From Ray Dalio's "Principles," my favorite work of nonfiction —
... 40) Recognize that the inevitable responsible party is the person who bears the consequences of what is done. Because of this, the RP must choose wisely when delegating responsibilities to others, and he must incentivize and manage them appropriately. There is no escaping that. For example, you are the inevitable RP for taking care of your health because you’re the one who inevitably bears the consequences. If you’re sick, you might choose to delegate the responsibility of figuring out what do to about it to a doctor. However, it is your responsibility to pick the right doctor because you will bear the consequences of that decision. While it is, of course, also the doctor’s responsibility to handle the responsibilities that you delegate to him, you still need to make sure that his incentives are aligned with his responsibilities and that he is doing his job well. The inevitable responsible party can’t delegate all his responsibilities away and expect good outcomes, even in cases in which he has no expertise. So you can’t escape hiring and managing properly.
While the logic here is incredibly sound, the vast majority of people do not think this way.
It doesn't help that experts encourage you to delegate your authority to them, and specialized topics are confusing.
Dalio uses the health/doctor example, which is a good one. But here is another obvious one: if you're pursuing a legal case, it is absolutely up to you to plan your legal strategy, set your budget, interview attorneys while communicating your expectations and plan, pick an attorney that "gets it" and communicate your expectations to him or her, and then manage and followup appropriately.
Most people, in a legal situation, feel intimidated and delegate to their attorney. But at the end of the day, the attorney is paid by their fees and the majority of attorneys will err on the side of accumulating more fees rather than less.
Not all of them. Perhaps 30% of attorneys will take a very sincere interest in maximizing the clients' outcome while minimizing fees spent, time, and potential aggravation. (This might be a generously high estimate.) But even if you know there's good attorneys out there who care about their clients and want to get things done quickly and efficiently, it's still up to you to find someone like that and get into a good working relationship with them.
This is, of course, obvious when written on paper.
But most people don't do it.
Here, some examples: you're in a class. Is it your responsibility or the teacher's to make sure you master all the material?
You're going out drinking. Can you count on your friends or the bar you're visiting to ensure you don't drink too much and get sick or in a compromised situation?
You're going to Las Vegas. Who needs to ensure you don't lose too much money, you or the casino? Does the casino care about you?
You go to the doctor and get a prescription. Who needs to research the current state of the medicine, the effectiveness rates, and side effects to monitor them?
As Dalio says,
"...the inevitable responsible party is the person who bears the consequences of what is done."
It's axiomatically true, but almost no-one operates that way. You don't know the material? Well, get familiar with it quickly, at least enough to evaluate if the expert you're working with is good and what their track record is. If you bear the consequences, you're the responsible party.
I have some trouble with this generalisation. Life is too short to check everything from first principles. I can't get an engineering degree before I'll risks driving over a bridge. (I accept that this is taking the point to the extreme, but that is why generalisations are 'general' and not invariable.)
Sometimes we do not even have the tools to test the tools. How should I evaluate my doctor, for example?
If what I learn reinforces what I already know that can be a good thing/right or a bad thing/wrong. Do I have a confirmation bias, or am I finding supporting evidence of an objective and rational universe?
Clarke's first law: When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong.
(This is, of course, another generalisation.)
In short, I am not sure how I would apply this principle.
> Life is too short to check everything from first principles. I can't get an engineering degree before I'll risks driving over a bridge. (I accept that this is taking the point to the extreme, but that is why generalisations are 'general' and not invariable.)
Counterpoint: I almost got killed in Phnom Penh, Cambodia when a teenager drove his motorcycle on the wrong side of the road while taking a turn at high speed, and hit me while I was in a crosswalk.
So I would say that yes, you need to be able to accept the risk of people crossing a bridge. If it's clearly a regularly used bridge in a safe country and you're driving a normal sized car, you probably don't need to calculate. But if you're driving a heavily laden truck in Cambodia, then you better double check somehow... or not be in a position where you need to drive that truck at all.
