Leadership, Identity, Survival, and Bees | Derick Cooper | EP 417

Hello everyone. I'm pleased to announce my new tour for 2024, beginning in early February and running through June. Tammy and I, an assortment of special guests, are going to visit 51 cities in the US. You can find out more information about this on my website jordanbpeterson.com, as well as accessing all relevant ticketing information. I'm going to use the tour to walk through some of the ideas I've been working on in my forthcoming book, out November 2024: "We Who Wrestle with God." I'm looking forward to this, I'm thrilled to be able to do it again, and I'll be pleased to see all of you again soon. Bye-bye.

But you talked about sort of the concept of a reciprocity bank. That's what reputation is. Yeah, that's what... That's a good description. Yeah. And I think that... So, if I go hunting, you know, it's 10,000 years ago, and I go hunting and I'm successful, and I share with you, well now we have a mutual banking system. We have a relationship that transcends across...

Hello everyone. Today I have the opportunity to speak with Mr. Derek Cooper. Derek's the Chief Executive Officer of Q Medical, which is a private pharmaceutical company that specializes in the production of treatments and the origination of treatments for rare diseases. So, you can understand how that, properly done, could be a very worthwhile enterprise. I've got to know Derek over the last few years. He volunteered to be of aid to my enterprise in whatever way might be useful a while back. After investigating his background a bit, both Michaela, my daughter, and I reached out to him, and we've established a very productive relationship.

We work together on Ralston College in Savannah, Georgia, and he's a benefactor of that institution. And we've gone on a number of adventures together in Greece with the people from Ralston College, the students, and some of the other principles and benefactors, and that's been extremely interesting. I've had a lot of conversations with Derek about deep biological matters. He's an expert in immunological function, and as he's instructed me about the adaptations that the immunological system is capable of, we've been able to work out a mapping of the manner in which the immunological system works to stave off pathogens and the manner in which human thought and general behavioral adaptation progresses.

And that's one of the things that I wanted to share with everyone today, and I think we did that quite effectively, bringing the communication patterns of bees along for the ride. It's very interesting, you know, to talk to someone whose knowledge is quite disparate from yours in some ways, and still, where the communication still remains in the boundaries of mutual comprehensibility. So, I also walked Derek through his experiences as a businessman, first working for a large baked foods enterprise and then as an investment banker. We tied that into our biological discussion as well, talking about how experience can be mined to lead to what would you say the facilitation of broader and broader patterns of adaptation practically and conceptually. And so that's all on the table in this discussion.

So welcome aboard, Derek. Do you remember where we met and how?

Derek: I do. It was originally on Zoom. Actually, I was sitting right here, and Michaela introduced us. I reached out to Michaela back when you were having some health issues because I run a pharmaceutical company and just have some access to resources and offered to help however I possibly could, because I've over time developed a lot of respect for what it is that you're doing in the world.

Jordan: Well, you have been a tremendous amount of help. So for everybody watching and listening, I've worked with Derek since we've met. To a large degree, I suppose our most intensive collaboration has been with regards to Ralston College in Savannah, and we'll talk about Ralston as we walk through this interview. But Derek's also been very helpful in relation to the tour as well and has provided me with transportation and so forth when that's been extraordinarily helpful. We've also had a variety of extremely productive conversations, not least in Greece. So I've traveled with Derek to Greece as part of our collaboration with Dr. Steven Blackwood. Some of you watching and listening will be familiar with him as a consequence of The Exodus seminar, and Dr. Blackwood is president of Ralston College. Derek is one of its supporters and developers, and so we've traveled to Greece a number of times and gone to some remarkable places and had some amazing adventures, and also had the opportunity to get to know each other at a conversational and personal level. The conversations have been extremely enlightening to me, partly because Derek knows a lot in the biological realm, especially with regard to immunological function. That's something I really hope to touch on today.

We found all sorts of interesting parallels between how the immune system works and how cognitive systems work. Part of the reason I wanted to interview Derek today, apart from the fact that he's an interesting character on the entrepreneurial side as well as the cognitive side, is because of what he knows on the biological front. I thought that would be really interesting to bring to people's attention. So, let's start, if you don't mind. Let's start with your company. Do you want to describe it and describe its scale and exactly what you do?

Derek: Sure. Yeah, so it's a midsize, maybe large, private specialty biopharmaceutical company. We make drugs for rare diseases. So we focus primarily on genetic diseases and therapies for those diseases, which involve understanding the sort of genetic background for why those diseases may occur. Once you sort of capture that biological dynamism, you investigate how you can possibly counter whatever may be going wrong. The scale of our company? We have a couple hundred employees, primarily in the US, although we do have some European operations. We sort of run the gamut from the manufacturing side we have in-house to sales and commercial operations, as well as clinical development, etc. So we do a fully integrated biopharmaceutical company.

Jordan: So you told me at one time paradoxically that there's nothing rare about rare diseases when you take them in their cumulative sense, so maybe you could explain to everybody what that means.

Derek: Yeah, so I think that a rare disease, in the US at least, is defined as a disease that less than 200,000 people have. Typically, rare diseases are rare; each silo, each disease is rare because they tend to be fairly impactful to human health and can cause real problems. When they're more significant in terms of human health, they're less likely to have survived through evolutionary history. Each rare disease, in and of itself, is unique and relatively small in terms of the prevalence or the number of people that would have the disease. But overall, the total people with rare diseases, if you add up all of the categories of each individual disease, is pretty substantial.

Another thing that's happening, just as we evolve in the industry and learn more about the genetic background of different diseases, is that what we're learning is that they have implications for other diseases. So, a rare disease that impacts cognitive function, for example, we find that maybe minor mutations with something like that could have a broader impact on a disease like dementia, for example. The two could be related. And then you learn about the disease in a broader context by focusing on the sort of hyper-severe portion of the...

Jordan: Well, that's, I suppose in some ways that's almost a scientific truism, because it turns out that because everything is ultimately connected, if you investigate anything deeply enough, even something rare, you start to find commonalities between what you're studying and all sorts of things that are relevant in the broader world. One of the things you see in the careers of scientists often is that, you know, they start out to some degree maybe when they're undergraduates as generalists, then they specialize intensely on a phenomenon that might seem trivial because of its particular specificity—genetic mutations and fruit flies, I suppose, comes to mind—but as the scientist develops his or her career and starts to approach the limits of their cognitive ability, the connections between what they're studying and everything else start to become more and more apparent to them. As their careers progress, they become broader and broader in their range of knowledge. And I think this is partly why I think it's possible for people to follow what they're interested in, and to do that effectively, because if you follow what you're interested in, even if it's a pinpoint, it'll lead you to, if you do it properly and in a disciplined manner, and striving uphill, it'll lead you to wherever you want to go.

I guess this is partly also what happened to you, and I'm kind of interested in that on the autobiographical front because you started out in investment banking. You were in investment banking for 16 years, right? So maybe walk us through that and tell everybody how it is that your interests transformed across that period of time and how you ended up, first of all, in investment banking and then out of it and then into the company that you now run.

