Farnam Street

Lee Kuan Yew on the Proper Balance Between Competitiveness and Equality

Lee Kuan Yew, the former Prime Minister of Singapore and the one responsible for its rise from third world to first in only a generation, is a great source of wisdom.

In this excerpt from, Lee Kuan Yew: The Grand Master’s Insights on China, the United States, and the World, he talks about the necessary balance between competitiveness and equality.

To be successful, society must maintain a balance between nurturing excellence and encouraging the average to improve. There must be both cooperation and competition between people in the same society.

If everybody gets the same rewards, as they do under communism with their iron rice bowl, nobody strives to excel; society will not prosper, and progress will be minimal. That led to the collapse of the communist system. On the other hand, in a highly competitive society where winners get big prizes and losers paltry ones, there will be a great disparity between the top and the bottom layers of society, as in America. … At the end of the day, the basic problem of fairness in society will need to be solved. But first, we have to create the wealth. To do that, we must be competitive and have a good dose of the “yang.” If we have too much of the “yin” and over- redistribute the incomes of the successful, then we will blunt their drive to excel and succeed, and may lose too many of our able, who will move to other countries where they are not so heavily taxed. On the other hand, if too many at the lower end feel left out, then our society will become divisive and fractious, and cohesiveness will be lost. Communism has failed. The welfare state of Western democracies has also failed.

There is a continual need to balance between a successful, competitive society, and a cohesive, compassionate one. That requires judgment, to strike a bargain or social contract. Each society must arrive at that optimum point for itself. Between the two ends, the highly competitive and the excessively equal, lies a golden mean. This point will move with time and changing values.

I can best explain the need for balance between individual competition and group solidarity by using the metaphor of the oriental yin and yang symbol. … The more yang (male) competitiveness in society, the higher the total performance. If winner takes all, competition will be keen, but group solidarity will be weak. The more yin (female) solidarity, with rewards evenly distributed, the greater the group solidarity, but the weaker the total performance because of reduced competition…. We have arranged help, but in such a way that only those who have no other choice will seek it. This is the opposite of attitudes in the West, where liberals actively encourage people to demand entitlements with no sense of shame, causing an explosion of welfare costs.

7 Things I Learned in Architecture School

“Always design a thing by considering it in its next larger context
—a chair in a room, a room in a house,
a house in an environment, an environment in a city plan.”
— Eliel Saarinen

***

“The following lessons in design, drawing, creative process, and presentation first came to me as barely discernible glimmers through the fog of my own education,” writes Architect Matthew Frederick in the insightful book 101 Things Things I Learned in Architecture School. The series of books, which we’ve covered before, includes law school, business school, and engineering school. Like others in the series, the book on architecture offers many lessons in thinking and design that transcend one discipline.

Here are some ideas and nuggets of wisdom that stood out as I read the book.

Be specific. “The more specific a design idea is, the greater its appeal is likely to be. Being nonspecific in an effort to appeal to everyone usually results in reaching no one. But drawing upon a specific observation, poignant statement, ironic point, witty reflection, intellectual connection, political argument, or idiosyncratic belief in creative work can help you create environments others will identify with in their own way.”
Ideas can take away from or add to the essential idea. “When designing a stair, window, column, roof, lobby, elevator core, or any other aspect of a building, always consider how its design can express and reinforce the essential idea of the building.”
Throw away your best loved ideas. “A good designer isn’t afraid to throw away a good idea.”
The most important skill for a designer to develop. “Being process-oriented, not product-driven, is the most important and difficult skill for a designer to develop.”
Think about how you think. “The most effective, most creative problem solvers engage in a process of meta-thinking, or “thinking about the thinking.” This means you’re aware of how you’re structuring your thoughts while you’re thinking. You want to test ideas, challenge yourself, see if you understand the other side of the argument, criticizing, and redirecting your thought process.
Don’t make it too complex. “Create architectural richness through informed simplicity or an interaction of simples rather than through unnecessarily busy agglomerations.”
Consistent and repeatable results come from a process. “True style does not come from a conscious effort to create a particular look. It results obliquely—even accidentally—out of a holistic process.”

Ego is the Enemy: The Legend of Genghis Khan

In his new book, Ego is the Enemy, Ryan Holiday tells the story of Genghis Khan and how his openness to learning was the foundation of his success.

