In my experience, everything worth knowing in life is simple. Why then do our teachers and the media make it so complicated?
I think there are several reasons:
- desire to keep valuable knowledge to yourself
- an agenda to mislead others so that you can profit
In my opinion, these stem from fear of scarcity (the myth that there is not enough to go around).
But perhaps the greatest reason of them all is
- ignorance
Which comes from
- flawed (conventional) education
Joseph Stiglitz, famous ex-World Bank economist, author and professor delivered a public lecture in Johannesburg on Wednesday afternoon.
In his speech, he discussed ‘asymmetric knowledge’. This means when one person in a deal knows important things that the other person doesn’t.
It played a big role in the current financial meltdown, the worst since the Great Depression. Homebuyers, pension funds and many others were seriously misled because they didn’t know what they were getting into.
If you don’t know the real story, you get preyed upon.
Like ordinary Americans were, when unscrupulous bankers offered them loans they couldn’t afford.
He also mentioned ‘embarrassing’ economic theories and models that university economic departments teach. That led to, and justified, the ‘toxic’ behavior of the bankers.
So what do I take out of this? You can’t trust bankers and you can’t trust tertiary education.
They design their courses and their products to confuse and mislead and to hide the truth.
So where do you find the truth? How do you avoid being misled?
I would recommend that you first educate yourself, with genuine knowledge that has been proven to work for years. Check your sources, check the facts, and the claims. No matter who it is – even the most respected universities, the most respected economists.
Secondly, avoid complicated explanations. If someone is trying to tell you that economics or health or wealth creation is very difficult and hard to understand, warning bells should ring.
You are being ‘confokulated’ – confused and misled.
Avoid claims that ‘the usual rules do not apply’. They said that in the dotcom bubble, and in the sub-prime bubble. Read history! Stiglitz said that economic history was no longer taught, and I think he meant in an economics course.
He said as a result nobody was aware of housing prices ever going downhill- because they did not look back far enough! This is astounding! If they’d looked at the 1980s, they would have realized their error!
Stiglitz said one of the main reasons all those people got ‘confokulated’ (my word, not his!) was because bankers and regulators and the public all believed that housing prices never drop.
The lesson? Avoid 'confokulation'. If the truth seems very complicated, you’re being misled. Focus on educating yourself, with the real thing. Read history.
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