Derek: So when I left undergraduate school at Washington and Lee, I started in what's called corporate finance and investment banking, which is sort of the capital raising side. We would help small and midsize companies go public or raise debt and execute on an acquisition, that kind of thing. Then I ended up moving to a family-owned business that my father had built after working for a good-sized Fortune 500 company. For many years, he left in the late 80s and started his own company in the baked foods business of all things. I moved into the operations of a baked foods business; it was a good-sized company. We had 2,500 employees at one point, operations throughout the Southeast. We then sold that company about 10 years later. So in the late 90s, I worked for that company for a while, and after we sold it, I went to work for a company in Nashville, Tennessee, which was called a mezzanine capital. It was basically helping invest in small companies so they could grow. At the time, it was a lot of fun; it was right in the sort of peak of the internet craze. We were... chaos would be the defining characteristic of what was happening in the capital markets at the time. We were making a lot of investments in a lot of different small companies. Then that company was sold, and I sort of talked to my family and some friends, and we ended up putting together a private equity investment company that ultimately made an investment in this pharmaceutical company in 2003. I was on the board initially and got to know the company, and then joined the company full-time in 2010 as CEO, and I have been there ever since.

Jordan: So when you started out in the baked foods company, what did you—what did that teach you? What did that teach you about business? And so what did it teach you personally? What did it teach you about business? And what did it teach you that enabled you to make the move to the investment banking side of things and then into the pharmaceutical industry? The reason I'm asking, I suppose, is that you have an intellectual interest that we'll explore in relationship to biology, but you also have business knowledge and interest that enables you to not only investigate cognitively, let's say, and conceptually, but to run a business successfully and profitably and to manage people while doing that. And that's not an obviously overlapping skill set, so I'm curious to pull out the threads and to explain, you know, how both of those abilities developed.

Derek: So let's go on the business side first. You started with this baked foods company.

Derek: Yeah, so I think maybe it is more of an overlapping skill set because a baked foods company is defined by sort of a hyper-competitive environment, and it's very much what I would call a cost-driven business. What I mean by that is you have to watch your costs very, very carefully because the margins are thin. There's a lot of competition. We basically were producing a very high volume of like white bread and the basic stuff that you get on the shelf in a Walmart grocery store—white bread and wheat bread and hot dog and hamburger buns—and distributing them to... I mean, we had a facility in BD, North Carolina. They would make 50,000 pounds an hour, just to put some perspective on this. Because of that fairly low margin, cost-driven business, you have to manage the hierarchy of costs really, really precisely because anything that sort of grows or gets out of control can be detrimental to the cost of the business. It's sort of the extreme side of pencil sharpening, I would say.

I would say the pharmaceutical business, by contrast, is almost the complete opposite; it is driven by a focus on the intellectual property development around a unique approach to treating a particular disease, which is highly complex and requires an extraordinary amount of funding to develop the product and the patent portfolio around the product, and that kind of thing, as opposed to managing the cost explicitly. But your question's a good one; it's not one I've thought about before.

One of the things that we do somewhat uniquely with our company is we manage our costs pretty rigorously even though we don't necessarily have to because it is a more profitable business than baked foods, for example. But what I found in doing that is that it limits chaos because if you continuously hyper-focus on what it is that is your goal, and make sure that you are not allowing noise to enter the situation in pursuit of that goal, it's highly correlated with success.

Jordan: So I'm trying to think of that from a psychological and a trait perspective. We know very well that success in complex endeavors is primarily dependent on intelligence, but that personality trait variance also plays a role. And so when you're talking about very tight cost control, I immediately think of two things. One is conscientiousness—that's the ability to pay attention, that's orderliness and industriousness, and the ability to, and willingness—and desire for that matter—to pay attention to details—so details matter. And I would also suspect a certain degree of disagreeableness too, because when you're talking about control of costs, let's say to me—and this is partly practical experience speaking—that also means the ability to say no, right? Control implies no, right?

Derek: Right. So but then on the product development side, let's say with regards to the pharmaceutical industry, that seems to be more something associated with high levels of openness and creativity, an interest in intellectual matters. So that's a relatively rare combination—extremely high openness. And I know that's characteristic of you because I've talked to you a lot and you're unbelievably interested in ideas, but you're also extremely detail-oriented, so that's a relatively rare overlap of traits.

Jordan: And so it sounds to me like you really did, when you were working in the baked foods industry, did you enjoy the detail management that was associated with keeping the company functional despite it being lean?

Derek: No, that was not something that I found interesting. It's necessary, and I understood the value from a good management perspective, but I do—I am a bit of a chaos seeker from an openness perspective. I do like to explore new ideas, and so an overly ordered organization is not optimum for me.

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Derek: ... Well, I think you're conscientious, and that you have a certain degree of emotional resilience, so you're low in neuroticism. Those are the best predictors on the managerial front. On the entrepreneurial front, the best predictors are intelligence once again, because that's Universal across any domain that's complex, but trait openness—openness is basically aesthetic appreciation on the one hand and interest in ideas and intellectual exploration on the other. And my empirical investigations into predicting entrepreneurship showed quite clearly that the major trait predictor there was openness by a substantial margin, and so it sounds to me like you, when you were in your baked foods incarnation, let's say, that there was plenty of room there for conscientiousness, but not necessarily as much room as you have now for the investigation into deep problems, the intellectual investigation. Is that fair?

Derek: That's fair. That's a very good description.

Jordan: Okay, okay. But it trained you.

Derek: Yeah, I think that there's... If you're a very open person, it's good to work on the discipline. You know, if you're in a role like a CEO, ultimately your responsibility is strategic. You need to be looking ahead and deciding where the organization is going and what it is that you're going to do and how you get there. But you have to learn to constrain your own openness in terms of seeking those things because if you don't, you will become the biggest source of chaos in the organization. Because very open people tend to be, well, open to lots of different ideas, and so you have to discipline yourself on that front first, then I think that that propagates throughout the organization. Ultimately, it's like anything: you have to draw the boundary between Chaos and Order.

Jordan: Yeah, intelligently. Matter of fact, I think you could even define competence that way as the sort of optimum dynamic positioning of the boundary between Order and Chaos depending on the circumstances. And it does change because—do you have any idea how in your present business you make a decision about... So, okay, so if you're open, any given idea has a high probability of triggering a set of associated ideas, and the more open you are, the larger the gap is between the ideas that are triggered. So, in fact, when you're talking to highly open people, they'll jump from one topic to another, and if you're less open, you may not understand that there's any connection between those ideas at all. Now, the advantage to that is that you bring things together that are not normally conceptualized together—and also you're a seeker of multiple pathways, but the disadvantage, as you're inferring or even pointing out, is that if you have 40, if you have 30 open people working on a project, there's going to be like 900 ideas a day. And some of those might even be great ideas, but the problem is, well, most great ideas are still going to fail. The pursuit of any great idea is unbelievably time-consuming and costly, and you can't do everything at once. So how have you learned, do you think, to distinguish between the ideas that attract your interest that are worth pursuing and the ideas that attract your interest that are, you know, that you have to let fall by the wayside? And, you know, how have you learned to deal with that conceptually but also practically? Because you can have people around you that can help you with that too, so how have you solved that problem given your openness?

Derek: Yeah, yeah, you know, that's a good question. I hadn't really thought about it before. I think that what occurs is a process of sort of aligning the opportunity with the relevant sacrifice that you have to... In the investment world, we call it good capital allocation. So the way that you do this with investments is you sort of create a hierarchy of your opportunities, and whatever is at the top of the hierarchy, your very best opportunity where you can get the best return, you put as much resource into that opportunity; fill that bucket first before you allow... Warren Buffett says this in an extraordinarily pithy manner; he says, you know, when you're 25 years old, write down the top 25 goals that you have for your life, draw a line under number five, tear the page off, keep the top five, and don't ever change. You can make, you know, some changes, but it's capturing this concept of high focus.

So I think you have to—if you have an extraordinary opportunity, you're willing to direct more sacrifice to that opportunity, as you should. It's a mathematical balancing of the equation of how good is the opportunity and how much is it going to cost to pursue it.

Jordan: Right, right. Well, so there's a number of avenues of exploration that are germane to that observation. So one is, if you talk to managers of small and large companies about what frustrates them, one of the things you find very rapidly is they're frustrated by the constant necessity of having to put out fires. So they're so busy dealing with like crisis minutiae that they never get a chance to strategize over the long run or even to sit down and think about what a reasonable medium-to-long-term strategy is. And that is not productive. But part of the reason is this: the typical manager—so the typical manager, first of all, fails. The empirical estimates are that 65% of managers add negative net value to their companies, right? So that's a pretty damning statistic.

Derek: Yeah, I do think that's mostly chaos.

Jordan: Well, that's... So what happens to managers very frequently is that they spend the majority of their time with their worst employees; and so the perverse management strategy, which is well-documented empirically, is that you do the same thing with your employees that you do with your goals, according to your description, which is you figure out the people who are stellar performers, and you spend all your time with them. And part of the reason is that the payoff as a consequence of facilitating your stellar employees or partners, let's say, is exponential and not linear here. And so also the probability that if you're dealing with problem employees that you're going to be able to do anything for them in the medium-to-long run is extremely low. You don't have the time or the energy, and they may not have the inclination. I mean, managers aren't clinical psychologists and their employees aren't people who are coming to them for psychological help. So there's an analogy there, no?

Derek: Yeah, yeah. I think that that's directionally partially correct. I might say it a little bit differently. I think that at a high level, it's definitely a Pareto distribution, and you want to focus your time and energy on the sort of uber-competent people that can get a lot of things done. But you need to build a functional organization that has a lot of different people in a lot of different roles, and you can't do that by saying, “Well, we're just going to focus on these two or three superstars and hope everything else works out.” You have to understand how the entire organization functions, up and down the hierarchy.

And I would say that chaos, to me, if things start going wrong in some element of the organization, it's, you know, the sort of hyper-manager conscientiousness types that you're describing—they want to just get rid of the chaos. They don't want any change; they don't want anything to disturb the organization. I don't think that's actually exactly right. I think there's more subtlety to it. I think that when you... and sort of the sign of chaos, to me, is that the idea proliferation just kind of starts to go crazy. You get all these “Well, maybe we should do this” and “Maybe they're competing ideas.” And that's, I think, in the business context, a sign of one of two different things: either you have not communicated the goal clearly as a leader, or you don't have the right goal and people aren't sure what to do.

So they're actually doing the right thing in the sense that if you don't know what to do, and what you are doing isn't working, changing is a good idea. Now, that doesn't mean that you necessarily are changing in the right direction because you may or may not have access to or be privy to what's going on in other aspects of the organization, but it's, to me, a sign—it's a smoke signal of something that you need to pay attention to.

The other thing that I typically see that causes chaotic behavior is people have a goal; the goal is relatively clear, and they realize they're not going to be able to make the goal. There's sort of a fear or threat aspect that starts to occur, and they feel like whatever it is that they're doing isn't working and they need to make a change in order to make sure that they're successful.

So both, in a sense, those reactions are correct, but you need to understand what it is that's motivating the person to change direction so that you can either help them get to the goal or make sure that the goal is clear. It’s not—it's not necessarily just that there's a misalignment of competence, I think, which was your description.

Jordan: I guess I'm also wondering—it may be the case as well—it's complicated when it comes to intelligence because intelligent people tend to perform better wherever they're put if it's complex, but you could imagine a situation where there's a lot of different subgames in your corporate environment and they're all necessary. So maybe there's a distinction, let's say, between sales and research.

Derek: So that's a good distinction. The great people on the sales side aren't going to be the same people who are the great people on the research side.

Jordan: Absolutely. So, there's going to be a distribution of competence by specialized bins. I mean one of the things we know psychologically about specialized bins, let's say—for example, because you might ask yourself, “Well, how do you conceptualize the different... What does it mean for an occupation to be different from another occupation?” Right? Because obviously, nurse and doctor are similar, but probably, you know, doctor and graphic artist aren't that similar. So it is the question of what constitutes similarity and interest seems to be relevant in that regard, right?

Derek: Yeah, you know, I think that your goal is to run an organization, but—well, I'll focus on a pharmaceutical company. If you want to run it well, you absolutely need to understand people. And I think that one of the things that you've been tremendously helpful to me with is things like the Big Five personality profile and understanding myself. And I think if you can understand what it is that you're good at and what it is that you are not good at, and there's a key component to that which I'd describe as epistemic humility, you have to know the boundary of what you know and what you don't know and, if you can fill in the gap or if you can understand that and fill in the gap properly, then the organization will function better because...

Jordan: Right, right, because you're sort of aligning different skill sets appropriately with what needs to be done.

Derek: So I think—and you know, another key component to this I would say I’ve learned from listening to you is that because different people perceive the world differently, you have to understand at least somewhat—you have to have some concept of what their reference frame is. Because if you're a highly ordered, you know, conscientious person, then someone who's a creative marketing person is... it's almost a different language in terms of how those people view the world. And so you need to sort of align the way that you communicate with the recipient of the communication because, I mean, it literally is almost like a different language.

Jordan: Right, right. Well, and you know, we hear a lot of squawking about diversity in the culture wars that are raging, but there's relevant appreciation for diversity. And true diversity is actually diversity of temperament because we know there are five temperament dimensions. We know they're normally distributed, and we know that there are different skills associated with them, and that those differences are real. So we know, for example, if you're extroverted rather than introverted, you're going to be motivated by social interaction, and it's going to energize you rather than drain you. And it's highly probable, especially if you're involved in sales—this isn't invariable the case, but it's highly likely that, like sales, especially sales that involve a lot of presentations, a lot of people, a lot of group presentations— that's much more suitable for someone who's extroverted. Now, extroverts can also be impulsive, and in the extreme, there's pathologies associated with every skill; they can also, you know, that can degenerate into mania. You don't get anything without a cost.

But it is extremely useful to know that people are actually different. You know, the people who are higher in neuroticism, they're going to be much more sensitive to threat, and so you can imagine that that would be one of the things that would stop them from taking risks. And that might be a very bad thing on the strictly entrepreneurial side, but you might imagine too that having a few people around that who serve as canaries in the coal mine could also be extremely useful. And agreeableness is particularly interesting in that regard because there are really pronounced advantages and disadvantages at the ends of the distribution. So, disagreeable people, they're much more likely to bargain hard for themselves, so they're going to be formidable competitors, and they're going to be super blunt, and they can be blunt enough to be offensive especially if you're agreeable and neurotic. But they'll tell you exactly what the hell's going on, and if you need a foil for yourself and also someone who, if allied with you, can help you stop you from being taken advantage of, they're unbelievably useful. Whereas agreeable people, they can be taken advantage of, but they're very good at facilitating social bonds between people and making the environment have that feeling of closeness and intimacy. Now that's not always appropriate, but sometimes it's unbelievably useful.