By Ryan Holiday

The legend of Genghis Khan has echoed through history: A barbarian conqueror, fueled by bloodlust, terrorizing the civilized world. We have him and his Mongol horde traveling across Asia and Europe, insatiable, stopping at nothing to plunder, rape, and kill not just the people who stood in their way, but the cultures they had built. Then, not unlike his nomadic band of warriors, this terrible cloud simply disappeared from history, because the Mongols built nothing that could last. Like all reactionary, emotional assessments, this could not be more wrong. For not only was Genghis Khan one of the greatest military minds who ever lived, he was a perpetual student, whose stunning victories were often the result of his ability to absorb the best technologies, practices, and innovations of each new culture his empire touched. In fact, if there is one theme in his reign and in the several centuries of dynastic rule that followed, it’s this: appropriation.

Under Genghis Khan’s direction, the Mongols were as ruthless about stealing and absorbing the best of each culture they encountered as they were about conquest itself. Though there were essentially no technological inventions, no beautiful buildings or even great Mongol art, with each battle and enemy, their culture learned and absorbed something new. Genghis Khan was not born a genius. Instead, as one biographer put it, his was “a persistent cycle of pragmatic learning, experimental adaptation, and constant revision driven by his uniquely disciplined and focused will.”

He was the greatest conqueror the world ever knew because he was more open to learning than any other conqueror has ever been.

Khan’s first powerful victories came from the reorganization of his military units, splitting his soldiers into groups of ten. This he stole from neighboring Turkic tribes, and unknowingly converted the Mongols to the decimal system. Soon enough, their expanding empire brought them into contact with another “technology” they’d never experienced before: walled cities. In the Tangut raids, Khan first learned the ins and outs of war against fortified cities and the strategies critical to laying siege, and quickly became an expert. Later, with help from Chinese engineers, he taught his soldiers how to build siege machines that could knock down city walls. In his campaigns against the Jurched, Khan learned the importance of winning hearts and minds. By working with the scholars and royal family of the lands he conquered, Khan was able to hold on to and manage these territories in ways that most empires could not. Afterward, in every country or city he held, Khan would call for the smartest astrologers, scribes, doctors, thinkers, and advisers—anyone who could aid his troops and their efforts. His troops traveled with interrogators and translators for precisely this purpose.

It was a habit that would survive his death. While the Mongols themselves seemed dedicated almost solely to the art of war, they put to good use every craftsman, merchant, scholar, entertainer, cook, and skilled worker they came in contact with. The Mongol Empire was remarkable for its religious freedoms, and most of all, for its love of ideas and convergence of cultures. It brought lemons to China for the first time, and Chinese noodles to the West. It spread Persian carpets, German mining technology, French metalworking, and Islam. The cannon, which revolutionized warfare, was said to be the resulting fusion of Chinese gunpowder, Muslim flamethrowers, and European metalwork. It was Mongol openness to learning and new ideas that brought them together.

As we first succeed, we will find ourselves in new situations, facing new problems. The freshly promoted soldier must learn the art of politics. The salesman, how to manage. The founder, how to delegate. The writer, how to edit others. The comedian, how to act. The chef turned restaurateur, how to run the other side of the house.

This is not a harmless conceit. The physicist John Wheeler, who helped develop the hydrogen bomb, once observed that “as our island of knowledge grows, so does the shore of our ignorance.” In other words, each victory and advancement that made Khan smarter also bumped him against new situations he’d never encountered before. It takes a special kind of humility to grasp that you know less, even as you know and grasp more and more. It’s remembering Socrates’ wisdom lay in the fact that he knew that he knew next to nothing.

With accomplishment comes a growing pressure to pretend that we know more than we do. To pretend we already know everything. Scientia infla (knowledge puffs up). That’s the worry and the risk—thinking that we’re set and secure, when in reality understanding and mastery is a fluid, continual process.

The nine-time Grammy– and Pulitzer Prize–winning jazz musician Wynton Marsalis once advised a promising young musician on the mind-set required in the lifelong study of music: “Humility engenders learning because it beats back the arrogance that puts blinders on. It leaves you open for truths to reveal themselves. You don’t stand in your own way. . . . Do you know how you can tell when someone is truly humble? I believe there’s one simple test: because they consistently observe and listen, the humble improve. They don’t assume, ‘I know the way.’”

