Preamble: On Sunday, I had my first ‘speaking engagement’ as Rolling Alpha at the Art of Mastery workshop in Sandton. If you’re a regular to the site, you’ll notice some cribbing from a few older posts – but I wanted to share a slightly-edited version as a long-read.

I am going to start with a warning – as a four and a half year old blogger, who writes every day, I’ve spent a long time consuming a lot of content, and then condensing it into daily posts. And I use the word ‘condensing’ very loosely. I’m not afraid to ramble.

Given that, let me freely admit that in the presentation that I’ve prepared for today, we’re going to be covering some ground. Here’s a list of topical highlights: social media, inequality, China, sparrows, modern medicine, the Wealth of Nations, Pope Francis, water shortages, and the path to freedom.

In that order.

So let’s get going.

When the organiser and I had coffee to discuss the Art of Mastery, he asked me a question. And I’m paraphrasing here, but it went something like ”After all this time writing about economics and finance, have you found a particular issue that you consider to be really important?”

I’m not sure what he was expecting as an answer. But I doubt “not really” was on his list.

You see, the problem is that I find myself caught between two very different worlds. When I am writing for the blog, and interacting with people on twitter and facebook, I find myself getting very caught up in the ‘big and burning issues”

But once I’ve published my morning post, my work day begins, where it’s all about to do lists and practical problems like getting this customer to process payment today, because if they do it tomorrow then the bank will only finish clearing the transfer next week Thursday, which will probably mean that I’ll be late in paying my staff, who will then definitely be upset because they’ll miss their month-end debit orders.

This tension between thinking and doing is a good thing. On the one hand, I am forcing myself to think philosophically about the world – but two cups of cappuccino later, I’m being forced to offer outcomes for real business needs and challenges. In both situations, I am thinking about solutions. In the first, the solutions are abstract. In the second, the solutions have to be paid for and carried out. And quickly.

Do you know what else happens quickly when you spend time in the real world trying to balance cash flows and manage teams of people?

You lose your sense of idealism.

Followed (just as quickly) by your patience for it in others.

These days, whenever someone starts a blog comment with “Yeah, but, in an ideal world…” – I click “mark as spam”.

And the problem is that the social media scene is all about ideals and “what ought to be”s. It’s partly why I force myself to interact with it – it prevents my inner pragmatist from turning full-psychopath on the world.

But this is also why it’s hard for me to identify with many of the specific issues that burn on social media. Most of the time, any issue has two very valid sides for and against. But the idealists that sit on either side are a bit like religious fanatics. They know what they know, they have the solution, and anyone that disagrees with them is either a moron, pathologically evil, or part of a conspiracy.

Let me give you a big buzzwordy example. Inequality.

It’s definitely a big buzzword, right? Especially here in South Africa. You have Thomas Piketty arriving at the UJ Soweto Campus to get us all fired up with a type of socialistic fervor around wealth taxes. And of course, he is right. White privilege does exist – and 20 years is not near enough time for racial economic equality to have been restored after apartheid. Nowhere close.

And the wealthy should also definitely be concerned. Deep trenches of wealth and income inequality are the stuff that revolutions are made of. The French invented this game. La guillotine, eh?

But there is a problem with that line of argument as well. Because almost every time someone throws an inequality statistic out there, they measure it before the redistributive effect of the tax system. Piketty included. That is, the magnitude of the problem is being measured as though we’re not doing anything to address it. It is completely bizarre. It’s like trying to measure how bad the drought by ignoring any rain that fell.

And that’s not the only problem. When the right claims that inequality is a fact of life, they are also right. We are not, all of us, equally attractive. We are not equally intelligent. We are not equally athletic. Genetically, environmentally and economically, there is no equality utopia. It does not exist – and even in the most socialist periods of our history, economic inequality has always persisted.

So once you realise that both sides of any story have positions that are indisputably valid, how can you tell if any one of them is important?

With that in mind, let me go back and re-answer the organizer’s question: are there any particularly important issues?

Yes, of course there are.

But they’re not the ones that we tend to talk about on social media.

So I have some thoughts about two truly big issues that I would like to share with you today.

The first comes from my experience of interacting with the economic blogosphere for half a decade – and it is the answer to this question “What do we actually know about the world of economics, and the world in general for that matter?” And the second, which comes from my day job, is an answer to a related question. Which is [spoiler alert] “Given that we know almost nothing about almost everything that we think we know of the world, what are we to do?”

