Most of the obvious, visible ‘truisms’ about how you should invest your money and get rich are just plain wrong. For example, globalisation appears to have made the very rich much richer and improved the lot of the least well off in China and India. But there is very little “income mobility” for your average Australian, American, or Brit in the middle class. His debts keep piling up.
In exchange for his debts he seems to have happily accepted asset-based wealth building through rising share prices and home values. Meanwhile, his government burdens him with more and more restrictions on what he can eat, how he can speak in public, what kind of car to drive, and even how he must think about other people.
In nearly every aspect of his life, he finds himself more beholden and answerable to nameless, faceless, all-powerful bureaucrats. His only means of escape from this is some sort of financial independence. Yet all the main financial tools supposedly at his disposal merely deliver him more securely into the hands of creditors. He becomes dependent on banks to forgive his debts and later the government to subsidize his salary, his health care, and his old age. He becomes a ward of the state, a child with a perpetual government Nanny and a very large, perpetually attentive Big Brother.
Is this independence? Is this freedom? Is this living? It seems like a horribly bad trade to make, and unnecessary too. At every turn, it pays to challenge orthodox ways of thinking about money and wealth, freedom and power, life and liberty. If you don’t think about these things, you end up being carried along helplessly and aimlessly toward a fate over which you have no control. It results in poor health, poor finances, and even worse government.
It’s regaining control of this fate that is our primary editorial mission at Markets and Money headquarters here in an Old Hat Factory in Melbourne. We recognize we will probably fail. But our goal is not to change public policy. It’s to be better at discovering the rules for effective self-government, by which we mean making the world better by keeping our little corner of it clean, well- lighted, and well swept. Our most interesting friends, among the nearly 1,000,000 global readers of the DR–are the ones who think for themselves. That doesn’t mean they challenge every piece of received wisdom. After all, tradition is a useful guide to past experience.
But what we find more and more as we look around Australia and the world is that the dream of personal success and happiness you’re presented with in the images our culture produces is not much of a dream at all. If you go along and do what your told-investing in what you’re told to buy by the people who make money selling to you, accepting the infringements on your liberty in exchange for some perceived safety, and taking seriously the clap-trap of political ideas mouthed by the same self-important blow-hards you went to high school with (who are simply older and better dressed now, but none the wiser)-well than you might not get what you expect, but you’ll get what you deserve.
Long time readers will recognize this as the Law of Perverse outcomes, as authored by Markets and Money founder Bill Bonner. Stated formally, the Law of Perverse outcomes is that people get what they deserve, not what they expect. The corollary to this law is the Law of Effort, or perhaps, as we should call it in Australia, the Law of Having a Go. This law is that you can’t guarantee success, but you can deserve it by ensuring the quality of your effort, leaving the rest to god, fate, and probability.
That about covers the whole gamut of human action, as near as we can tell. And human action is what makes the market go. So with that, we finish today where we expressly intended on avoiding, from the big picture. More on the details tomorrow. Until then… more from Bill Bonner.