Mental Models, Checked
15 Thinking Tools and Where They Really Come From

A mental model is a small rule of thumb for thinking: invert the problem, look for the second effect, ask what you gave up. They are useful, and most of them are passed around without their origins, which is where the useful detail usually is. Here are fifteen, checked against the texts they came from. English after French or German is our translation.

1. “Charlie Munger invented mental models”

Partly true The phrase has two meanings. In psychology, according to the Mental Models Global Laboratory, a group of researchers who study how people reason with mental models, “the Scottish psychologist Kenneth Craik (1943) proposed a similar idea; he believed that the mind constructs ‘small-scale models’ of reality”, but “cognitive scientists took for granted that people reasoned based on the laws of symbolic logic until Phil Johnson-Laird published the book Mental Models in 1983”. In Johnson-Laird’s own summary, “reasoning is a simulation of the world fleshed out with our knowledge”.

The self-help sense is Munger’s. In a talk at the USC business school on 14 April 1994 he said: “You’ve got to hang experience on a latticework of models in your head”, and “80 or 90 important models will carry about 90 percent of the freight in making you a worldly-wise person.” The exact phrase “latticework of mental models” comes in a later talk.

2. Circle of competence

Partly true as Warren Buffett’s alone. It is a Berkshire idea, and the earliest use we found is Charlie Munger’s, in the same USC talk of 14 April 1994: “Every person is going to have a circle of competence. And it’s going to be very hard to enlarge that circle.” He applied it to aptitudes and careers: “you’ve got to play within your own circle of competence.” Buffett set it out for judging businesses in his 1996 letter to Berkshire Hathaway shareholders: “The size of that circle is not very important; knowing its boundaries, however, is vital.” The point people drop is that second half: the size matters little, the edge matters a lot.

3. Chesterton’s fence

Partly true The popular version is “never remove a fence until you know why it was put up”. G. K. Chesterton’s image, in “The Drift from Domesticity” in The Thing (first published 1929), is “a fence or gate erected across a road”. A reformer says: “I don’t see the use of this; let us clear it away.” The reply: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.” The part usually left out comes a paragraph later: a reformer who knows what an institution was for “may really be able to say that they were bad purposes, or that they have since become bad purposes, or that they are purposes which are no longer served.” It is a rule about understanding before you change something, not a rule against change. We did not find who first called it “Chesterton’s fence”.

4. “The map is not the territory”

True as Alfred Korzybski’s, from a paper he gave in New Orleans on 28 December 1931 and his book Science and Sanity (1933). His fuller sentence is not a warning that maps are useless: “A map is not the territory it represents, but, if correct, it has a similar structure to the territory, which accounts for its usefulness.” The joke about a perfect map is older. In Lewis Carroll’s Sylvie and Bruno Concluded (1893), a character boasts, “We actually made a map of the country, on the scale of a mile to the mile!”, and then: “So we now use the country itself, as its own map, and I assure you it does nearly as well.”

5. Second-order thinking

Partly true as an idea with an old source; the label is modern and we found no single origin for it. Frédéric Bastiat’s pamphlet Ce qu’on voit et ce qu’on ne voit pas (“What is seen and what is not seen”), published in July 1850, states it for economics: “Dans la sphère économique, un acte, une habitude, une institution, une loi n’engendrent pas seulement un effet, mais une série d’effets” — in the economic sphere, an act, a habit, an institution or a law produces not one effect but a series of effects. Only the first is seen; “les autres ne se déroulent que successivement, on ne les voit pas; heureux si on les prévoit” — the others unfold one after another, unseen; we are lucky if we foresee them.

6. Opportunity cost

Partly true as “Friedrich von Wieser coined it”. The English term is in David I. Green, “Pain-Cost and Opportunity-Cost”, Quarterly Journal of Economics (January 1894): “Such consideration gives rise to the conception of opportunity-cost”, the cost of “the opportunities foregone in accepting a certain line of action”. Wieser’s claim is to the idea: the History of Economic Thought website says the doctrine “was only explicitly introduced as an all-encompassing theory of cost in a seminar paper by Friedrich von Wieser (1876) and expounded in his later books”, and credits Green’s 1894 paper with popularising it in English. The idea is older still. Bastiat’s broken window (1850): “puisque notre bourgeois a dépensé six francs à une chose, il ne pourra plus les dépenser à une autre” — since our townsman has spent six francs on one thing, he cannot spend them on another.

