Behavioural Economics

The Narrative Fallacy: The story of your life is most likely a sham.

Life is full of random facts. You forcibly knit them together to give it meaning.

Abhishek Chakraborty
8 min readFeb 18, 2019


I write Sunday Wisdom where I discuss the principles of life, strategy, and antifragility. Subscribe here.

Last night, I was reading the memoir of a best selling author. Here’s an excerpt:

“When I was growing up I had the great privilege of being home schooled. For me that meant personalised attention, learning at my own pace, more discipline, and ultimately being able to graduate a few years early.”

“Once I realised that unlike other kids in the neighbourhood I was getting special attention in the speed and quality of my education, I became much more confident and motivated.”

“Rather than having to continue high school for a set number of years, I had a fixed amount of schoolwork I needed to complete to graduate. I saw that as a checklist and dove in.”

“When I was about 12 I was working on an essay with my mom. Frustrated with the entire process, I exclaimed, ‘Why do I have to learn to write? I’ll never be a writer!’ My patient mother calmly explained something about how you need to be balanced in our skills and how writing is very important.”

It got me thinking, gee this guy was destined to become a successful author since he was a kid. Look at me, I got no chance! I was not homeschooled. I never got frustrated with an essay and asked my mom why they are making me write. I so wish that had actually happened. Maybe I would have gotten a chance to become successful as well.

What about you, what do you conclude from this excerpt? Doesn’t it feel like all these factors — home schooling, helping mother, etc — came together and made him successful as an adult? Almost biographies take up this format.

In the biography of Steve Jobs, for example, Walter Isaacson illustrates that Jobs’s success was determined to a great degree by the childhood influence of his father. Paul Jobs, a careful, detailed-oriented engineer and craftsman who would carefully craft the backs of fences and cabinets even if no one would see — who Jobs later found out was not his biological father.

The combination of his adoption and his craftsman father planted the seeds of Jobs’ adult personality: his penchant for design detail, his need to prove himself, his messianic zeal. Wow, what a story! It shows you how the ultimate painting began as just a sketch.

Same is true for business books as well. If you’ve read ever In Search of Excellence or Good to Great or any other book in this genre, you can surely relate. The template is usually the same. X company used Y strategy to get Z result. It gives the impression that if you have a business all you have to do is follow these same strategies for guaranteed success.

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This is not actually how it usually happens in real life though. Life is a muddle. The rundown of any life consists of events such as “woke up late, made bed in a hurry,” “went out for a run, came back, took a cold shower,” “quarrelled with the Uber driver, gave 1 star,” “booked vacation with fiancée, now out of money,” “took a piss in office restroom, no water to wash hands, life sucks,” and so on.

Biographies are written to entertain, to sell, and to make money. A plot needs to have a pattern for the brain to digest it easily and follow along the hero’s journey. A biographer sits with the subject and jots down bits and pieces from his or her life, and then builds a compelling “narrative” to force a “meaning” into it. She knits this jumble of details into a neat story. What doesn’t fit is ignored.

These types of stories strike a deep chord. They give you deep, affecting reasons to hang your understanding of reality on it. They help you make sense of your own life. And, most importantly, they frequently cause you to believe you can predict the future. That’s the problem with narratives — they are a sham most often. They lure you into believing that you can explain the past through cause-and-effect when you hear a story that supports your prior beliefs.

Explanations bind facts together. Theorising helps you build good mental models to go around the world. In fact, non-theorising cost you much more energy than theorising.

You are bombarded with so much sensory information that your brain has no other choice. It must put things in order so that it can process the world around you. It’s implicit in how you understand the world.

When the coffee cup falls, you need to know why it fell — you knocked it over by mistake. If your colleague gets the promotion instead of you, you need to know why she was deemed better — she does have more experience and is also your boss’s favourite.

Without a deep search for reasons, you would go around in the world with blinders on. The world does not really make any sense without cause and effect. Without it, it’s just a bunch of random stuff happening one after the other.

Nassim Nicholas Taleb further explains:

“Consider a collection of words glued together to constitute a 500-page book. If the words are purely random, picked up from the dictionary in a totally unpredictable way, you will not be able to summarise, transfer, or reduce the dimensions of that book without losing something significant from it.”

“You need 100,000 words to carry the exact message of a random 100,000 words with you on your next trip to Siberia. Now consider the opposite: a book filled with the repetition of the following sentence: ‘The chairman of [insert here your company name] is a lucky fellow who happened to be in the right place at the right time and claims credit for the company’s success, without making a single allowance for luck,’ running ten times per page for 500 pages.”

