The Morgan Housel Podcast
Cumulative vs. Cyclical Knowledge
Aug 29, 2024
Explore the intriguing differences between cumulative and cyclical knowledge. Discover how some fields, like finance, face repeated historical mistakes while others build on accumulated wisdom. Delve into the timelessness of financial principles that remain consistent despite societal changes. Reflect on how human behavior often leads us to relearn lessons throughout generations. This conversation unravels the complexities of knowledge, urging us to consider whether we're truly progressing or merely circling back to old errors.
13:13
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Quick takeaways
- Cumulative knowledge in fields like medicine allows each generation to build on prior learning, fostering continuous improvement in practices.
- Investing is marked by cyclical knowledge where historical lessons about greed and risk are often forgotten, leading to recurring financial mistakes.
Deep dives
The Nature of Knowledge in Different Fields
There are two distinct forms of knowledge: cumulative and cyclical. In fields like medicine, knowledge is cumulative, allowing each generation to build on the learning of the previous one, ultimately leading to improved practices and successes over time. Conversely, investing is characterized by cyclical knowledge, where lessons from the past are often forgotten, requiring new generations to relearn the same critical lessons about greed, risk, and fear. Understanding these differences is vital as it affects decision-making in these areas and reflects on how society learns from its past experiences.
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