Deep Sunk

Are we trapped by the past and doomed to repeat it?

A professor of mine in graduate school often pronounced regarding financial assets “if you’re not selling - you’re buying.” Meaning that it does not matter what you have invested in a thing, it matters what it is worth today and what you plan to do with it. In other words, every day you choose not to sell (your house, apartment building, stocks), you have chosen to buy it at today’s price. He was a wealthy real estate investor, and his words stuck with me, as did the images of bits of food on his lapels and his penchant for forgetting his zipper at half-mast at 8 AM lectures.

I realize his quote sums up the mercenary attitude that has permeated the financial world and fueled our disregard for old buildings, companies, and people. Perhaps it’s this fraying of the social contract that makes the vapidity of socialism so appealing to many people today. While it may not be the best prescription for society, it is useful, I think, for personal decision-making. How many things do we hang on to, simply because we have invested so much (time, money, labor, ego, pride, love, sex, magic) into them? 

In economics, costs that are already spent and cannot be recovered are known as “sunk costs”. The idea then is that these expenditures should have no bearing on decisions you make about the future. But like losing weight or cutting back on wine - it is easier said than done.

Simple enough. But here’s the rub. Our brains like to play tricks on us, as brains are likely to do, and a phenomenon exists called the sunk-cost fallacy. We become reluctant to change course even when it’s apparent we have lost our way. Then our brains, resourceful little bastages, manufacture evidence to support staying the course, holding the line or playing prevent defense. Our need to be right so often prevents us from getting it right. This explains most government policies - see Covid, Afghanistan, drug wars, and nearly every Cabinet position created since 1903.

So what happens when our sunk costs are sinking us?

Fitzgerald wrote it most beautifully at the end of The Great Gatsby (a novel you absolutely must read, or read again, but you likely will not) - no bear with me here, it’s a bit flowery - “So we beat on, boats against the current, borne back ceaselessly into the past.” In other words, we are trapped by our past and doomed to repeat it. Fitzgerald was particularly concerned with this idea of letting go of the past as a key to the future. In his short story The Curious Case of Benjamin Button, about an old man who ages in reverse (the movie with Brad Pitt was good but creepy), the protagonist writes to his daughter:

“For what it's worth: it's never too late or, in my case, too early to be whoever you want to be. There's no time limit, stop whenever you want. You can change or stay the same, there are no rules to this thing. We can make the best or the worst of it. I hope you make the best of it. And I hope you see things that startle you. I hope you feel things you never felt before. I hope you meet people with different points of view. I hope you live a life you're proud of. If you find that you're not, I hope you have the strength to start all over again.”

― Benjamin Button, The Curious Case of Benjamin Button

There are times, of course, we must never let go. Some commitments we make, are for life. It’s useful though, I think, to know the difference. A friend of mine once posted a quote that my mind is attributing to the poet Dorothy Parker but my search engine offers no confirmation.  From memory - Ms. Parker was missing her lover and she sent a note: “Miss you terribly. Deep. Sunk.”

Annie Duke, the poker player who transcends card games, has written a book on when to walk away - smartly.

Dominic Packer & Jay Van Bavel

have a great interview with Ms. Duke on their excellent Substack, which you should read here:

INTERVIEW with Annie Duke on "QUIT: The Power of Knowing When to Walk Away"

One of the most brilliant books of our new century is The Book Thief written by Markus Zusak. You should read its 500+ pages, but you likely will not. His 2018 equally long follow-up, Bridge of Clay, is an excellent book about 5 boys living without supervision who have to confront the past when their father returns home. You can read the easy parts here:

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Don’t Try

Charles Bukowski (If you enjoyed Turkey and Swiss last week, read his Ham on Rye), “the poet laureate of lowlife”, who died in my hometown, has on his gravestone the epitaph, “Don’t Try.” To some, it’s a nihilist motto but to Bukowski, it was his creative philosophy. When the trying becomes the thing what’s the point anymore? It may be interesting to ask - “what am I trying for?”

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The Sunk Cost Fallacy Is Ruining Your Decisions. Here's How:

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