A Free Course on Karl Marx’s Capital, Volume 1 from Yale University

From Yale pro­fes­sor Paul North comes a chap­ter-by-chap­ter study of Karl Marx’s Cap­i­tal: Cri­tique of Polit­i­cal Econ­o­my, Vol­ume 1. Accord­ing to the descrip­tion that accom­pa­nies the course on YouTube, this “book from 1872 is still the best guide to the preda­to­ry eco­nom­ic and social sys­tem with­in which we live. The book solves five basic mys­ter­ies in our social world. The mys­ter­ies are: why social class­es strug­gle against one anoth­er, why human beings are in the thrall of things, how a quan­ti­ty of mon­ey turns into more mon­ey with­out seem­ing to add any­thing, why some peo­ple are forced to work and the more they work the less they make pro­por­tion­al to their effort, and final­ly, and why it is so hard to trans­form the sys­tem for the bet­ter.” You can watch the 19 lec­tures from the course in the playlist above.

Prof. North is the co-edi­tor of the new Eng­lish trans­la­tion and crit­i­cal edi­tion of Cap­i­tal Vol­ume 1, and it’s the text used in the course. If you’re inter­est­ed in delv­ing deep­er into Marx’s Cap­i­tal, see the David Har­vey cours­es list­ed in the Relat­eds below.

This course will be added to our list of 1,700 Free Online Cours­es from Top Uni­ver­si­ties

Relat­ed Con­tent

David Harvey’s Course on Marx’s Cap­i­tal: Vol­umes 1 & 2 Now Avail­able Free Online

5 Free Online Cours­es on Marx’s Cap­i­tal from Prof. David Har­vey

A Short Ani­mat­ed Intro­duc­tion to Karl Marx

What Karl Marx Meant by “Alien­ation”: Two Ani­mat­ed Videos Explain

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An Introduction to the Strait of Hormuz and Its Role in the Longstanding US-Iran Conflict

Above, you can watch a primer on the Strait of Hor­muz, the nar­row pas­sage between Iran and Oman through which rough­ly 20% of the world’s oil sup­ply flows. Pro­duced by Vox, the video explains why this choke­point has long played a cen­tral role in ten­sions between the Unit­ed States and Iran. Since the 1980s, Iran has threat­ened to dis­rupt traf­fic through the Strait, all as a way to exert pres­sure on the glob­al econ­o­my. Now, fac­ing an attack from the Unit­ed States and Israel, it’s mak­ing good on its threats, slow­ing traf­fic to a trick­le. With oil prices surg­ing, the Trump admin­is­tra­tion has yet to demon­strate that it has a coher­ent plan for coun­ter­ing a strat­e­gy that Iran announced decades ago. Stay tuned for more…

If you would like to sup­port the mis­sion of Open Cul­ture, con­sid­er mak­ing a dona­tion to our site. It’s hard to rely 100% on ads, and your con­tri­bu­tions will help us con­tin­ue pro­vid­ing the best free cul­tur­al and edu­ca­tion­al mate­ri­als to learn­ers every­where. You can con­tribute through Pay­Pal, Patre­on, and Ven­mo (@openculture). Thanks!

Scott Galloway Unveils “Resist and Unsubscribe,” an Action Plan for Consumers to Push Back Against Government Overreach

As men­tioned here last week, Scott Gal­loway argued that Amer­i­cans have one way to reverse the vio­lent over­reach of the fed­er­al gov­ern­ment: launch a one-month eco­nom­ic strike aimed at major tech and AI com­pa­nies, with the goal of reduc­ing Amer­i­ca’s GDP and mak­ing the mar­kets wob­ble. When the mar­kets gyrat­ed after “Lib­er­a­tion Day,” Pres­i­dent Trump imme­di­ate­ly rolled back many tar­iffs. Now, if Amer­i­cans can flex their eco­nom­ic mus­cles in Feb­ru­ary, Gal­loway wagers the admin­is­tra­tion will rethink whether it wants to keep arrest­ing jour­nal­ists and let­ting masked ICE agents shoot civil­ians in the streets—with impuni­ty.

