I Know that She Knows that I Know that She Knows: Steven Pinker on the Mysteries of Money, Power, and Everyday Life

I Know that She Knows that I Know that She Knows: Steven Pinker on the Mysteries of Money, Power, and Everyday Life

A Note from James

I first got really impressed with Steven Pinker when he wrote The Better Angels of Our Nature: Why Violence Has Declined. He basically shows that over the past 10,000 years, every single century has been less violent than the one before it. You might think, “That can’t include the 20th century,” right? We had World War I, World War II, atomic bombs, the flu pandemic of 1920, Vietnam—all these massive wars. But when you look at violent deaths per capita, the 20th century was actually less violent than the 1800s, which were less violent than the 1700s, and so on. It’s a beautiful, data-driven argument for optimism.

But it’s his latest book that really fascinated me: When Everyone Knows That Everyone Knows: Common Knowledge and the Mysteries of Money, Power, and Everyday Life. That subtitle alone—“common knowledge and the mysteries of money, power, and everyday life”—you can’t just skip past that. You have to know what it means.

Take poker, for example. If someone bluffs you, you have to think: are they bluffing? Or are they making me think they’re bluffing, but they’re not? Or do they know that I think they’re bluffing, so now they’re actually not bluffing at all? That kind of circular reasoning—what philosophers call “common knowledge”—shows up in real life all the time.

Like when you ask someone up for “a cup of coffee” after a date. You’re not really talking about coffee. But you’re also not saying what you actually mean. You’re hinting. You’re creating a safe, ambiguous space where both people know what’s being suggested without anyone having to say it outright. The same thing happens when you ask your boss, “Can we discuss taking on more responsibilities?” instead of saying “I want a raise.” We give partial information all the time, because being direct can change the relationship—or close off possibilities.

Steven and I talked about why we communicate this way, how shared knowledge shapes everything from flirtation to power to money, and what happens when that balance breaks down.

And by the way—if you’ve never seen Steven Pinker—he looks exactly like what you’d imagine a Harvard professor to look like. Long white hair, sharp blue eyes, and this kind of wild genius energy. Jay and I joked that he looks like Einstein meets Jimmy Page meets Beethoven. He’s the best-looking academic I’ve ever seen.

Anyway, here’s our conversation on When Everyone Knows That Everyone Knows: Common Knowledge and the Mysteries of Money, Power, and Everyday Life, with my good friend Steven Pinker.


Episode Description

In this conversation, James and Steven Pinker explore how much of life runs on signals, innuendo, and the unsaid. Pinker explains how “common knowledge”—what everyone knows that everyone else knows—shapes everything from romantic attraction to political polarization to financial panics.

They discuss why laughter matters, how game theory explains social awkwardness, and why being “brutally honest” all the time can destroy relationships. From Seinfeld to poker tables to the stock market, Pinker shows that our most human moments depend on the subtle art of leaving things unsaid.


What You’ll Learn

  • Why subtle hints and shared assumptions keep relationships, negotiations, and societies stable
  • How laughter creates “common knowledge” and strengthens social bonds
  • The role of game theory and “recursive thinking” in everything from dating to diplomacy
  • Why total honesty isn’t always a virtue—and how “rational hypocrisy” preserves relationships
  • How stock market behavior, toilet paper hoarding, and bank runs all reflect the same hidden logic


Timestamped Chapters

  • [00:00] Introduction – When everyone knows that everyone knows
  • [03:00] A Note from James: Why Pinker’s optimism matters
  • [08:00] The hidden rules of communication and “weasel words”
  • [10:00] Why we hint, wink, and avoid blurting the truth
  • [13:00] “I love you” and the creation of common knowledge
  • [16:00] How humor and laughter level the playing field
  • [20:00] Politics, laughter, and social signaling
  • [27:00] Bluffing, poker, and recursive thinking
  • [31:00] Negotiation, honesty, and the limits of directness
  • [38:00] Rational hypocrisy vs. radical honesty
  • [42:00] Stock markets, speculation, and public knowledge
  • [47:00] The toilet paper paradox: when panic becomes reality
  • [56:00] Why intimacy can’t be legislated
  • [01:00:00] Trade-offs, awareness, and flexible social norms
  • [01:01:00] The “Sagan Curse” and being a public intellectual
  • [01:04:00] The logic behind life’s unspoken rules


