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

Steven Pinker – When Everyone Knows That Everyone Knows: Common Knowledge and the Mysteries of Money, Power, and Everyday Life
Steven Pinker – The Better Angels of Our Nature: Why Violence Has Declined
Steven Pinker – Rationality: What It Is, Why It Seems Scarce, Why It Matters

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

The James Altucher Show

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