Today, Gal­loway has launched a new web­site, Resist and Unsub­scribe, that pro­vides an action plan for a month­long strike. In the “Ground Zero” sec­tion of the site, Gal­loway lists sub­scrip­tion ser­vices from America’s largest tech­nol­o­gy companies—Amazon, Meta, Google, Apple, Net­flix, Ope­nAI, and Microsoft—and pro­vides links that let users unsub­scribe quick­ly. He also sug­gests hold­ing off on buy­ing new hard­ware and prod­ucts from these com­pa­nies (e.g. iPhones). If you use Feb­ru­ary to review your sub­scrip­tions and find ones to cut, you’ll clean up your per­son­al finances. You’ll also get the atten­tion of the major tech­nol­o­gy com­pa­nies that account for one-third of the S&P 500. When the tech CEOs get “yip­py,” so too will Trump.

In the “Blast Zone” sec­tion of Resist and Unsub­scribe, Gal­loway lists consumer‑facing com­pa­nies he has “iden­ti­fied as active enablers of ICE,” nam­ing AT&T, Com­cast, Lowe’s, Mar­riott, and Spo­ti­fy among oth­ers. He explains how these com­pa­nies sup­port ICE and rec­om­mends spe­cif­ic ser­vices you can can­cel or avoid. Scroll down the page to see these sug­ges­tions.

Vis­it Resist and Unsub­scribe, find some ser­vices to can­cel (it’s not a large sac­ri­fice), and spread the word. You can also find more infor­ma­tion about the Resist and Unsub­scribe move­ment on Gal­loway’s blog, “No Mercy/No Mal­ice.”

Relat­ed Con­tent 

Scott Gal­loway Explains How YOU Can Stop Gov­ern­ment Over­reach Using the Pow­er of Your Purse

Bruce Spring­steen Revives the Protest Song, Con­demns ICE Vio­lence in “Streets of Min­neapo­lis”

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Hear Alan Watts’s 1960s Prediction That Automation Will Necessitate a Universal Basic Income

One of the most propul­sive forces in our social and eco­nom­ic lives is the rate at which emerg­ing tech­nol­o­gy trans­forms every sphere of human labor. Despite the polit­i­cal lever­age obtained by fear­mon­ger­ing about immi­grants and for­eign­ers, it’s the robots who are actu­al­ly tak­ing our jobs. It is hap­pen­ing, as for­mer SEIU pres­i­dent Andy Stern warns in his book Rais­ing the Floor, not in a gen­er­a­tion or so, but right now, and expo­nen­tial­ly in the next 10–15 years.

Self-dri­ving cars and trucks will elim­i­nate mil­lions of jobs, not only for truck­ers and taxi (and Uber and Lyft) dri­vers, but for all of the peo­ple who pro­vide goods and ser­vices for those dri­vers. AI will take over for thou­sands of coders and may even soon write arti­cles like this one (warn­ing us of its impend­ing con­quest). What to do? The cur­rent buzzword—or buzz-acronym—is UBI, which stands for “Uni­ver­sal Basic Income,” a scheme in which every­one would receive a basic wage from the gov­ern­ment for doing noth­ing at all. UBI, its pro­po­nents argue, is the most effec­tive way to mit­i­gate the inevitably mas­sive job loss­es ahead.

Those pro­po­nents include not only labor lead­ers like Stern, but entre­pre­neurs like Peter Barnes and Elon Musk (lis­ten to him dis­cuss it below), and polit­i­cal philoso­phers like George­town University’s Karl Widerquist. The idea is an old one; its mod­ern artic­u­la­tion orig­i­nat­ed with Thomas Paine in his 1795 tract Agrar­i­an Jus­tice. But Thomas Paine did not fore­see the robot angle. Alan Watts, on the oth­er hand, knew pre­cise­ly what lay ahead for post-indus­tri­al soci­ety back in the 1960s, as did many of his con­tem­po­raries.

The Eng­lish Epis­co­pal priest, lec­tur­er, writer, and pop­u­lar­iz­er of East­ern reli­gion and phi­los­o­phy in Eng­land and the U.S. gave a talk in which he described “what hap­pens when you intro­duce tech­nol­o­gy into pro­duc­tion.” Tech­no­log­i­cal inno­va­tion enables us to “pro­duce enor­mous quan­ti­ties of goods… but at the same time, you put peo­ple out of work.”

