. Not kidding. All the way back in 1642 at the age of only 18 years old his dad was an accountant and for anybody that has done any sort of personal accounting in today’s world or taken a class on this you can relate to it, but there was a TON of monotonous, menial calculations of arithmetic that were incredibly time consuming and Pascal, filled with ingenuity and the mind of a polymath genius created a device in 1642 that could add, subtract, multiply and divide and became not only an object of admiration from the people immediately around him for actually inventing the thing, but he became his father’s favorite son. I mean come on, at that point what does he say to his other kids. I love you guys just as much…just differently. Nope…nobody was buying that garbage anymore, Pascal was the man. But it’s not like his father didn’t see this early representation of his genius coming, he had been facilitating it and trying to nurture it for years. Blaise Pascal lived in a pretty amazing time, obviously, because the show is chronological, it wasn’t that far removed from the time we’ve been talking about for a while now, the scientific revolution. Well, the exact decade that Pascal was born was a time of UNPRECEDENTED change. Change on a scale that no one EVER could have foreseen. If you were someone who wanted to create something or think of some idea that spreads like intellectual contagion and changes the way that people around you view the world, Pascal’s lifetime was the perfect time to be born. Whenever there are HUGE breakthroughs throughout human history, it is always very shortly after those breakthroughs come to pass that some person is born that is seen in retrospect as incredible. This period of time after this huge paradigm shift is a time of HUGE opportunity if you were trying to change the world.

Pascal was part of a new age of thinkers. He was 14 years old when Descartes released his Discourse on Method. This text as we talked about before sparked a huge debate and in that sense it was revolutionary. Pascal, was the first generation to benefit from those insights. Kind of makes you wonder about what is possible and what sorts of people are emerging as the first generation able to benefit from something as revolutionary as the internet in today’s world. I mean, imagine if someone as brilliant as Blaise Pascal had access to the internet. What could a polymath genius accomplish if he had the collective knowledge of the history of man available at his fingertips instantly? Probably wouldn’t be Nyann Cat that’s all I’m saying. Anyway, Pascal’s father was a very intelligent man and he understood the inherent biases in the way that people were being educated back in the 1600’s. During the time of the upbringing of Pascal, the average school of the time was riding the tail end of this wave of Scholasticism, and they were riding it directly into the ground. See, for a long long time if you were learning about something like, the natural sciences in school, you just read Aristotle.

You studied him. You memorized him. He was the unchallenged authority on that sort of stuff. But now that we’re trying to navigate the dark waters of the post scientific revolution…now that we’re searching for certainty about natural causes, we don’t want to be creating people that just blindly accept whatever came before them as the truth. We want to move forward. So Pascal’s father, with an incredible amount of foresight, decides to keep him out of the school system and educate him at home. Pascal talks about how his father didn’t dive right in to teaching him stuff from the very beginning…no he spent a lot of the time at the beginning just talking to him about the subjects in general. His father would talk to him about what mathematics is in a broad sense and why it is important…and because of this approach it apparently really got Blaise Pascal excited about doing it. His father actually forbid him to study math until the time was right and this cause him to want to do it so bad, the story goes that by the age of something absurdly young like 11 years old he had independently worked out all of the geometrical axioms that Euclid had laid out millennium ago. I wanna try that with my kids when I have them one day…You can play all the video games you want…I’ll buy you all the drugs you want…but one thing that is NOT gonna fly under my roof is Immanuel Kant. That book is forbidden. It is to stay on the shelf at all times.

So anyway…this extremely novel approach to education coupled with a genius mind and the luxury of being born into incredibly interesting times gave Blaise Pascal a very unique perspective on truth. Truth, as we’ve talked about on several shows, is a very slippery thing. But to Blaise Pascal, being the generation that everyone is looking to to solve this problem of science and truth…people thought it would come out of his generation if it came at all. Blaise Pascal in particular had a very hard time proving beyond a shadow of a doubt that scientific truth was possible at all. In this way, he shared the struggle of one Rene Descartes, but the good news was that it didn’t matter to Pascal anyway. He thought that we COULD arrive at religious truth, but scientific truth was impossible to achieve. The reason why is something very similar to what Montaigne talked about, who Pascal was influenced by tremendously: that is that the scientific truth of today is tomorrow’s punchline. We are constantly, especially in the times of Pascal, PROVING things to be true and then finding out in a couple years that the mechanisms we were using to measure it or collect whatever it is we were trying to prove were flawed from the start. But look, don’t get Pascal wrong here. He isn’t using this as a basis to denounce ALL of science. The reason he is saying this is so that we NEVER STOP LOOKING! So that we never grow complacent. The last thing Pascal wants is for us to arrive at something we determine to be scientific TRUTH and then say ok! dust our hands off and move on to other things. We should NEVER consider anything in science to be absolute truth, that is a dangerous precedent to set.