Derek: Right, and so people will tell you what they really think and I find that incredibly helpful because if I'm making a mistake in leading an organization, I need to understand that it's a mistake, and agreeable people won't tell you that you're making a mistake because they don't like to upset the apple cart.

Jordan: Yeah, yeah, they don't like interpersonal conflict at all.

Derek: Yeah, yeah. So you know, we can see there that one of the upsides of viewing the world this way is that you can understand that people genuinely differ in their abilities, but there is a very large number of potential games that people can play. And if you're running something like a corporation, there's plenty of games within the corporation where you can identify the players properly, and you can put them into a game that they'll be highly motivated to play, and so you can get the advantage of that diversity.

Jordan: Right. You can get the advantage of the diversity, you can maintain your standards of excellence—all that happens, though, is the excellence in what you're measuring in terms of excellence in performance is going to change. And so that would mean, for example, that you're not going to look for the same kind of performance, as you said, from a creative marketing director that you might expect from someone who's assigned to manage and carefully control costs.

Derek: Absolutely, absolutely. I mean that is a very good description of good management right there, is to align personality and competence with the job.

Jordan: Right, right. Well, that's a good definition. That's a good definition of merit, that's also not particularly exclusionary. Now, Derek mentioned—for everybody who's watching and listening—Derek mentioned this Understand Myself site, and so Understand Myself is a site I set up with Dr. Daniel Higgins and Dr. Robert Peel, who I've interviewed on this podcast, to help people understand their personalities. It offers people a five-dimensional analysis of their personality, and five dimensions is a lot, by the way. The world has four dimensions, and personality has five; it's a very complex structure, and it breaks each of the two dimensions further down into two aspects, so it gives you ten different aspects of your personality. And so you can take that and find out where you sit, what your relative strengths are in relationship to your temperament and what your relative weaknesses are. And if you take it with your partner, then you can find out theirs as well, assuming that they allow you access to it. You’ll also get a report that details out your similarities and differences with that person because that's also really useful to know. I mean if you're talking to someone who's disagreeable and you're agreeable, they are really looking at the world quite differently than you are. And so if you don't understand that, there's no shortage of opportunities for misunderstanding and friction, and if you do understand it, as you said, especially if you're talking to someone who has a personality trait that you lack, is that they're going to be able to shed light on elements of the world that are somewhat opaque to you.

Derek: Exactly. I mean, I think that's one of the problems with things like Twitter: the algorithms are driven to aggregate you into echo chambers of people who see the world similarly, but that's not how the world works. We need good operations people and good sales and marketing people and good scientists, and those are all different skill sets, and they have to talk across an organization in order to be able to function optimally. So you can't just stay in your silo and just do what you want to do without understanding that, you know, the distribution function is not functioning optimally, then it's going to cause disruptions for the sales team.

Jordan: Right, right. These things have to align across perspectives, I guess. So what did you learn in addition to what you learned in the baked goods industry when you moved into investment banking, and how did you learn to... I presume—I mean the first thing I guess I would like to know is exactly what is it that you did and then what was the utility in that, like socially and also in terms of your later development and work in the enterprise that you're pursuing now?

Derek: Yeah, I think investment banking is a highly technical, highly conscientious—I mean you work 100 hours a week. I mean it's a pretty brutal environment, but you are exposed to an unbelievable stream of CEOs and CFOs. You're only dealing with people who have been very successful running businesses and they're looking to take their business to the next step, and it's a pretty amazing educational environment because you're working hard and you're being exposed to people who are highly competent, and they're looking to take the business to the next step. So you're involved in that whole process in terms of writing a description of the company and what it is that they do, so when you go market it to institutional investors and whatnot, you can say, “Look at this amazing company that's created this new software” or whatever it is. You have to... you become the financial marketing arm of the organization and so you have to do all of the analysis on what the... how competent the company is from an income perspective, and how sustainable they'll be, what their growth opportunities are. So you're hyper-exposed to a lot of very high-level financial and operational concepts at a very young age. It's a very open environment. You work on one deal for three months and then go right into the next one and then go right into the next one.

Jordan: How many companies do you think—you evaluated, oh my gosh, I don't know. I couldn't—hundreds.

Derek: Hundreds.

Jordan: Yeah.

Derek: Uh-huh.

Jordan: And how long do you think—how many did you have to evaluate, do you think? I mean, I know you came from a business background when you moved into investment banking, but how many companies did you have to evaluate before you felt that you knew what you were doing? And what is it that you were looking for? I mean, so we could imagine, okay, so—and I'd like to start from basic principles. So, as Derek pointed out, if you run a company and you want to make it grow, at some point, it's possible that you're going to look for additional funding. And so if you go to an investment banker, you're going to find people who will invest in your company, and they're, you're going to—they're going to take a piece of your company as a consequence of working with you. And so there's a risk on both sides. The risk to the investment bank is that the company fails or is fraudulent, and the risk to the person who's running the company is that someone else will end up with more control or more ownership than might be optimal, as far as they're concerned, of the enterprise. And so that has to be negotiated. And so, as an investment banker, you're in a situation where you have to evaluate a company's probability of success. Now, that's a very tricky thing because there's many things other than the apparent creativity and utility of the product. Right? There's the management team, there's the timing in the market, there's the marketing team—there's an endless number of things that go together to make a company work. And it's not at all obvious that you can take a look at a portfolio of stocks, and you can assess the companies and predict which stocks are going to perform well because most money managers actually do worse than chance.

What do you do? Do you think that it's different in investment banking? And there's something I else I'd like to introduce into that. So investment bankers look for—they're hoping to... This is my understanding of it—they're hoping for at least something approximately a ten-to-one return on their investment. And part of the reason they're looking for a return that high is that a number of the companies that they evaluate that look good won't succeed. And so there will be substantive losses. Did you get to the point where you felt that you were credible in your analysis of the growth potential of companies, and if so, what did you learn that enabled you to make that determination?

Derek: Yes, probably not then. I was too young to be able to do what it is that you're describing. I would say that I've gotten a lot better at it since then. One of the primary teachers is science itself. What I mean by that is science teaches you the discipline—if you pay attention, the data will really help take you to the right answer. I think a lot of investment banking and sort of investing in earlier-stage companies is a bit of a—call it Kentucky windage in the South—but it's making guesses as to the competence of the management team and whether or not the idea is going to explode and take off.

What science says is, “Get hard data and then make a decision.” It's much more cold and calculating, analytical, and much less intuitive. Now, I do think that intuition is important for being a good scientist. You can't just rely on what the spreadsheets tell you. But there again, there's an optimum balance to... You have to... if the data tells you something different than what your intuition is telling you, listen to it, no matter where you're listening.

