Munger on Multidisciplinary Thinking, Part 2

In the first part of our series on Charlie Munger's thoughts on multidisciplinary thinking, we looked at his answer to the question: “Do broadscale professionals need more multidisciplinary skill?” Munger's answer was an unequivocal yes. His argument was that while real-world problems span disciplines, professionals often approach them using only tools from their field they are familiar with. The result is what he calls the “man-with-a-hammer tendency,” or looking at every problem as the one that can be solved with the tools one has.

This brings us to the second question in Munger's 1998 Harvard Law School reunion speech: “Was our education sufficiently multidisciplinary?”

Was our education sufficiently multidisciplinary?

Here too, Charlie Munger’s answer is simple and straightforward: NO. He says, “Our education was far too unidisciplinary. Broadscale problems, by definition, cross many academic disciplines. Accordingly, using a unidisciplinary attack on such problems is like playing a bridge hand by counting trumps while ignoring all else.” Munger believed that the problem went beyond the way individual professionals were trained. Academic knowledge itself had become siloed into separate subjects and tracks, creating what philosopher Alfred North Whitehead called the “fatal unconnectedness of academic disciplines.”

• The fatal unconnected-ness of knowledge: The phrase captures the problem: knowledge may be divided into separate subjects for the convenience of education, but the connections between those subjects don't disappear simply because universities put them in different departments. Economics, psychology, mathematics, biology and law may be studied separately. But the problems that professionals encounter can involve several of them at once. The problem arises when someone becomes highly knowledgeable within one discipline, without learning how that knowledge connects to ideas outside it.
• The problem with academic silos: Munger describes academia as having been divided into “insular, turf-protecting enclaves”, where ideas could be maintained by excluding minds that challenged those very ideas. This is where his argument becomes particularly relevant to investing: businesses don't operate within academic departments. A company can face a pricing problem that involves economics, a management problem that involves psychology, and a regulatory problem that involves law, all at the same time.
• Knowledge becomes useful when it’s all connected: Financial markets are often treated as though they are primarily about numbers: earnings, valuations, interest rates, margins and returns. But markets are made up of people, and businesses operate within systems created by people. An investor therefore needs to understand not just what is happening, but potentially why it is happening. For example, a change in consumer behaviour may be psychological. A change in pricing may be economic. A change in the management’s decision may be driven by incentives.

Munger isn't arguing that disciplines and specialisations should be done away with. He says problems become difficult to solve when those ideas remain siloed: the challenge for the investor is to connect them. Munger argues that if we learn to think about subjects as isolated boxes, we may carry that habit into professional life.

The heart of the lesson

Munger's second question is ultimately a criticism of fragmented knowledge. There are practical reasons why universities divide knowledge into subjects. It is impossible to teach everything at once, and specialisation allows people to develop deep expertise. But Munger's concern is what happens when the divisions become intellectual boundaries. The solution, according to him, is not to eliminate specialisation, but to ensure that specialists also understand important ideas beyond their own field, and, crucially, how those ideas connect.