The key to success...

Nov 18, 2014

Baltimore, Maryland

Dear Diary,

Stocks up a few bucks yesterday. Gold up pennies.

Nothing to get excited we return to "The Secret of Success."

The Battle of Rorke's Drift was either a triumph for Western Civilization or a bloody disaster, depending on how you look at it. The battle took place in what is now South Africa, pitting the British against the Zulu, on January 22, 1879. The British were vastly unnumbered. They had a total of just over 150 men, including regular troops, colonial auxiliaries and some sick men who were in the hospital at Rorke's Drift but who were able to fire a rifle. They faced between 3,000 and 4,000 Zulu warriors.

Did the battle show the world the secret to the West's success? Necessity may be the mother of invention, but Sir Garnet Wolseley, commander-in-chief of the British Army, didn't think it was worth a medal. "It is monstrous making heroes of those who shut up in buildings at Rorke's Drift, could not bolt, and fought like rats for their lives which they could not otherwise save," he said, commenting on the many awards given to the survivors.

But American military historian Victor Davis Hanson can hardly stop his chest from swelling up when he reads accounts of the battle. "In the long annals of military history, it is difficult to find anything quite like Rorke's Drift," he writes, "where a beleaguered force, outnumbered forty to one, survived and killed twenty men for every defender lost."

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Was that success? Dead Zulus and live white men?

Hanson, along with Jared Diamond (author of "Guns, Germs and Steel") has made a reputation for himself by speculating about why Western civilization has been so much more successful than its competitors. We do not drink the finest wines or eat cheeses imported from the Hindu Kush. We do not listen to chamber music from Borneo. Neither we, nor the Australians, nor the Canadians modeled their government after that of Thailand or Tasmania. We have yet to read a distinguished philosopher born and raised in the African bush. And if a Tamil engineer had invented the repeating rifle, we might be wearing a dhoti now rather than a white shirt with a button down collar.

Diamond believes it was Europe's navigable rivers that gave it an edge. They made it easy to trade, which led to many exchanges of ideas and technology...including, importantly, the technology you use for killing people. Hanson thinks more broadly that it was a matter of culture itself; the West was more disciplined...more inventive...more thoughtful...and more lethal. Unlike many other peoples, Western armies fought to win, not just to preen, play or make a point.

As far as we recall Hanson offers no convincing explanation for where that culture came from or why it developed in the Middle East, between the Tigris and the Euphrates rather than, say, in the Middle West between the Mississippi and the Ohio. And neither Hanson nor Diamond shows much appreciation for the role of civilization itself.

First, there are no competing civilizations. There are competing cultures. And rival governments. And adversary nations. Different groups may speak different tongues, but they share a common civilization. All civilized communities have the same essential feature; they rely upon persuasion rather than force. The more force and violence they use, the less civilized they are. The less civilized they are, the less prosperous and technologically advanced they become. And the less advanced they are, the less able they are to exterminate a small group of English-speaking soldiers on the frontiers of civilization.

That is the crucial paradox of civilization. The more civilized you are, the more you are capable of doing very uncivilized things. It is oft remarked, for example, that Germany - in the '20s and '30s - was the most civilized country in Europe. That is what made it possible for it to throw its weight around. Which just goes to show that no matter how civilized you are, you never really get out of that 'foul rag and bone shop of the heart.' Push the saint too hard; he will turn into a beast.

The West was able to conquer uncivilized people, but not other fully civilized groups. China and Japan, for example, were never brought into submission. While the tribes of the Great Plains, the pampas and the Outback were almost annihilated, civilized peoples were better able to defend themselves, against germs as well as guns and steel.

What is the secret?

Porter saw it not merely as the foundation of civilization, but as a piece of advice. It was like the owner's manual for being a successful individual in a modern economy. He began by quoting your Diary editor:

    "The only way any transaction can take place is when both parties are making a profit."
Then, Porter continues:

    I didn't think much about this idea at first... and probably didn't really understand it, either. But over time, I came understand how and why this idea could explain nearly everything... especially people's behavior.

    I began to learn how understanding any business, any relationship, any transaction... it's all about understanding the incentives. And that's what Bill was talking about.

    In other words, in every situation you simply have to ask: What's in it for the other guy?

    As Bill taught me, in every transaction you have to persuade someone. If you want to be successful in life, you do that - not by trickery or force - but by offering a fantastic deal.

    And if you understand that simple fact and learn how to implement it... you really understand the key to life.
What is the key to success?

A few more words on the subject tomorrow...and then we will leave it alone. Promise.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

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