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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Ep. 7 - Matthew Berry: How to Create Your Fantasy Life

Ep. 7 - Matthew Berry: How to Create Your Fantasy Life

This week, Matthew Berry, Senior Fantasy Sports Analyst at ESPN, joins the show to talk about his New York Times bestseller, Fantasy Life.The world of fantasy sports is huge, and still growing, Matthew gives us an inside look to this niche subculture that has become a national pastime. You will hear him talk about his success as a writer and the different career paths he has experienced along the way.And... there is no holding back!Divorce, hate mail, business deals gone bad, disappointing celebrity idols... Matthew shares it all.Find out his secret to happiness.Plus, don't miss out on the special promo code to use at rotopass.com.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.

28 Feb 20141h 53min

Ep. 6 - Dr. Wayne Dyer: A Test to See If You Are Ordinary

Ep. 6 - Dr. Wayne Dyer: A Test to See If You Are Ordinary

It's a question many of us are too afraid to answer..   "Is this as good as it gets?" Perhaps you feel that way from time to time. You get stuck in an unfulfilling job. You get stuck with a mortgage you can barely pay, in a house that didn't make you any happier than your previous home. You get stuck in a negative relationship. And you wonder if things will ever get better. James Altucher knows the feeling well. And in the latest episode of his radio show, he shows you exactly how to get "un-stuck" by making your negative life experiences work for you instead of against you. The type of unconventional ideas you'll hear on his show made James a millionaire... and many of his guests have done the same. This week's guest is no exception..  Dr. Wayne Dyer has seen plenty of obstacles in his life... but his attitude and belief in the power of self-reliance have earned him the title "father of motivation" by his fans. A hard worker since his first paper route at age 9, Dr. Dyer says, "There's never been a moment when I was unemployed, ever." He was an orphan, served in the military, taught at a prestigious university, had eight children of his own, and made a comfortable life for himself in Hawaii. To say he is influential is an understatement.   His first book, Your Erroneous Zones, was not only a New York Times bestseller, but it sold more than 100 million copies in 47 languages... and was even smuggled to readers living behind the Iron Curtain of the 1980's.   He is one of the most prolific writers of our time. In fact, he has authored 40 books.   But like we mentioned earlier, some people really struggle with the feeling that their life is ordinary and unimportant...   James and Dr. Dyer explain why getting "un-stuck" is so important.   Dr. Dyer explains "If you're feeling stuck, your stuckness is going to have a physical impact on you... You're gonna get sick if you stay stuck."   More importantly, he shows you exactly how to get un-stuck, and live the life you were meant to lead.   The tips and ideas Dr. Dyer discusses in the show are wide ranging.   From how to side-step fights with your wife... to avoiding the most common regret of the dying... Dr. Dyer's advice is well worth listening to.   We'll be the first to admit this was an intense show.   But Dr. Dyer is one of the most inspirational speakers in the world... And when combined with James' fascinating, original take on the world, the result is riveting.         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.

21 Feb 201456min

Ep. 5 - Lewis Howes: The Millionaire Who Couldn't Read

Ep. 5 - Lewis Howes: The Millionaire Who Couldn't Read

You've heard the stories about college dropouts who go on to become billionaires... like Bill Gates, Steve Jobs, and Mark Zuckerburg... And you might even know that 20% of America's millionaires never stepped foot on a college campus. But how many guys have you heard of who read at a second grade level... yet go on to be millionaires? My guess is none... but you're about to meet one. His name is Lewis Howes, and he's this week's guest on the James Altucher Show, a radio show we recently helped to launch. Lewis Howes' story is nothing short of amazing... At age 10, he was 6'3". He described himself as a "gangly, skinny, ugly, acne kid, who couldn't read or write or do anything." In the eighth grade, he could only read at a second-grade level. He cheated on every test in high school because he says that's the only way he could pass. But Lewis' life changed dramatically after talking his way into college. He wanted to become a football player... and despite a series of major setbacks and injuries, he became a two-time All-American. Thing is... when it came time to leave college, the NFL didn't want him. He had no other skills. He was broke and depressed. By now, you might be wondering how listening to a former semi-pro football player can help you become more successful and wealthy. Turns out, a lot more than you'd think... Howes figured out an ingenious way to make a fortune. At one time, he was making an incredible $60,000 per hour. This week, you'll hear the amazing story of Lewis Howes, who now travels the globe teaching people exactly how they can achieve their dreams. Schools can't prep you for success anymore. Today's millionaires prove that if schooling and traditional employment does not work for you, then you must figure out how to connect with people on a different level. And Lewis teaches you exactly what you need to do to get there. He reveals the secret thing that people should never, ever do when they're trying to get ahead. I was shocked because it's usually the first thing people think they SHOULD do! He also reveals the question that he always asks during networking sessions. Lewis explains, "That simple question opened the door" to his future as a millionaire.   Like James Altucher, Lewis Howes is a quirky, interesting guy, who's become a huge success by thinking outside the box.   ------------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.

