Category: People

Eric Hoffer and the Creation of Fanatical Mass Movements

What is the nature of a true mass movement? In 1951, the American philosopher Eric Hoffer attempted to answer this, and published his first and most well-known work: The True Believer: Thoughts on the Nature of Mass Movements.

The True Believer became a hit because it was released on the heels of World War II and at the outset of the US/Soviet Cold War, and hoped to explain the nature of the “mass movements” that created widespread devastation: Nazism, Fascism, and Stalinism among them. Most people were still hungry for answers. (Heck, many people all over the world were still hungry, period.)

Hoffer took the analysis a bit further. What did all mass movements seem to have in common? He didn’t stop with modern political movements, but thought also about religious movements, reformations, and nationalist movements throughout history, featuring heavy commentary on Christianity and Islam in particular.

The book is a series of loosely connected cogitations on the nature of fanatically organized mass movements, the kind that can lead to mass murder and starvation as in the cases above, but that have also led to movements we generally look fondly upon like the Catholic Reformation, the American Revolution, and the Indian Independence Movement.

Like any good book, it’s impossible to summarize without losing a tremendous amount of understanding. But Hoffer does offer a loose framework for how mass movements start and move into completion, and his insights here are worth studying, for they give us a great window into humanity and history. This will be a longer one, but it’s worth the ride.

The Intellectual Underpinning of Revolution

Hoffer makes it clear that the nature of a true mass movement is one of unified struggle. It comes at a time of disillusionment with the state of affairs. It’s not necessarily and not even usually desperation, though: People who can barely feed themselves do not tend to revolt, for they do not have the time, interest, or energy. Revolt tends to happen in a society of intellectual discourse and, counter-intuitively, a certain amount of freedom.

But when conditions are right and people are sufficiently whipped into a fervor, a mass movement can arise among a frustrated group. Hoffer outlines the basic definition of a mass movement by emphasizing the call for self-sacrifice as a central element:

The vigor of a mass movement stems from the propensity of its followers for united action and self-sacrifice. When we ascribe the success of a movement to its faith, doctrine, propaganda, leadership, ruthlessness and so on, we are but referring to instruments of unification and the means used to inculcate a readiness for self-sacrifice. It is perhaps impossible to understand the nature of mass movements unless it is recognized that their chief preoccupation is to foster, perfect and perpetuate a facility for united action and self-sacrifice. To know the processes by which such a facility is engendered is to grasp the inner logic of most of the characteristic attitudes and practices of an active mass movement.

With few exceptions, any group or organization which tries, for one reason or another, to create and maintain compact unity and a constant readiness for self-sacrifice usually manifests the peculiarities—both noble and base—of a mass movement. On the other hand, a mass movement is bound to lose much which distinguishes it from other types of organization when it relaxes its collective compactness and begins to countenance self-interest as a legitimate motive of activity. In times of peace and prosperity, a democratic nation is an institutionalized association of more or less free individuals. On the other hand, in time of crisis, when the nation’s existence is threatened, and it tries to reinforce its unity and generate in its people a readiness for self-sacrifice, it almost always assumes in some degree the character of a mass movement. The same is true of religious and revolutionary organizations: whether or not they develop into mass movements depends less on the doctrine they preach and the program they project than on the degree of their preoccupation with unity and the readiness for self- degree of their preoccupation with unity and the readiness for self-sacrifice.

The essential nature, then, of a fanatical mass movement is one where a group of loyal followers can be made to believe, or simply nudged into indulging a prior belief that their own life is less important than a greater cause. A willingness to lose their own identity for the “greater good,” however defined, seems a necessary element.

In order for this to happen, a population must obviously be given something to believe — a cause strong enough to subsume them. And in order to do that, the cause must be all-encompassing. The reason Hoffer titles the book True Believer is that a strong mass movement only works when it purports to provide a solution that can be turned to for all the essential answers: The Bible, the Qur’an, Liberty, Freedom, Communism, Equality, Lebensraum, the State, the Nation…all-encompassing narratives which would become the central dogma of a mass movement, to be enacted and upheld by force. (These narratives would become a central element of Yuval Harari’s wonderful book Sapiens about 50 years later. He called them the human myths.)

The process is kicked off by a radical intellectual, or what Hoffer calls a Man of Words.

The Man of Words

As Hoffer describes it, the process begins with a thinker or a group of thinkers with a strong set of ideas that offer a solution to a proposed societal problem. Karl Marx. Jesus Christ. Thomas Paine. Martin Luther. The German philosophers. The French philosophers.