This is not only a very central and important point within the thought of Blaise Pascal, but it something all of us can relate to in our own lives and something that is a very special idea to me. Do you know what three words are the most honest words you can ever say? I don’t know. Try it sometime when somebody asks you a question about something important that you SHOULD have thoughts on. There is never a time when I feel more confident about how well I know about a subject than after I just finish reading the first book I’ve ever read on it. I feel like an authority on the subject. I feel like going out and educating all my friends and coworkers, because now I feel like I know everything about it. At least that’s how I used to be the first couple times because what inevitably happens is I read another book on the subject and that confidence dwindles a bit. Suddenly the picture isn’t so clear…now there are all these other things to consider…now my thoughts on it can’t be relegated to a single tag line…it is a couple-three tag lines now. And then I listen to experts talk about the subject and I feel a little less confident…and then I start to seek out the opposing viewpoints of what I believe and I start to realize there are a lot of really intelligent people with great arguments on the other side of this issue too and then I start to see how deep the rabbit hole goes and how which side of the issue is right or wrong really hinges on things that nobody can predict and nobody has control over.

This process has been my ENTIRE adult life. The first time I ever wanted to educate myself on American Politics, I was looking for a place to be educated about it and the first thing I ran across was conservative talk radio. For like, six months of my life all I listened to was Rush Limbaugh, Sean Hannity, Mark Levin and I can’t imagine how different of a person I would be today if I just assumed these people were right and what I mean by that is that I took the first thing that presented itself to me and accepted it as the gospel truth. It would have been much, much easier for me to never question anything. To grow complacent.

And this is what Blaise pascal was worried about when it came to the human race moving forward scientifically. Let’s not, figuratively speaking, listen to a few episodes of Sean Hannity around election time and think that we know everything about the universe. Pascal says, why don’t we never be satisfied? Why not ALWAYS keep looking for more?

So this is a noble cause and one that I would think most people listening to this agrees with, but it brings up very real implications when it comes to our lives. The most notable of which is probably: If we can’t know anything about this natural world that we exist in for CERTAIN…where does that leave us? I mean, isn’t that a really weird task? How do you navigate a world where you know nothing for certain…

Well, Blaise Pascal and a couple of his mathematician contemporaries were already trying to solve a problem that was much, much more important but dealt with the same kind of thing. Pascal focused on the REAL problems…How can two people…if they are in the middle of a gambling bout…whatever it is and they have to stop the game early…how should these two people divide up the stakes evenly and fairly? Certainly the guy that is ahead at the time they decide to stop it shouldnt just be declared the winner. But then again, is it fair to the players to just split the money based on where the players were when the game was stopped? I mean, what if one person had a statistical advantage to win the game but was on a bad streak?

Leave it to Pascal to find a revolutionary solution to a problem. He laid the foundations for probability theory and expected value. Two things that we can’t imagine not existing today and two things that offer us some insight into how Pascal thought about decision making in our personal lives. Let’s talk about how Pascal solved his friend’s gambling problem; let’s talk about expected value.

Let’s say that I have a die: a six sided cube. 1 through 6 written on the sides and I tell you that for just $1 you can have a chance at winning $10. Here’s how the game works: you pick one of the numbers…let’s say you pick 5 for example…you give me a dollar…I roll the dice and if it comes up on ANYTHING but 5 you lose your dollar, but if it comes up on five you win $10. Should you take that bet?