“The entire book can be accurately compressed, as I have just done, into 34 words (out of 100,000); you could reproduce it with total fidelity out of such a kernel. By finding the pattern, the logic of the series, you no longer need to memorise it all. You just store the pattern. And, as you can see here, a pattern is obviously more compact than raw information. You looked into the book and found a rule.”

This mental shortcut forms the basis of The Narrative Fallacy.

The narrative fallacy addresses our limited ability to look at sequences of facts without weaving an explanation into them, or, equivalently, forcing a logical link, an arrow of relationship upon them. Explanations bind facts together. They make them all the more easily remembered; they help them make more sense. Where this propensity can go wrong is when it increases our impression of understanding.

— Nassim Nicholas Taleb, The Black Swan

So, if condensing complex events into easy to understand narratives is dangerous, then what can you do about it?

I believe becoming aware of the problem and understanding that narrative fallacy exists is a crucial first step. You have to realise that you are subject to this way of thinking, and you should expose your views to a more critical self-analysis.

For example, if you have to critically analyse the theories fabricated by successful authors who write about other successful people — for example, Malcom Gladwell — the key question you must ask yourself is, “Out of all the people/businesses who followed similar strategies, or were subjected to the same initial conditions, how many turned out successful like the hero of the story? What hard-to-measure causes might have played a role?”

Logically, you should concur that there are likely to be many more failures than successes in that pool. There are always some unrealised factors at play — luck being a crucial one.

And it is just as relevant to ask yourself the inverse of the question posed above: “Out of all the people/businesses who did not follow similar strategies, or were not subjected to the same initial conditions, how many still turned out successful like the hero?”

The hardest part of this method is design experiments to prove your hypothesis as well as disprove other alternative hypotheses. But when you are willing to ask both types of questions and try your best to answer them, you can start to see which elements are simply part of the story rather than causal contributors.

A second way to circumvent narratives is to simply avoid or reinterpret sources of information most subject to this bias. Be sceptical of biographies, memoirs, and personal histories/anecdotes. Be careful of people who are incredibly talented at painting a narrative, but claim to be writing facts. All marketers, salespeople, and consultants would fall into this category.

A good narrative is so powerful that it can overcome basic logic, so you must be rigorous to some extent about what kinds of information you allow to pass through your filters.

Read biographies for inspiration and entertainment. But never use it as a guidebook. Place equal, if not more weight on actually trying things yourself, failing, learning and improving. Favour experimentation over storytelling, experience over history and clinical knowledge over grand theories.

Personally, I prefer to remove the storytelling bit from all kinds of pitches — be it a new product, a new business, or a new product feature. Storytelling is just people’s brains trying to rationalise the facts to meet some preconceived notion. By forcing people to stop that act, you can have a rational discussion based only on data and numbers. People can’t bullshit with numbers, and it also saves a tonne of time.

On a separate note, if you are planning to go with a decision based on your gut feeling, it’s better to accept it rather than wrapping it up with a juicy ‘fake’ story. You would be fooling others as well as yourself, and it’s unwise to fool yourself.

In Brad Stone’s account of Amazon’s rise, The Everything Store, Bezos himself warns against the trappings of the narrative fallacy. He suggests that there is no easy explanation for how certain products were invented — such as Amazon Web Services — the cloud-computing juggernaut that is the most profitable part of Amazon’s business. There was no aha moment where they realised they could make billions by licensing the technology to other companies.

Similarly, in The Black Swan, Taleb argues that humans severely underrate the role of luck and randomness in all aspects of life. He cites the laser as an invention that changed the world based on luck rather than conscious intent.

Lasers are crucial building blocks of modern society, with uses spanning across data storage, eye surgery, barcode scanners and robotics. But all Charles Townes, the inventor of the laser, wanted to do was split light beams. Similarly, all Google wanted to do initially was build a search engine that works. They didn’t set out to build this massive business.

What I’m trying to say is that you seldom have all the facts when you make a decision, and even if you do, you never really know it. Chance plays a far bigger role in your life and success than what you mention in your narratives.

I write Sunday Wisdom where I discuss the principles of life, strategy, and antifragility. Subscribe here.



Abhishek Chakraborty

I write ‘Sunday Wisdom’, a weekly newsletter on clear thinking and decision making: