9 Facts that Demonstrate the Need for Simple Rules
I’m going to adapt Tyler Cowen’s Marginal Revolution blog format (which you should definitely check out, by the way). Here’s how it works: I’m gonna hit you with some interesting facts I picked up from reading Simple Rules by Donald Sull & Kathleen Eisenhardt. If there’s a lesson to learn from it, I’ll write it out.
That’s, uh, pretty much it. Here goes!
Simple Rules is about how in an increasingly complex world, where disparate elements and circumstances affect each other in unpredictable ways, what we need are simpler rules. Not overloaded legal codes. Not insanely complicated algorithms.
I’m not qualified to judge the veracity of their claims, but the authors made some compelling observations.
Facts About Simple Rules
1.) Combat doctors use simple questions to categorize casualties into four groups, allowing them to focus on the people who most need attention.
They assess with questions like:
- “Can they walk under their own power?”
- “Are they conscious?”
- “Are they bleeding?”
Lesson: high stakes make simple rules more useful, not less.
2.) The Glass-Steagall Act, which governed banking regulations for 70 years until the Clinton Administration, was 37 pages. Dodd-Frank, its successor, is 30,000 pages.
3.) Researchers studied personal income tax compliance in 45 countries. They found that the best predictor that a person would dodge or pay their taxes was how complex the tax code was. Lesson: if you make it easy to pay taxes, people are more likely to pay taxes.
4.) A group of U.S. tax professionals was once given identical information about a hypothetical family’s financial situation. Every single one of them calculated a different tax liability for the same family. Lesson: no one understands the U.S. tax code.
5.) The Jesuits (who had a “mission statement” that allowed its members to act flexibly and independently wherever they went) produced 39 priests who would go on to be canonized in the first 100 years of their existence.
6.) IBM once analyzed a century of shoe fashion and economic data to show that the height of a woman’s heel could predict the economy’s health. Lesson: without good theory, terabytes of data won’t teach us anything.
7.) Famed noir author Elmore Leonard had three rules for writing:
- Avoid prologues
- Only use “said” to carry dialogue
- Leave out the parts readers skip
8.) The Exxon Valdez oil spill, the Challenger explosion, and the Chernobyl meltdown were all caused by errors made from sleep deprivation. Lesson: go to bed.
9.) Napoleon gave a standing order to all his commanders: “March toward the sound of gunfire.” As a result, even when his lieutenants were unsure where they were, they could trust that they would find their allies eventually. Lesson: write a #1 Rule and make sure your lieutenants know it.
Tax law is the only U.S. code that allows, in rare cases, for ignorance of the law to serve as a valid defense.