MACHINA

by Sebastian Marshall

  To quote two men from very different backgrounds that drive at the same idea, father of value investing, Benjamin Graham said, “In the short run, the market is a voting machine but in the long run, it is a weighing machine”… whereas Mao noted that “political power grows out of the barrel of a gun.”

  So – caution is warranted before getting too deep down the intersubjective rabbit hole; reality always has the final say in the matter.

  Now, on to takeaways –

  1. Recognize the intersubjective everywhere, and thus be much smarter.

  How loud can you speak here? Should you wait in line or push your way to the front? How clean is an appropriately clean house? Why is money worth something? What’s the expected behavior at a dinner party? Why do we respect borders of countries? How much respect and deference should religious figures get? What should you spend your paycheck on? How fancy of clothing, cars, furniture, and other things should people like you buy to fit in?

  All of this is intersubjective.

  You now have a word for it. You can not fail to notice it now. Intersubjective stuff is real, certainly – subjective tastes and whims matter, sure, but are infinitely less important than objective things. Once something hardens into something intersubjective – the norms and expected behaviors and broad agreements – people often fail to note it’s not objective, but still lives by mutual agreement.

  Law – country – passport – credit – money – work – property – language itself – all of this is intersubjective.

  Just knowing the word is incredibly powerful.

  2. Scrutinize and eliminate foolishly inherited intersubjective notions.

  I’m so anti-utopian it’s not even funny. Utopians are the most devastatingly destructive people in the world. Nothing leads you quite into hell and misery and downgoing like trumpets blaring with beautiful ideas that don’t actually work. Pragmatism is the midwife of all prosperity and goodness.

  Thus, the first thing to do after recognizing the intersubjective is not “start adding more intersubjective stuff,” but instead to start stripping the worst of it away.

  As Antoine de Saint Exupéry put it,

  “Il semble que la perfection soit atteinte non quand il n'y a plus rien à ajouter, mais quand il n'y a plus rien à retrancher.”

  “Perfection is finally attained not when there is no longer anything to add, but when there is no longer anything to take away.”

  Or the Zen proverbs,

  “The Buddhist scriptures are nothing but scraps of paper for wiping up filth.”

  “If you see the Buddha on the road, kill him.”

  Zen practitioners throughout the ages tend to respect objective reality immensely – chop wood, carry water. They tend to respect subjective reality immensely – “When you’re hungry, eat. When you’re tired, sleep.”

  They tend to be strongly dismissive of intersubjective reality: language, words, traditions, scriptures, and so on.

  This might be wise counsel to emulate, first and foremost. Dumping the trash out of your mind is always going to produce more value than cramming more ideas into an otherwise cluttered and disoriented place.

  3. Finally, the pragmatic and unopinionated person can shape the intersubjective to greatly benefit humanity.

  If you neglect pragmatism in favor of mere ideas – if you believe that 100 pacifists could really impose their moral authority and will on 100 of the Mongol General Subutai’s outriders, or Mao’s elite troops, or any such thing without outside intervention – well, good luck with that.

  So, take care of objective reality. Kemal needed armed, trained, well-equipped troops to expel the invaders from Turkish territory before negotiating a settlement and building the Republic of Turkey formally.

  And then, start by dumping the trash out of your own mind. It's a recipe for disaster to take a flawed and broken ideal that you inherited, but which doesn’t serve you, and then try to build on top of it.

  To quote one last Zen precept on the matter,

  “The Great Way is not difficult for those who have no preferences. When love and hate are both absent everything becomes clear and undisguised.”

  But then, once all that is true, building better intersubjective norms might be one of the most powerful things at your command.

  There is nothing stopping you from importing Japanese-style courtesy into your home in another country, from building a social circle that’s incredibly uplifting, from completely defecting and embargoing from foolish norms that mandate eating junk and getting intoxicated with people you dislike without enjoying it…

  The world needs people who can think clearly about norms and institutions, and who can construct new ones when it’s called-for.

  But get on solid ground first!

  Eradicate foolish opinions first!

  Then, and only then, perhaps much ground can be covered intersubjectively.

  I marvel over Kemal; he is a hero to me.

  Turkey has its ups and downs, and yet, it is a magnificent place filled with magnificent people; Istanbul is one of the finest cities in the world, perhaps my favorite in all of my travels. I genuinely love and admire the Turks and what they built their civilization to be.

  But there was no “Turkey” before Kemal conceived of it, built it, reinforced it, defended it.

  In 1934, the Turkish parliament gave him an additional surname, and he became –

  Mustafa Kemal Atatürk

  It means “Father of the Turks.”

  Truly, a worthy designation for a man of such heroism and genius.

