Critical States

Author: David Perell URL: https://www.perell.com/blog/critical-states One-line: Borrowing the physics of phase transitions, big societal shifts happen “gradually, then suddenly” — the visible trigger event is just the last straw; the real cause is the criticality of the underlying state.

Key claims

• A Phase Transition is a system absorbing or emitting energy to change states (ice → water). The dynamics of criticality are counterintuitive: cold water and about-to-freeze water look identical, but microscopically the latter is full of tiny ice crystals — one degree from a solid mesh. The real cause of the transition is the criticality of the state, not the last crystal. (via Cesar Hidalgo, Why Information Grows)
• Most of our institutions are narratives. Religion, money, corporations, human rights, even countries are stories told to unite people who wouldn’t otherwise cooperate. (via Yuval Noah Harari)
• Narratives can blind us. Nassim Taleb — humans can’t view a sequence of facts without forcing a relationship; narratives bind unrelated facts and create false simplification.
• We gravitate to oversimplified stories. Tyler Cowen — especially good-versus-evil; the most popular stories are easily grasped, told, and remembered, which clouds complexity (a game of telephone).
• Major shifts aren’t caused by one event — they’re jumpstarted by one. Critical events resemble the moment water turns to ice.
• The shifts we notice reflect our time horizon. Beat reporters track the daily; journalists track policy; book authors track multi-year geopolitical trends.

Notable quotes

“How did you go bankrupt?” Mike responds, “Two ways. Gradually, and then suddenly.” — Hemingway, The Sun Also Rises

“Water that is just about to freeze is still liquid… the real cause of the transition is the criticality of the state.” — Cesar Hidalgo

“There are no gods in the universe, no nations, no money, no human rights, no laws, and no justice outside the common imagination of human beings.” — Yuval Noah Harari

How it connects

• Phase Transition — the governing metaphor for nonlinear, tipping-point change.
• Cesar Hidalgo / Why Information Grows — source of the criticality framing.
• Nassim Taleb / Tyler Cowen — narrative as false simplification.
• Yuval Noah Harari — shared institutions as imagined narratives.

Verbatim source notes — restored from Roam, 2026-09-21

• Religion, money, corporations, human rights — all of these ideas are narratives. Countries, even, are narratives, told to unite people that would not otherwise trust one another, or be able effectively cooperate.
• ((JbkoL5miI)) Yuval Noah Harari
• The shifts we look for reflect our operating time horizons. Consider Donald Trump’s presidency. On a short time horizon, White House beat reporters are likely to cover day-to-day shifts within the Trump administration. On a medium time horizon, journalists are likely to comment on public policy. On a longer time horizon, book authors are likely to consider multi-year trends such as the state of democracy, America’s position as a global superpower, and other geopolitical shifts.
• In physics, a phase transition is when a system either absorbs or emits energy, resulting in its transition from one state to another. An example of a phase transition is when ice turns into water. This transition requires energy in the form of heat.
• Borrowing from Cesar Hidalgo, author of Why Information Grows: “The dynamics of criticality, however, are not very intuitive. Consider the abruptness of freezing water. For an outside observer, there is no difference between cold water and water that is just about to freeze. This is because water that is just about to freeze is still liquid. Yet, microscopically, cold water and water that is about to freeze are not the same. When close to freezing, water is populated by gazillions of tiny ice crystals, crystals that are so small that water remains liquid. But this is water in a critical state, a state in which any additional freezing will result in these crystals touching each other, generating the solid mesh we know as ice. Yet, the ice crystals that formed during the transition are infinitesimal. They are just the last straw. So, freezing cannot be considered the result of these last crystals. They only represent the instability needed to trigger the transition; the real cause of the transition is the criticality of the state.”
• Ernest Hemingway exemplifies the notion of criticality in his 1926 novel The Sun Also Rises, Bill asks Mike “How did you go bankrupt?” Mike responds, “Two ways. Gradually, and then suddenly.”
• Nassim Taleb asserts that humans have a limited ability to look at a sequence of facts without forcing a relationship among them. Narratives can bind unrelated facts together and blind us from reality. Narratives can create false simplification. They can provide a false sense of connection between a sequence of events. Blink
• Major shifts are not usually caused by one event. Instead, significant events often jumpstart major shifts. These critical events resemble the point when water turns to ice.
• Tyler Cowen warns that humans tend to gravitate towards overly-simplified storylines, especially good versus evil. The most popular stories are easily grasped, easily told, and easily remembered. Due to their simplicity, they can cloud complexity. Like a game of telephone, narratives tend to warp through truth by omitting details. Made To Stick