7. Inversion: “Invert, always invert”

Unverified as a saying of the mathematician Carl Jacobi. The earliest printed attribution we found is Edward B. Van Vleck, in the Bulletin of the American Mathematical Society for October 1916: “The great mathematician Jacobi is said to have inculcated upon his students the dictum: Man muss immer umkehren.” Van Vleck’s own gloss is “One must always seek a converse, turn a thought the other end to.” Michael Molinsky, in a column republished by the Mathematical Association of America in 2024, found that of the modern sources repeating it, “none of them provide a primary source or any original context for the quotations”, and raised “the possibility that it also may be misattributed”.

Munger used it as a way of avoiding failure. In his 1986 commencement speech at the Harvard School in Los Angeles he said “many hard problems are best solved only when they are addressed backward”, and quoted the rustic who said: “I wish I knew where I was going to die, and then I’d never go there.”

8. Occam’s razor

Partly true The idea is Ockham’s; the famous wording is not. The Stanford Encyclopedia of Philosophy says of “must not multiply entities beyond necessity”: “Although the sentiment is certainly Ockham’s, this particular formulation is nowhere to be found in his texts.” His own fullest version names what can justify positing more: “reason (or reasoning from self-evident premises), experience, and infallible religious authority”. It is a rule about needing grounds, not “the simplest explanation is usually right”. We trace the popular wording in Older Than You Think, Part 2.

9. Hanlon’s razor: “Never attribute to malice that which is adequately explained by stupidity”

Partly true as Robert Heinlein’s. The earliest close match known to Quote Investigator, with the name, is in Arthur Bloch’s 1980 Murphy’s Law Book Two. Heinlein’s 1941 story “Logic of Empire” has a close ancestor: “You have attributed conditions to villainy that simply result from stupidity.” But in the story it is a diagnosis of “the devil theory”, and the speaker goes on to blame “an antiquated financial structure” and plain stupidity rather than villains: “You think bankers are scoundrels. They are not”.

10. The Pareto principle (80/20)

Partly true Vilfredo Pareto studied the unequal distribution of income and fitted a curve to it (Cours d’économie politique, 1896–97). The universal “vital few and trivial many” principle is Joseph Juran’s, and Juran later wrote: “I was forced to confess that I had mistakenly applied the wrong name to the principle.” More on this in Older Than You Think, Part 2.

11. Parkinson’s law: “Work expands to fill the time available”

Partly true The sentence opens C. Northcote Parkinson’s essay in The Economist of 19 November 1955, but as “a commonplace observation that work expands so as to fill the time available for its completion”, not as his law. The law he goes on to propose is about staff: “the number of the officials and the quantity of the work to be done are not related to each other at all.” The essay is written in a deadpan, mock-scientific style, and ends: “It is not the business of the botanist to eradicate the weeds.”

12. Goodhart’s law: “When a measure becomes a target, it ceases to be a good measure”

Partly true as Charles Goodhart’s words. That sentence is the anthropologist Marilyn Strathern’s, in a 1997 paper on university audit, where she writes that another scholar “describes this as ‘Goodhart’s law’, after the latter’s observation on instruments for monetary control”. Goodhart’s own 1975 wording, as quoted by Takeda and Ueda, was narrower: “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes”. We could not open Goodhart’s original. See also AI benchmarks explained.

13. The Dunning-Kruger effect

Disputed in size, and the famous chart is a MYTH. Justin Kruger and David Dunning (1999) found that people in the bottom quarter on tests of humour, grammar and logic “grossly overestimated their test performance and ability”: “Although their test scores put them in the 12th percentile, they estimated themselves to be in the 62nd.” They also found the top quarter “tended to underestimate their ability”, and they raised the statistical objection themselves, concluding the effect was “more psychological than artifactual”. The peak-and-valley curve people share is not in the paper. Critics argue the effect is partly a product of how it is graphed. Nuhfer and colleagues (2016) showed that “graphical conventions common in the self-assessment literature introduce artifacts”, and in a study of self-rated intelligence Gignac and Zajenkowski (2020) concluded that “the magnitude of the effect may be much smaller than reported previously”. The site’s cognitive biases page covers the replication in more detail.

