
Charlie Munger on Economics (pdf) - davidw
http://www.tilsonfunds.com/MungerUCSBspeech.pdf
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jamiepitts
Charlie Munger is definitely worth learning from. A coworker and I gave him a
series of web software demos back in the 1990s and, bar none, he's the
smartest person I've met. Check out what he has to say about mental models:

<http://www.capmag.com/article.asp?ID=4669>

"You've got to have models in your head," he explained, "and you've got to
array your experience-both vicarious and direct-on this latticework of
models."

~~~
yagibear
A better link is <http://www.vinvesting.com/docs/munger/> which provides his
full "Art of Stock Picking" speech in which he gives his opinion on mental
models, as well as the UCSB speech & another.

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davidw
His criticisms really are quite astute. It's a very insightful article.

I don't quite agree with his views on China and free trade: I don't think it
matters if America or China or Belize is "1st". What matters is that everyone
is objectively better off. Looking at things on a relative scale rather than
an objective one is a sneaky way of turning a non-zero sum game into a zero
sum game where there can only be one "1st" or "leader".

~~~
Xichekolas
The worry is not that China becoming rich will make us poorer... everyone will
become better off financially.

The worry is that China will get to #1 economic power while staying non-
democratic. The world economic superpower can control/influence a lot of
things worldwide, and people worry about a repressive state that can impress
it's will upon the world (instead of just it's own people).

Not entirely sure I worry about that. I think that any mass economic progress
of the people of China will eventually lead to a self-interested middle class
that will simply overwhelm the party's ability to control it.

It's like the RIAA and downloading. The RIAA member companies control the keys
to the music kingdom (or at least the mass music kingdom), but they can't
resist the overwhelming tide of people that want to download music and play it
on any device they own. Eventually China will have it's overwhelming tide
moment. Either that or the regime will change itself over time to avoid that
moment, until they become what the people want anyway.

~~~
byrneseyeview
Can it influence things cheaply enough to be worth it? What are they going to
do?

_They can dump goods. But that just means we'll buy a larger proportion of
those goods from China, when China sells them at a loss. The world is a net
beneficiary, even if individual producers lose.

_ They can dump financial products. But again, that just creates a market
opportunity -- it's a small transfer of wealth away from whoever else owns
those products, but to have a big influence, they'd also have to have a big
portfolio, so they would bear a large fraction of the cost.

 _China could try to sell shoddy goods. But we'd just learn not to buy them.

_ China could raise tariffs. But that would just force them to invest more in
domestic production while hurting their own economy.

Trade wars are not worth their cost. They aren't winnable either, unless
someone has overwhelming scale, overwhelming speed, or overwhelming patience.

~~~
davidw
In terms of trade, you're right.

Going beyond that, they do seem to have fewer qualms about dealing with
individuals like Mugabe, or the government of Sudan, since promoting human
rights isn't really high up on their agenda.

My hope is that once enough people in China start to get enough money, they'll
start wanting a better deal in terms of the distribution of power.