These intellectuals “prepare the ground” for the movements to come, by providing the central dogmas of the revolution which begin to get the populace on board by giving them an alternative to the present. A new future. And without these forceful new ideas, the momentum will eventually die.

Generally, this only works in a society where the intellectuals are not already part of the establishment: There has to be a certain disaffected nature to their work. If they don’t hate the powers that be, why bother inciting Revolution — intentionally or not? Hoffer makes the point that in societies where the intellectuals are the ruling class, or participate heavily in the ruling class, there’s not much of a tendency towards a true mass movement.

In one passage, he describes the outline of this beginning period:

The men of letters of eighteenth-century France are the most familiar example of intellectuals pioneering a mass movement. A somewhat similar pattern may be detected in the periods preceding the rise of most movements. The ground for the Reformation was prepared by the men who satirized and denounced the clergy in popular pamphlets, and by men of letters like Johann Reuchlin, who fought and discredited the Roman curia. The rapid spread of Christianity in the Roman world was partly due to the fact that the pagan cults it sought to supplant were already thoroughly discredited. The discrediting was done, before and after the birth of Christianity, by the Greek philosophers who were bored with the puerility of the cults and denounced and ridiculed them in schools and city streets.

Christianity made little headway against Judaism because the Jewish religion had the ardent allegiance of the Jewish men of words. The rabbis and their disciples enjoyed an exalted status in Jewish life of that day, where the school and the book supplanted the temple and the fatherland. In any social order where the reign of men of words is so supreme, no opposition can develop within and no foreign mass movement can gain a foothold. The mass movements of modern time, whether socialist or nationalist, were invariably pioneered by poets, writers, historians, scholars, philosophers and the like. The connection between intellectual theoreticians and revolutionary movements needs no emphasis.

But it is equally true that all nationalist movements— from the cult of la patrie in revolutionary France to the latest nationalist rising in Indonesia—were conceived not by men of action but by fault-finding intellectuals. The generals, industrialists, landowners and businessmen who are considered pillars of patriotism are latecomers who join the movement after it has become a going concern. The most strenuous part of the early phase of every nationalist movement consists in convincing and winning over these future pillars of patriotism. The Czech historian Palacky said that if the ceiling of a room in which he and a handful of friends were dining one night had collapsed, there would have been no Czech nationalist movement.

Such handfuls of impractical men of words were at the beginning of all nationalist movements. German intellectuals were the originators of German nationalism, just as Jewish intellectuals were the originators of Zionism. It is the deep-seated craving of the man of words for an exalted status which makes him oversensitive to any humiliation imposed on the class or community (racial, lingual or religious) to which he belongs however loosely. It was Napoleon’s humiliation of the Germans, particularly the Prussians, which drove Fichte and the German intellectuals to call on the German masses to unite into a mighty nation which would dominate Europe. Theodore Herzl and the Jewish intellectuals were driven to Zionism by the humiliations heaped upon millions of Jews in Russia, and by the calumnies to which the Jews in the rest of continental Europe were subjected toward the end of the nineteenth century. To a degree the nationalist movement which forced the British rulers out of India had its inception in the humiliation of a scrawny and bespectacled Indian man of words in South Africa

Of course, the Man of Words is simply an intellectual forbear. Although it has happened, it’s rare that he or she is the actual leader of the movement. As Hoffer points out, Christ was not a Christian and Marx was not a Marxist. The movements came as a result of their anti-establishment thought-work, but there’s a crucial difference between the Man of Words and the Fanatic which will begin catalyzing the movement: the Man of Words may be a lot more intellectually flexible than the true believers who follow in their footsteps:

The genuine man of words himself can get along without faith in absolutes. He values the search for truth as much as truth itself. He delights in the clash of thought and in the give-and-take of controversy. If he formulates a philosophy and a doctrine, they are more an exhibition of brilliance and an exercise in dialectics than a program of action and the tenets of a faith. His vanity, it is true, often prompts him to defend his speculations with savagery and even venom; but his appeal is usually to reason and not to faith. The fanatics and the faith-hungry masses, however, are likely to invest such speculations with the certitude of holy writ, and make them the fountainhead of a new faith. Jesus was not a Christian, nor was Marx a Marxist.

[…]

The reason for the tragic fate which almost always overtakes the intellectual midwives of a mass movement is that, no matter how much they preach and glorify the united effort, they remain essentially individualists. They believe in the possibility of individual happiness and the validity of individual opinion and initiative. But once a movement gets rolling, power falls into the hands of those who have neither faith in, nor respect for, the individual. And the reason they prevail is not so much that their disregard of the individual gives them a capacity for ruthlessness, but that their attitude is in full accord with the ruling passion of the masses.