14. First principles

True as Aristotle’s. In the Physics he writes that “we do not think that we know a thing until we are acquainted with its primary conditions or first principles, and have carried our analysis as far as its simplest elements.” For him first principles are starting points you grasp rather than prove, not a brainstorming technique. A well-known modern example is Elon Musk’s, in a 2012 Wired interview: “physics teaches you to reason from first principles rather than by analogy.” We go further in first principles thinking.

15. Base rates

Disputed in how often people ignore them. The classic experiment is Daniel Kahneman and Amos Tversky’s, summarised in their 1974 Science paper: people were told a description was drawn from a group of 100, “30 engineers and 70 lawyers” in one condition and the reverse in another. With no other information, “the subjects used prior probabilities correctly”. Given short personality descriptions, “in a sharp violation of Bayes’ rule, the subjects in the two conditions produced essentially the same probability judgments”. Jonathan Koehler (1996) is one prominent challenge: “We have been oversold on the base rate fallacy”, and base rates “play a relatively larger role in tasks where base rates are implicitly learned or can be represented in frequentist terms”. The disagreement is over the lab format itself. Tversky and Kahneman read their result as base rates being “effectively ignored” once a description was given; Koehler’s review of the literature, “including the famous lawyer–engineer problem”, concludes that base rates “are almost always used”, and that they count for more when they are learned from experience or given as frequencies. We leave it as disputed: both are reviews of experiments, and they weigh the same studies differently. More in Numbers that mislead.

Our reading

Most of these models came from someone making a careful, limited point: about maps with the right structure, fences you have understood, measures used for control. The versions that travel are shorter and more confident. When a mental model sounds like a law of nature, the page it came from is worth finding.

Sources

• The Mental Models Global Laboratory, “What are mental models?”; Philip N. Johnson-Laird, “Mental models and human reasoning”, PNAS 107 (2010).
• Charles T. Munger, Poor Charlie’s Almanack (Stripe Press): Harvard School speech (13 June 1986) and USC talk (14 April 1994).
• Warren Buffett, Berkshire Hathaway letter to shareholders, 1996.
• G. K. Chesterton, The Thing (1929), “The Drift from Domesticity”.
• Alfred Korzybski, Science and Sanity (1933); Lewis Carroll, Sylvie and Bruno Concluded (1893), Project Gutenberg.
• Frédéric Bastiat, Ce qu’on voit et ce qu’on ne voit pas (1850), French Wikisource.
• David I. Green, “Pain-Cost and Opportunity-Cost”, Quarterly Journal of Economics 8 (1894); “The Opportunity Cost Doctrine”, History of Economic Thought website.
• Edward B. Van Vleck, “Current Tendencies of Mathematical Research”, Bulletin of the AMS 23 (1916); Michael Molinsky, “Quotations in Context: Jacobi”, Convergence (MAA, 2024).
• Paul Vincent Spade, Claude Panaccio and Jenny Pelletier, “William of Ockham”, Stanford Encyclopedia of Philosophy.
• Quote Investigator, “Never Attribute to Malice…” (2016, updated 2025); Robert Heinlein, “Logic of Empire”, Astounding Science-Fiction (March 1941).
• Vilfredo Pareto, Cours d’économie politique (1896–97); Joseph M. Juran, “The Non-Pareto Principle; Mea Culpa” (1974).
• “Parkinson’s Law”, The Economist (19 November 1955).
• Marilyn Strathern, “‘Improving ratings’: audit in the British University system”, European Review 5 (1997); Y. Takeda and A. Ueda, “Uncovering the Goodhart’s Law”, CIRJE workshop paper.
• J. Kruger and D. Dunning, Journal of Personality and Social Psychology 77 (1999); E. Nuhfer et al. (2016); G. E. Gignac and M. Zajenkowski, Intelligence 80 (2020).
• Aristotle, Physics I.1, trans. Hardie and Gaye; C. Anderson, “Elon Musk’s Mission to Mars”, Wired (October 2012).
• A. Tversky and D. Kahneman, “Judgment under Uncertainty: Heuristics and Biases”, Science 185 (1974); J. J. Koehler, “The base rate fallacy reconsidered”, Behavioral and Brain Sciences (1996).

Checked September 2026.

Related: Logical fallacies cheat sheet · Cognitive biases, checked · Older Than You Think, Part 2