Page 188 - Morgan Housel - The Psychology of Money_ Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

Even at a year old, she’s written her own internal narrative of how
everything works. Blankets keep you warm, mom snuggles keep you safe,
COBACOBA
and dates taste good.

Everything she comes across fits into one of a few dozen mental models

she’s learned. When I go to work she doesn’t stop in confusion, wondering
what salary and bills are. She has a crystal clear explanation of the
situation: Dad isn’t playing with me, and I wanted him to play with me, so
I’m sad.

Even though she knows little, she doesn’t realize it, because she tells herself
a coherent story about what’s going on based on the little she does know.

All of us, no matter our age, do the same thing.

Just like my daughter, I don’t know what I don’t know. So I am just as
susceptible to explaining the world through the limited set of mental models
I have at my disposal.

Like her, I look for the most understandable causes in everything I come
across. And, like her, I’m wrong about a lot of them, because I know a lot
less about how the world works than I think I do.

This is true for the most fact-based of subjects.

Take history. It’s just the recounting of stuff that already happened. It
should be clear and objective. But as B. H. Liddell Hart writes in the book
Why Don’t We Learn From History?:

[History] cannot be interpreted without the aid of imagination and intuition.
The sheer quantity of evidence is so overwhelming that selection is
inevitable. Where there is selection there is art. Those who read history tend

to look for what proves them right and confirms their personal opinions.
They defend loyalties. They read with a purpose to affirm or to attack. They
resist inconvenient truth since everyone wants to be on the side of the
angels. Just as we start wars to end all wars.