The answer should be an immediate and resounding YES. The reason why is because this bet has a positive expected value. Let’s talk about why. You have a 1 in 6 chance of winning ten dollars and a 5 in 6 chance of losing a dollar. For every six tries, you should win ten dollars. How much does it cost you to roll the die six times? Six dollars. For every six dollars that you spend, statistically speaking you should win 10 dollars. You may the first 100 times in a row, but eventually, if you played long enough you would be in the black. By the way, if someone ever actually offers you this bet and you lose the first 100 throws, I would just stop…he is probably scamming you.

The way Pascal would be explaining it is by assigning values to each potential outcome. In the case of the die, numbers 1,2,3,4 and 6 would have a value of -1, because we paid a dollar to roll the die and we lost that dollar. The number 5 would have a value of 9, not 10 because remember we paid a dollar in to try to win before we rolled it. All you math buffs out there know that there is a mathematical formula to calculate this and for the record it is much better because you can account for things much more complex than a roll of the dice. But for the sake of an audio program, add up all the values. 1,2,3,4, and 6 are -1 so we’re at -5 plus 9 for the value if we rolled a 5 and what do you get? 4. A Positive number. This wager can be said to have what’s known as a positive expected value, or +EV in gambling lingo.

This is how professional gamblers think about things. You may ask…professional gambler? What skill are they a professional at, pulling the lever of a slot machine? No, it is calculating the expected value of various wagers. Professional gamblers are experts at wagering their money in places that yield a positive expected value. They may lose 100 gambles in a row, but it doesn’t matter to them because as long as they keep “getting their money in good” as they say or wagering on +EV bets, in the long run, with enough times wagering, they should be profitable.

The significance of this, the revolutionary thing that Pascal can teach us is that rolling a dice is not as chaotic and random as it might initially seem…as it seemed back in the times of Blaise Pascal. When you graph the probability of certain outcomes, you are left with a bell curve. A high occurrence of certain outcomes that makes up the tall part of the graph and the lower portions of the graph made up of outliers. A SINGLE roll of the dice may be unpredictable, but over time, if we keep rolling the dice thousands and thousands of times and make a graph of the results…that graph is symmetrical. Therefore, Pascal reasoned, the roll of a dice, or some seemingly random and chaotic event is actually quite predictable.

Now knowing the benefits of making +EV gambling decisions over the long term can help us understand Pascal’s Wager better. Now we can see what Pascal was talking about. There are no certainties in this life. Each and every decision and action we make is a risk, to Pascal. His basis for saying that it is impractical not to believe in God is that while in this state of uncertainty and risk, ALL you can do as a wise person is make a +EV play in life and hope for the best. When it comes to the nature of existence, he argued that that included a belief in the Christian God, but I don’t think many of us would argue with his point when it comes to every other decision in life.

How can we navigate living in a world where we can never arrive at scientific truth? We make +EV decisions. Now it should be said that when it comes to life, calculating +EV decisions becomes ENORMOUSLY harder than calculating it when it comes to the roll of the dice. The reason why is because there are just so many variables. See, in the dice game you are wagering your money, and that’s it. When it comes to life, you are wagering all kinds of stuff, your time, your emotional state, your health…and it comes even more complex when you think in terms of what you are winning by betting. But by and large, these calculated risks that pascal talks about, using the best information you have and trying to yield a positive expected value is what separates people who succeed at creating a good life for themselves and those who fail.

Let’s talk about an example of this. Barrack Obama. President of the United States. Like his politics or not, the guy is pretty tremendous as a human being. He is effective, hardworking and what he has constructed for himself in this life is incredibly impressive. Now every decision that he has made throughout his life can be thought of as a gamble, similar to the dice game we laid out earlier. He could’ve made many BAD decisions that he didn’t. Well, those decisions are kind of like a street hustler coming up to him, telling him about a dice game where he bets 5 dollars for a chance to win 6 dollars. Barrack Obama said no to those games. The decision to drop out of prep school and sit around collecting unemployment playing video games and watching sports wasn’t a +EV decision. So he didn’t do it.