Additional Resources


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Episoder(1375)

Ep. 23 - Steve Scott: How To Go From $0-$40,000 a Month Writing From Home

Ep. 23 - Steve Scott: How To Go From $0-$40,000 a Month Writing From Home

Divorce, success, failure, struggle... are these excuses or stepping stones?Today's guest has been through many situations similar to our host, James Altucher.Like James, Steve Scott has made his passions a reality by going around the gatekeepers of industries and finding a way to "choose himself."Steve has written a variety of books that deliver step-by-step strategies you can immediately implement to improve your life and business strategies.You'll quickly learn that what separates Steve from many others is his unique ability to break down barriers and explain complex topics in a no-nonsense, straight forward way.You would think that having a failed marriage, losing his house, and moving back in with his parents would have slowed his success and willpower. However, for Steve, that is simply not the case... in fact, it has only pushed his drive and focus even further.Here is your shortcut in life... There is no holding back in this interview. Steve shares all the secrets and shortcuts that have brought him success.This month alone he is already set to make $40,000... all from the comfort of his home and at his own leisurely schedule.There are two strategies that Steve follows, and he explains why there is no need for any others... It could be your new business philosophy.Enjoy! ------------What do YOU think of the show? Head to JamesAltucherShow.com/listeners and fill out a short survey that will help us better tailor the podcast to our audience!Are you interested in getting direct answers from James about your question on a podcast? Go to JamesAltucherShow.com/AskAltucher and send in your questions to be answered on the air!------------Visit Notepd.com to read our idea lists & sign up to create your own!My new book, Skip the Line, is out! Make sure you get a copy wherever books are sold!Join the You Should Run for President 2.0 Facebook Group, where we discuss why you should run for President.I write about all my podcasts! Check out the full post and learn what I learned at jamesaltuchershow.com------------Thank you so much for listening! If you like this episode, please rate, review, and subscribe to "The James Altucher Show" wherever you get your podcasts: Apple PodcastsiHeart RadioSpotifyFollow me on social media:YouTubeTwitterFacebookLinkedIn See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

6 Jun 20141h 3min

Ep. 22 - Tim Ferriss: Possibilities and Experimentation

Ep. 22 - Tim Ferriss: Possibilities and Experimentation

This week James hosts his good friend and best-selling author of The 4-Hour Workweek, Tim Ferriss.Before every interview, James spends hours reviewing his guest's work so he can come up with something different and something very special.This interview proved to be the most difficult in regard to preparation, so far. Not because Tim Ferriss doesn't have anything interesting to talk about (quite the opposite), but because James didn't want to ask him the same old questions he gets asked on every interview. "Can you really only work 4 hours a week?" "Did you really do the things you wrote about?" "Is it actually possible to get the results that you did?" Blah, Blah, Blah.Tim Ferriss has done many different, interesting things besides writing his "4 hour series," and James explores many of those passions on this podcast.And don't worry, this isn't "The 4 Hour Podcast." But almost. ------------What do YOU think of the show? Head to JamesAltucherShow.com/listeners and fill out a short survey that will help us better tailor the podcast to our audience!Are you interested in getting direct answers from James about your question on a podcast? Go to JamesAltucherShow.com/AskAltucher and send in your questions to be answered on the air!------------Visit Notepd.com to read our idea lists & sign up to create your own!My new book, Skip the Line, is out! Make sure you get a copy wherever books are sold!Join the You Should Run for President 2.0 Facebook Group, where we discuss why you should run for President.I write about all my podcasts! Check out the full post and learn what I learned at jamesaltuchershow.com------------Thank you so much for listening! If you like this episode, please rate, review, and subscribe to "The James Altucher Show" wherever you get your podcasts: Apple PodcastsiHeart RadioSpotifyFollow me on social media:YouTubeTwitterFacebookLinkedIn See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