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Derek: Well, it's tricky too, it seems to me. I suspect that one of the things you're also trying to figure out, and this would be harder to reduce to data, is that when you're entering into a partnership with someone that you're going to fund, one of the things that you're also attempting to specify is whether your team can work productively with that team, and that's also a matter not so much of initial analysis but of continual negotiation as you're getting to know each other, I would presume.

Derek: It is, and I'm disagreeable enough to very strongly prefer running the business myself.

Jordan: Right, right! That's a tangible interaction with the organization that I think is tremendously beneficial, in terms of sort of really more clearly understanding what it is that you're doing and making sure that the various functions, up and down the hierarchy of the organization, also understand that.

Derek: So it's hard to make sure that that communication game is played effectively. And if you're more removed—right—at the investment level, your source of information is less reliable, and you're much less likely to get the smoke signal of the chaos somewhere halfway down the organization, that something's not functioning well.

Jordan: I think that's why so many big enterprises inevitably fail—they get layers and layers of operation and at some point the information can't propagate up the layers without disappearing or becoming biased in a way that's unproductive. Like, there might be a built-in failure to gigantism in that manner for some of the reasons that you just described, is you just don't know what the hell's going on anymore.

Derek: Yeah, I think that's part of it. I think you don't know what the hell's going on, but I also think a big part of the reason you don't know what's going on is because the chaos tends to become a self-fulfilling propagation function. And so as you add more layers, the mid-level layers add layers themselves. Because at some point, what starts to happen is the number of people that you have that report to you is defining characteristic of success. So it's not “Are we achieving the goals as an organization that we want to achieve?” It is “How many people do I have reporting to me?”

Jordan: Right!

Derek: And so the tendency to sort of build thorns is just inevitable in a large...

Jordan: Right too!

Derek: Well, and there's some evidence, you know, from the comparative Anatomy or the evolutionary biology end of psychology that human groups tended to fractionate at about 200 individuals. So you could imagine that if 400 individuals are reporting to you, let's say that you actually can't keep track of the permutations of their interactions, right? And so that's a recipe for chaos as well.

I talked to Frank Magna, who’s run a very successful organization in Canada, and he had a rule, and I can’t remember precisely the rule, but his factories were capped at something like 400 employees. He just built another factory after he got bigger than that because it was his experience, you know. And that might be somewhat unique to him, but I think the general principle is reasonable, is that once the enterprise got to—it could become unmanageable in terms of size and scope, and then it didn't know what it was doing anymore.

Derek: Yeah, yeah, okay.

Jordan: So let's turn to your current company. And so the first question I would have for you is how in the world is it that you've been able to run a profitable enterprise concentrating on rare diseases, when, you know, that's an interesting niche? And the fact that they're rare should indicate that there isn't—this is the standard excuse, as far as I've been able, or reason, as far as I've been able to determine—for the fact that not that much research effort is put into addressing rare diseases.

But you have this niche where you seem to have managed that and also to be profitable. You know, and people who are somewhat soured on capitalism listening to this might think, “Well why does profit matter?” and the answer to that is, “Well, it's an index that you're running an efficient organization.” But without profit, there's no growth. So, if you're not careful enough to run your enterprise profitably, it's not going to thrive.

Derek: Yeah, I think on the ethical sort of the implicit ethical question there, I think one of the—there's a distinct advantage in my mind of running an organization that is profitable because it is doing something that is actually good for people. If you develop a drug that actually really helps people, there’s an ethical exchange that occurs there. Yes, it is costly for the patient or the insurance company to buy the product, but you're actually doing something that can be transformative in that patient’s life. So it's a pretty valuable trade, I think, to do something that really benefits people’s lives and can make dramatic changes in their health. I mean, that’s certainly a good thing to be able to look in the mirror in the morning and tell your—and realize that's what you’re doing.

Jordan: So why do you think that matters? I was just talking to Jocko Willink yesterday and one of the things Jocko said that he learned in the military, and this came as somewhat of a surprise to him—partly because he’s a pretty rough guy—he said he was quite shocked at how much pleasure he took, implicit pleasure he took, in the mentoring and development of other people’s skills. He didn’t know—although learned quite rapidly—that that was an innate source of motivation and pleasure.

Now the cynics with regards to capitalism or the cynics with regards to human beings, you know, they basically make the claim that, well, fundamentally people are motivated by nothing other than power, right? Or maybe some combination of power and hedonism because you need power for some reason, and it’s usually to serve some hedonistic goal. So, and they would say in response to you know a claim like the one you made is that, “Well, you’ve made a lot of money and you’ve accrued a lot of power as a consequence of addressing these rare illnesses, and the real reason you did that was for the power and the money. And the claim that you’re making, that you know can be reasonably satisfied when you look yourself in the mirror—or at least not too guilty—that’s just a cover story for these other more fundamental motivations.” But you claimed that as a primary motivation and so why do you believe that even of yourself?

Derek: Well, the answer for me is because I know how I view the world. But, you know, I think that the thing that motivates most really competent, successful people that I know is a job well done, a functioning organization. There's an element of deep satisfaction that comes with well, you know, closing the entropic gap, as you would say—and moving towards a goal that is... It's probably dopamine related, and has something to do with—there’s satisfaction in doing something, doing something well. You know, I think we could look back to ancient Greece and Patmos and Samos and some of the islands that we’ve been on, and that’s really where capitalism developed.

And you know if I make olive oil on my island and you make wine on your island, and we trade, there's an implicit ethic in that because if I make rancid olive oil—and this is where the postmodernists are just completely wrong—they think that that narcissistic, you know, self-interest is the sole motivation; but if I make rancid olive oil and you stop trading your wine with me, I’m not going to get any more of your wine—I might get some vinegar. I might get some vinegar.

Jordan: That's exactly what's going to happen. And so, you know, there’s a—and you know, it feeds on itself in terms of if you elevate your game and you make better wine, then there’s an implicit call to me that, “Hey buddy, you gotta step up your game,” because my wine— I now get 10 bottles of olive oil for one bottle of wine because my wine's so much better. And so there's an invitation to excellence that is an implicit aspect of the ethical side of capitalism that the...

Derek: ... That's the point. See the other thing that blinds people's vision to some degree is that we use terms that become abstracted and then carry with them an unfortunate baggage, and capitalism is likely one of those. You know, and it's more what you're pointing to, especially the implicit ethic, I think is more simply conceptualized in relationship to voluntary exchange. You know, I think if you ask the typical college student if they’re opposed to capitalism, they might be inclined to say yes, but if you ask them whether their capacity to engage in voluntary exchange should be restricted, they’d say no, right?

And so the case you’re making is twofold with regards to implicit motivation. One is, once you specify a goal, there’s an intrinsic pleasure in moving efficiently towards that goal, and then you might say, “Well, you know, if the goal is destruction of other people, there could be implicit motivation in moving towards that, and sometimes that’s true.”

But I would say that that's not a goal that's very easy to sustain in a social community, right? And then that moves us into the second domain, which is if you’re in a social community, you are in a community of exchange. Even if you’re not exchanging goods, you’re going to be exchanging glances, you’re going to be exchanging ideas, you’re going to be exchanging—well, to the degree that you’re interacting with other people, you’re exchanging. Then, if those other people repeatedly—the exchanges are going to be iterated, and we know that this has been mathematically modeled. I’ve been reading Robert Axelrod’s book on Tit for Tat, computer competitions. We know perfectly well that there are emergent ethics; there are ethics that emerge out of iterated exchanges and you...

