Margin of Safety » Inoculated Investor http://amarginofsafety.com "...to distill the secret of sound investment into three words..." Fri, 26 Jun 2020 18:44:00 +0000 en hourly 1 http://wordpress.org/?v=3.2 The Great Minds Think Alike Department http://amarginofsafety.com/2011/07/06/the-great-minds-think-alike-department/?utm_source=rss&utm_medium=rss&utm_campaign=the-great-minds-think-alike-department http://amarginofsafety.com/2011/07/06/the-great-minds-think-alike-department/#comments Wed, 06 Jul 2011 16:15:23 +0000 Ray Galkowski, CFA http://amarginofsafety.com/?p=772 Continue reading →]]> If I am correctly reading the notes taken by the Inoculated Investor (http://inoculatedinvestor.blogspot.com/) at Charlie Munger’s annual meeting recently, then Munger is a big fan of Matt Ridley’s Rational Optimist too.

The Google document:

https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B7X_KYnqpniZNTY4YjdkY2UtNjU5Ny00ZmYxLTg0YWItODJkMWY0ZjBhNzA1&hl=en_US

I disagree with the conclusion (Munger’s or II’s? page 2) that Ridley fell in love with the division of labor as the sole explanation for economic success. Ridley showed that throughout history and in various cultures, trade led to specialization which led to Ricardo-like increases in wealth. He showed that the freedom to trade is one of the most important drivers of economic success and that such success usually leads the powerful collective elements–clergy, military, government, etc.–to appropriate for themselves larger shares of wealth from the less powerful individual entrepreneurs. That is, the success that was born on political and economic freedom often leads to conditions that are less free.

Ridley’s prescription for stagnation isn’t that we need more division of labor; it is that we need more freedom.

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