The next steps, the corralling of the people, is often carried out by a Fanatic.

Fanatics of a Revolution

When the moment is ripe, only the fanatic can hatch a genuine mass movement. Without him the disaffection engendered by militant men of words remains undirected and can vent itself only in pointless and easily suppressed disorders. Without him the initiated reforms, even when drastic, leave the old way of life unchanged, and any change in government usually amounts to no more than a transfer of power from one set of men of action to another. Without him there can perhaps be no new beginning.

This may be a bit of historical curve-fitting, but Hoffer thinks that a frustrated creative intellectual makes a pretty good Fanatic, and points to specific examples of where that held — Hitler, Robespierre and Lenin among them. Whether or not that is true matters less than the fact that the Fanatic is responsible for galvanizing the movement and pushing it to a point of no return.

But the Fanatic is not really a good leader or manager in a long-term sense, simply because of the nature of their fanaticism: They believe too strongly in their dogmas, and their intellectual blindness pushes them to blunder. Hitler and Mussolini would be excellent examples. Their fanaticism got them a long way, but ultimately it sowed the seeds of its own destruction.

If it is to be a sustainable movement, then the Men of Action, as Hoffer names them, will have to do the hard work.

Men of Action: Holding Down the Fort

Hoffer continues by describing the final phase of the beginning of a Movement: Leadership by a practical actor with less devotion to pure fanaticism and a healthier dose of order (ideally):

The chief preoccupation of a man of action when he takes over an “arrived” movement is to fix and perpetuate its unity and readiness for self-sacrifice. His ideal is a compact, invincible whole that functions automatically. To achieve this he cannot rely on enthusiasm, for enthusiasm is ephemeral. Persuasion, too, is unpredictable. He inclines, therefore, to rely mainly on drill and coercion. He finds the assertion that all men are cowards less debatable than that all men are fools, and, in the words of Sir John Maynard, inclines to found the new order on the “necks of the people rather than in their hearts.” The genuine man of action is not a man of faith but a man of law.

Still, he cannot help being awed by the tremendous achievements of faith and spontaneity in the early days of the movement when a mighty instrument of power was conjured out of the void. The memory of it is still extremely vivid. He takes, therefore, great care to preserve in the new institutions an impressive façade of faith, and maintains an incessant vow of fervent propaganda, though he relies mainly on the persuasiveness of force. His orders are worded in pious vocabulary, and the old formulas and slogans are continually on his lips. The symbols of faith are carried high and given reverence. The men of words and the fanatics of the early period are canonized.

Though the steel fingers of coercion make themselves felt everywhere and great emphasis is placed on mechanical drill, the pious phrases and the fervent propaganda give to coercion a semblance of persuasion, and to habit a semblance of spontaneity. No effort is spared to present the new order as the glorious consummation of the hopes and struggles of the early days.

It is, of course, true that the categories often overlap. Joseph Stalin was both a practical leader and a man of deep fanaticism, as was Hitler. The leaders of the American Revolution certainly carried both traits, as did Gandhi in leading the Indian Independence. The balance between the fanaticism necessary to catalyze real change and the practical sense needed to sustain a cohesive movement probably affords some measure of success or failure as time goes on. (Nazism collapsed, at least partially, due to fanaticism outstripping reality.)

From there, the new movement, no longer a minority but the dominant power, must find a way to stabilize, and it often does this by patching together a structure from many other institutions:

Stalin’s Russia was a patchwork of bolshevism, czarism, nationalism, pan-Slavism, dictatorship and borrowings from Hitler, and monopolistic capitalism. Hitler’s Third Reich was a conglomerate of nationalism, racialism, Prussianism, dictatorship and borrowings from fascism, bolshevism, Shintoism, Catholicism and the ancient Hebrews. Christianity, too, when after the conflicts and dissensions of the first few centuries it crystallized into an authoritarian church, was a patchwork of old and new and of borrowings from friend and foe. It patterned its hierarchy after the bureaucracy of the Roman Empire, adopted portions of the antique ritual, developed the institution of an absolute leader and used every means to absorb all existent elements of life and power.

***

Thus we have an outline for the True Believer style mass social movement: It starts by creating an ideology, a set of dogmas around which a fanatical leader or group can create a following. From there, it must find a way to sustain itself as reality creeps in on ideology — structure is introduced or the whole thing will collapse. In almost all cases, there is tremendous violence, although in certain (rare) circumstances, it can be bloodless. Even the rise of religions or nations that promote peace came with tremendous bloodshed.

In the end, mass movements likely take many forms, but Hoffer gives us as good a framework as any to start thinking about the way they are constructed.