Derek: Okay, so you imagine that any goal that you have that’s going to be sustaining is going to have to serve the purposes of iterated exchange because otherwise it’s not going to function in a social environment. People will just punish it out of existence. So that sets a set of constraints on what your goals are going to be. Okay, so now you have a set of constrained goals; if you paint one of those goals and start moving towards it, there’s going to be pleasure in that.

But then you've added an additional layer to that, which is, well, okay, imagine you have goal A and I have goal B, and you produce something and I produce something, and we're going to exchange our products. There’s an implicit ethic that’s going to emerge out of the repeated exchange as well. One of them is going to be, I’m going to try to match your quality because if I don’t you’re going to find someone else to play with.

Derek: Yeah, I think you actually touched on this in quite an elegant fashion, but I think it was with CEO Si, when you did a podcast with him, and you guys talked about the concept of a reciprocity bank. That's what reputation is.

Jordan: Yeah, that’s what—rep, that’s a good description. Yeah, and I think that... So if I go hunting, you know, it’s 10,000 years ago, and I go hunting and I'm successful, and I share with you, well, then now we have mutual banking system. We have a relationship that transcends across time, right? Because the next time you hunt, you're successful and I'm not, you're going to share with me. And I think that's a good description of the same thing.

And the wine-olive oil example—so Derek, I’ve been writing about—I’ve been writing this book, "We Who Wrestle with God," as you know, and I’ve been closing it up. I’ve been writing the final chapter, which is a chapter on the gospels, and one of Christ’s injunctions, I believe it’s in the Sermon on the Mount, but it may occur in other places, is to store up treasure in heaven and not on Earth, where moth can eat it, or rust can get at it, or it can be stolen. And I’ve been trying to understand what that means.

Now, a lot of the ethic that’s embedded in the gospels and in the biblical corpus as a whole is an ethic of eternal view. So the idea is something like, so Abraham, for example, becomes the father of nations because he embodies a set of paternal attitudes and actions that propagate best across the longest conceivable span of time and in the largest number of situations. So you could imagine this is why the selfish idea with regards to propagation and genetic propagation doesn’t make any sense to me. You know, because human beings have this long-term investment strategy with regards to their kids—you don’t just have sex and reproduce, that doesn’t work at all. In fact, if you just have sex and reproduce, your children are very much likely to die. They’re going to be abused; they’re going to be abandoned. So you have to have sex and then you have to invest for, okay, 18 years—that’s a long-term strategy. But it’s not 18 because there’s grandparent investment, and there’s even great-grandparent investment.

Then you might say even there’s—if you conducted yourself properly as a father, you would embody a set of sacrificial gestures that would maximize reproductive fitness across the broadest conceptual span of time. Right? And so that’s an implicit ethic now—a fair bit of that has to do with reciprocity. So when Christ says that you should store up treasure in heaven, and that that’s the most effective form of treasure, what he’s essentially referring to, at least practically speaking, is something like reputational integrity.

So the idea would be, you know, a currency can inflate and collapse, and you can lose everything, but if you’ve stored up a body of goodwill in a distributed community, well, even if everything around you falls apart, you’re going to have people who are perfectly willing and eager to come to your aid, just to fulfill their obligations of reciprocity. That’s the hospitality, by the way, that’s made so much of in the Old Testament, right? And so—and what this is—I think human beings really figured out is that our best investment is in the minds of others.

Derek: Like our—and then you can imagine how that can be gamed, right? Because if the most important thing I have is my representation in the minds of others, then I can use narcissistic manipulation and moral manipulation to game that reputation. And here’s another thing that happens in the gospels that’s so bloody interesting is, so Christ’s primary enemies in the gospels are the people who game reputation. And so he goes after the Pharisees and the scribes and the lawyers, and he basically says, “You people are claiming to act under the ages of divine inspiration, but all you’re doing is falsely elevating your status in the marketplace.” Right? They’re—you're—essentially exactly what he tells them, you know?

Jordan: And so they’re gaming the system in order to falsely obtain reputational points and that’s...

Derek: Well, there’s no difference between that and virtue signaling; are there, those are the same thing?

Jordan: Yeah, yeah. So what do you do? Okay, let's go back to your company. What do you think—do you think that’s effective in terms of motivating your—the people that you’re overseeing and mentoring? What do you do in your company that’s effective in terms of providing them with a clear vision, and what do you think the consequences of that are?

Derek: I think that part of it, we've touched on. You have to understand how communication propagates differently throughout different functions within the organization. So, and, but, you know, ultimately there’s a hierarchical aspect of good communication of a goal. You have to have a clear sort of superordinate goal for the organization. This is what we’re going to do, and then translate that goal to individual process steps and actions for different functions across the company. So, if our goal is to sell a certain amount of product, well, we need salespeople to find a certain number of new patients in order to achieve that goal, and then we need to make sure the manufacturing team understands they have to produce this product at this level in order to achieve that goal. And so it gets translated into different pertinent, you know, functional area pertinent goals. But all of those are subordinate to the overall objective of the company.

A lot of it's just a matter of translating that. You do want to state the high-level goal to make sure everybody understands it, but then try to clearly communicate how that is translated to what it is that you need for them to do. So, but people really appreciate clarity of goal setting. It's comforting from the standpoint of—well, you want to know what it is that is going to be the defining characteristic of success, right?

Jordan: Right, well, and a failure for that matter because then you can avoid failure. People don’t want to know what that is. It is—that’s the no fun part of it. But you do have to set a goal because if you don’t set a goal, you can’t accomplish anything because you don’t know what it is that you’re supposed to be doing. I mean, it’s sort of a statement of the obvious, but I think that goal setting is implicit in it. It’s wrapped up in who we are, right? Like, I think your identity is goal integrated; it’s integrated into goal setting, which, which is responsibility, which is setting that boundary. If your goal is to become a good lawyer, well then you need to understand the law. You have to execute the law well in terms of your responsibility to your client. It sets the goal. Your identity sets the goal for what it is that you’re doing every day. It’s your responsibility in the world. If you want to be a good mother, you have to take care of your children. And so I think, without a goal, it’s—you can’t—I don’t think you can have an identity.

Derek: Well, you certainly can't have clarity of emotional...

Jordan: Well, I think that— I think that identity, properly understood, is visionary and subsidiary. So you need the highest order vision, the thing at the pinnacle of the pyramid, and then you have to differentiate down into actionable steps, right?

Derek: Yeah, yeah. And I think that is what identity is, and in the absence of visionary identity, we default to things like sexual identity or ethnic identity or, you know, those are all... We fractionate is what happens.

Jordan: Yeah, well, we certainly fractionate without a uniting vision, virtually by definition.

Derek: Well, the other thing too that happens with clear goals is—and this is so important in terms of managing chaos—is that if the goal is clear and even the steps are clear, then there’s no anxiety-producing ambiguity. So you control a tremendous amount of both entropy and negative emotion, but you also make the criteria for movement forward clear. And what that literally produces is positive emotion. Like, as soon as you establish a goal and you move towards it, you feel positive emotion. That’s how the system works.