No matter what you’ve done up to this point, you better still be a student. If you’re not still learning, you’re already dying.

It is not enough only to be a student at the beginning. It is a position that one has to assume for life. Learn from everyone and everything. From the people you beat, and the people who beat you, from the people you dislike, even from your supposed enemies. At every step and every juncture in life, there is the opportunity to learn—and even if the lesson is purely remedial, we must not let ego block us from hearing it again.

Too often, convinced of our own intelligence, we stay in a comfort zone that ensures that we never feel stupid (and are never challenged to learn or reconsider what we know). It obscures from view various weaknesses in our understanding, until eventually it’s too late to change course. This is where the silent toll is taken.

Each of us faces a threat as we pursue our craft. Like sirens on the rocks, ego sings a soothing, validating song— which can lead to a wreck. The second we let the ego tell us we have graduated, learning grinds to a halt. That’s why Frank Shamrock said, “Always stay a student.” As in, it never ends.

The solution is as straightforward as it is initially uncomfortable: Pick up a book on a topic you know next to nothing about. Put yourself in rooms where you’re the least knowledgeable person. That uncomfortable feeling, that defensiveness that you feel when your most deeply held assumptions are challenged—what about subjecting yourself to it deliberately? Change your mind. Change your surroundings

An amateur is defensive. The professional finds learning (and even, occasionally, being shown up) to be enjoyable; they like being challenged and humbled, and engage in education as an ongoing and endless process.

Most military cultures—and people in general—seek to impose values and control over what they encounter. What made the Mongols different was their ability to weigh each situation objectively, and if need be, swap out previous practices for new ones. All great businesses start this way, but then something happens. Take the theory of disruption, which posits that at some point in time, every industry will be disrupted by some trend or innovation that, despite all the resources in the world, the incumbent interests will be incapable of responding to. Why is this? Why can’t businesses change and adapt?

A large part of it is because they lost the ability to learn. They stopped being students. The second this happens to you, your knowledge becomes fragile.

The great manager and business thinker Peter Drucker says that it’s not enough simply to want to learn. As people progress, they must also understand how they learn and then set up processes to facilitate this continual education. Otherwise, we are dooming ourselves to a sort of self-imposed ignorance.

Source: Ego is the Enemy and used with permission from the author.

George Washington’s Practical Self-Education

Washington was a practical reader. He clearly valued useful knowledge that made many of his tasks easier. He was and still is the quintessential American success story because he applied his mind to achieving success. He was relentless in pursuing his goals, and his reading is an applied demonstration of it.

-Adrienne Harrison

Our first President and Commander-in-Chief, George Washington, is not known as an intellectual, the way Ben Franklin, James Madison, Thomas Jefferson, and some of his other Revolutionary counterparts were. Washington had little formal education — he was not a university man and he did not occupy the intellectual circles when was young. He didn’t hope to make any contribution to political philosophy or the scientific understanding.

Washington grew up in Virginia into a landowning family, and his education didn’t continue beyond the equivalent of elementary school. He developed a trade — surveying — and would eventually inherit his family’s land and become a farmer and plantation owner. Washington couldn’t speak or read any language but English, living in a time when it was considered necessary and desirable to know French and Latin, at a minimum. (Ben Franklin learned English, Italian, Spanish, Latin, French, and German.) Unlike others we’ve written about before, Washington wasn’t very bookish.

And yet, this poorly educated man with seemingly little interest in literature, classics, or reading at all, became one of the seminal leaders in American history, and as Adrienne Harrison details in her book A Powerful Mind, he did it in large part by reading. Even a man with little interest in high-brow intellect, a man with very little time to spare, felt that sitting on his ass with a book was a useful thing indeed. He was a lifelong learner.

Practical Self-Education

As judged by the library he left behind, his diaries, and the investigations into his life, Washington did not carry much interest in theoretical or classical reading or learning. It seems unlikely that he read for pleasure. But Washington used reading as a means to an end — he wanted to know how to farm better, how to lead an army, how to lead a country, how to conduct himself civilly. There wasn’t any other way but to read and combine it with his direct experience.

