Steven Pinker: The hidden psychology shaping money, power, and social life | Full Interview

Quick Overview

Steven Pinker explains that common knowledge—the concept that everyone knows a fact, knows that everyone knows it, and so on—is a powerful psychological phenomenon underpinning social coordination, yet it differs from simple shared knowledge, exemplified by historical moments like the 1973 oil crisis, the 1984 Apple Macintosh ad, and political polarization where the tacit agreement to uphold a norm (like not attacking a political opponent's perceived weakness) can break down when one party tests the boundary, leading to chaos or societal shifts.

Key Points: Common knowledge is a powerful psychological concept where knowledge is mutually known and everyone knows that everyone knows it, which is essential for social coordination in areas like finance, language, and social norms. The strict definition of common knowledge (infinite recursion of mutual knowledge) is distinct from merely shared knowledge; for example, the 1973 oil embargo shortages occurred because people assumed others would panic-buy, even if they didn't explicitly know others knew about the shortage. Political polarization is fueled by common knowledge failure; for instance, political attacks or jokes (like Obama's birth certificate controversy or Trump's business failures) often succeed when a minority breaks the unstated norm of restraint, causing a cascade of reactions. The fear of being publicly shamed for breaking a norm (like not laughing at a joke about a sensitive topic) enforces common knowledge, even if the norm itself is irrational or unfair. Historical examples illustrating the failure of common knowledge include bank runs during the Great Depression and the Apple Macintosh '1984' commercial, which was a massive, expensive ad designed to shatter a shared perception of conformity. Pinker suggests that social media accelerates the breakdown of common knowledge norms because the barrier to entry for broadcasting information (and thus testing boundaries) is extremely low, allowing fringe views to quickly gain perceived commonality. The mechanism of common knowledge is what allows coordinated action, whether beneficial (like accepting currency) or detrimental (like panic buying or political upheaval).