  Mind the intersubjective! It’s not real the way an apple or an AK-47 is real, but it’s pretty damn important just the same.

  Temporal Control #6: The Heart of the Matter

  THE KEYSTONE

  “A keystone is the wedge-shaped stone piece at the apex of a masonry arch, the generally round one at the apex of a vault. In both cases it is the final piece placed during construction and locks all the stones into position, allowing the arch or vault to bear weight. … Although a masonry arch or vault cannot be self-supporting until the keystone is placed, the keystone experiences the least stress of any of the voussoirs, due to its position at the apex.” – Wikipedia: Keystone_(architecture)

  ***

  2 SEPTEMBER 1870

  Surveying the scene of the debacle, you could be forgiven if you’d forgot that the French had declared this war.

  Drunk on past glories, the self-assessment of the French population and leadership was… mistaken. They felt ever and always superior to their opponents on the battlefield.

  Failing to see how the world had shifted in two generations, French Emperor Napoleon III (nephew of Napoleon I), had personally headed out to command the Imperial troops at Sedan.

  They were crushed.

  It was one of the most lopsided defeats between two modern powers in the gunpowder age. The Germans took 9,000 casualties; the French… 120,000.

  Napoleon III, having seen his armies at Sedan fully encircled, with no hope of breaking out, was forced to choose between a senseless bloodbath or capitulation. He chose the latter –

  “At six o'clock in the morning on 2 September, in the uniform of a general, and accompanied by four generals from his staff, Napoleon was taken to the German headquarters at Donchery. He expected to see King William, but instead he was met by Bismarck and the German commander, General von Moltke. They dictated the terms of the surrender to Napoleon. Napoleon asked that his army be disarmed and allowed to pass into Belgium, but Bismarck refused. […] The Emperor was then taken to the Chateau at Bellevue, where he was visited by the Prussian King. Napoleon told the King that he had not wanted the war, but had been forced into it by public opinion. The Prussian king politely agreed.”

  Five months later, in a glittering spectacle, the German Empire was proclaimed from within the Hall of Mirrors at the French Palace of Versailles. Chancellor Bismarck and General Moltke surveyed their work proudly, had cocktails and sna
cks, and listened with faint Prussian smiles to the German music playing in the French halls, as Wilhelm I was proclaimed German Emperor.

  ***

  A FLAW IN OUR COGNITION

  Humans are such wonderful and miraculous creatures, are we not?

  And yet, ask around to those who understand our psychology – perhaps asking Kahneman, who seems to know our species rather well – and you’ll hear that we routinely make some large and reasonably well-known errors.

  Most of these “cognitive biases” are well-proven... and baffling in how stupid they make us. Get shown a random number written on a piece of paper (say, 117) and then get asked how many countries are in Africa… and the number of countries you guess will be closer to 117 than if you were shown a lower number like "15".

  Well, this field is already being mapped rather well by Kahneman et al; we need not spend too much time on it.

  But there is another class of errors that humans make, that Kahneman and his colleagues are unfortunately not exploring as rapidly.

  Objectively, getting shown a random number – 117 – should not have any effect on the next estimate you make on a topic. And yet, it does. We know that. It’s a very big flaw.

  Yet Kahneman et al, for all the genius of the behavioral economists, tend not to venture into the boundary and borders where the subjective and objective meet.

  One of the larger flaws in human cognition, as I see it, is how much stories and narratives seem to dominate raw information.

  It makes sense, of course, on many levels. It’s not all bad. But in 2016, it is at least a potentially weak point.

  It would not be so bad, actually, if the stories that were most persuasive and appealing to us also helped us learn…

  … if the stories we were most attracted to weren’t stories of train wrecks.

  When there is a car crash on the road, an accident, most drivers cannot stop themselves from morbidly craning their neck to get a look at the carnage.

  Likewise, the tendency in historical studies is to look at the great spectacles and train wrecks – those who led their nation seemingly to the highest levels of glory, but who came crashing back down to earth in din and clatter, and who died badly – of course, you know the story of Alexander, of Napoleon I, of Hitler.

  Train wrecks. You know the names and stories of the great calamaties.

  But how many temperate and fundamentally solid names do you know?

  ***

  TEMPORAL CONTROL #6: THE HEART OF THE MATTER

  Helmuth von Moltke is certainly one of the most impressive Generals of all-time; paired with Otto von Bismarck, the two of them rapidly unified Germany from a disparate mix of little city-states and principalities into a powerful modern industrial state.

  We often overlook fundamentally solid commanders, modernizers, pragmatists… Moltke invented a lot of what runs modern armies, but people who are not military scholars do not know this name.