Says Harrison in her book:

Washington was a practical reader … While the purpose of this book is not to remake Washington’s image into a sort of closeted scholar, it does argue that reading was a key component behind Washington’s success. The real contribution that this volume makes is that it takes one step closer to understanding how Washington’s mind worked. While his self-directed reading was not anywhere near that of Jefferson, Franklin, and Adams, Washington outshone them all by combining the knowledge he gained from his reading with his natural talent for leadership into a masterful performance.

Washington’s lack of education and culture certainly bothered him as a youngster. He was ambitious — he wanted to serve as a high-level British military officer and operate in government. He wanted to be a somebody. But he knew his formal education was going to be lacking, and he knew it wouldn’t all happen by accident. So he set out to do some of the hard work.

In a story that eventually became well-known, Washington first spent time as a teenager copying over a French manual for conducting yourself in high circles:

As his younger brothers Samuel and John Augustine still lay sleeping nearby and the first of the sun’s rays stretched through the neatly curtained windows and across the small table, the future father of his country busily copied word for word a translation of an old guidebook for princely behavior that a French Jesuit priest wrote called The Rules of Civility.

Such a project was no small undertaking for the boy, but little by little he was determined to press on to the end; so he kept scratching at the paper with his quill, careful to keep his ink-stained fingers off the paper. By the time he was finished, young Washington’s manuscript consisted of 110 rules for how to properly conduct himself as a respectable member of society. He took pride in his work, for he would rely on these maxims to guide him throughout a long career in the public light.

This tells you a lot of Washington: He was a climber, he had discipline, and he could apply himself when needed. Even in the 18th century, not too many wealthy southern teenagers would have taken on that kind of task.

Learning the rules of civilized social behavior in this way, Washington started a pattern he’d carry on his entire life: Gaining knowledge from books that he couldn’t get through experience, or that he needed before he had the right experience. He did it again when he was put in charge of the Virginia Regiment, the first dedicated military unit in the colonies.

Washington hoped that leading this ragtag group of frontier soldiers against the French and the Natives would eventually lead to his becoming a full British military officer (which never happened). And although he was not actually part of the British military, as with his study of the Rules of Civility Washington took it upon himself to read the most influential book in British military circles, and instructed his officers to study it with him:

With specific regard to training, Washington was responsible for training not only raw recruits but also officers. Washington pushed his officers to study, particularly the latest in British military texts such as Humphrey Bland’s A Treatise on Military Discipline. Washington wrote that “having no opportunity to improve from example, let us read”; for he recognized that it was not possible for an ambitious officer to obtain the requisite expertise “without application, nor any merit or applause to be achieved without certain knowledge thereof.”

Bland’s Treatise was the fundamental textbook for all British officers. Known throughout the army as “the bible,” the 360-page manual spelled out everything a new officer needed to know about how to form and operate a regiment both in garrison and in the field. Bland outlined what an officer’s duties were and what officers could reasonably expect from their subordinates.

Studying for Success

Washington didn’t stop his self education upon completion of his duties as a frontier officer — he just changed course:

He therefore turned his attention to doing his duty to his country, Virginia, and shifted his focus to becoming a leader in that provincial society, which did actually appreciate his achievements…Washington abandoned his study of the military arts that he had begun some four years earlier, for that reading no longer served a practical purpose for him. He instead devoted his energies in the coming years to increasing his wealth and status in Virginia society.

[…]

To successfully mix in the best social circles, Washington had to learn more about the science of agriculture, history, politics, and religion, for he had to balance being a planter, a member of the House of Burgesses, and a parish vestryman. After he returned to Mount Vernon and began assembling a library, those subjects that had the practical purpose of advancing his social stature dominated his burgeoning collection.

Washington took it upon himself to delve deeply into agriculture, acquiring scores of books on how to improve the productivity of his farms and manage the soil more effectively. He read religious tracts to understand the mood of the people around him, and history books to understand the history of English people.

It’s important to note what Washington didn’t do. He didn’t try to achieve a classical education on his own. Some of his contemporaries were educated in England and became legal scholars, classicists, and composers of belles lettres. They wanted the mind of a European intellectual.

Washington didn’t do this — he wanted to learn things he could use, and given a limited amount of time, focused his attention where it was most profitable to him. (An opportunity cost problem which we hit on in our How to Read a Book course earlier this year.)