19 Feb 20141h 13min

Ep. 4 - Ylon Schwartz: A Poker Champion's Secret Revealed

Ep. 4 - Ylon Schwartz: A Poker Champion's Secret Revealed

On this week's show, James and Aaron Brabham chat with Ylon Schwartz: poker champion, chess master, and gamer extraordinaire.   He is without a doubt one of the most intriguing characters you're ever likely to encounter...   College Dropout Who Has Never Had a Real Job Wins $8 Million in Cash at the Poker Table...   If you watched the 2008 World Series of Poker, you may remember Ylon Schwartz and his trademark curly locks...   The day before the championship, Ylon was drowning in debt and in trouble with the law back in his hometown of New York City. From rock bottom, he redirected years of frustrations about money and women, channeling it towards winning the game...   ... and walked out of the Las Vegas Rio Casino with a cool $3.7 million in his pocket.   In fact, Ylon has won an estimated $8 million in cash, just from playing poker. Not bad for a college dropout who has never held a job.     Today, he's one of the most widely recognized and well-respected poker players in the world.  ------------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.

14 Feb 20141h 9min

Ep. 3  - A. J. Jacobs: A Biblical Experiment

Ep. 3 - A. J. Jacobs: A Biblical Experiment

On this week's show, James' special guest is A.J. Jacobs, a journalist, lecturer, self-described human guinea pig and author of four New York Times bestsellers.   In this episode, he shares life-changing tips about how to improve your business, become healthier, and live better.   You see, A.J. has spent years conducting the wackiest "experiments" we've ever heard of to see what he could learn.   You won't believe the crazy things he has done!   James and A.J. discuss how to generate great ideas... and the importance of exercising the "idea muscle" in your brain. The very act of generating 40 different ideas literally made A.J. millions of dollars.   Other things you'll learn when you listen to this show include:   ** One simple exercise that will make you feel more confident and optimistic. George Washington used this tip to create an aura of authority...   ** How to reframe the boring parts of your job as something creative. If you aren't satisfied living in a cubicle, you need to hear this...   **What you should do within the first three seconds of meeting someone to overcome shyness...   ** Why overthinking is a problem... and how you can stop your brain from ruling your life...   ** A.J.'s proven technique for using Facebook to fix almost any problem...   ** How he's using genetic testing, of all things, to grow his business...   Like James Altucher, A.J. Jacobs is a quirky, interesting guy, who has become a huge success by thinking outside the box. ------------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.

7 Feb 201456min

Ep. 2 - Gary Vaynerchuk: Millionaire by Age 35

Ep. 2 - Gary Vaynerchuk: Millionaire by Age 35

On this week's show, which you can now access free of charge, James covered several interesting, unique, and useful topics... which I guarantee you won't hear anywhere else.   For example...   *He shares his idea of the absolute best place to meet women... and how to avoid feeling embarrassed if she says no to your invitation.   *He discusses the 2 reasons traditional jobs are a scam... why he tries to avoid working in the workplace... and the ways you can avoid having a regular ho-hum job...   *And he explains why there has been such a dramatic change in the way we interact with total strangers... how that impacts the way we sell our goods... and how to use this change to your benefit...   Altucher has an interesting take on this subject and you won't want to miss it!   Then James brings on his special guest...   James' good friend Gary Vaynerchuk, author of a New York Times best-selling book: Jab, Jab, Jab, Right Hook.   ------------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.

31 Jan 201455min

Ep. 1 - Tucker Max: Buckle Up, We've Launched

Ep. 1 - Tucker Max: Buckle Up, We've Launched

On James' very first show, he covers several really interesting, unique, and useful stories, which I guarantee you won't hear anywhere else. Then James brings on his special guest for Show #1...   Maybe you've heard of Tucker Max. Maybe not.   Tucker is an entertaining guy, who figured out a way to basically reinvent the entire book-publishing industry.   ------------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 Jan 201453min

Robert Greene: How to Become a Master of What You Love

Robert Greene: How to Become a Master of What You Love

Robert Greene, best-selling author of Mastery, joins The James Altucher Show. ------------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.

13 Jan 201434min

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