Still Interested? Check out the whole book, it’s a very interesting read.

Lee Kuan Yew on the Proper Balance Between Competitiveness and Equality

Lee Kuan Yew, the former Prime Minister of Singapore and the one responsible for its rise from third world to first in only a generation, is a great source of wisdom.

In this excerpt from, Lee Kuan Yew: The Grand Master’s Insights on China, the United States, and the World, he talks about the necessary balance between competitiveness and equality.

To be successful, society must maintain a balance between nurturing excellence and encouraging the average to improve. There must be both cooperation and competition between people in the same society.

If everybody gets the same rewards, as they do under communism with their iron rice bowl, nobody strives to excel; society will not prosper, and progress will be minimal. That led to the collapse of the communist system. On the other hand, in a highly competitive society where winners get big prizes and losers paltry ones, there will be a great disparity between the top and the bottom layers of society, as in America. … At the end of the day, the basic problem of fairness in society will need to be solved. But first, we have to create the wealth. To do that, we must be competitive and have a good dose of the “yang.” If we have too much of the “yin” and over- redistribute the incomes of the successful, then we will blunt their drive to excel and succeed, and may lose too many of our able, who will move to other countries where they are not so heavily taxed. On the other hand, if too many at the lower end feel left out, then our society will become divisive and fractious, and cohesiveness will be lost. Communism has failed. The welfare state of Western democracies has also failed.

There is a continual need to balance between a successful, competitive society, and a cohesive, compassionate one. That requires judgment, to strike a bargain or social contract. Each society must arrive at that optimum point for itself. Between the two ends, the highly competitive and the excessively equal, lies a golden mean. This point will move with time and changing values.

I can best explain the need for balance between individual competition and group solidarity by using the metaphor of the oriental yin and yang symbol. … The more yang (male) competitiveness in society, the higher the total performance. If winner takes all, competition will be keen, but group solidarity will be weak. The more yin (female) solidarity, with rewards evenly distributed, the greater the group solidarity, but the weaker the total performance because of reduced competition…. We have arranged help, but in such a way that only those who have no other choice will seek it. This is the opposite of attitudes in the West, where liberals actively encourage people to demand entitlements with no sense of shame, causing an explosion of welfare costs.

George Washington’s Practical Self-Education

Our first President and Commander-in-Chief, George Washington, is not known as an intellectual, the way Ben Franklin, James Madison, Thomas Jefferson, and some of his other Revolutionary counterparts were. Washington had little formal education — he was not a university man and he did not occupy the intellectual circles when was young. He didn’t hope to make any contribution to political philosophy or the scientific understanding.

Washington grew up in Virginia into a landowning family, and his education didn’t continue beyond the equivalent of elementary school. He developed a trade — surveying — and would eventually inherit his family’s land and become a farmer and plantation owner. Washington couldn’t speak or read any language but English, living in a time when it was considered necessary and desirable to know French and Latin, at a minimum. (Ben Franklin learned English, Italian, Spanish, Latin, French, and German.) Unlike others we’ve written about before, Washington wasn’t very bookish.

“Washington was a practical reader. He clearly valued useful knowledge that made many of his tasks easier. He was and still is the quintessential American success story because he applied his mind to achieving success. He was relentless in pursuing his goals, and his reading is an applied demonstration of it.”

— Adrienne Harrison

And yet, this poorly educated man with seemingly little interest in literature, classics, or reading at all, became one of the seminal leaders in American history, and as Adrienne Harrison details in her book A Powerful Mind, he did it in large part by reading. Even a man with little interest in high-brow intellect, a man with very little time to spare, felt that sitting on his ass with a book was a useful thing indeed. He was a lifelong learner.

Practical Self-Education

As judged by the library he left behind, his diaries, and the investigations into his life, Washington did not carry much interest in theoretical or classical reading or learning. It seems unlikely that he read for pleasure. But Washington used reading as a means to an end — he wanted to know how to farm better, how to lead an army, how to lead a country, how to conduct himself civilly. There wasn’t any other way but to read and combine it with his direct experience.

Says Harrison in her book:

Washington was a practical reader … While the purpose of this book is not to remake Washington’s image into a sort of closeted scholar, it does argue that reading was a key component behind Washington’s success. The real contribution that this volume makes is that it takes one step closer to understanding how Washington’s mind worked. While his self-directed reading was not anywhere near that of Jefferson, Franklin, and Adams, Washington outshone them all by combining the knowledge he gained from his reading with his natural talent for leadership into a masterful performance.