So let’s start with what we think we know about the world.

To explain it, I want to show you a picture.


This is a recent work by William Kentridge. If you’re not familiar with him, he’s one of South Africa’s greatest exports – an anti-apartheid activist who has gone on to become one of the top 30 contemporary artists in the world.

Now I’ll be honest here – this doesn’t look like much. Two ink drawings of Chairman Mao, and two sparrows… One of which appears to be missing a face…I mean, it’s quite a strange image, really. A bit arbitrary. When I first wrote this, I included a line about a comic strip and a thought bubble and a massive question mark in the same black indian ink.

But I encourage you to google the term “Chairman Mao and the sparrows.” Because I did. And the historical episode that is represented by this particular artwork is haunting.

In 1958, as part of his Great Leap Forward, Chairman Mao Zedong initiated the ‘Four Pests Campaign’, which encouraged a nationwide systematic eradication of four creatures that were seen to plague the Chinese nation. Mosquitoes, rats, flies, and the Eurasian Tree Sparrow.


Why the sparrow, you might well ask?

Here’s some historical background. The big idea behind the “Great Leap Forward” was the elevation of China to the industrial status of the big world powers at the time. And Mao believed that the two fundamental pillars of China’s industrialisation were going to be grain and steel production. In the early years of the Party, he had belonged to a faction which had argued that the best way to finance China’s industrialization was for the government to establish a monopoly over the supply and distribution of grain. So when Mao took power, his first big step was to secure the grain supply, and thereby the funding for his plans of China’s industrialisation.

Unfortunately for the sparrows, they were often seen eating grain seeds. So often, in fact, that it had become conventional wisdom amongst Chinese farmers that sparrows were ‘freeloaders’. Communist propaganda poetry at the time included lines like “Damned creature! Criminal for thousands of years!”

So when Chinese scientists calculated that each wild sparrow consumed 4.5kg of grain a year – and that for every million sparrows killed, there would be food for 60,000 people – Mao set in motion a program for their extinction.

I want you to imagine the army that he had at his disposal.

Over that period, city by city, province by province, the entire population of China was mobilized to leave their houses, waving flags and banging pots and pans, driving the sparrows into the air, and forcing them to fly in fright until they fell to the ground exhausted and died, only to be collected by the villagers, strung up into garlands and submitted to the local party headquarters for counting.


Hundreds of millions of birds were slaughtered, and for all intents and purposes, the Eurasian Tree sparrow was rendered extinct in Mainland China.

Now I want to emphasise something here. This was conventional wisdom. Other countries had also gone after the sparrow for its grain-stealing ways. But no ruler had ever commanded a citizen army in quite the same way that Mao did.

And more than this, there was science involved. In effect, you had this magnificent trifecta of unanimous approval: historical precedent, mass popular support, and the backing of scientific prediction.

And if the occasional scientist spoke out in favour of the sparrows’ survival, they were publicly condemned as anti-Mao. If someone raised concerns about other unforeseen impacts for killing the sparrows, they were seen as anti-the Great Leap Forward. And if any academic dared to publish a suggestion that the sparrows were also seen eating a lot of insects, then they were purged alongside the birds.

Unfortunately though, it turns out that those fringe academics were right. While adult sparrows were fans of grain, those same adult sparrows fed their young a diet consisting almost entirely of… young locusts.

[At this point, I’m meant to pause for effect]

Once the sparrows disappeared, the locust population of mainland China ballooned. It also didn’t help that Mao’s new agricultural policies had meant that farming had been localized and concentrated into tight communes. In effect, the combination of these initiatives had invited plagues of locusts to a well-laid out buffet table.

In 1958, the sparrow was exterminated. Between 1959 and 1961, China’s crops failed, causing what we now term the “Great Chinese Famine”.

When the secretary to a party official from the Xinyang province wrote about his travels during the famine, he said this:

“I went to one village and saw 100 corpses, then another village and another 100 corpses. No one paid attention to them. People said that dogs were eating the bodies. Not true, I said. The dogs had long ago been eaten by the people.”

35 million Chinese died in the Great Chinese Famine. And it pushed Chairman Mao right to the top spot in the list of the World’s Deadliest Dictators. Far ahead of Hitler and the Holocaust. Even further ahead of Stalin and Pol Pot and Idi Amin.

But hey.

He was just following the conventional wisdom, right? It was what everyone knew. Sparrows were pests.

