Two types of Knowledge
In 2007, Charlie Munger, who is Warren Buffet’s right-hand man at Berkshire Hathaway made a speech to the graduating class at the University of Southern California about what he called “Two types of Knowledge”.
He illustrated his point with an apocryphal story about Max Planck, the Nobel Prize winning German Physicist. After he won the Nobel in 1918, Planck was asked by the scientific powers of the day to give a lecture on the new quantum mechanics in all the major cities of Germany. The authorities provided Planck with a car and a chauffeur to aid his endeavours.
The chauffeur always sat in on the lecture and, over time, memorized most of the talk. The last event of the tour was in Munich and during the drive south, the Chauffeur said, “Would you mind, Professor Planck, because it’s so boring to stay in our routine. What if I gave the lecture in Munich and you just sat at the front in the audience wearing my hat?” Planck was amused by the idea and agreed to it. The Chauffeur got up and gave this long lecture on quantum mechanics and sounded word perfect. Planck was suitably impressed.
After the applause died down, an elderly professor stood up and asked a very tough question. The Chauffer was taken aback for a moment but composed himself after a brainwave. He replied “Well I’m surprised that in such a scientifically advanced city like Munich, I get a question that is so simple that even my chauffer can answer it.
“Any fool can know. The point is to understand.”— Albert Einstein
The story is amusing but illustrates that there are at least two types of knowledge: real knowledge which is Planck or real knowledge and Chauffer knowledge.
Real knowledge is hard- you must study, you must question and think, you must experiment, re-assess, and modify your views in the light of reflection and the emerging evidence. It cannot be copied. Those who have real knowledge respect it, they know its limitations and, mindful of the toil needed to gain it, treat it as a contingent position which can be discarded if decisive contradictory evidence emerges.
On the other hand, Chauffer knowledge is much simpler to gain as it can be copied relatively easily. You can learn the jargon and can utilise it in parroting speeches which sounds impressive and intelligent to the layman On the surface, you appear to know the answer, but you lack the deep understanding to show your work.
The great Physicist, Richard Feynman understood the concept when he talked about a distinction between knowing the name of something and knowing something.
Munger in his speech went on to describe the chauffeurs. “They’ve learned the talk. They may have a big head of hair, they may have fine temper in the voice, they’ll make a hell of an impression. But in the end, all they have is chauffeur knowledge. I think I’ve just described practically every politician in the United States.”
Munger then addressed the students who are about to venture into the real world “And you are going to have the problem in your life of getting in with the people with the Planck knowledge and getting away from the people with the chauffeur knowledge. And there are huge forces working against you. My generation has failed you a bit… but you wouldn’t like it to be too easy now would you?”
In fact, we all face the same problem. When you invest, you must decide whether the CEO or the Fund Manager that you propose to entrust with your precious capital to has Planck Knowledge or Chauffeur Knowledge? Does he or she have real expertise or are they simply talking the talk?
The same issue arises when you decide who to vote for and entrust the future of your country. As stewards of your Capital or your Nation, you have to vote wisely.
Rolf Dobelli in his book “The Art of Thinking Clearly” has some advice for all who have to make this decision.
Dobeli says
Be on the lookout for chauffeur knowledge. Do not confuse the company spokesperson, the ringmaster, the newscaster, the schmoozer, the verbiage vendor, or the cliché generator with those who possess true knowledge.
The challenge lies in expectations. We expect the “expert” to know the answer to every question and in the politically correct world that we live in, it is almost looked down on if a CEO or Prime Minister or any leader dared to use those 3 words: “I don’t know”. Society and workplaces should in fact encourage people to say those three precious words, because in that vulnerability lies true power.
So how do you recognize the difference? There is a clear indicator: True experts recognize the limits of what they know and what they do not know. Knowing one’s perimeter of competence is power not weakness. When the real wise find themselves outside their circle of competence, they keep quiet or simply say, “I don’t know.” This they utter unapologetically, even with a certain pride. But for chauffeurs, they waffle, because they “know it all.”