System 1 and System 2 are the twin engines that fuel our cognitive mind and drive thought. System 1 is our intuitive emotional mind whereas System 2 is our rational mind. The question arises about what System 1 and System 2 use as fuel.

At the heart of our twin systems is information, which consists of all of the data, facts, knowledge, and wisdom about the world we take in through our senses that we are consciously aware of. Estimates vary but usually converge somewhere around 50 bits per second. Vision is about 40 bits, with hearing at 10 and the remainder between touch, smell, and taste. The senses themselves process about 11 million bits per second filtering out most it. For the remainder of this post, we will be focusing on vision and hearing, the channels by which we receive and disseminate information.

Because intake channels are small, the human brain developed two strategies to overcome this limitation. The first strategy is called chunking. Chunking occurs when information is broken down into smaller pieces and stored in neurons which are then connected to other chunk of information stored in other neurons. Effectively this creates a web consisting of connected chunks. Chunks allow us to use working memory more effectively which is limited to about 7 chunks. I sometimes refer to chunks as mechanics. The second strategy is grouping chunks together in bigger structures. I will refer to these structures as models, which are simplified representations of how the world works. I associate them closely with the concepts of schemas, which are general knowledge structures in the brain, and scripts which tell us how to behave in certain situations.

Models are the concepts of reality we work with. We have in our minds models for what a family is, what a country is, what the economy, etc. It is these models that we use in our day to day thinking relieving us from the task of not having to relearn everything. Models can represent entities, behavior, or a mix of the two. For instance, we have a model of not only what a restaurant is but how to behave inside. We know what a menu is, what the waitstaff is for, how to order, and the payment of the bill. The model can vary depending on the restaurant type (fast food vs elegant dining), the function of the dinner (a night out, a first date, a party), and type of food. Yet, all of these variations can be accessed by the restaurant model. The key feature of models is this: they all have an underlying logic to them that describes their behavior and how they operate.

The late Charlie Munger was a big fan of mental models, suggesting that a small set of models, between 80 – 90, would account for up to 90% of decision making. His models included such things as inversion which turns the problem around by thinking backwards, compounding, avoiding stupidity, and multidisciplinary thinking.

Models usually contain other models which in turn comprise of other models. In other words, its models all the way down. Our model of how the universe began, called the Bing Bang, consists of models related to physics and chemistry. It explains how stars, galaxies, asteroids, comets, planets, and black holes are formed. It relies on concepts like Hubble’s Law (expanding space), the Cosmic Microwave Background (leftover heat), and the abundance of hydrogen and helium. Models are how we make sense of the world around us by packing lots of information in a tiny space. The information density is high.

Over time, models have a tendency to turn into the most powerful tool of all for communicating information: stories. Stories are simply an account, either real or made up, of some aspect of the world we live in. It is meant to either educate or entertain. Stories act to compress information and distill data into a more digestible and coherent narrative. A good story can compress large amounts of information into 300 – 500 pages. Stories are the main source of information transmission today because of their superpower. More than anything else, humans are wired for story.

The human attachment for story comes from many places. First is the fact that the human brain is always fascinated by the unusual and bizarre. It craves uniqueness. It hates the banal and boring, so when a good story comes along, it captivates our attention. Second, the human brain seeks meaning in the world. We seek explanations. We seek cause and effect. Stories give us that. Stories explain how the world works, they tell us good conquers evil, they tell us of how the world was formed, they tell us of our place in the world, and through religion, the greatest story ever told, they tell us how to live with others. The explanatory power of stories is the yardstick by which all stories are measured. Finally, stories are how we survived as a species. The super power of our species is our ability to cooperate in large groups, which effectively enabled us to strategize and defeat competitors that were much more powerful than us, and to hunt larger animals for food. Listening to information then was not a luxury, it was a critical necessity. The oral tradition of story telling was the mechanism for how we communicated vast amounts of information.

It has been estimated that stories are up to 22% more likely to be remembered than facts alone. They create shared experiences through our mirror neurons, which are associated with empathy, and can establish an emotional connection, activating the ancient parts of our brain. Combine the advanced research going on with the brain with the story tellers alive in the world today and you have what Jonah Sachs labelled The Story Wars: the ability to break through a tidal wive of stories and information to change minds, influence behavior, and inspire.

Stories have a dark side though. Since they are models in their very nature, they abstract out a lot of detail. They seek to explain cause and effect through anecdotal narratives, rather than facts. The story can make sense, but it also doesn’t have to be true. The details that are left out could be important. And since stories are made by humans, they are influenced by human biases and fallacies. In this regard, stories can be very dangerous and lethal. The Nazis told stories designed to dehumanize Jews, leading to the Holocaust. So when consuming stories, it is critical to ask what details are being left out, what is the point of view of the story teller, what opinion do they want you to come away with. In today’s highly sensitive environment of culture wars, stories have been weaponized.

Stories are extremely versatile and adaptable acting like chameleons, changing to fit the needs of their environment. Some stories we hear, some we read, most we watch. TV shows and movies tell stories. Games tell stories that are more interactive in nature where you can shape the narrative going forward. Stories can be as quick as a 30 second commercial or as long as a multi-year series. History is a collection of stories about the past. The news broadcasts stories that are happening now. Predications, forecasts, and speculation are stories about the future. Star Trek told stories about humans encountering new life and new civilizations in outer space. Ancient Aliens tells stories about life and civilizations in outer space encountering human life here on Earth (both are ranked among the 1000 TV shows of all time). Primal on HBO tells stories with very little language, Seinfeld tells stories where language is key. Stories can be about animals interacting with people or people interacting with stories. Stories can be about creating life (religion) or ending life (murder mysteries). The continuum of stories is as vast as the imaginations that create them. Nothing is off the table.

The key point is this; virtually everything we consume in today’s world is a story in some form. It is the most efficient way of compressing information into manageable models and chunks humans can consume and propagate. In the words of Yuval Noah Harari, an Israeli historian, best selling author, and storyteller par excellence, from his book *21 Lessons for the 21st Century:

“Humans think in stories rather than in facts, numbers, or equations, and the simpler the story the better. Every person, group, and nation has its own tales and myths. … Indeed, Homo sapiens conquered the planet thanks above all to the unique human ability to create and spread fictions. “