Liu Run's Underlying Logic: See Through the World, Navigate Change

This book, "Underlying Logic: Seeing Through the World's Cards," by Liu Run, distills fundamental principles across various domains—from personal growth to business and social interaction. It emphasizes that understanding these "underlying logics" allows individuals to navigate complex environments, adapt to change, and achieve success by focusing on unchanging truths amidst constant flux. The core message is that true wisdom lies in discerning the essential patterns and relationships that govern phenomena, rather than superficial observations.

The Concept of Underlying Logic

• Definition: Underlying logic refers to the commonalities within differences and the unchanging principles behind change.
• Importance: It is the foundational element that allows for the derivation of new methodologies when combined with environmental variables (Underlying Logic + Environmental Variables = Methodology).
• Application: Unlike "dry goods" (specific methods) that become obsolete with change, underlying logic is dynamic and adaptable, enabling continuous understanding of essence.

Multiple Perspectives on Right and Wrong

• Three Views: Individuals should possess three perspectives on right and wrong: the jurist's (focus on law/justice), the economist's (focus on social cost/efficiency), and the businessman's (focus on individual loss/self-responsibility).
• Loss Principle: A key concept is that "whose loss is greater, it is whose fault," implying that the party with the greatest potential loss should take preventative action.
• Humanity, Morality, and Law: Humanity (survival/reproduction) is instinctual, morality (social norms for group prosperity) often counters instinct, and law is the lowest moral baseline enforced by punishment.

Individual Evolution and Personal Growth

• Personal Business Model: An individual's success can be modeled as "Ability × Efficiency × Leverage."
• Ability Development: Emphasizes "efficient and terrifying diligence" and "deliberate practice" to rapidly acquire and improve skills.
• Efficiency Enhancement: Achieved by prioritizing crucial tasks ("choice"), employing effective methods, and utilizing suitable tools.
• Leverage Types: Four main types of leverage are identified: team, product, capital, and influence, which multiply a strong core ability.

Systems Thinking and Problem Solving

• Beyond Phenomena: True insight comes from seeing through surface phenomena to the underlying system.
• System Components: A system is defined as "elements × connecting relationships," comprising variables, causal chains, reinforcing loops, balancing loops, and time lags.
• Problem-Solving Method: Advocates for an "assumption-validation-conclusion-adjustment" approach, emphasizing objective analysis over relying on unreliable experience.
• Distinguishing Concepts: Clarifies the differences between processes (linear, sequential), rules (behavioral guidelines), and systems (interconnected elements forming a functional whole).

Principles of Social Collaboration

• Three Laws of Interaction: Interactions in the world operate under three laws: natural (survival of the fittest), tribal (group norms for collective goals), and universal (shared values transcending groups, like contract spirit).
• Profit & Competition: True profit comes from having no competition, achieved through innovation that significantly lowers costs or creates unique value, rather than merely earning a "social wage."
• Wealth Distribution: Wealth distribution is determined by who controls scarce resources, not solely by diligence or effort.
• Credit as Asset: Credit is paramount; trustworthiness reduces transaction costs and is a valuable asset, while its loss leads to isolation.