How my Dad Accidentally Taught me the Secret to Life

Seeking Positive-Sum Games

I lost my dad two years ago today.

As anyone who’s lost a close family member knows, it just takes time for the pain to ease. What often helps me is reflecting on some of the great lessons he shared with me. This post is to share one of my favorites.

Dad was always busy with all kinds of things when he was at work, so the best opportunities to get to know him came from long nights we spent together on the back of his boat. With a glass of wine filled to the point of spilling (a pour he called “just a titch”) we would sit together and talk about anything and everything that crossed our minds.

I asked a lot of questions. I was fascinated by all the adventures he had been on. It sounded like the kind of life you would see in a movie, and I wanted to know all about it - what happened, what he learned, and where he went. I was particularly interested in advice and mistakes: what to do and what not to do.

He gave plenty of great tips of both kinds. But there was one that consistently appeared.

“Joel,” he started, “most people spend their entire lives and careers trying to cut a bigger piece of the pie for themselves.”

“Don’t be like that. There’s always a way, in any situation, to make the pie bigger for everyone. Then you don’t have to worry as much about how big your slice is. If you’re doing that consistently you’ll end up with plenty of pie, and you’ll be happier with your life overall.”

It seemed like good advice at the time, but only with time have I realized just how profound that statement was.

Positive and Zero Sum Games

What I now realize he was telling me was to only spend time seeking out and participating in positive-sum games. For those not familiar with game theory, here’s a very quick summary of the two types of games:

Zero Sum Games

Zero-sum games are the easiest to understand because they are the most common. All the name “zero-sum” means is that the sums of gains and losses from the players of the game add up to zero.

Take any sport: there is always a winner and a loser. The aggregate records of all football teams must add up to zero at the end of the season. No team can win more than the total number of games in a season and the only way for one team to win a game is for another team to lose. This is fine as far as a means of entertainment goes, it is only problematic when we try to apply the same logic to real things: business, research, etc.

Another way to sum up zero sum games: your incentives are incompatible with the incentives of other people you’re playing with. What is good for you is bad for the group, and vice versa.

Examples of Zero-Sum Games: sports, college admissions, competitive career tracks, politics, social status, mature or declining businesses and industries (one company’s market share gain is another’s loss)

Positive-Sum Games

Positive-Sum Games are different.

These are games where the total of gains and losses is greater than zero. These are often called “win-win” scenarios and nobody wins at someone else’s expense.

If zero-sum games are about getting a bigger piece of a fixed pie, then positive-sum games are about finding a way to make the pie bigger, or bake more pies so everyone has one.

Wealth creation of any kind is positive sum. It is the invention of some product or technique for doing things that either gives people something they want, or makes it easier or less expensive to do something.

Communication of information is usually positive sum. If I tell you something I know, it may be very valuable to you but cost me nothing to provide. We are both better off as a result of the interaction.

Another way to describe positive sum games: the incentives of each individual player are compatible with the incentives of everyone else you’re playing with. What is good for you is good for the group, and vice versa.

Examples of positive-sum games: growing businesses, scientific or technical invention, trade between individuals or countries, the creation of new things

Here’s one of my favorite writers explaining the idea using the same analogy as my dad: pie!

The Pie Fallacy

A surprising number of people retain from childhood the idea that there is a fixed amount of wealth in the world. There is, in any normal family, a fixed amount of money at any moment. But that's not the same thing. When wealth is talked about in this context, it is often described as a pie. "You can't make the pie larger," say politicians. When you're talking about the amount of money in one family's bank account, or the amount available to a government from one year's tax revenue, this is true. If one person gets more, someone else has to get less.

I can remember believing, as a child, that if a few rich people had all the money, it left less for everyone else. Many people seem to continue to believe something like this well into adulthood. This fallacy is usually there in the background when you hear someone talking about how x percent of the population have y percent of the wealth. If you plan to start a startup, then whether you realize it or not, you're planning to disprove the Pie Fallacy.

