 So, Adam, today we're going to be reviewing The Grey Rhino by Michelle Wilker. Now this book is about highly obvious but ignored threats. Forgive the comical example, but you can think of this as you're on safari, you're looking for a grey rhino, you find one, you're creeping closer and closer, and just as you're about to get that perfect shot for Instagram, the rhino charges, and now you're in danger. What a disaster. Now Vesta Nalchi is a little bit strange, but you kind of have to roll of it when you're reading this book. It's also helpful to think of the grey rhino as sort of a complement to an assimilator like the black swan. Now in the black swan, black swans are these massive outlines, these things on the edge of the bell curves, but no one saw coming. Things like a 2008 global financial crisis, this sort of mention is being a quintessential example. But Michelle Wilker's point is that these big threats don't have to be hidden, and in fact they can be pretty much obvious or pretty much self-evident for anyone looking. So an example is something like climate change, where everyone is well aware of the research, governments certainly know about it, but there isn't necessarily a lot of action going on to even do anything. At a smaller level you have things like accidents in hospitals, whereby small changes and procedures can lead to greatly reduced mortality rates, but for whatever reason we don't see these changes taking place, and then finally you have things like crumbling government infrastructure. Yeah, and you know, Michelle Wilker's thinking about this because she's one of these policy walks, she's a journalist, she's hanging out at Davos with lots of these big thinkers, who are trying to answer these questions. We'll get back to this at the end, but first we should say why we decided to review this book. Simply, it's very popular in China. This book was featured in The People's Daily, and is really singing high praise of the Chinese government. It talks about how the five-year plans have enabled China to, you know, avoid some gray rhinos and use this long-term planning effectively. Yes, Wilker really praises the Chinese government for tackling obvious threats head on and making great progress against them. Now, when you think of five-year plans and government planning and centralized planning, you might not necessarily have a great impression of it, but Wilker actually tackles this in the book where she compares the Chinese plans to those that are implemented by the Soviets. And she says that the Soviets were very process-oriented. They wanted to do X, Y, and Z, make sure that everything was done in a very particular fashion, whereas the Chinese, by counter-example, sort of plan more towards an overall goal and leave the actual minutiae to sort of a local level, which makes their plans much more flexible than the Soviets ever were. One thing that's clear in this book is that, you know, Michelle Wilker is just not a big fan of the United States, the style of disaggregated government. She really sees this as, you know, creating some of these gray rhino events. And two events that are called out is the Chicago Public School System, which is basically insolvent because it's made these sweetheart deals with Chicago teachers. And the second is the I-35 Bridge Collapse in Minnesota, whereby we knew for a decade that this bridge was in disrepair and we did absolutely nothing. Yes. So between Wilker's praise of Chinese plans and her critiques of sort of the flaws of US government decision-making, you sort of get the sense, reading this book, that she doesn't feel like Western democracies are really capable of tackling gray rhinos. Now, I think a lot of this comes down to the short-term incentives at play in these political systems. So looking at the US House of Representatives, for example, reps are on two-year election terms. Now this basically means that they're always worrying about re-election. There's always another election coming down the pike. You know, they're checking approval ratings. They're trying to do things to benefit their constituents right now. And they're not really thinking about broader societal outcomes or even the long-term well-being of their districts. Yeah. But even in cases where the US does think long-term, like a Supreme Court appointment, for example, there's lots of cases where you don't exactly get what you thought you were buying, where somebody starts out with one political opinion and changes over time. So even within the US system, there's a little bit of awkwardness there. Yes. The other thing I would say, given all the praise of the Chinese government's five-year plans and the US government's failures, I'm not sure you would find many citizens who are willing to trade. Now, I think some of this probably speaks to, perhaps, Wukro is kind of looking at the wrong metrics of success, where she's not really focusing on the negative aspects of five-year plans, the lack of individual rights. And instead, she's focusing on who has the ability to build the most highways in a given period of time. That's not really the best success metric that individual citizens are looking for in that government. Yeah. I think a lot of this comes down to culture. A lot of the praise she has for five-year plans, I really just see is praise of Asian culture. Because the other side to it is Japan. Japan has also talked about this book as having great planning. It doesn't have a communist government or a five-year plan, but it still solves a lot of these great rhino problems in a very succinct way. So really, I think if you think back to a book we reviewed before, The Innovator Solution by Clayton Christensen, this is kind of a comparison of modularization versus integration, where the US government is very modular and the Chinese government is very integrated. Another critique, I agree with you completely by the way, but another critique Worker has about the US government is she talks about Rita's muddling, where she basically says that Rita will kind of know something could happen. Maybe there's a threat of a natural disaster, a landslide to make it concrete. But they muddle, they don't do anything. They just kind of want to pass it off to someone else or pass it off to their successor. Now, I think this is a little bit flawed in the way that it views the way the US government is working. Because I would argue that the US government is actually extremely effective. It's just extremely effective for particular participants within the system, namely interest groups. To go back to the Chicago example you mentioned, Worker talks about how Chicago is basically insolvent, had no money, teachers salaries and pensions are too high. And she basically views this as a failure of Chicago's government leadership. I would argue that it's actually a tremendous success for public unions who have been able to negotiate for this amazing compensation relative to perhaps what they ought to have been able to get to from an all-time societal outcome type of view. Well, there's no