There is a lesson here. The world’s deadliest dictator did not get his title because of holocausts or wars. His title ultimately came from putting in place the extreme version of what was commonly accepted as right and good thinking.

If the history of human progress has taught us anything, it is this: every successive generation of people is more advanced and more knowledgeable than the generation that came before it. And we look back on every generation that preceded us as relatively ignorant in their knowledge and understanding of the world.

Let me give you another example.

Consider medicine.

During the Dark Ages, healthcare was a poultice of herbs, a splash of holy water, and a sideways glance at any old woman in the nearby vicinity who looked like she might have floated when thrown into a nearby pond. Today, fortunately, we’re familiar with hygiene. And we’ve discovered antibiotics. We have come so very far.

But think about how modern medicine might sound to a future generation of school children, learning history.


This is an artwork by Diane Victor, another of South Africa’s great anti-apartheid artists. She drew this work in the months before she went in for a kidney transplant in mid-2014. This period of her art is filled with a biting criticism of her doctors. She often depicted them as clad in the skin of hyenas, scavenging bodies while their victims still lived. From this image, it appears that her experience of kidney disease was one in which she might well have chosen the crocodile of death instead – because at least there might have been some comfort in the devil that you know. Which, not coincidentally, is the title of this piece.

But looking at this drawing, can you help but wonder if this is not how our so-called ‘advanced medicine’ will be remembered?

Because when you zoom out, we’re still really healing people with old-school butchery.

Whenever an x-ray shows up a dark and suspicious spot, our doctors are real keen to get exploratory with a scalpel. When there’s a genetic risk of ovarian cancer, we’re not afraid to preventatively cut out a uterus. And yes, when it comes to transplants, we’ll harvest corpses and pigs for organs, break open chest walls with vices, and replace the worn out parts. It may be the gift of life. But it is still bloody and crude.

For what it’s worth, I think that this is the primary problem with our accumulated body of wisdom. We are, all of us, woefully ignorant of just how naive we still are – and because we lack omniscience, we just don’t know what we don’t know. All that we have is history’s empirical evidence to indicate just how quickly we’re going to lose our ‘enlightened’ status in the minds of the peoples that will follow us.

And yet, somehow, we happily manage to ignore this historical truth, and loudly preach dogmatic positions as though knowledge is fixed, and we have fixed it.

And having spent many years in the online world of economic debate, let me be the first to tell you that economics is no different. In fact, it’s far worse. You see, at least with medicine, you’re talking about the human body – which, while complex, has remained mostly as it is for millennia.

But when it comes to economics, and the study of human behavior in crowds, and the political systems that manage them – we are dealing with something that is almost ineffably dynamic.

In 1776, in the same year that the American Declaration of Independence was signed, Adam Smith published “The Wealth of Nations”. At that point in time, the total global population was 776 million people.

Today, the world’s population is 7.4 billion – larger by an order of magnitude of ten. And it terms of complexity, raise it again to the power of ten. Just remember that we have gone from communicating via letter delivered over land by horse and over sea by sail boat, to instant communication. Our news is no longer distributed via intermediaries and written hearsay – each time Donald Trump tweets, he is directly interacting with 11.8 million people. When he speaks at a debate, he is in the living rooms of 84 million of us.

Can we honestly believe that Adam Smith contemplated this world when he wrote the Wealth of Nations?

If you stepped into a Republican Convention today, and declared in Smith’s own words:

“It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”

If you said that, you’d be hailed as a true believer, and praised for your ability to defend individual liberties from the oppression of the State.

But I wonder if Adam Smith contemplated the self-love of limited liability corporations. I wonder if he would have agreed that individual liberties should extend to those mini-monarchies, each ruled by a dictatorial CEO, and a board of aristocratic directors.

And as for two of the other big economic schools: both Keynesianism and Monetarism developed when the world of finance was still trading stocks and bonds on messy floors, with people waving slips of paper and sporting suspenders. Today, we literally can and do trade at the speed of light – so most trades take place between mathematical algorithms.

And it’s what I wish we would all recognise: that we actually know very little about modern economies. We haven’t lived in them long enough to even understand what we’re dealing with. And because of that, we fall back on models that were developed in monetary systems that no longer exist, models that make assumptions about human rationality that are demonstrably false, and perhaps even more importantly, models that operate on the basis that all trade is and will always be between human beings.