30 Mai 20141h 47min

Ep. 21 - College is a Scam

Ep. 21 - College is a Scam

We are doing something a little different this week. There isn't a guest, but there will be a heated debate between James and Aaron.It's a sensitive topic for many individuals, so get ready...Kids that are graduating high school right now are beginning to apply for college. Unfortunately, they could be making one of the biggest mistakes of their lives.Hundreds of dollars of student debt, little to no job opportunities - these are the realities of today's college graduate.James takes some of the most popular arguments for why kids should go to college and turns them on their head.It's the American religion that kids should go to college... but is it necessary?What are the reasons for going to college? Is it to network and meet people?Couldn't you do the same by taking a year off and traveling? Not only would you get to see the world, meet people from all walks of life, but you would be gaining knowledge and experiences that could NEVER be taught in a classroom.Will you make more money if you go to college?Do you want to be a writer? Why not write a book for free and self-publish?There are many ways around almost every gate-keeper out there... Why not get a head start on your fellow "classmates" and skip the debt process?Sure you learn certain things in college, but the real question is, "what are you NOT learning?"...Whether you are a student or the parent of a student, listening to this episode is a must...And even if you are neither, these children are the future of the country and they will affect the direction this country goes.It's a fantastic show that will certainly have you rethinking your goals in life. ------------What do YOU think of the show? Head to JamesAltucherShow.com/listeners and fill out a short survey that will help us better tailor the podcast to our audience!Are you interested in getting direct answers from James about your question on a podcast? Go to JamesAltucherShow.com/AskAltucher and send in your questions to be answered on the air!------------Visit Notepd.com to read our idea lists & sign up to create your own!My new book, Skip the Line, is out! Make sure you get a copy wherever books are sold!Join the You Should Run for President 2.0 Facebook Group, where we discuss why you should run for President.I write about all my podcasts! Check out the full post and learn what I learned at jamesaltuchershow.com------------Thank you so much for listening! If you like this episode, please rate, review, and subscribe to "The James Altucher Show" wherever you get your podcasts: Apple PodcastsiHeart RadioSpotifyFollow me on social media:YouTubeTwitterFacebookLinkedIn See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

23 Mai 20141h 24min

Ep. 20 - Stephen Dubner: How to Think Like a Freak

Ep. 20 - Stephen Dubner: How to Think Like a Freak

This week, James asked one of his favorite guests, Stephen Dubner, to join the show and talk about his newest book, Think Like a Freak.Just like his previous bestseller, Freakonomics, you'll hear James and Stephen talk about how his new book also infuses the power of storytelling... If you don't already know the secret purpose, you'll hear it here!Stephen's newest book gives practical advice on how to think outside of the box and how to solve problems from an economic perspective.He explains to our listeners that "in order for a piece of writing to be successful, you have to be really good at both logic and rhetoric." What Stephen has to share will certainly have your idea-muscle breaking a sweat... His recipe for greatness is revealed. and you'll get incredibly valuable behind-the-scenes knowledge.Get ready, because once again, James has found another completely unconventional guest to deliver priceless knowledge and information that you just can't get anywhere else!It's rare to come across an individual that sees the world so differently than anyone else.Here is where you will learn how to think a bit more productively, more creatively, more rationally, and most importantly, a bit unusual... Do you have what it takes to Think Like a Freak? ------------What do YOU think of the show? Head to JamesAltucherShow.com/listeners and fill out a short survey that will help us better tailor the podcast to our audience!Are you interested in getting direct answers from James about your question on a podcast? Go to JamesAltucherShow.com/AskAltucher and send in your questions to be answered on the air!------------Visit Notepd.com to read our idea lists & sign up to create your own!My new book, Skip the Line, is out! Make sure you get a copy wherever books are sold!Join the You Should Run for President 2.0 Facebook Group, where we discuss why you should run for President.I write about all my podcasts! Check out the full post and learn what I learned at jamesaltuchershow.com------------Thank you so much for listening! If you like this episode, please rate, review, and subscribe to "The James Altucher Show" wherever you get your podcasts: Apple PodcastsiHeart RadioSpotifyFollow me on social media:YouTubeTwitterFacebookLinkedIn See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

