Resentment has always worked for me exactly as it worked for Carson. I cannot recommend it highly enough to you if you desire misery. Johnson spoke well when he said that life is hard enough to swallow without squeezing in the bitter rind of resentment.
For those of you who want misery, I also recommend refraining from practice of the Disraeli compromise, designed for people who find it impossible to quit resentment cold turkey. Disraeli, as he rose to become one of the greatest Prime Ministers, learned to give up vengeance as a motivation for action, but he did retain some outlet for resentment by putting the names of people who wronged him on pieces of paper in a drawer. Then, from time to time, he reviewed these names and took pleasure in noting the way the world had taken his enemies down without his assistance.
Well, so much for Carson's three prescriptions. Here are four more prescriptions from Munger:
First, be unreliable. Do not faithfully do what you have engaged to do. If you will only master this one habit you will more than counterbalance the combined effect of all your virtues, howsoever great. If you like being distrusted and excluded from the best human contribution and company, this prescription is for you. Master this one habit and you can always play the role of the hare in the fable, except that instead of being outrun by one fine turtle you will be outrun by hordes and hordes of mediocre turtles and even by some mediocre turtles on crutches.
I must warn you that if you don't follow my first prescription it may be hard to end up miserable, even if you start disadvantaged. I had a roommate in college who was and is severely dyslexic. But he is perhaps the most reliable man I have ever known. He has had a wonderful life so far, outstanding wife and children, chief executive of a multibillion dollar corporation.
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If you want to avoid a conventional, main-culture, establishment result of this kind, you simply can't count on your other handicaps to hold you back if you persist in being reliable.
I cannot here pass by a reference to a life described as "wonderful so far," without reinforcing the "so far" aspects of the human condition by repeating the remark of Croesus, once the richest king in the world. Later, in ignominious captivity, as he prepared to be burned alive, he said: "Well now do I remember the words of the historian Solon: "No man's life should be accounted a happy one until it is over."
My second prescription for misery is ro learn everything you possibly can from your own personal experience, minimizing what you learn vicariously from the good and bad experience of others, living and dead. This prescription is a sure-shot producer of misery and second-rate achievement.
You can see the results of not learning from others' mistakes by simply looking about you. How little originality there is in the common disasters of mankind - drunk driving deaths, reckless driving maimings, incurable venereal diseases, conversion of bright college students into brainwashed zombies as members of destructive cults, business failures through repetition of obvious mistakes made by predecessors, various forms of crowd folly, and so on. I recommend as a memory clue to finding the way to real trouble from heedless, unoriginal error the modern saying: "If at first you don't succeed, well, so much for hang gliding."
The other aspect of avoiding vicarious wisdom is the rule for not learning from the best work done before yours. The prescription is to become as non-educated as you reasonable can.
Perhaps you will better see the type of non-miserable result you can thus avoid if I render a short historical account. There once was a man who assiduously mastered the work of his best predecessors, despite a poor start and very tough time in analytic geometry. Eventually his own original work attracted wide attention and he said of that work:
"lfl have seen a little farther than other men it is because I stood on the shoulders of giants."
The bones of that man lie buried now, in Westminster Abbey, under an unusual inscription:
"Here lie the remains of all that was mortal in Sir Isaac Newton."
My third prescription for misery is to go down and stay down when you get your first, second, or third severe reverse in the battle oflife. Because there is so much adversity out there, even for the lucky and wise, this will guarantee that, in due course, you will be permanently mired in misery. Ignore at all cost the lesson contained in the accurate epitaph written for himself by Epicetus: "Here lies Epicetus, a slave, maimed in body, the ultimate in poverty, and favored by the Gods."
My final prescription to you for a life of fuzzy thinking and infelicity is to ignore a story they told me when I was very young about a rustic who said: "I wish I knew where I was going to die, and then I'd never go there." Most people smile (as you did) at the rustic's ignorance and ignore his basic wisdom. If my experience is any guide, the rustic's approach is to be avoided at all cost by someone bent on misery. To help fail you should discount as mere quirk, with
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no useful message, the method of the rustic, which is the same one used in Carson's speech. What Carson did was to approach the study of how to create X by turning the question backward, that is, by studying how to create non-X. The great algebraist, Jacobi, had exactly the same approach as Carson and was known for his constant repetition of one phrase: "Invert, always invert." It is in the nature of things, as Jacobi knew, that many hard problems are best solved only when they are addressed backward. For instance, when almost everyone else was trying to revise the electromagnetic laws of Maxwell to be consistent with the motion laws of Newton, Einstein discovered special relativity as he made a 180 degree turn and
revised Newton's laws to fit Maxwell's.
