In 1914 Ernest Shackleton lost the Endurance and the expedition he had spent years preparing. With the ship gone, he chose what to do next from where he stood, and set aside everything he had already spent.
Something we’ve been thinking about
In 1914 Ernest Shackleton set out to make the first overland crossing of Antarctica. His ship, the Endurance, was caught in the pack ice of the Weddell Sea in January 1915, held there for months, and slowly crushed; he ordered her abandoned that October, and she sank in November, before the crossing had even begun. Standing on the ice with twenty-eight men and no ship, Shackleton set a new goal in place of the old one: to bring every man home alive. In time, every man came home.
How we see it through leadership economics
The years of preparation and the ship itself were gone the moment the Endurance was lost, and nothing Shackleton chose next could bring them back. In his extreme circumstances, it seems obvious that the only remaining goal would be survival. But the story serves as a stark image of the sunk cost fallacy.
In economic research, a peer-reviewed paper can take several years, and often a couple of those years pass before it is clear the project will not succeed. A young researcher too often keeps pouring effort in, hoping to salvage the years already sunk into the work, when that time would bring greater returns elsewhere. Knowing when the ship is actually sunk, rather than just faltering, is a skill in itself. So how do you know when it’s time to change course?
The answer is marginal analysis: from where you stand now, weigh only what the next unit of effort will add. What you have already spent cannot enter that decision, because no choice you make can bring it back. Shackleton decided from where he actually stood. He sent his remaining men, the boats they had saved, and the time still left to them wherever they would do the most good. What remained was his to use well.
A line we’re sitting with
Make the best use of what is in your power, and take the rest as it happens.
Epictetus, the Stoic
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Before he proposed, Charles Darwin worked the decision out on paper in two columns, weighing what each path would cost him.
Richard Titmuss argued that Britain's volunteer blood system produced safer blood than America's paid one. A Swedish experiment later offered donors a small payment and found it cut women's willingness to give almost in half. The lesson is about what a price tells people.
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