Wisdom Of the Week

"Another thing that is never discussed any more is my idea of one of the great philosophers of America who was Charlie Frankel. He was mugged to death in due course because, after all, he lived in Manhattan in a different time. Before he was mugged to death, he created this philosophy of responsibility. He said the system is responsible in proportion to the degree that the people who make the decisions bear the consequences. So to Charlie Frankel, you don’t create a loan system where all the people who make the loans promptly dump them on somebody else through lies and twaddle, and they don’t bear the responsibility when the loans are good or bad. To Frankel, that is amoral, that is an irresponsible system. That is like selling an automobile with bad brakes and you know the brakes are bad. You shouldn’t do it. Well, we’ve just been through a period where nobody gave a damn about an irresponsible system. If you can engage in business in some lawful way and dump trouble on  somebody else through God knows what techniques, the more the merrier. It finally got to be like musical chairs, except in musical chairs, you are only one chair short when the music stops. In the new form of musical chairs, everybody has a hell of a time and is sitting on his ass on the floor. Of course, that is what we created and it  was perfectly obvious that something like this was bound to happen although we didn’t know when. So this is very, very significant cognitive failure and it has just shot through pretty much through the whole civilization. It isn’t everybody. If it were, the civilization would perish and it would deserve to.

There are people who have behaved well through this and a lot of them I can see sitting in this room. But what would you suspect with a bunch of people that are supporting a really great school? I mean, these are not the scumbags of the world. And so, all I can say is that this is very serious stuff and what we have all done together at Harvard-Westlake School is to try to create the kind of education that reduces the future nonsense. It is not easy, because very powerful forces of self-interest and subconscious powers of delusion are working against us -- and, of course, we live in a nation with different ethnic groups, different religious groups and so forth. Our civilization is a lot harder [to] manage than say, Denmark or Norway or something -- and always will be. Therefore, we should be doing it better, not worse, and of course, it is just the opposite. We have a worse problem and therefore we are governing it worse. In California, we have carefully created two types of people in the legislature: right-wing nuts and left-wing nuts who hate each other. Every 10 years they get together and each side has two or three decent halfway moderate people and they join together in throwing them out. They identify those six or eight people - ‘We don’t want any normal people in our legislature’ - and they gerrymander them out. This is the largest state in the most important country in the world, and that is the way our legislature works. How many of us are really doing anything about it? It is something."

- Charlie Munger at Harvard-Westlake School - It's brilliant and a must read.

Also, checkout  Munger's enlightening 1995 Harvard speech - Psychology of Human Misjudgement

And Seeking Wisdom: From Darwin to Munger by Peter Bevelin is now one my all time favorite books.