What leads people astray here is the abstraction of money. Money is not wealth. It's just something we use to move wealth around. So although there may be, in certain specific moments (like your family, this month) a fixed amount of money available to trade with other people for things you want, there is not a fixed amount of wealth in the world. You can make more wealth. Wealth has been getting created and destroyed (but on balance, created) for all of human history.

Suppose you own a beat-up old car. Instead of sitting on your butt next summer, you could spend the time restoring your car to pristine condition. In doing so you create wealth. The world is-- and you specifically are-- one pristine old car the richer. And not just in some metaphorical way. If you sell your car, you'll get more for it. In restoring your old car you have made yourself richer. You haven't made anyone else poorer. So there is obviously not a fixed pie. And in fact, when you look at it this way, you wonder why anyone would think there was.

Paul Graham, How to Make Wealth

One Step Further

I recently read a book called Nonzero: The Logic of Human Destiny

The author argues that seeking positive sum games is not just a helpful analogy to guide us through life, but in some way is actually the “meaning” of life itself.

Both biological systems and human societies progress by finding new positive-sum ways to interact with each other:

Each of our cells has two vital components: the nucleus, where DNA is stored, and mitochondria, which generate energy. Originally, these two cell parts were actually separate, individual cells, which came together in a non-zero-sum interaction to form the basis of complex life.

And as multicellular life continued to grow, it also had to grow increasingly complex in order to survive the competition with other life-forms.

In order to accomplish this, cells began specializing in various tasks, such as maintaining the health of the organism (for example, by producing blood), getting the lay of the land (the senses) and handling the big decision-making (the nervous system).

Lifeclub.org

This increasing biological complexity fueled by cooperation of the different individual cells is what allows higher-level biological organisms like animals to exist.

The way biological life has grown more advanced is identical to the way human society grows more advanced:

Nearly all of the world’s economies have joined together in trade – to everyone’s benefit. By encouraging trade between nations, countries that participate can then buy and sell the resources and products that they need in order to progress.

A consequence of this, however, is a very strong mutual dependency that nations have on one another. For example, a country might depend heavily on raw material imports from one nation in order to export manufactured products to another. Were these relationships to suddenly disappear, these countries would collapse.

And it is this increased interdependence that pushes our political and social structures to become more sophisticated. As interdependence grows in a system, more complex social hierarchies must be developed in order to manage these structures.

We can see an example of this in the Taleumit Eskimo tribes living on the Arctic shore. As a whale-hunting people, they have stricter social hierarchies than settlements have further inland, because whale hunting requires team effort, division of labor and correspondent coordination from a supervisor if it’s to be successful.

Likewise, the more integrated and complex our globalized economy becomes, the more complex the social hierarchies will be that manage them.

Lifeclub.org

I don’t know about you, but I get chills reading this. In this scenario, individual humans are the cells learning to specialize in certain tasks. New positive sum games allow us to share our specialization with others, and in return receive access to the specialization of the rest of the planet. The net result is that everyone is better off.

In the process of playing progressively larger positive-sum games, we form organisms that are larger and more complex - companies, associations, nations - that enable more positive-sum interaction, and on the cycle goes.

The English philosopher Thomas Hobbes famously said that without government, life in its “natural” state would be “solitary, poor, nasty, brutish, and short.”

We now know this mostly isn’t true. The only thing that can guarantee a life that is “nasty, brutish, and short” is a lack of positive sum games.

What my dad was telling me, knowingly or not, was to only spend time seeking out and playing positive-sum games. To do so, according to Wright’s book, is to be aligned with the greater arrow of history. To insist on competition - to think that in order for you to win someone else has to lose- is a recipe for a life that really is nasty, brutish, and short.

In short: seek more positive-sum games. This lesson has already shaped my life in a big way, and I’m sure will continue to do so. This post is just to share that lesson and to say I miss you, Dad.

Joel