I’m not saying that those models might not be right. But I can’t help but suspect that if they are, then that will be almost entirely accidental.

But despair not.

The good news: “not knowing a lot” doesn’t mean that we know nothing. We know some things. We now know that socialist and communist style regimes are inherently doomed to failure. We also know that greed and fear exist, and they seem to drive the markets in cycles, regardless of whether it’s a human trading, or an algorithm that a human designed.

We also know that economies need to be managed. Somehow.

And usually, most of the time, we get by, right?

That ‘somehow’ part is only a real problem when the economy is suffering. Because while, for example, you don’t really need to understand the biological workings of the leg in order to know how to walk – if you break the leg, then the biological workings are important. And if you’re a member of the economic school of thought that believes all ailments can be healed with a simple herbal infusion, then chances are, the leg will heal deformed. Or the entire organism may die.

And right now, given how quickly we’re changing, almost every economic school of thought seems to be little more than conventional wisdom. So we need to proceed with a little less self-congratulation about being right all the time – because in the long run, conventional wisdom can turn out to be dangerously misinformed.

Which brings me to the second question: how do we deal with this? Practically.

I mean, we’re not all-knowing, so we can’t tell what the multiplier effects of our actions might be. And those multipliers can be unexpected. There’s a youtube clip which mathematically demonstrates how stopping to let a car slip into your lane in front of you can create hours of traffic. And even though it seems considerate, what you actually end up doing is creating mass inconvenience for thousands of people.

So should we just stay home and do nothing? Don’t procreate. Don’t try. Just nothing.

Well, no.

You see, up to this point, I’ve focused on the shortcomings of our macro-knowledge. But there is a second type of knowledge – it’s a personal and practical type of knowledge, more empirical than learned, and it deals with the Self and our capacity to make good, practical and constructive choices.

This pathway towards what Maslow calls self-actualization is not new – instead, it appears to be something that each successive generation rediscovers. Call it self-discovery, call it letting go of your ego, call it enlightenment. However you describe it, you can see that across time and across belief systems, mankind is crowned with great sages and mystics who labored toward a higher, some might call more divine, way of being.

And what I find most interesting here is what those spiritual masters do not preach. Their focus is not on appropriate tax policies, or on how best to structure the judicial system, or on the correct way to address social injustice.

While Pope Francis may condemn the current system of capitalism and the rise of global inequality – which is perhaps his responsibility as spiritual leader to almost a fifth of the world’s population – that’s a political viewpoint that seems almost at odds with a gospel message which declares that the poor will be with us always.

The Buddha was also not a fan of macro-concerns. He’s quoted as saying “Those who grasp at perceptions and views go about butting their heads in the world.” Which is often paraphrased as “People with opinions just go around bothering each other.”

The main point here is not that these teachers were so ‘spiritual’ as to be politically and economically unaware.

Rather, I think that they were pragmatists. If you want to communicate a powerful message to the powerless, I don’t think you start by telling them that the big problem is their powerlessness. Because that seems self-defeating.

Let me put this differently. When you are upset by something – an economic pain or a political situation – and it is having an impact on you, you basically have two choices:

  1. You can try to change the cause of the problem; or
  2. You can find a way to live with it.

Only one of those options has any realistic probability of success.

Here’s a real world example.

Whenever I travel to see my parents in Zimbabwe. I stay with them in the home that I grew up in. It’s a very different house to what it was when I was a toddler. There are some fairly normal changes – like as my siblings were born, my parents built new bedrooms and redid the kitchen to accommodate a larger kitchen table. But there are other alterations as well – and ones that you might find more surprising. In particular, I’m thinking of the collection of 5,000 litre water tanks that have been walled off at the back of the property.

The reason for that: our house last received water from the Harare municipality in 2001. But in the lead-up to the taps running dry, there were lots of water outages. Plenty of burst pipes and make-shift repairs. This was not a problem caused by drought – it was a problem caused by a lack of maintenance.

Now in the late 90s when this was happening, there was no social media. But let’s hypothetically say that there was. My parents would have had options. They could have taken their complaints to twitter and facebook. They could have launched online petitions to remove mayors from office. They could have ‘taken a stand’ about the status quo of the country by posting expletive-filled rants from behind an Apple keyboard.

But what would this have achieved? The maintenance damage was done. The water was not coming back. All that stand-taking would have done is just delay the inevitable.