16 Mai 20141h

Ep. 19 - Austin Kleon: How To Be A Creative Genius

Ep. 19 - Austin Kleon: How To Be A Creative Genius

This week, Austin Kleon, New York Times bestselling author, joins The James Altucher Show.James and Austin start the show with a discussion on embracing influence, which is the main theme in his book, Steal Like An Artist.This will truly open up your creativity and tap into your artistic side.Austin believes that you should open yourself up to influence and accept a mash up of what you let into your life.James and Austin both express the importance of following your interests and generating ideas... They tell you how you can be unique by just reinventing ideas of others.They encourage you to "choose yourself" and get rid of any hurdles that are keeping you from success.And... It's a question that many of us have asked... "How do I find purpose in life?" It's different for everyone, but Austin tells you how to look at the world to figure that out.Throughout the day, is there time that you are not using efficiently? Find out how to utilize those moments you might have been overlooking. It's a fantastic show that you won't want to miss out on.Enjoy! ------------What do YOU think of the show? Head to JamesAltucherShow.com/listeners and fill out a short survey that will help us better tailor the podcast to our audience!Are you interested in getting direct answers from James about your question on a podcast? Go to JamesAltucherShow.com/AskAltucher and send in your questions to be answered on the air!------------Visit Notepd.com to read our idea lists & sign up to create your own!My new book, Skip the Line, is out! Make sure you get a copy wherever books are sold!Join the You Should Run for President 2.0 Facebook Group, where we discuss why you should run for President.I write about all my podcasts! Check out the full post and learn what I learned at jamesaltuchershow.com------------Thank you so much for listening! If you like this episode, please rate, review, and subscribe to "The James Altucher Show" wherever you get your podcasts: Apple PodcastsiHeart RadioSpotifyFollow me on social media:YouTubeTwitterFacebookLinkedIn See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

9 Mai 201453min

Ep. 18 - Ryan Holiday: Turning Trials into Triumph

Ep. 18 - Ryan Holiday: Turning Trials into Triumph

Feeling stuck, frustrated, or faced with unbearable situations?Do you find it difficult to live in the present moment?If any of those apply to you, then this is the show to listen to!Ryan Holiday joins The James Altucher Show to talk about his brand-new book, The Obstacle Is the Way: The Timeless Art of Turning Trials into Triumph.You'll hear how you can build resilience in your life to help protect yourself from any difficulties that may cross your path.There is a discipline in perception that needs to be put in place... and James and Ryan walk you through the process.His book depicts several examples of individuals that were faced with impossible situations and were able to thrive past any limitations they thought would have held them back.A lot of us are stuck, stymied, and frustrated - working to make the best of the financial crisis or unemployment or personal problems. But it needn't be this way. There is a formula for success that has been followed by the icons of history - from John D. Rockefeller to Amelia Earhart to Ulysses S. Grant to Steve Jobs - a formula that let them turn obstacles into opportunities. The Obstacle Is The Way contains that formula and will be your manual for facing adversity and turning it into the triumphs we all seek.If you can't handle the minor obstacles, how are you going to handle the major dilemmas?Here is your chance to get an inside look from the author himself... There is a formula to turn negative situations into positive ones and James and Ryan reveal the secret.James asks Ryan, why this book and why now?"I believe that you write the book that you have to write. This is that book for me. I first discovered the Stoic exercise of turning obstacles upside down when I was 19 years old. Since then, it has been seared into my brain regardless of what I've done, and I've always tried to think about my problems and opportunities in life through that frame. It has helped me become successful, just as it helped countless people before me. The Obstacle Is The Way reveals that framework for the first time - and shows you how to turn your trials and tribulations into opportunities." ------------What do YOU think of the show? Head to JamesAltucherShow.com/listeners and fill out a short survey that will help us better tailor the podcast to our audience!Are you interested in getting direct answers from James about your question on a podcast? Go to JamesAltucherShow.com/AskAltucher and send in your questions to be answered on the air!------------Visit Notepd.com to read our idea lists & sign up to create your own!My new book, Skip the Line, is out! Make sure you get a copy wherever books are sold!Join the You Should Run for President 2.0 Facebook Group, where we discuss why you should run for President.I write about all my podcasts! Check out the full post and learn what I learned at jamesaltuchershow.com------------Thank you so much for listening! If you like this episode, please rate, review, and subscribe to "The James Altucher Show" wherever you get your podcasts: Apple PodcastsiHeart RadioSpotifyFollow me on social media:YouTubeTwitterFacebookLinkedIn See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

2 Mai 201442min

Ep. 17 - Chris Brogan: Are YOU a Freak?