Having made his mental break with his Englishness after Lord Loudon harshly dealt him a very personal affront, Washington in that key moment was forced to confront his academic shortcomings. This realization, when coupled with his extreme sensitivity to criticism, drove Washington intellectually inward and toward the subjects that he felt most comfortable with and that, more important, could meet his immediate needs at the time. He was fortunate to have already made his public reputation in Virginia based on his natural propensities for physical bravery and on his leadership experience. Learning to read Latin or becoming an amateur scientist would not sustain that hard-won reputation in the planter-dominated high society; earning money and being a dedicated public servant would. Consequently, Washington focused his reading and intellectual pursuits accordingly, and reading remained an intensely private activity. For example, when in residence at Mount Vernon, he spent on average two hours in the morning and all afternoon alone in his library.

Washington would keep these habits the rest of his life, although during the Revolution and his presidency, he had a lot less time to devote to reading than at Mount Vernon. But he still did it, even in the midst of the great upheaval he led against the British:

With these military treatises and drill manuals that he acquired during the first two years of the Revolution, we see Washington applying the same diligent study method he had used previously with Duhamel’s Practical Treatise of Husbandry when he sought to make his plantations profitable. In other words, he read these military books for the sake of immediate practical problem solving. There is nothing philosophical or reflective about them. They are tactical field manuals, not massive theoretical tomes on the art of command as it evolved over the centuries.

This is not to recommend avoiding such reflective, theoretical tomes, if such reading interests you. But Washington does provide a good example to those who don’t take an inherent pleasure in deep reflection. The process of reading can be intensely practical as well as enjoyable for its own sake. Never think that reading is a mere luxury. Even the busiest man of the 18th century, who did not enjoy reading as an end itself, felt a duty to allocate his time to the written word. It was simply that important.

***

Still Interested? Check out the rest of Adrienne Harrison’s A Powerful Mind, or for a better and more thorough treatment, try the wonderful biography written by Ron Chernow, now the standard and most modern bio of the fascinating GW.

Nassim Taleb’s Life Advice: Be Careful of Life Advice

Nassim Taleb, the modern philosopher best known for his ideas on The Black Swan and Antifragility, gave his first commencement address this year, at American University in Beirut. (I suspect he’s been asked in the past but declined.)

Like him or not, Taleb is a unique and uncompromising mind. He doesn’t suffer any fools and doesn’t sacrifice his principles for money or fame, so far as one can tell. He’s willing to take tremendous personal heat if he thinks he’s right. (Again, agree with him or not.) There’s a certain honor in his approach that must be admired.

The most interesting part of his commencement is on the idea of life advice itself. Commencement speeches are, obviously, meant to pass advice from a wise (and famous) person to a younger generation. But Nassim goes in a bit of a different direction: He advises the students to be careful of common life advice, for if he had followed it, he’d have never become the unique and interesting person he became.

I hesitate to give advice because every major single piece of advice I was given turned out to be wrong and I am glad I didn’t follow them. I was told to focus and I never did. I was told to never procrastinate and I waited 20 years for The Black Swan and it sold 3 million copies. I was told to avoid putting fictional characters in my books and I did put in Nero Tulip and Fat Tony because I got bored otherwise. I was told to not insult the New York Times and the Wall Street Journal; the more I insulted them the nicer they were to me and the more they solicited Op-Eds. I was told to avoid lifting weights for a back pain and became a weightlifter: never had a back problem since.

If I had to relive my life I would be even more stubborn and uncompromising than I have been.

The truth is, much of the advice you receive as a young person will be pretty good. Saving money works. Marrying the right person works. Avoiding drugs works. Etc. The obvious stuff is worth following. (You don’t always have to walk on your hands because everyone else walks on their feet.)

But there’s a host of more subjective wisdom that, generally speaking, leads you to become a lot more like other people. “Common wisdom,” insofar as it’s actually common, tends to reinforce cultural norms and values. If you want to lead a comfortable existence, that may work fine. But it won’t create another Nassim Taleb, or another Steve Jobs, or another Richard Feynman. They, and many others, embraced what made them different.

