For those of you seeing these posts for the first time, my name is Paul and I’m a writer and investor. You can read more about me here. Readers enjoy my books, Raising a Thief and Master, Minion and I think you will too. You can support my team with a paid subscription. For those of you in Connecticut, I speak tomorrow night at the Westport Book Shop, an organization with a great mission.
I was recently introduced to a certifiably popular musician by a mutual friend. My friend thought she might be a potential podcast guest. I pitched her; she declined.
“I’m a Marxist,” she wrote, “and I don’t imagine that’s who your listeners are, based on your past guests.”
The first time I heard a person declare themselves a Marxist was when one of my Brown University teachers used the term. This was the 1980s. A few years later, I moved to Moscow, the cradle of “Marxism,” with the vague hope of becoming a foreign correspondent. I was just in time to watch the Soviet Union collapse.
In college, I associated Marxism with abstract terms like “the means of production,” “surplus value” and literary criticism. In the former Soviet Union, Marxism meant food shortages. In my first job, I was once compensated with a chicken. Marxism also meant paying doctors off at my son’s birth with stacks of 100-dollar bills, paying cops off at gunpoint for crimes not committed, and bribing a commercial jet pilot for the stewardess’s jump seat and then settling the price while we were in flight over Siberia.
As one of my friends in Moscow quipped, tugging on a Marlboro, “Paul, do you know what happened when they tried to build socialism in the desert? They ran out of sand.”
Linguistic Gauze
Modern life is more complex than pre-modern life, so we rely on linguistic shortcuts to simplify reality. “Technology” refers to the complex processes that allow me to write this on a screen and then send it to you. I don’t actually understand how a computer works.
Reality changes so fast that it is hard for language to keep up. My therapist wife employs a useful phrase—you name it, you tame it. Modernity is shrouded in phrases whose inexact meaning gauzes reality. Take some of the most notable issues today—like Ukraine, energy supply, and inflation.
For instance:
“Foreign Policy” really means stacks of bodies in Ukraine. Putin gave orders to kill and the Ukrainians fought back. To get even more granular, Ukraine says that 824 Russian soldiers are dying per day in February. Assume a roughly equal number of Ukrainian deaths and “foreign policy” means 1,648 people died today.
“Energy” is the smell of gasoline on your fingers after you fill the car, or sliding into a hot tub on a freezing winter day, both of which are the final stop from a latticework of drills, pipelines, refineries, ships and trucks that haul this magical fluid from distant lands to you.
“Inflation” is the average price of a pile of stuff that you buy. If you break down most of these prices they are some mix of gasoline (i.e. energy), food and wages. So my haircut is the cost of my hairdresser showing up to work (gas), the electricity for the clipper, her wage (supply), and how much money I am willing to spend (demand).
Nothing New
The person who best “tamed” this issue is George Orwell in his essay “Politics and the English Language.” I’ve read the essay multiple times, so likely have many of you.
“It follows that any struggle against the abuse of language is a sentimental archaism, like preferring candles to electric light or hansom cabs to aeroplanes. Underneath this lies the half-conscious belief that language is a natural growth and not an instrument which we shape for our own purposes.”
Orwell says that bad language has two attributes: “staleness of imagery” and “lack of precision.”
“As soon as certain topics are raised, the concrete melts into the abstract and no one seems able to think of turns of speech that are not hackneyed: prose consists less and less of words chosen for the sake of their meaning and more and more of phrases tacked together like the sections of a pre-fabricated hen-house.” Example: Marxism.
The Judo Mental Match
Orwell’s essay resonates today. To understand reality we must be in a constant judo match against meaningless language. Part of the beauty of financial markets is that they force reality onto the henhouses of hackneyed speech. The prices flickering on the screen provide a measure of truth.
We are moving away from oil? Then why is the price high? Bitcoin offers a way to de-centralize finance? Well, let’s discuss FTX. Inflation is spinning out of control? Then how come it is discounted to be around 2.3% over the next 10 years?
This is also, by the way, why I like to travel to out-of-the-way places, like Iquique, Chile, to see them first hand. My next trip is to Tbilisi, Georgia. Tbilisi is interesting for a number of reasons, among them because it is a country that has stepped out of the post-Soviet orbit. I want to talk to people on the ground there about what that has been like. The last time I was there they were having a civil war, so I am curious.
The Money Part
The abstract investment concept right now is about a “wage-price” spiral,
Keep reading with a 7-day free trial
Subscribe to Things I Didn't Learn in School to keep reading this post and get 7 days of free access to the full post archives.