doubt public unions are the absolute worst. But regardless, I think what you should think about is private companies in the US who are actually quite good at this long-term planning. So yes, the US government can be influenced by different interest groups, but you know, companies in the oil industry, in the airline industry, even in the tobacco industry are really good at long-term planning because they have these fixed costs they can think about far into the future. And so I really think it all comes down to incentives. Can you get the right incentive in the right situation to get people to behave how you want? So one namesake example that comes up is of the Gray Rhino. So we allow hunting of the Gray Rhino now in some of these protected wildlife areas because we've actually found out that that's good for conservation. We can use the money towards helping other rhinos and it removes some of the older rhinos from the population. And so, you know, in the end, it's the right incentive to create more rhinos. You have a hunting license idea that's kind of really counterintuitive, but by placing this very high value on a rhino, you basically incentivize, you know, the parks and the park ranges to protect them with everything they have to, you know, prevent poachers getting at these rhinos. There are other examples of kind of bigger problems like climate change, whereby programs like carbon credits have been implemented to try and align the incentives of private companies with those of sort of a broader societal outcome. Now, you know, the results have been somewhat mixed, but I think the general idea is solid of trying to make sure everyone's incentives basically pointed in the right direction. Having said that, there is still an issue which Walker really dives into in this book, which is human biases. There's all kinds of ways we can make mistakes. She lists things like groupthink or confirmation bias or priming bias, or even something called backfire effects, whereby if you receive information that is contrary to your own opinion, it doesn't change your mind. It just makes you dig in even more. Well, Adam, I've never had that one. I'm 100% sure. But there are some great examples of these biases. So the first would be groupthink in something like the Challenger Disaster, where, you know, we had a lot of engineers on the sidelines who said, oh, this thing might not actually work, the temperatures are too cold, and yet no one stepped in to stop the disaster. However, when we compare this to, you know, the reality of something like global warming, I'm not sure the comparison holds, because, you know, obviously in something like the Challenger, it happened very quickly, you didn't have much time to react, and everybody was very nervous about shutting down this very expensive space shuttle launch. But in the case of global warming, it's kind of slow when it's brewing. And I'm not sure it's fair to call both of those great rhino. Yes, given the amount to which biases are now taught in like every single business class, you would really hope that people would be coming more aware of these biases. And especially with like a longer time horizon, where you're not having to make sort of a quick decision within a day or two, you would hope that people would be able to recognize and kind of control for these biases. So I don't really see human biases as explaining why we have failed to deal with these massive great rhinos. Now I have a couple pet theories as to, you know, why people don't respond to these things properly. The first is a human's discount time much more than we're willing to admit. Something like climate change is going to affect us 50, say 100 years in the future. But I don't think a lot of people are that concerned about what the world is going to look like and say 2150. Instead, I think people are very focused on how things are now, and they're unwilling to accept kind of these short term sacrifices in exchange for a potentially better future a long time down the road. Now the other thing I would say is that we are all Bayseians at heart's map. You know, we all have priors when we take in information, we're going to try and kind of regress it to the mean a little bit. And so when we see an outlier data point, even if this is maybe a huge threat coming along the way, we kind of say, you know, the truth is probably not so extreme. You know, we go return to our strong priors, and we don't take it as seriously as we should. Now there's an interesting example in the book with climate change, where Walker talks about a climate change scientist who has a much more aggressive prediction for how quickly the Arctic ice is going to melt than any of kind of his compatriots. All these other scientists basically dismiss him out of hand, they're like he's a crank, you know, he's making us look bad at these stupid predictions. But Walker's point is that, you know, we shouldn't dismiss outliers so lightly, we should listen to them, and we should kind of take the information into account more than just, you know, dismissing it because it doesn't fit with our price. Yeah, you know, there's a bit of an odd point here, though, if she believes that we should always look at outliers, well then we should look at the outliers on the other side, which would be the climate change deniers. And I'm not really sure that was the point she was going for. You know, the problem when you consider these outliers is there's always a balance, and one side is right and the other side may be wrong. But who's to say which one is right or wrong in the time? Changing gears a little bit, let's talk about the mechanics of this book, how it's written, the story style, etc. You know, I thought this book was a little bit odd, and then it's basically oriented like, I met this person at Davos, and here's a story about them. So it is a name drop after name drop of people she met at Davos, and there's a large sort of rehashing of other books in this genre. So books like, you know, Think Fast and Slow, All of the Den Ariely books, all these things come up throughout this, and you know, for me personally, having read all those other books, I didn't see a large need or, you know, what this was really adding to the things I already knew. It's sort of like a Gladwellian theme, almost, of lots of kind of pop psychology and anecdotes, you know, crammed into a book. But while Gladwell does this with kind of the extreme enthusiasm of like, this is the most interesting thing I've ever seen, you know, work is writing style, I don't think, is, you know, quite on the same level. And so sometimes it can fall a little bit flat. So unfortunately, we did not like this book as much as, you know, Xi Jinping perhaps did. But we're going to try again with his book recommendations. For our next book, we're going to be reading The Master Algorithm. Now, this is also a favorite of Bill Gates, so I'm very excited to get to it. But this has been Random Talkers. Thank you very much for watching. Make sure to subscribe on YouTube, and we'll see you next time.