Derek: Well, I think one of the most important aspects of narrowing focus is that, well, the goal—you could reinterpret a goal as all of the things that you are not going to do. Because the things that are going to distract you from the goal... If you pick an example in biology, if you are a lion pride and you are approaching a herd of zebra, what the alpha lioness does is she actually communicates to the entire pride which zebra they’re going to carve out and focus on. So she communicates the goal to the pride so they can set a boundary and separate that zebra from the rest of them, and then the whole pride can pounce on that zebra, and it makes the hunt much more effective when you target your efforts highly specifically.

Jordan: I think that's what a hierarchy is—it's a procession from a general to a specific. It's the same thing as a fractal, etc.

Derek: Right, right. Well, so that means what the lion is communicating in large part is just how many zebras we’re not going to chase today.

Derek: Exactly, that’s exactly it. And what the zebras are doing, as prey animals—I do fundamentally think that a predator is an order-creating, hierarchy-seeking action, and that prey often do— not always, but most of the time—they try to disrupt the lion's hierarchy. So they do that with their camouflage; they start running around.

Jordan: Yeah, they just start running around, zigging and zagging. And actually, what the camouflage with the black and white stripes does is disorient the sensory perception system of the lion so they can't actually pick out one particular zebra. You know, birds do the same thing; if you come up on a covey of quail, a raccoon approaches a covey of quail, they just explode in 40 different directions at once, which disorients the predator.

Derek: Right, right. And deer do that because they leap randomly into the area.

Jordan: Yeah, exactly. I think it’s fundamentally a similar prey behavior across almost all species.

Derek: I mean, bees do the same thing. When the bear comes along and tries to steal their honey, the whole swarm of bees just starts... they create chaos for the bear; they start stinging him all over the place.

Jordan: Right, so there's...

Derek: But just the scientist that figured this out about zebras—I don't remember the name, but it's fascinating—they darted a zebra and they just painted a red stripe!

Jordan: I think that was Spolski. I think that was Spolski.

Derek: I think so. So they basically disrupt the zebra’s chaos mechanism...

Jordan: Alright, so this is a good one of the things I wanted to talk to you today about was immunological function, and this is actually a pretty good segue into that because one of the more fascinating things you taught me about was exactly how the immunological system targets its prey. Why don't we take a segue into that? This is obviously someone of interest that you had on the biological front that overlaps with your pursuit of the cure for rare diseases. But do you want to walk everybody through a brief description of how the immunological system adapts to a target?

Derek: Yes, you actually covered this in... I think it was maybe with Hoffman, but you called it true enough. I think it's actually a very, very good description. So there's a sequence of activities that I would say seems to be a fairly common behavior pattern within biology generally, and the immune system follows this same sequence. When you’re confronted with the randomness of a pathogen, the first thing you do is react randomly. Because there’s just no other way to deal with randomness other than wander around randomly.

Jordan: So you throw everything, including the kitchen sink at it.

Derek: Yeah. Not well... yes. And so what happens is, and this is part of the reason you get tired when you first get sick, you've got a bacterial pathogen that gets into your bloodstream and it's growing and proliferating. What your immune system does is it creates millions—billions of different plugs would be a good way to think about it, and each of those plugs has a slightly different structure. An analogy might be, you know, an American plug versus a European plug for plugging in your computer, but imagine there are billions of them. And so the surface of a bacterium actually is highly specific. It's got curves and valleys. You get it—it's like the island of Britain has a geography—there's geography. So what the immune system is trying to do is identify specific aspects of that geography in order to be able to identify the bacterial cells themselves, because once it can identify a particular shape in that geography, then if that shape is the same for all of the bacterial cells in your body, then it can identify every single one of them. And so what it's trying to do is map the bacteria essentially, and it uses a really highly sophisticated sequence from the general to the specific in order to do that.

Jordan: And it starts with sort of a general high-level shape recognition...

Derek: ...You described this, I think, as a child grasping at a ball that doesn’t know how to grasp yet.

Jordan: Right.

Derek: And so there’s... Right, they use their whole arms. They use their whole arms and it’s... they can kind of grasp.

Jordan: So the first thing that happens is the whole-arm grasp of the bacteria is not very good, but what the body does is it takes the few antibodies that sort of grasp generally, they get a little bit of a hold on the bacteria, and they concretize that first level of analysis.

Derek: So how does the immune system, like how did the cells that get that initial—how do they communicate the fact that they've established that grip?

Derek: There are other cells that come along and they analyze antibodies that are plugged into things. They test and say, “Well, is this antibody plugged into something that I recognize, which would be a human cell?” And they say "No, no, don't bother with that.” Or they look at, “Is this something that I’m familiar with or I know?” And they say “No.” When the T-cell answer is “No,” then what ends up happening is that antibody that sort of vaguely grasps the bacteria—it gets copied. So the immune system stops making all the wild variations and it starts making more and more of the first level of antibody that has a little bit of grasp. And then what happens is that that sort of first level grasp—call it from the shoulder to the elbow, sort of the childlike vague grasping at the ball—becomes concretized.

Jordan: And then there’s variation.

Derek: This is all called what's called the Chimeric R region, but there's variation from the elbow to the wrist. So this part of... There are millions of copies made from here to here, and then this part is allowed to flex, to vary.

Jordan: Yeah, varying.

Derek: And so as that part varies, what will happen is some copies of from here to here are better graspers, some angle actually fits the fractal structure of the bacteria better, and then you get from here to here.

Jordan: Okay, so this whole section from your shoulder to your wrist is fitting better than just this section.

Derek: Yeah, then what happens is that gets copied over and over and over again, and this part is allowed to flex.

Jordan: Right, right.

Derek: So then you get grip like this, and so the grip just proceeds with a higher and higher level of affinity—it's precision—it's proceeding from the general to the specific, and it’s getting better and better.

Jordan: So you could imagine, imagine trying to map a coastline with blocks, and so you could imagine if your blocks were ten miles by ten miles, you could push them against the coast, and they obviously wouldn’t fit very well because they're very low resolution, but some blocks would fit better in some areas of the coast than others. And so once you got the ten square mile blocks in place, you could proliferate, like one mile by one mile blocks, and then five hundred foot by five hundred foot blocks, and map the coast very, very precisely.

Derek: So what you're describing is a fractal dimension, actually.

Jordan: Right, right. And so I'm going to use a slightly different analogy and translate that to... So imagine you could get on a 200-foot boat and just sail around the island of Britain. I think that's about 3,000 kilometers, or you could go in and out of every cove, and that gets to 6,000 kilometers, call it, or you could get on a 10-foot rowboat and go in and out of every river and little nook and cranny, or you could use a one-foot measuring stick and measure around every single rock.

And so when you—a fractal dimension is a way of measuring the complexity in something, and the way you can discern this is that as your measuring stick decreases in size, the total perimeter of the island of Britain is going to dramatically logarithmically increase. And so you go—as you go from a 200-foot yacht to a one-foot measuring stick, you go from 3,000 kilometers to 300,000 kilometers.