Washington’s lack of education and culture certainly bothered him as a youngster. He was ambitious — he wanted to serve as a high-level British military officer and operate in government. He wanted to be a somebody. But he knew his formal education was going to be lacking, and he knew it wouldn’t all happen by accident. So he set out to do some of the hard work.

In a story that eventually became well-known, Washington first spent time as a teenager copying over a French manual for conducting yourself in high circles:

As his younger brothers Samuel and John Augustine still lay sleeping nearby and the first of the sun’s rays stretched through the neatly curtained windows and across the small table, the future father of his country busily copied word for word a translation of an old guidebook for princely behavior that a French Jesuit priest wrote called The Rules of Civility. 

Such a project was no small undertaking for the boy, but little by little he was determined to press on to the end; so he kept scratching at the paper with his quill, careful to keep his ink-stained fingers off the paper. By the time he was finished, young Washington’s manuscript consisted of 110 rules for how to properly conduct himself as a respectable member of society. He took pride in his work, for he would rely on these maxims to guide him throughout a long career in the public light.

This tells you a lot of Washington: He was a climber, he had discipline, and he could apply himself when needed. Even in the 18th century, not too many wealthy southern teenagers would have taken on that kind of task.

Learning the rules of civilized social behavior in this way, Washington started a pattern he’d carry on his entire life: Gaining knowledge from books that he couldn’t get through experience, or that he needed before he had the right experience. He did it again when he was put in charge of the Virginia Regiment, the first dedicated military unit in the colonies.

Washington hoped that leading this ragtag group of frontier soldiers against the French and the Natives would eventually lead to his becoming a full British military officer (which never happened). And although he was not actually part of the British military, as with his study of the Rules of Civility Washington took it upon himself to read the most influential book in British military circles, and instructed his officers to study it with him:

With specific regard to training, Washington was responsible for training not only raw recruits but also officers. Washington pushed his officers to study, particularly the latest in British military texts such as Humphrey Bland’s A Treatise on Military Discipline. Washington wrote that “having no opportunity to improve from example, let us read”; for he recognized that it was not possible for an ambitious officer to obtain the requisite expertise “without application, nor any merit or applause to be achieved without certain knowledge thereof.”

Bland’s Treatise was the fundamental textbook for all British officers. Known throughout the army as “the bible,” the 360-page manual spelled out everything a new officer needed to know about how to form and operate a regiment both in garrison and in the field. Bland outlined what an officer’s duties were and what officers could reasonably expect from their subordinates.

Studying for Success

Washington didn’t stop his self education upon completion of his duties as a frontier officer — he just changed course:

He therefore turned his attention to doing his duty to his country, Virginia, and shifted his focus to becoming a leader in that provincial society, which did actually appreciate his achievements…Washington abandoned his study of the military arts that he had begun some four years earlier, for that reading no longer served a practical purpose for him. He instead devoted his energies in the coming years to increasing his wealth and status in Virginia society.

[…]

To successfully mix in the best social circles, Washington had to learn more about the science of agriculture, history, politics, and religion, for he had to balance being a planter, a member of the House of Burgesses, and a parish vestryman. After he returned to Mount Vernon and began assembling a library, those subjects that had the practical purpose of advancing his social stature dominated his burgeoning collection.

Washington took it upon himself to delve deeply into agriculture, acquiring scores of books on how to improve the productivity of his farms and manage the soil more effectively. He read religious tracts to understand the mood of the people around him, and history books to understand the history of English people.

It’s important to note what Washington didn’t do. He didn’t try to achieve a classical education on his own. Some of his contemporaries were educated in England and became legal scholars, classicists, and composers of belles lettres. They wanted the mind of a European intellectual.

Washington didn’t do this — he wanted to learn things he could use, and given a limited amount of time, focused his attention where it was most profitable to him. (An opportunity cost problem which we hit on in our How to Read a Book course earlier this year.)

Having made his mental break with his Englishness after Lord Loudon harshly dealt him a very personal affront, Washington in that key moment was forced to confront his academic shortcomings. This realization, when coupled with his extreme sensitivity to criticism, drove Washington intellectually inward and toward the subjects that he felt most comfortable with and that, more important, could meet his immediate needs at the time. He was fortunate to have already made his public reputation in Virginia based on his natural propensities for physical bravery and on his leadership experience. Learning to read Latin or becoming an amateur scientist would not sustain that hard-won reputation in the planter-dominated high society; earning money and being a dedicated public servant would. Consequently, Washington focused his reading and intellectual pursuits accordingly, and reading remained an intensely private activity. For example, when in residence at Mount Vernon, he spent on average two hours in the morning and all afternoon alone in his library.