Of course, many less successful people embraced their oddities, too. The silent grave is chock full of candidates. This isn’t a “recipe for success” or some other nonsense — it’s more complicated than simply being different. (The narrative fallacy is always right around the corner.)

But one has to suspect that a more interesting and honorable life is led by those who are a bit uncompromising on the important values like integrity, self-education, and moral courage. If you can offset that by being extremely compromising on the unimportant stuff, you may have a shot at living an interesting and different life with a heaping scoop of integrity.

You can read the rest of the commencement here. If you’re still interested, check out a few other great commencement speeches.

Sol Price on Becoming Your Customer’s Best Friend

Sol Price is a legend in the retail business. Price founded one of the first discount retailers, FedMart, in the 1950s, and then later the pioneer warehouse club Price Club, which he later sold to Costco, a business started by his former protege Jim Sinegal. Price’s innovations would go on to change the retail landscape dramatically and permanently. Costco now does $120 billion in sales and Sam’s Club, owned by Wal-Mart, does about $60 billion. Adding in other smaller operations, warehouse retailing is at least a $200 billion business in the United States alone.

Price innovated in several ways: Membership fees, way fewer product SKUs in stock, much larger sizes, extremely low profit margins bordering on break-even, low employee turnover and a lean labor model. But these were all mere symptoms of his overall stance: Price’s fundamental innovation was his approach to the customer relationship.

Whereas most retailers saw customers as adversaries, bodies to be sold to, Price saw the world differently. He felt he was on the customers’ side. He felt his job as a retailer was to become the customer’s greatest friend and advocate, and in return, the customer would pledge his loyalty back. He understood that trust given is trust earned.

The idea was very simple: See the world through the eyes of the customer. His son Robert, influential in his own right, describes Price’s unusual attitude (which is still uncommon) in a book called Sol Price: Retail Revolutionary & Social Innovator:

Sol’s experience as an attorney representing clients, and his own moral code, became a foundational feature of the FedMart business. Sol described his business approach as “the professional fiduciary relationship between us (the retailer) and the member (the customer). We felt we were representing the customer. You had a duty to be very, very honest and fair with them and so we avoided sales and advertising. We have in effect said that the best advertising is by our members…the unsolicited testimonial of the satisfied customer.”

This fiduciary relationship with the customer was similar to the Golden Rule; the way Sol put it—if you want to be successful in retail, just put yourself in the place of a cranky, demanding customer. In other words, see your business through the eyes of the customer.

Clearly, Sol Price followed Tussman’s dictum to understand the world and act accordingly, and understood the value of a win-win relationship. The success of Costco in his wake, and the continued loyalty of its customers in the face of a rapidly changing retail landscape, is a testimony to the value of his attitude.

Price had a few simple tenets in running FedMart and Price Club, which Sinegal would later adopt at Costco:

Provide the best possible value to the customers, excellent quality products at the lowest possible prices.

Pay good wages and provide good benefits, including health insurance to employees.

Maintain honest business practices.

Make money for investors.

Regarding the last point, it was clearly important to Price to make money, and if you look at Costco today, the model is obviously profitable. But it’s not that profitable. Costco makes solid returns but not incredible ones. And that is by choice.

Price — and Sinegal by extension — wanted a win-win relationship whereby he made his investors a reasonable return on their capital and the customer got a better deal than they could find elsewhere, while employees were paid well enough and treated well enough that they wouldn’t want to leave. In his words, “If you recognize you’re really a fiduciary for the customer, you shouldn’t make too much money.” This model has been tough to beat.

Price was so hardcore about his fairness philosophy that he wouldn’t even engage in loss-leader pricing, which is common in retail. Have you ever found yourself saying How can they make any money at this price? Well, they may not be — products are frequently priced below cost to induce you to buy other products at a more inflated profit margin. But Price wouldn’t do this: It meant he was selling some portion of his goods at inflated prices to make up for the loss leaders, and that he would not abide.

His customer advocacy went so far that if Price’s competitors were selling a competing product below cost, Price did one of the most unusual things I’ve ever heard: He put up signs telling his customers to go shop there.

In this way and many others, the life of Sol Price reinforces the truth of Munger’s philosophy for living a more effective life: “Take a simple idea, and take it seriously.”

***

Still Interested? Check out the book in its entirety.