Derek: Right, right. You get astronomical increase. So what the system does is sort of true enough—I think your description is perfect—it’s sort of optimum fractal dimensional Goldilocks. It finds one or two or three different, what are called epitopes, and so it just maps one cove; it maps part of one cove. And then once it gets that—that that cove is the same on every—you imagine there are thousands of Britains all over the Atlantic Ocean, and you map one cove; now your immune system goes, “Okay, I know this, and I know this one cove, and all of these bacterial cells have this cove, so I know how to identify all of them.” I don’t need to keep mapping the whole entire thing, right?

Jordan: And good enough in that situation would be the immune system just has to map that organism well enough so that it can stop it.

Derek: Yes, yes! And that’s a kind of understanding, right?

Jordan: Well, this is part of the reason I got attracted to the New England pragmatists, because they have a philosophy of knowledge that's very much akin to this—is that how do you know when something is right? It’s like, well, first of all, you have to set a target, and then it’s right if you can use it to hit the target, and that’s actually the definition of what constitutes right. I think it's the right boundary between Order and Chaos.

And I mean, you added a definition of truth, I think it was with Sam Harris, of evolutionarily advantageous—basically something like that, right?

Derek: So, here’s the definition: If your immune system identifies a couple of epitopes or coves on a bacterial cell, and it wipes out all the bacterial cells, it can identify the bacterial cell, it’s done! And then the really interesting thing happens is, then that library gets encoded in almost like a language in what’s called a memory B cell, and those are kept in a library. And so the next time that bacterial cell comes into the body, the sequence of fractal dimensions of antibodies from the broad to the more and more specific, that’s all maintained! So it can identify the bacterial cell at multiple levels of analysis—large coves and small cove—right?

So if there’s a mutation, it doesn’t have to start from square one; you can go back to sort of halfway between the general and the specific and start at the point where the fractal dimension no longer matters.

Jordan: Okay, okay. So there are two things that are relevant there practically speaking, I would say. And the first is, if you’re negotiating with someone like your wife, it’s useful to let her, let’s say, wander around the problem space until she comes up with a first approximation of a solution, and you don’t want to criticize that to death too badly because even though it’s not a great fit, it’s better than the initial state. And then what you're doing as you're negotiating is you're getting a tighter and tighter grip.

Derek: Yeah, yeah!

Jordan: I think that’s a pretty valid analogy, right?

Derek: I think I could put it along.

Jordan: Yeah.

Derek: But I think that the immune system, it is perhaps a good analogy to hypothesize about in terms of the way that human thought...

Jordan: Yeah, it strikes me as highly probable. I think that human thought sort of proceeds from the general to the specific, so that maybe, you know, with a child they sort of learn the hierarchy of things as they mature at a young age.

Derek: So a blueberry might be something like food, fruit, berry, blueberry.

Jordan: Oh, you know that’s proportionate to word length by the way. The shorter words, the shorter words map on to more fundamental concepts. Right? And those words have been conserved in linguistic history.

Derek: That’s fascinating because they call those primary level or base level words.

Jordan: Yeah, cat is one by the way.

Derek: Wow!

Jordan: Yeah, yeah. Same. That’s the same thing as the antibody gaining sophistication as it proceeds sort of down the. I call it concentricity, but it’s really concentric; but imagine an upside down traffic cone is really a hierarchy, but you're getting more and more specific as you—

Derek: You're getting more and more technically sophisticated.

Jordan: Okay, so imagine this. Imagine that an archetype is like a shoulder. It’s like this, it’s like this from the shoulder to the elbow. It’s like it’s a general-purpose problem-solving approach. And it isn't—you have to make it specific, right, to match it to the precise conditions that obtain in that environment. But the stories we conserve—the narratives we conserve—are those general-purpose problem-solving tools that have the broadest possible application.

Then you could imagine this too, Derek: you could imagine that if you hear a story and it really strikes you and it's memorable, that's because your memory has evolved to have a place for that story because that story is so necessary that without it, your functional... your general functionality would be massively impaired.

Derek: Yes, I think that’s...

Jordan: Yeah, it's like the antibody—it goes, you go back to the generality level where it resonates with whatever it is that you're...

Derek: I think that might be something like a heuristic in terms of problem-solving.

Jordan: Yeah, you're looking for a pattern similarity at the level of analysis that matches the new problem appropriately. You were sort of describing this earlier, you know, when you describe one—when you learn how one genetic disease works, well, there’s a lot of knowledge that you learn that translates to another genetic disease. It’s not exactly the same protein, but in terms of DNA and RNA and all of the functional elements that go wrong with the genetic disease, many of them are the same.

Derek: Okay, so well, so imagine that there’s a behavioral space where evolutionary competition between strategies occurs. And we’ve already agreed on the fact that the strategies that are going to work consistently across time in a social organization are going to be functions of iterated reciprocal interactions—they have to be, because that’s what defines a society.

Jordan: Okay, so now imagine those are all laid out through behavioral cooperation and competition. Okay? Now imagine you have a mapping function and you can map those strategies—that’s what a story is.

Jordan: Okay, now imagine those stories have levels of generality and specificity, right? And so if you told your story, it would be specific to your time and place and the conditions of your life, but it would also be a variant of a broader story that people could rely on to orient themselves in conditions that were somewhat similar to yours. There’s a whole hierarchy of those. So I would say the deepest and most general stories are the—we define them as the religious stories.

Derek: Absolutely.

Jordan: And translating them into their specific application is actually quite a complex act, right? It's like you can take a generalistic which would be coded as a narrative, and it might not be obvious to you how to apply that to the conditions of your life. That’s a problem you have to solve. But that doesn’t mean it’s not without worth because it’s a good... it’s a great starting place.

Derek: It occurs to me that...

Jordan: I don't know if this analogy is appropriate, but you could define living systems as the ability to dynamically manage the boundary between order and chaos to direct sacrifice. I think all living things have the ability to do that; they all share. And, you know, there’s a good reason for that because the physical world itself outside of nature and living things is somewhat chaotic.

Jordan: There’s even, at the quantum mechanical level or quantum physics level we know that things can be waves or particles, they can randomly become something completely different. So there’s a dynamism that’s in the physical world.

Derek: So I think there’s—you define biology as to be able to navigate a highly complex environment that shares the tension between order and chaos.

Jordan: Yeah, well it seems like that in the archetypal accounts because the constituent elements of reality, in the narratives of value, are order and chaos, and the third element is the ability to traverse that border.

I mean, so in the DSM worldview, you just see that absolutely clearly: is what’s the world made of? Well it’s made out of chaos—so that’s something like entropy—and it’s made out of order, and that’s something like predictability.

Derek: Right.

Jordan: And the dynamic interaction between them—what would you say—then it’s the ability to mediate between those two forces dynamically that constitutes, well you said it constitutes life, it certainly constitutes consciousness, that’s for sure. Does it constitute life? Yes, likely it’s acted out.

Derek: I mean, it’s happening at the cellular level; it’s happening at... Bees do this, ants do this—they create... they map, they create a boundary in randomness in order to direct sacrifice to sensory perceptive phenotypically relevant value, yeah.

Jordan: That’s the Gargan... that’s—it’s all good. But yeah, I think that this boundary-setting mechanism enables different species to direct what it