Ep. 17 - Chris Brogan: Are YOU a Freak?

Willpower is pointless!   Do you agree? If you do then you will love this interview with Publisher and CEO of Owner Magazine, Chris Brogan.   James brings Chris on as a guest to talk about his new book, The Freaks Shall Inherit the Earth: Entrepreneurship for Weirdos, Misfits, and World Dominators.   He breaks down what willpower really is... just our brains' programming language.    Just like James does in his upcoming book, The Power of No, Chris discusses how to use discipline with our willpower and to learn that smarter no's lead to better yesses...    How do you avoid getting stuck in "plan-ville?" How will you launch these great ideas that have inspired you?   James and Chris talk about how to turn your passions into businesses...    Are you still playing it safe? Scared to take that plunge and trust your ideas?   This is an excellent "Choose Yourself" episode that gives you that nudge of reassurance that you need to go after whatever it is that you are hesitant about.   Enjoy! ------------What do YOU think of the show? Head to JamesAltucherShow.com/listeners and fill out a short survey that will help us better tailor the podcast to our audience!Are you interested in getting direct answers from James about your question on a podcast? Go to JamesAltucherShow.com/AskAltucher and send in your questions to be answered on the air!------------Visit Notepd.com to read our idea lists & sign up to create your own!My new book, Skip the Line, is out! Make sure you get a copy wherever books are sold!Join the You Should Run for President 2.0 Facebook Group, where we discuss why you should run for President.I write about all my podcasts! Check out the full post and learn what I learned at jamesaltuchershow.com------------Thank you so much for listening! If you like this episode, please rate, review, and subscribe to "The James Altucher Show" wherever you get your podcasts: Apple PodcastsiHeart RadioSpotifyFollow me on social media:YouTubeTwitterFacebookLinkedIn See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

25 Apr 201451min

Ep. 16 - Paul Oyer: Mastering Online Dating!

Ep. 16 - Paul Oyer: Mastering Online Dating!

How can you make yourself stand out in a crowd?   Are you catching the right person's attention?   Well, here is the show where you can figure that out. Our guest this week is Paul Oyer, author of Everything I Ever Needed to Know about Economics I Learned from Online Dating.   Like our host James, Paul is an interesting guy who has found success by thinking outside the box.   Paul shares his discoveries about the online dating world that he found to stem from economics.    After more than 20 years of marriage, Paul found himself swimming in the deep sea of the online dating scene...    Sure he was out of the game for some time - older than the last time he was single - but he did have an edge on the dating market... his economist's point of view.    He talks about his experiences in the online dating world that helped him learn how to stand out. It's all about signaling...   Paul explains how he came to realize that the sites available out there are no different from the markets that he had spent a lifetime studying.   You'll hear how you can relate these ideas to your everyday life.   Enjoy! ------------What do YOU think of the show? Head to JamesAltucherShow.com/listeners and fill out a short survey that will help us better tailor the podcast to our audience!Are you interested in getting direct answers from James about your question on a podcast? Go to JamesAltucherShow.com/AskAltucher and send in your questions to be answered on the air!------------Visit Notepd.com to read our idea lists & sign up to create your own!My new book, Skip the Line, is out! Make sure you get a copy wherever books are sold!Join the You Should Run for President 2.0 Facebook Group, where we discuss why you should run for President.I write about all my podcasts! Check out the full post and learn what I learned at jamesaltuchershow.com------------Thank you so much for listening! If you like this episode, please rate, review, and subscribe to "The James Altucher Show" wherever you get your podcasts: Apple PodcastsiHeart RadioSpotifyFollow me on social media:YouTubeTwitterFacebookLinkedIn See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

18 Apr 20141h

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