Washington would keep these habits the rest of his life, although during the Revolution and his presidency, he had a lot less time to devote to reading than at Mount Vernon. But he still did it, even in the midst of the great upheaval he led against the British:

With these military treatises and drill manuals that he acquired during the first two years of the Revolution, we see Washington applying the same diligent study method he had used previously with Duhamel’s Practical Treatise of Husbandry when he sought to make his plantations profitable. In other words, he read these military books for the sake of immediate practical problem solving. There is nothing philosophical or reflective about them. They are tactical field manuals, not massive theoretical tomes on the art of command as it evolved over the centuries.

This is not to recommend avoiding such reflective, theoretical tomes, if such reading interests you. But Washington does provide a good example to those who don’t take an inherent pleasure in deep reflection. The process of reading can be intensely practical as well as enjoyable for its own sake. Never think that reading is a mere luxury. Even the busiest man of the 18th century, who did not enjoy reading as an end itself, felt a duty to allocate his time to the written word. It was simply that important.

***

Still Interested? Check out the rest of Adrienne Harrison’s A Powerful Mind, or for a better and more thorough treatment, try the wonderful biography written by Ron Chernow, now the standard and most modern bio of the fascinating GW.

Life Advice: Be Careful of Life Advice

Nassim Taleb, the modern philosopher best known for his ideas on RandomnessThe Black Swan, and Antifragility, gave his first commencement address at an American University in Beirut.

Like him or not, Taleb is a unique and uncompromising mind. He doesn’t suffer any fools and doesn’t sacrifice his principles for money or fame, so far as one can tell anyways. He’s willing to take tremendous personal heat if he thinks he’s right. (Again, agree with him or not.) There’s a certain honor in his approach that must be admired.

The most interesting part of his commencement is on the idea of life advice itself. Commencement speeches are, obviously, meant to pass advice from a wise (and famous) person to a younger generation. But Nassim goes in a bit of a different direction: He advises the students to be careful of common life advice, for if he had followed it, he’d have never become the unique and interesting person he became.

I hesitate to give advice because every major single piece of advice I was given turned out to be wrong and I am glad I didn’t follow them. I was told to focus and I never did. I was told to never procrastinate and I waited 20 years for The Black Swan and it sold 3 million copies. I was told to avoid putting fictional characters in my books and I did put in Nero Tulip and Fat Tony because I got bored otherwise. I was told to not insult the New York Times and the Wall Street Journal; the more I insulted them the nicer they were to me and the more they solicited Op-Eds. I was told to avoid lifting weights for a back pain and became a weightlifter: never had a back problem since.

If I had to relive my life I would be even more stubborn and uncompromising than I have been.

The truth is, much of the advice you receive as a young person will be pretty good. Saving money works. Marrying the right person works. Avoiding drugs works. Etc. The obvious stuff is worth following. (You don’t always have to walk on your hands because everyone else walks on their feet.)

But there’s a host of more subjective wisdom that, generally speaking, leads you to become a lot more like other people. “Common wisdom,” insofar as it’s actually common, tends to reinforce cultural norms and values. If you want to lead a comfortable existence, that may work fine. But it won’t create another Nassim Taleb, or another Steve Jobs, or another Richard Feynman. They, and many others, embraced what made them different.

Of course, many less successful people embraced their oddities, too. The silent grave is chock full of candidates. This isn’t a “recipe for success” or some other nonsense — it’s more complicated than simply being different. (The narrative fallacy is always right around the corner.)

But one has to suspect that a more interesting and honorable life is led by those who are a bit uncompromising on the important values like integrity, self-education, and moral courage. If you can offset that by being extremely compromising on the unimportant stuff, you may have a shot at living an interesting and different life with a heaping scoop of integrity.

You can read the rest of the commencement here. If you’re still interested, check out a few other great commencement speeches.

Sol Price on Becoming Your Customer’s Best Friend

Sol Price is a legend in the retail business. Price founded one of the first discount retailers, FedMart, in the 1950s, and then later the pioneer warehouse club Price Club, which he later sold to Costco, a business started by his former protege Jim Sinegal. Price’s innovations would go on to change the retail landscape dramatically and permanently. Costco now does $120 billion in sales and Sam’s Club, owned by Wal-Mart, does about $60 billion. Adding in other smaller operations, warehouse retailing is at least a $200 billion business in the United States alone.

Price innovated in several ways: Membership fees, way fewer product SKUs in stock, much larger sizes, extremely low profit margins bordering on break-even, low employee turnover and a lean labor model. But these were all mere symptoms of his overall stance: Price’s fundamental innovation was his approach to the customer relationship.

