Over at the New Yorker, John Cassidy has a New Yorkerish (but still pretty good and not too dickish) profile of hedge-fund multi-billionaire Ray Dalio, whose zen Darwinist approach to capitalism has won him both hard cash and ridicule from the likes of New York magazine, whose earlier profile/takedown of Dalio is headlined “Pursuing Self-Interest in Harmony With the Laws of the Universe and Contributing to Evolution Is Universally Rewarded.”
Overall, Dalio’s shop sounds a lot like a zen version of Apple, Microsoft, or Google, without the West Coast high spirits—a brilliant, ruthless boss who pushes both his employees and himself mercilessly (but, in Dalio’s case, without raising his voice), but isn’t afraid to lose an argument, even in public, and rewards competence (or, rather, super competence), with the riches of Croesus—a corporation where technical expertise rather than political acumen is the key to success. (According to Dalio, the first duty of a leader is to be transparent, so that followers aren’t afraid to be transparent as well.)
According to Dalio, the way to get rich is to take a leaf from the book of the hyena. Dealbreaker posted a few of Ray’s rules here:
“For example, when a pack of hyenas takes down a young wildebeest, is that good or evil? At face value, that might not be “good” because it seems cruel, and the poor wildebeest suffers and dies. Some people might even say that the hyenas are evil. Yet this type of apparently “cruel” behavior exists throughout the animal kingdom. Like death itself it is integral to the enormously complex and efficient system that has worked for as long as there has been life. It is good for both the hyenas who are operating in their self-interest and the interest of the greater system, including those of the wildebeest, because killing and eating the wildebeest fosters evolution (i.e., the natural process of improvement). In fact, if you changed anything about the way that dynamic works, the overall outcome would be worse.
While all this sounds very philosophical and removed from how to behave at Bridgewater, it is integral to how we operate. Bridgewater is based on the core belief that everyone here is evolving together. How well and how quickly we do that will have a huge effect on our well-being and the well-being of all the people we have contact with (e.g., our clients, our families, etc.). Those two things are inextricably linked. Further, to be successful and happy, not only do we have to be excellent, but we have to continue to improve at a surprisingly fast rate. Bridgewater also operates consistently with the belief that to be excellent and improve at a fast rate, we must be hyperrealistic and hypertruthful. We therefore need to overcome any impediments to being realistic and truthful.”
This sort of thinking is hardly new on Wall Street. Back in the seventies (waay back in the seventies), I more or less got paid to read the Wall Street Journal, among other things, and it featured any number of books promising to teach you how to unleash your inner “jungle warrior” (he’s there! You just don’t know he’s there!)
What’s amusing is that Dalio extracts (really, inserts) the moral of his own creation into Nature, which has no moral, not even the moral of “efficiency,” as arrantly as any tree-hugging hippie (who must be efficient, because there are so many of them). I doubt if Ray would encourage his team to emulate the “lowly” dung beetle, but dung beetles are just as “efficient” as hyenas. But because hyenas are vicious and ruthless, with big teeth and slavering jaws (and because Dreyfus has already copyrighted lions), Ray runs with the hyenas.
Even more amusing (I’m full of laughs this morning), according to Cassidy, Ray thinks it’s the job of government to bail out the hyenas when things get really rough, bemoaning the Bush Administration’s decision to let Lehman fail. “So, now we sit and wait to see if they have some hidden trick up their sleeves, or if they really are as reckless as they seem,” Dalio groaned in his newsletter to clients after Lehman’s collapse. For whatever reason, Cassidy doesn’t question Dalio on this obvious contradiction.
Despite his belief that governments have to give hyenas a break when they get too fat to catch the wildebeest, Ray’s take on the economic future seems pretty sound to me. (Skip to the end of Cassidy’s piece if you want to read it for yourself.) Briefly, things are going to be slow for a long time, and ultimately there’s going to be a good deal of inflation. Governments like the U.S. can summon up the nerve to bite the bullet on occasion, but ultimately there’s going to be one crisis too many. Something will have to go, and that will be the stable dollar. So, probably, you shouldn’t quit your day job.
Afterwords
Want to go to work for Ray? Check out the company website, which looks sort of like a Walden for rich guys.