It is my opinion, as a certified biography nut, that Charles Robert Darwin would have ranked near the middle of the Harvard School graduating class of 1986. Yet he is now famous in the history of science. This is precisely the type of example you should learn nothing from if bent on minimizing your results from your own endowment.
Darwin's result was due in large measure to his working method, which violated all my rules for misery and particularly emphasized a backward twist in that he always gave priority attention to evidence tending to disconfirm whatever cherished and hard-won theory he already had. In contrast, most people early achieve and later intensify a tendency to process new and disconfirming information so that any original conclusion remains intact. They become people of whom Philip Wylie observed: "You couldn't squeeze a dime between what they already know and what they will never learn."
The life of Darwin demonstrates how a turtle may outrun the hares, aided by extreme
objectivity, which helps the objective person end up like the only player without blindfold in a game of pin-the-donkey.
If you minimize objectivity, you ignore not only a lesson from Darwin but also one from
Einstein. Einstein said that his successful theories came from: "Curiosity, concentration, perseverance and self-criticism. And by self-criticism he meant the testing and destruction of his own well-loved ideas.
Finally, minimizing objectivity will help you lessen the compromises and burdens of owning worldly goods, because objectivity does not work only for great physicists and biologists. It also adds power to the work of a plumbing contractor in Bemidji. Therefore, if you interpret being true to yourself as requiring that you retain every notion of your youth you will be safely underway, not only toward maximizing ignorance, but also toward whatever misery can be obtained through unpleasant experiences in business.
It is fitting now that a backward sort of speech end with a backward sort of toast, inspired by Elihu Root's repeated accounts of how the dog went to Dover, "leg over leg." To the class of 1986:
Gentlemen, may each of you rise high by spending each day of a long life aiming low.
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- APPENDIX Two -
WISDOM FROM CHARLES T. MUNGER AND WARREN E. BUFFETT
On how to change people
Suppose you've got a client who really wants to commit tax fraud. If he doesn't push the tax law away beyond the line, he can't sta
nd it. He can't shave in the morning if he thinks there's been any cheating he could get by with that he hasn't done. And there are people like that. They just feel they aren't living aggressively enough.
You can approach that situation in either of two ways: (A) you can say, "I just won't work for him," and duck it. Or, (B) you can say, "Well, the circumstances of my life require that I work for him. And what Tm doing for him doesn't involve my cheating. Therefore, I'll do it." And if you see he wants to do something really stupid, it probably won't work to tell him,
"What you're doing is bad. I have better morals than you."
That offends him. You're young. He's old. Therefore, instead of being persuaded, he's more likely to react with, "Who in the hell are you to establish the moral code of the whole world?" But instead, you can say to him, "You can't do that without three other people beneath you knowing about it. Therefore, you're making yourself subject to blackmail. You're risking your
reputation. You're risking your family, your money, etc."
That is likely to work. And you're telling him something that's true. Do you want to spend a lot of time working for people where you have to use methods like that to get them to behave well? I think the answer is no. But if you're hooked with it, appealing to interest is likely to work better as a matter of human persuasion than appeal to anything else. That, again, is a powerful psychological principle with deep biological roots.
I saw that psychological principle totally blown at Salomon. Salomon's general council knew that the CEO, Gutfreund, should have promptly told the Federal authorities all about Salomon's trading improprieties in which Gutfreund didn't participate and which he hadn't caused. And the general counsel urged Gutfreund to do it. He told Gutfreund, in effect, "You're probably not legally required to do that, but it's the right thing to do. You really should."
But it didn't work. The task was easy to put off - because it was unpleasant. So that's what Gutfreund did - he put it off.
And the general counsel had very little constituency within Salomon except for the CEO. If the CEO went down, the general counsel was going down with him. Therefore, his whole career was on the line. So to save his career, he needed to talk the dilatory CEO into doing the right thing.
It would've been child's play to get that job done right. All the general counsel had to do was to tell his boss, "John, this situation could ruin your life. You could lose your wealth. You could lose your reputation... "And it would have worked. CEOs don't like the idea of being
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ruined, disgraced and fired. (Lecture by Charles T. Munger to the students of Professor William Lazier at Stanford Law School, Outstanding Investor Digest, March 13, 1998, p.59.)
On some reasons to why managers don't make rational decisions
My most surprising discovery: the overwhelming importance in business of an unseen force that we might call "the institutional imperative." In business school, I was given no hint of the imperative's existence and I did not intuitively understand it when I entered the business world. I thought then that decent, intelligent, and experienced managers would automatically make rational business decisions. But I learned over time that isn't so. Instead, rationality frequently wilts when the institutional imperative comes into play.