  Why?

  Moltke and Bismarck were not fanatic idealogues. They were flexible. Having reached their core aims in German Unification, they did something miraculous – they stopped.

  It’s a rare and precious ability, knowing when to quit and take your chips away from the table.

  One of the great strengths of those two Prussians is the focus of this chapter, and one of the most simple and profitable lessons to be had –

  Getting right at the heart of the matter.

  An arch is unstable until the keystone is placed in it.

  Likewise, there are oftentimes a single actions or a single factor that will determine and dominate all other factors at play.

  This is worth exploring and learning from.

  ***

  WORAUF?

  You might memorize the word “Worauf?” and start using it shorthand for,

  “Worauf kommt es eigentlich an?”

  In English, you might translate to something like: “What is the heart of the matter?”

  The phrase is explained in the good-but-not-great book, “Art of Action” by Stephen Bungay –

  “Watching the Prussians in 1870, General Woide thought that they had perfected a secret weapon. He was right, in that the most important things happening were going on in people’s heads. People […] who see themselves as functionaries, the servants of a process, or cogs in a machine, behave quite differently from those who understand themselves as independent agents bearing some responsibility for the achievement of a collective purpose and as part of a living organism. The ultimate test of how embedded the disciplines are is how individuals think. In his comparison of the US and German armies of the 1940s, van Creveld points to the difference succinctly:

  “A German officer, confronted by some task, would ask: worauf kommt es eigentlich an? (what is the core of the problem?). An American one, trained in the “engineering approach” to war, would inquire: what are the problem’s component parts?””

  That paragraph is important, perhaps more important than it looks on a quick glance.

  Between the 1940’s and now, the American military learned this lesson the hard way – written in blood. But across our civilian world, it’s still far too common to see people take that “engineering approach” to things that matter…. and to fail spectacularly.

  ***

  BEYOND COMPONENT PARTS

  The astute long-term reader will say: “Wait! Marshall, I’ve read you specifically advocate for doing ‘component parts’ analyses multiple times!”

  Indeed, this is true. Do not neglect the details. The details are precious.

  But the idea of driving at the heart of the matter is that if there’s a single critical factor that will dominate success or failure, get that right first.

  Component Parts is fundamentally sound and ought to be done, yes – don’t neglect the details – but there’s a chance to get caught up in the trivial things and neglect the very big things.

  As a very simple example, let’s say you’re throwing a party.

  “Component parts” might suggest:

  --> Theme

  --> Music

  --> Guest list

  --> Parking

  --> Security

  --> Food and drink

  --> Venue

  --> Reminders

  --> RSVP list

  And many more things. Cleaners the next day, decorations potentially, etc.

  All of those matter. But until you’ve got (1) a great core confirmed guest list, and (2) a suitable venue, the other parts don’t matter much at all.

  You can have a great party without a theme, without music, without decorations, without food or drink – if there are great people there. That factor dominates all the others to start.

  Once you have assured you can have some terrific people coming, the next consideration that will most effect the experience is the venue.

  It is very possible to have a great RSVP system, theme, and music… and have no one come.

  You should not neglect the details, but making a complete list and not discerning which factors are overwhelmingly needed to be done first – this can lead downwards into folly. If one factor dominates all the others in success and failure, assuring success on that parameter must come first.

  This sounds so terribly and ridiculously obvious, and yet – what percentage of people actually do it?

  ***

  EXAMPLE I: PRUSSIAN RAILROADS

  “The speed of Prussian mobilization astonished the French, and the Prussian ability to concentrate power at specific points — reminiscent of Napoleon I's strategies seventy years earlier — overwhelmed French mobilization. Utilizing their efficiently laid rail grid, Prussian troops were delivered to battle areas rested and prepared to fight, whereas French troops had to march for considerable distances to reach combat zones. After a number of battles … the Prussians defeated the main French armies and advanced on the primary city of Metz and the French capital of Paris. They captured Napoleon III and took an entire army as prisoners at Seda
n on 1 September 1870.” — Wikipedia: Unification_of_Germany#Military_operations

  Two generations earlier, Napoleon I’s victories had initially savaged all of Revolutionary France's enemies. It was only Napoleon’s own hubris that brought the French down – his betrayal and usurpation of Spain being the most significant blunder to me, but the slow-moving invasion ever-deeper into Russia being the more famous blunder.

  Nevertheless, scholars of war were baffled by Napoleon. How did he do it?

  And thus, entire schools of military thinking were formed to analyze this very question. Carl von Clauswitz, the brilliant military theorist, devoted his whole life to answering it; Vom Kriege – “On War” – was his answer to the question.