Whereas most retailers saw customers as adversaries, bodies to be sold to, Price saw the world differently. He felt he was on the customers’ side. He felt his job as a retailer was to become the customer’s greatest friend and advocate, and in return, the customer would pledge his loyalty back. He understood that trust given is trust earned.

Sol Price Price Club

The idea was very simple: See the world through the eyes of the customer. His son Robert, influential in his own right, describes Price’s unusual attitude (which is still uncommon) in a book called Sol Price: Retail Revolutionary & Social Innovator:

Sol’s experience as an attorney representing clients, and his own moral code, became a foundational feature of the FedMart business. Sol described his business approach as “the professional fiduciary relationship between us (the retailer) and the member (the customer). We felt we were representing the customer. You had a duty to be very, very honest and fair with them and so we avoided sales and advertising. We have in effect said that the best advertising is by our members…the unsolicited testimonial of the satisfied customer.”

This fiduciary relationship with the customer was similar to the Golden Rule; the way Sol put it—if you want to be successful in retail, just put yourself in the place of a cranky, demanding customer. In other words, see your business through the eyes of the customer.

Clearly, Sol Price followed Tussman’s dictum to understand the world and act accordingly, and understood the value of a win-win relationship. The success of Costco in his wake, and the continued loyalty of its customers in the face of a rapidly changing retail landscape, is a testimony to the value of his attitude.

Price had a few simple tenets in running FedMart and Price Club, which Sinegal would later adopt at Costco:

  1. Provide the best possible value to the customers, excellent quality products at the lowest possible prices.
  2. Pay good wages and provide good benefits, including health insurance to employees.
  3. Maintain honest business practices.
  4. Make money for investors.

Regarding the last point, it was clearly important to Price to make money, and if you look at Costco today, the model is obviously profitable. But it’s not that profitable. Costco makes solid returns but not incredible ones. And that is by choice.

Price — and Sinegal by extension — wanted a win-win relationship whereby he made his investors a reasonable return on their capital and the customer got a better deal than they could find elsewhere, while employees were paid well enough and treated well enough that they wouldn’t want to leave. In his words, “If you recognize you’re really a fiduciary for the customer, you shouldn’t make too much money.” This model has been tough to beat.

Price was so hardcore about his fairness philosophy that he wouldn’t even engage in loss-leader pricing, which is common in retail. Have you ever found yourself saying How can they make any money at this price? Well, they may not be — products are frequently priced below cost to induce you to buy other products at a more inflated profit margin. But Price wouldn’t do this: It meant he was selling some portion of his goods at inflated prices to make up for the loss leaders, and that he would not abide.

His customer advocacy went so far that if Price’s competitors were selling a competing product below cost, Price did one of the most unusual things I’ve ever heard: He put up signs telling his customers to go shop there.

In this way and many others, the life of Sol Price reinforces the truth of Munger’s philosophy for living a more effective life: “Take a simple idea, and take it seriously.”

***

Still Interested? Check out the book in its entirety.

Ben Franklin and the Virtues and Ills of Pursuing Luxury

In a letter written in 1784 to his friend Benjamin Vaughan, Ben Franklin has a very interesting cogitation on the aggregate effect of the pursuit of luxuries beyond our needs.

Franklin displays a mastery of rational, balanced thought, and a deep understanding of human nature. Is the pursuit of luxury a net benefit or detriment to a country? Why do we pursue it?

The salient passages are below. (You can find his full writings here.) The last paragraph, in particular, is a gem, but taking 10 minutes to read it through is worth the time.

I have not, indeed yet thought of a Remedy for Luxury  I am not sure, that in a great State it is capable of a Remedy. Nor that the Evil is in itself always so great as it is represented.  Suppose we include in the Definition of Luxury all unnecessary Expence, and then let us consider whether Laws to prevent such Expence are possible to be executed in a great Country, and whether, if they could be executed, our People generally would be happier, or even richer. Is not the Hope of one day being able to purchase and enjoy Luxuries a great Spur to Labour and Industry? May not Luxury, therefore, produce more than it consumes, if without such a Spur People would be, as they are naturally enough inclined to be, lazy and indolent?