I like to think of Barrack Obama as the physical manifestation of thousands of gambles made with a positive expected value. Barrack Obama is the equivalent of the bulging wad of money that makes up a professional gambler’s bankroll. So at the risk of the secret service storming my condo and taking me away, I’d like to continue this thought experiment a little and imagine if Barrack Obama had a lot of bad things occurring in his life, one after the other after the other. Because after all, betting a dollar to win 10 on that dice game is NO GUARANTEE of success. You could theoretically not roll a five thousands of times in a row. In that same way, you can make great decisions in your life and just get tremendously unlucky over and over and over. Let’s pretend it happened to Obama. Let’s pretend he gets kicked out of office. Michelle leaves him, his kids want nothing to do with him. He loses every penny he’s ever earned. He hands in his resume at 100 businesses and no one gives him an interview. He has no where to stay but on Dick Cheney’s couch and then HE kicks him out. Picture a series of events so unfortunate that the former president of the United States finds himself living under a bridge for a night trying to develop a plan.

Well what would Pascal say? We live in an uncertain world! This was possible all along! There is no guarantee of success…What can we do about it other than continue to make the best calculated decisions we possibly can and hope for the best. I believe that no matter how low someone like Barrack Obama EVER found himself, eventually, with enough rolls of the dice making +EV decisions, he would be immensely successful again.

While trying to relate someones life to the probability of success with the roll of a dice is pretty much a lost cause, consider something for a second. What separates someone blindly rolling the dice and somebody that understands the expected value of that dice roll comes down to looking at all of the potential outcomes. The professional gambler thinks about each number that could pop up on the die: He says at some level…OK if it comes up 1 then I lost a dollar. Am I willing to accept that? How likely is that to happen? Where will I be tomorrow if that happens? And so on. He does this with all the numbers 1 – 6. In that same way, Barrack Obama weighs all of the potential outcomes when making +EV decisions in his personal life. Whenever he makes a decision he thinks of all the possible paths he could take to get there. Like numbers on a die. He thinks about the cost associated with each path. He thinks about worst case scenario. Etc.

If nothing else, it is really interesting to consider the fact that many times what lands people in bad situations is a lack of considering all possible options and what the consequences of each of them are. Like the professional gambler, like Barrack Obama, Pascal would advocate deep thought on major decisions in your life to insure that you make the best calculated risk possible.

All of this leads to what we talked about at the beginning: what Blaise Pascal refers to as “The supreme paradox of creation” that man livings in a perpetual state of both the highest grandeur and the biggest misery. See, we as humans are at least a little bit different than all the other animals of the animal kingdom. At least ostensibly. We have the magical power of foresight. We have the ability to weigh the pros and cons of our decisions. We have the ability to imagine an electronic device that will change the lives of millions of people and bring it to market. You know the common reflection on the world that everything around you, every table, every building, every book, everything was at one point just a figment of someone’s imagination. This imagination and this gift of foresight has allowed us to manipulate our environment much more than any other creature. It has allowed us to improve the quality of our lives more than any other creature. It leaves us in the highest state of grandeur in the animal kingdom.

On the other hand, that same ability also leaves us in a state of the deepest misery. Because it allows us the ability to imagine a life better than what we can ever possibly achieve. Pascal isn’t talking class warfare here, although it certainly applies to people that think they are stuck in whatever economic situation they are in. Pascal is talking about the inevitability of being a human. What is the only certainty in life? Death. Death, pain, suffering…these are things that we ALL experience sporadically, some more often than others. But Pascal points out that our ability to imagine also allows us to imagine a life devoid of death, pain and suffering and because of this we feel poisoned with no possible remedy.

Pascal talks alot about the power and detriment of using your imagination. He said it is an incredibly complicated thing to master because it is both right and wrong on occasion, but there is no way for us to know which it is when we are imagining it. He talks about how we use our minds to impose characteristics on people based on incomplete information. He talks about when we see someone dressed in a uniform or dressed importantly, we tend to take their thoughts more seriously than someone dressed like Barrack Obama under the bridge. Pascal asks, what is that really based on? A half-inch thick piece of fabric hung over their skin?

On the surface this may seem trivial, but the point he is getting at is an important one. This single thing that we call the imagination brought into being every great piece of technology and progress in human history, but simultaneously it serves to misguide us and imagine things that might hurt us. The implications of this are that VERY IMPORTANT THINGS like our sense of what happiness is or what justice is, these things could be as flimsy as our judgment of the guy dressed in rags.

“Imagination disposes of everything; it creates beauty, justice, and happiness, which are everything in this world.”

One thought on “Episode 32 Transcript

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