You can't count on other people to watch out for you. Pedestrian in a crosswalk who is even watching the oncoming direction is about as clear-cut as a "not my fault" situation as can be, but I had to put up with all the damage and subsequent hospital visit.
I don't count on others watching out for me in the same way I would. That is why we have survival instincts at an individual, automatic primary level. But accidents also happen, no matter how much checking you do.
How do you decide what to check, for what and to what extent? Do you check driving standards in Cambodia, that particular driver's competence (alcohol intake, homicidal tendencies, etc), the motorcycle for steering problems...
Other than keeping your eyes open and the other usual survival mechanisms what would you do differently as a result of the Principle outlined?
Where does this stop? "...make sure that [the doctor's] incentives are aligned with his responsibilities and that he is doing his job well." How do I do this? This is going to significantly add to my cognitive load.
I am not saying there is no merit in the Principle, but "Understand and do not abdicate what IS your responsibility in any transaction" would be a better phrasing for me.
> How do you decide what to check, for what and to what extent? Do you check driving standards in Cambodia, that particular driver's competence (alcohol intake, homicidal tendencies, etc), the motorcycle for steering problems...
I think there's no right answer to this -- it comes down to risk tolerance, preferences, costs of checking vs. downside of having a bad thing happen, your prior experience, your values, etc.
With decisions that are more numbers/monetary based, you could do expected value calculations. For ones like safety, it really comes down to how much you value being carefree vs. injury-free. I don't mean that facetiously, obviously anyone maxing out on safety risks being totally neurotic (or not taking any risks). But people that are 100% carefree are far more likely to have bad things happen to them. So it's about where you want to fall on that spectrum, which is more of a life/values choice than a question with right answers.
> "Understand and do not abdicate what IS your responsibility in any transaction" would be a better phrasing for me.
That seems a good phrasing yes.
More Dalio -
200) Think about the appropriate time to make a decision in light of the marginal gains made by acquiring additional information versus the marginal costs of postponing the decision. There are some decisions that are best made after acquiring more information, and some that are best made sooner rather than later. The later a decision is made, the more informed it can be; however, making it later can also have adverse consequences (e.g., postponing progress). Understanding the trade-off between the marginal gains of acquiring the extra information against the marginal costs of postponing a decision is an important factor in the timing and preparation of decision-making.
Brilliantly put. Don't postpone a decision unless you stand to make it better by an amount larger than the cost of the delay.
"Principles" is highly recommended if you haven't gotten around to grabbing a copy yet.
Freedom is often denied to many individuals, groups, and nations. The fact is that in no human societycan man be free in the absolute sense of the word. There must be some limitations of one sort or another, if the society is to function at all. Anarchy would prevail in lands where people have the freedom to live as they like. Freedom without restraints leads to corruption and immorality since they are not tied to higher moral values or self-control. The freedom that Islam grants is based on commitment and responsibility without which there can be no true freedom. Islam does not believe in giving man unbridled freedom to do whatever he likes. The right of freedom that man has been endowed with is sacred as long as he does not violate the Commandments of Allâh. Islam insists that man has freewill because that is the way that Allâh created him. It allows him to express this freedom and to practice it within the limits of commitment, responsibility, and self-control. Moreover, man has an obligation to choose the path of righteousness and to safeguard his freedom and that of others. One ofthe main objectives of Islam is to free humanity from superstitions, the soul from sin, and the conscience from fear. Every man has the right to freedom of belief, conscience, and worship. Islam expects man to think, ponder, affirm faith, and do good deeds. Every human being is personally responsible for his deeds and he is accountable for the consequences of all his actions. Man should therefore, practice his personal freedom without encroaching upon the rights of others and deviating from a correct moral conduct. In an atmosphere which respects the rights and freedoms of others, mankind can grow and prosper.
"The truth is from your Lord: Let him who will believe, and let him who will, reject (it). " [The Qurân, Ch: 18 Al-Kahf, V: 29]