[…]

In our Commercial Towns upon the Seacoast, Fortunes will occasionally be made. Some of those who grow rich will be prudent, live within Bounds, and preserve what they have gained for their Posterity ; others, fond of showing their  Wealth, will be extravagant and ruin themselves. Laws  cannot prevent this; and perhaps it is not always an evil to the Publick. A Shilling spent idly by a Fool, may be picked up by a Wiser Person, who knows better what to do with it.  It is therefore not lost. A vain, silly Fellow builds a fine House, furnishes it richly, lives in it expensively, and in few years ruins himself; but the Masons, Carpenters, Smiths, and other honest Tradesmen have been by his Employ assisted in maintaining and raising their Families ; the Farmer has been paid for his labour, and encouraged, and the Estate is now in better Hands. In some Cases, indeed, certain Modes of Luxury may be a publick Evil, in the same Manner as it is a Private one. If there be a Nation, for Instance, that exports its Beef and Linnen, to pay for its Importation of Claret and Porter, while a great Part of its People live upon Potatoes, and wear no Shirts, wherein does it differ from the Sot, who lets his Family starve, and sells his Clothes to buy Drink? Our American Commerce is, I confess, a little in this way. We sell our Victuals to your Islands for Rum and Sugar; the substantial Necessaries of Life for Superfluities. But we have Plenty, and live well nevertheless, tho’ by being soberer, we might be richer.

[…]

It has been computed by some Political Arithmetician, that, if every Man and Woman would work for four Hours each Day on something useful, that Labour would produce sufficient to procure all the Necessaries and Comforts of Life, Want and Misery would be banished out of the World, and the rest of the 24 hours might be Leisure and Pleasure.

What occasions then so much Want and Misery? It is the Employment of Men and Women in Works, that produce neither the Necessaries nor Conveniences of Life, who, [along] with those who do nothing, consume the Necessaries raised by the Laborious.

To explain this.

The first Elements of Wealth are obtained by Labour, from the Earth and Waters. I have Land, and raise Corn. With this, if I feed a Family that does nothing, my Corn will be consum’d, and at the end of the Year I shall be no richer than I was at the beginning. But if, while I feed them, I employ them, some in Spinning, others in hewing Timber and sawing Boards, others in making Bricks, &c. for Building, the Value of my Corn will be arrested and remain with me, and at the end of the Year we may all be better clothed and better lodged. And if, instead of employing a Man I feed in making Bricks, I employ him in fiddling for me, the Corn he eats is gone, and no Part of his Manufacture remains to augment the Wealth and Convenience of the family; I shall therefore be the poorer for this fiddling Man, unless the rest of my Family work more, or eat less, to make up the Deficiency he occasions.

Look round the World and see the Millions employ’d in doing nothing, or in something that amounts to nothing, when the Necessaries and Conveniences of Life are in question. What is the Bulk of Commerce, for which we fight and destroy each other, but the Toil of Millions for Superfluities, to the great Hazard and Loss of many Lives by the constant Dangers of the Sea? How much labour is spent in Building and fitting great Ships, to go to China and Arabia for Tea and Coffee, to the West Indies for Sugar, to America for Tobacco! These things cannot be called the Necessaries of Life, for our Ancestors lived very comfortably without them.

A Question may be asked; Could all these People, now employed in raising, making, or carrying Superfluities, be subsisted by raising Necessaries? I think they might. The World is large, and a great Part of it still uncultivated. Many hundred Millions of Acres in Asia, Africa, and America are still Forest, and a great Deal even in Europe. On 100 Acres of this Forest a Man might become a substantial Farmer, and 100,000 Men, employed in clearing each his 100 Acres, would hardly brighten a Spot big enough to be Visible from the Moon, unless with HerschelTs Telescope ; so vast are the Regions still in Wood unimproved.

‘Tis however, some Comfort to reflect, that, upon the whole, the Quantity of Industry and Prudence among Mankind exceeds the Quantity of Idleness and Folly. Hence the Increase of good Buildings, Farms cultivated, and populous Cities filled with Wealth, all over Europe, which a few Ages since were only to be found on the Coasts of the Mediterranean; and this, notwithstanding the mad Wars continually raging, by which are often destroyed in one year the Works of many Years’ Peace. So that we may hope the Luxury of a few Merchants on the Seacoast will not be the Ruin of America.

One reflection more, and I will end this long, rambling Letter. Almost all the Parts of our Bodies require some Expence. The Feet demand Shoes; the Legs, Stockings; the rest of the Body, Clothing; and the Belly, a good deal of Victuals. Our Eyes, tho’ exceedingly useful, ask, when reasonable, only the cheap Assistance of Spectacles, which could not much impair our Finances. But the Eyes of other People are the Eyes that ruin us. If all but myself were blind, I should want neither fine Clothes, fine Houses, nor fine Furniture.

Adieu, my dear Friend, I am

Yours ever
B. FRANKLIN.

***

Still Interested? Check out Franklin’s Rule for Decision Making, and check out the excellent book The Way to Wealth and Other Writings on Finance for an edited and condensed look at Franklin’s various essays on economics, business, and finance.