Upside decay is Lui's term for lower odds rare but useful events combining to create a "lucky break." The outer edge of their upside shrinks. He makes these key points:<p>1. Upside decay is hard to spot. It’s invisible if we’re not specifically looking for it, because the absence of rare positive events is unexceptional.<p>2. Upside decay is preceded by a lack of virtue that leads to zero-sum or even win-lose transactions<p>3. Two Leadership choices: virtuous or unvirtuous culture which leads to two disparate outcomes:<p>virtuous culture -> positive sum interactions -> weak ties help -> lucky breaks<p>unvirtuous culture -> zero sum interactions -> weak ties abandon -> upside decay<p>“The right culture, the highest and best culture, is a seamless web of deserved trust.” Charles Munger<p>Note: Clayton Christensen makes the same point for individuals who prioritize "winning" and "career advancement" over relationships in "How Will You Measure Your Life (<a href="https://hbr.org/2010/07/how-will-you-measure-your-life" rel="nofollow">https://hbr.org/2010/07/how-will-you-measure-your-life</a>). Summary at <a href="https://www.skmurphy.com/blog/2020/02/16/clayton-christensen-on-how-will-you-measure-your-life/" rel="nofollow">https://www.skmurphy.com/blog/2020/02/16/clayton-christensen...</a>
The first 15 of 24 instances of the term "Upside Decay" that are actually in the article title/body are not at all definitional. Somewhere between 1 and 15 I stopped caring about whatever the writer is either too cool to tell me or assumes I already know and decided to count instead...<p>The 16th use gets close: "Upside decay is preceded by a lack of virtue."<p>The 17th, 18th, and 19th invocations get closer still (but, pardon my French, sound like astrology):<p>> There’s a good reason why lack of virtue causes upside decay, and why virtue isn’t just a feel-good luxury: weak ties.<p>> Weak ties control upside decay
> Unvirtuous actions cause upside decay through the mechanism of weak ties.<p>The 20th use is the first to say anything I'm comfortable with calling a definition:<p>> Without weak ties, organizations resort to strong ties and hard assets. This leads them to adopt a mercantilist approach. Their zero-sum mindset alienates others and makes them even less virtuous, because their positive-sum actions are now viewed suspiciously by others. Left with no choice but to double down on their zero-sum approach, they’ll antagonize all their weak ties and enter upside decay.<p>If you write anything, please don't do this. If you must, put a disclaimer at the beginning that says the article is too cool for people who don't already know what upside decay is. Or a link to the definition. Anything, really, that shows respect for the reader's time.<p>Edit: or, per slowmovintarget in <a href="https://news.ycombinator.com/item?id=27376573" rel="nofollow">https://news.ycombinator.com/item?id=27376573</a>, a disclaimer that this is notes on a talk.
But does state investment into R&D and state sponsored companies more than compensate for this? I think (as does Ray Dalio) that the U.S. will be surpassed in the next 15 years. The U.S. aggressively removes meritocratic gifted programs and replaces them with diversity quotas [1] while China's Gao Kao is widely studied for (in contrast to say the SAT) and pure meritocracy. How can you claim that lower odds events will occur more often in the U.S. when we're suppressing the programs which produce people that go on to make those lower odds events happen?<p>1: <a href="https://www.washingtonpost.com/local/education/thomas-jefferson-high-admissions-change/2020/10/07/0a1f8faa-08a7-11eb-9be6-cf25fb429f1a_story.html" rel="nofollow">https://www.washingtonpost.com/local/education/thomas-jeffer...</a>
This reminds me of a similar point I first heard by Jordan Peterson, regarding how stereotypical judgements often have a true basis given the extremes of the distribution with regard to a trait, but are effectively false with regard to the vast majority of the population under the curve, explained in a purely statistical manner.<p>E.g. Why is it always X (e.g. men) that do bad thing Y (e.g. violence)?
Well, it's because, if the mean of the distribution of X vs ¬X is shifted by even just a 0.00001, then at the super-rare-extremes of the distribution, X will still have a much higher probability than ¬X for that event at the tail. However, for the most part, at anything but the extremes, there's virtually no difference.<p>So in many ways, stereotypes are simply the basic fallacy of mistaking a likelihood for a posterior.