Here’s a good read via Farnam Street. Charlie Munger goes off on the field of economics in a way that reminded me of, well, me. Except, you know, Munger has two things I don’t:
My favorite part:
Keynes said “It’s not bringing in the new ideas that’s so hard. It’s getting rid of the old ones.” And Einstein said it better, attributing his mental success to “curiosity, concentration, perseverance and self-criticism.” By self-criticism he meant becoming good at destroying your own best-loved and hardest-won ideas. If you can get really good at destroying your own wrong ideas, that is a great gift.
I’ve touched on this one several times and how modern mainstream economics is filled with so many bad ideas that we just can’t seem to get rid of. In fact, many times the bad ideas get layered on top of other bad ideas and the problems multiply. At some point you reach a form of economic modeling that doesn’t even look anything like the actual economy. And why? Because we couldn’t admit that some of the old ideas were just wrong?
Anyway, you’ve hear me gripe about economics enough. So go listen to Munger do it. He’s better at it than I am.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.