Robert Greene‘s The Laws of Human Nature delves into human behavior and the underlying motivations and drives that influence it. Understanding these laws can help people navigate interpersonal situations.
The Law of Irrationality as described by Greene refers to the idea that humans often act based on emotions, biases, and other factors that aren’t necessarily logical or rational.
We illustrate this law with three examples.
First, financial bubbles. There have been numerous financial bubbles throughout history driven by irrational exuberance, where the value of an asset or market sector rises way beyond its intrinsic value. The Dot-Com Bubble of the late 1990s is a prime example. In 1990 Investors poured money into internet-based startups expecting these companies would be very profitable. Stock prices soared, despite many of these companies having no clear business model or even any revenue. The behavior of investors during this period was strongly influenced by herd mentality, over-optimism, and fear of missing out. The bubble burst in the early 2000s, leading to significant financial losses.
I clearly remember a friend of mine saying in 2000 that the many Dot-Coms then proliferating like fungi on damp dung will undergo a period of consolidation leading to a few strong ones; he named Amazon as one. No one realized that the consolidation came with a crash.
Second, the placebo effect. In medical trials, patients sometimes show improvement or even full recovery when given a placebo (a treatment with no therapeutic effect) simply because they believe they’re receiving an actual treatment. This belief can lead to real physiological changes in the body. The placebo effect shows how belief and expectation, rather than logical reasoning, can influence outcomes. It’s not rational for a sugar pill to cure a disease, but the mind’s power can lead to perceived or actual improvements in health.
The popularity of certain drugs like ivermectin during the COVID pandemic of 2020-22 was fueled by numerous stories of people being “cured” of this drug. The stories were fueled by a curious mix of hope and desperation. As more data came in, it became clear that ivermectin had no appreciable effect on COVID symptoms. The large number of “positive” anecdotes stem from the fact that most people who were infected experienced relatively mild to zero symptoms, and that more than 97% survived at worst. This is not an example of the placebo effect, but a market driven by hopeful but wrong interpretation of data.
Second, behavior in crowds. Events like the Tulip Mania in the 17th century Netherlands showcase irrational behavior on a large scale. At the height of this craze, prices for tulip bulbs reached extraordinarily high levels, and a single bulb could sell for more than ten times the annual income of a skilled craftsman. Eventually, the market crashed, leaving many in financial ruin. The collective behavior during the Tulip Mania wasn’t based on the intrinsic value of tulips but rather on speculative greed and the fear of missing out.
The collapse of the housing market in 2008 happened in a similar way.
Here’s another interesting story about fads.
Once upon a time, in the groovy and psychedelic era of the 1970s, amidst bell-bottoms, disco balls, and the sweet tunes of ABBA, there emerged a pet unlike any other. A pet that wouldn’t bark, bite, or even breathe – the legendary Pet Rock!

In a bar in California, Gary Dahl, an advertising executive, listened to his friends complain about their pets – the mess, the expenses, the time. Inspired by this symphony of whines and a good dose of liquid creativity, Gary thought, “Why not have a pet that demands nothing?” What started as a joke became one of the most successful marketing stories of all time.
Housed in a cozy box, complete with straw (a rock’s preferred bedding, obviously) and a tongue-in-cheek instruction manual, the Pet Rock became an overnight sensation. People just couldn’t resist! It was the ideal pet. No feeding, no walking, no vet bills. Plus, it was the only pet that would (quite literally) never roll over.
Parents adored it (no mess!). Kids loved it (a rock to call their own!). And introverts? They finally had the perfect companion, quiet and unjudgmental. Pet Rocks were the ultimate low-maintenance companion, and they promised to “stay” and “sit” better than any dog.
Everywhere you looked, people were proudly showing off their “pets,” naming them, and some even painting and accessorizing them. Rock puns were all the rage: “You rock!”, “Rock on!”, and “This pet rocks!” echoed everywhere.
But as with most fads, the world eventually took this pet for granite. The initial boulder of excitement began to erode, and the pet sensation soon found itself between a rock and a hard place.
Yet, while their time in the limelight was brief, Pet Rocks left an indelible mark (but not on your carpet!) in the annals of pop culture. Today, they stand as a testament to the quirky, whimsical, and sometimes outright bizarre trends of yesteryears.
All of these examples underscore the fact that humans, individually and collectively, often act based on emotions, biases, or perceptions rather than pure rationality.
Here are some ways to manage and navigate the Law of Irrationality.
Be self-aware. Recognize that you, like all humans, are prone to irrationality. Accept that you have biases and emotional triggers; this is the first and most important step.
Pause before reacting. When faced with decisions, especially emotional ones, take a step back. Allow yourself time to cool off to ensure your decisions aren’t just impulsive reactions.
Reconnect with the rational self. practice activities that center and ground you, such as meditation, journaling, or simply taking walks in nature.
Seek feedback. Others can often see what you can’t. Trusted friends, mentors, or colleagues can offer valuable insights into your blind spots and alert you to when you’re behaving irrationally.
Expose yourself to different perspectives. Broaden your horizons by reading widely, talking to diverse groups of people, and exposing yourself to different ways of thinking. This can help reduce the strength of your biases.
Be aware of your emotional triggers. Understand what makes you tick, what angers you, or what makes you anxious. Identifying them when they happen is the first stem to controlling them.
Reframe the narrative. Learn to see things from a different light. For instance, if someone upsets you, instead of instantly reacting, try to understand where they might be coming from or consider the external pressures they might be under.
Limit exposure to emotional contagion. We tend to absorb the emotions of those around us. If you’re constantly surrounded by negativity or drama, it’ll be harder to stay rational. Seek environments that promote calmness and clarity.
Always be learning. The more you know about a subject, the more likely you are to make rational decisions concerning it. If you’re entering unfamiliar territory, take time to educate yourself.
Practice gratitude and perspective. Keep a gratitude journal or just take moments to appreciate what you have.
See what everyone is thinking, and think the opposite.
Next up: The Law of Narcissism.
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