So when those water shortages began, while some people wrote angry letters to the council and demanded action, other people took action. They bought water tanks and drilled boreholes. Water purification and filtration systems were installed. Entrepreneurs bought plots of property with prolific underground water supplies, and then invested in small tankers to carry the water to properties that had none.

By the time the taps ran dry, many people didn’t even notice. They’d already made themselves self-sufficient.

To me, this is a parable for pragmatism.

We could all get very involved in online facebook comment wars about who to blame in a crisis, all the while bewailing the lack of good solutions.

But does that really help you? I mean you, specifically. In your personal capacity. Does that make your life better?

Or does it blind you to what you could otherwise be doing to make your life better or easier?

We have choices here. That is the gift of free will. We can choose where to expend our effort, and we can choose to let it to be nullified.

Muhammad Yunus of Nobel Peace Prizewinning microcredit fame, has a story that he often refers to in interviews. It’s about how he addresses disaffected youths who complain about not being able to find a job because the world is against them. His response to them:

“Unemployment is an artificial fiction. Do you ever look at an animal and think ‘My goodness – that animal is unemployed!’? No, no you do not. And if you ever do think that an animal looks unemployed, then I tell you this: that animal belongs to a human. What is this ‘unemployment’ you speak of? You are skilled. You are creative. Go and be useful.”

I also believe in action over defeat.

My own analogy for this: there is a man standing in the middle of a field, surrounded by building materials, a team of workmen, and a set of foundations that have already been laid. But because he is worried about the cost of home insurance, he chooses instead to complain bitterly about the bad weather. And why is he getting wet.

I do not believe that we are here to be victims of our circumstances – for the most part, we cannot change them. And even if we are Chairman Mao with the ability to command the entire 650 million strong population of China, there is a very strong risk that we will just make it worse.

Instead, what we can do, and what we must do, is take some risks, take some action, and make ourselves independent of our environment. It is what we did when we first tamed a chicken. It is what we did when we first started cultivating grain. It is what we did when we first constructed a shelter.

I believe that this is what the spiritual greats meant when they said that we can choose to be free.

As I come to the end, I want to bring it back to where I started: the burning issues in our social discourse, and the many ‘pundits’ who resist subtlety, nuance and, dare I say, humility, as they proclaim the “right” policy and what “should” be done about the world.

What does it mean to be pragmatic in the face of so much emotion?

Here is my reflection: I am often asked if has a big following. It does not. And there is a clear reason for that.

I have been a part of this world for long enough to know that if I wanted to build a site that gathered a mass following, I could do so. All I would need to do is write apocalyptic fiction, and present it as inevitable fact. The loudest voices in social media are the extremists and the rage-filled – and they flock to those sites that confirm their fears and reaffirm their anger and pain.

In the face of that, the voice of moderation cannot compete. Not only is it drowned out, it is criticized for being weak and “lacking conviction”.

But knowing that should be a comfort. It is easy to be afraid. It is easy to be overwhelmed by anxiety in the wake of Donald Trump, Brexit, the levels of sovereign debt, asset bubbles, President Zuma, the EFF, #feesmustfall, ISIS, China’s slowing economy, North Korea’s nuclear tests, fiat money, and all the other burning issues that social media puffs up into full-blown panic.

But it is the type of concern that disempowers and leaves you feeling trapped and looking for a country to emigrate to.

Of course, some people might say that this is the time to take a stand. And if it happens to be on social media, then so be it – and as for someone like me, who appears to be a pacifist, then we’re the cowardly sell-outs.

It should come as no surprise that I do not agree with them.

When I decide to focus on what practical solutions I can find to improve my own position – I am affecting the world in a far more direct and sustainable manner. In my work every day, I help businesses to provide their staff with secure incomes that in turn allow them the freedom to vote with their conscience, rather than leaving them at risk of voting from a place of despondency and desperation. As an entrepreneur, I do the same for my own staff – and the rentals that I pay in my office space cover the salaries of cleaners and gardeners and rental agent administrators. I spend my income on dinners and takeaway flat whites. I buy clothes. I visit small art galleries. Every time I swipe a credit card somewhere, I am part of that business’ customer base, helping to justify their economic reason for existing.

To me, trusting in the multiplier effects of my actions is far more sensible than hoping that an angry facebook status will somehow change the world for the better.

I do not believe that being so outraged is how we are meant to live. I don’t believe that this is how we have to live.

We just have to start by working on the things that we can change.

And spoiler alert: it’s not the world.

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at