When Everyone Knows That Everyone Knows . . .: Common Knowledge and the Mysteries of Money, Power, and Everyday Life

Summary

From one of the world’s most celebrated intellectuals, a “fascinating” (Financial Times), brilliantly insightful work that explains how we think about each other’s thoughts about each other’s thoughts, ad infinitum.

It sounds impossible, but Steven Pinker shows that we do it all the time. This awareness is called common knowledge, and it has a momentous impact on our social, political, and economic lives.

Common knowledge is necessary for coordination, for making arbitrary but complementary choices like driving on the right and coalescing behind a political leader or movement. It’s also necessary for social coordination: everything from meeting up at a time and place to forming enduring bonds of friendship, romance, or authority. Humans have a sixth sense for common knowledge, and we create it with signals like laughter, tears, blushing, eye contact, and blunt speech.

But people also may strive to avoid common knowledge—to ensure that even if everyone knows something, they can’t know that everyone else knows they know it. And so we get rituals like benign hypocrisy, veiled bribes and threats, sexual innuendo, and pretending not to see the elephant in the room.

Pinker shows how the hidden logic of common knowledge can make sense of many of life’s enigmas: financial bubbles and crashes, revolutions that seem to come from out of nowhere, the eruption of cancel culture, and even the awkwardness of a first date.