For example: (1) As if governed by Newton's First Law of Motion, an institution will resist any change in its current direction; (2) Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds; (3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops; and (4) The behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated.
Institutional dynamics, not venality or stupidity, set businesses on these courses, which are too often misguided. After making some expensive mistakes because I ignored the power of the imperative, I have tried to organize and manage Berkshire in ways that minimize its influence. Furthermore, Charlie and I have attempted to concentrate our investments in companies that appear alert to the problem. (Warren Buffett, Berkshire Hathaway Inc., Letters to Shareholders, 1989, p.62.)
On the difficulty of replacing a CEO
Most organizations depend on the self-interest of the superior to weed out the second-rate inferior. If I'm a sales manager and I've got lots of lousy salesmen, it hurts my performance and it probably hurts my income to keep on the sub-par performers. It certainly hurts a football coach to keep a sub-par quarterback or any other player in there ifhe can get a better one. In almost all jobs, there is a reward or penalty system that causes the superior to think actively about whether the people beneath him are doing a first-class job and to do something about it if they aren't.
That works all the way up to the CEO. But the CEO's superiors are the directors of the publicly held company. And are the directors of the company going to suffer if the CEO is sub-par? Probably only if they're embarrassed. That's the way you hurt the superior in that case. You don't take away his directors' fee. And as a practical matter, you don't displace directors very often. So the only system that's comparable to the problem of the football coach or the sales manager is probably to hurt psychically the position of the inferior director
- and that will work. Otherwise, the motivation to correct the CEO problem is not strong unless there's a big ownership among directors - and even that doesn't always work perfectly. To change directors usually takes the action of big shareholders. It doesn't happen any other way. It's a very awkward situation for a management or a group of directors, who have somehow selected other weak directors, to make changes. It goes against all the natural
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societal norms to walk up to some guy at a meeting- who isn't causing any harm and is sitting there like a potted palm - and turn to him and say, "We've all thought it over. And you're really not any good." It just doesn't happen. (Warren Buffett, Berkshire Hathaway annual meeting, 1993, Outstanding Investor Digest, June 30, 1993, p.32.)
On the kind of people we should do business with
I have been asked by a number of people just what secrets the Blumkins [Nebraska Furniture Mart] bring to their business. These are not very esoteric. All members of the family: (1) apply themselves with an enthusiasm and energy that would make Ben Franklin and Horatio Alger look like dropouts; (2) define with extraordinary realism their area of special competence and act decisively on all matters within it; (3) ignore even the most enticing propositions falling outside of that area of special competence; and (4) unfailingly behave in a high-grade manner with everyone they deal with. (Mrs. B boils it down to "sell cheap and tell the truth".) (Warren Buffett, Berkshire Hathaway Inc., Letters to Shareholders, 1984, p.87.)
We really don't want to buy into any organization that we felt would be lacking that quality [intellectual honesty] in the first place - because we really don't believe in buying into organizations to change them. We may change the comp system a little or something of the sort...
We want people joining us who already are the type that face reality and that basically [not only] tell us the truth, but tell themselves the truth - which is even more important. Once you get an organization that lies to itself- and there are plenty that do - I just think you get into all kinds of problems. And people know it throughout the organization and they adopt the norms of what they think is happening up above them. Particularly in a financial organization - really in any organization, but particularly in a financial organization - that is death over time. We wouldn't buy into something that we felt had that problem with the idea that we would correct it - because we wouldn't. We've had a little experience with some organizations that have had that sort of problem. And it's not correctable - at least based on the life span of humans. It's too much to commit to. (Warren Buffett, Berkshire Hathaway annual meeting, 2000, Outstanding Investor Digest, OID.Com, continued from December 18, 2000 &Year End 200
0 Editions.)
We find it meaningful when an owner cares about whom he sells to. We like to do business with someone who loves his company, not just the money that a sale will bring him (though we certainly understand why he likes that as well). When chis emotional attachment exists, it signals that important qualities will likely be found within the business: honest accounting, pride of product, respect for customers, and a loyal group of associates having a strong sense of direction. The reverse is apt to be true, also. When an owner auctions off his business, exhibiting a total lack of interest in what follows, you will frequently find that it has been dressed up for sale, particularly when the seller is a "financial owner." And if owners behave with little regard for their business and its people, their conduct will often contaminate attitudes and practices throughout the company. (Warren Buffett, Berkshire Hathaway Inc., 2000 Annual Report, p.7.)
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On picking up the right character traits
Buffett: It does pay to have the right models.. .I think that it just stands to reason that if you copy the people that you look up to - particularly if you do it at an early enough age... If you influence the role models of a five-year old or an eight-year old or a ten-year old, then it's going to have a huge impact.
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