Page 145 - Ray Dalio - Principles

1. Top down: By trying to find the one code/law that drives them all.
For example, in the case of markets, one could study universal
laws like supply and demand that affect all economies and
markets. In the case of species, one could focus on learning
how the genetic code (DNA) works for all species.

2. Bottom up: By studying each specific case and the codes/laws that
are true for them, for example, the codes or laws particular to
the market for wheat or the DNA sequences that make ducks
different from other species.

Seeing things from the top down is the best way to understand
ourselves and the laws of reality within the context of overarching
universal laws. That’s not to say it’s not worth having a bottom-up
perspective. In fact, to understand the world accurately you need
both. By taking a bottom-up perspective that looks at each individual
case, we can see how it lines up with our theories about the laws that
we expect to govern it. When they line up, we’re good.

By looking at nature from the top down, we can see that much of
what we call human nature is really animal nature. That’s because
the human brain is programmed with millions of years of genetic
learning that we share with other species. Because we share common
roots and common laws, we and other animals have similar
attributes and constraints. For example, the male/female sexual
reproduction process, using two eyes to provide depth perception,
and many other systems are shared by many species in the animal
kingdom. Similarly, our brains have some “animal” parts that are
much older in evolutionary terms than humanity is. These laws that
we have in common are the most overarching ones. They wouldn’t
be apparent to us if we just looked at ourselves.
If you just looked at one species—ducks, for example—to try to
understand the universal laws, you’d fail. Similarly, if you just
looked at mankind to understand the universal laws, you’d fail. Man
is just one of ten million species and just one of the billions of
manifestations of the forces that bring together and take apart atoms
through time. Yet most people are like ants focused only on
themselves and their own anthill; they believe the universe revolves
around people and don’t pay attention to the universal laws that are
true for all species.

To try to figure out the universal laws of reality and principles for
dealing with it, I’ve found it helpful to try to look at things from
nature’s perspective. While mankind is very intelligent in relation to
other species, we have the intelligence of moss growing on a rock