You can say, but it always cre­ates more jobs, there’ll always be more jobs. Yes, but lots of them will be futile jobs. They will be jobs mak­ing every kind of frip­pery and unnec­es­sary con­trap­tion, and one will also at the same time beguile the pub­lic into feel­ing that they need and want these com­plete­ly unnec­es­sary things that aren’t even beau­ti­ful.

Watts goes on to say that this “enor­mous amount of non­sense employ­ment and busy­work, bureau­crat­ic and oth­er­wise, has to be cre­at­ed in order to keep peo­ple work­ing, because we believe as good Protes­tants that the dev­il finds work for idle hands to do.” Peo­ple who aren’t forced into wage labor for the prof­it of oth­ers, or who don’t them­selves seek to become prof­i­teers, will be trou­ble for the state, or the church, or their fam­i­ly, friends, and neigh­bors. In such an ethos, the word “leisure” is a pejo­ra­tive one.

So far, Watts’ insights are right in line with those of Bertrand Rus­sell and Buck­min­ster Fuller, whose cri­tiques of mean­ing­less work we cov­ered in an ear­li­er post. Rus­sell, writes philoso­pher Gary Gut­ting, argued “that immense harm is caused by the belief that work is vir­tu­ous.” Harm to our intel­lects, bod­ies, cre­ativ­i­ty, sci­en­tif­ic curios­i­ty, envi­ron­ment. Watts also sug­gests that our fix­a­tion on jobs is a rel­ic of a pre-tech­no­log­i­cal age. The whole pur­pose of machin­ery, after all, he says, is to make drudgery unnec­es­sary.

Those who lose their jobs—or who are forced to take low-pay­ing ser­vice work to survive—now must live in great­ly dimin­ished cir­cum­stances and can­not afford the sur­plus of cheap­ly-pro­duced con­sumer goods churned out by auto­mat­ed fac­to­ries. This Neolib­er­al sta­tus quo is thor­ough­ly, eco­nom­i­cal­ly unten­able. “The pub­lic has to be pro­vid­ed,” says Watts, “with the means of pur­chas­ing what the machines pro­duce.” That is, if we insist on per­pet­u­at­ing economies of scaled-up pro­duc­tion. The per­pet­u­a­tion of work, how­ev­er, sim­ply becomes a means of social con­trol.

Watts has his own the­o­ries about how we would pay for a UBI, and every advo­cate since has var­ied the terms, depend­ing on their lev­el of pol­i­cy exper­tise, the­o­ret­i­cal bent, or polit­i­cal per­sua­sion. It’s impor­tant to point out, how­ev­er, that UBI has nev­er been a par­ti­san idea. It has been favored by civ­il rights lead­ers like Mar­tin Luther King and con­tro­ver­sial con­ser­v­a­tive writ­ers like Charles Mur­ray; by Key­ne­sians and sup­ply-siders alike. A ver­sion of UBI at one time found a pro­po­nent in Mil­ton Fried­man, as well as Richard Nixon, whose UBI pro­pos­al, Stern notes, “was passed twice by the House of Rep­re­sen­ta­tives.” (See Stern below dis­cuss UBI and this his­to­ry.)

Dur­ing the six­ties, a live­ly debate over UBI took place among econ­o­mists who fore­saw the sit­u­a­tion Watts describes and also sought to sim­pli­fy the Byzan­tine means-test­ed wel­fare sys­tem. The usu­al con­gres­sion­al bick­er­ing even­tu­al­ly killed Uni­ver­sal Basic Income in 1972, but most Amer­i­cans would be sur­prised to dis­cov­er how close the coun­try actu­al­ly came to imple­ment­ing it, under a Repub­li­can pres­i­dent. (There are now exist­ing ver­sions of UBI, or rev­enue shar­ing schemes in lim­it­ed form, in Alas­ka, and sev­er­al coun­tries around the world, includ­ing the largest exper­i­ment in his­to­ry hap­pen­ing in Kenya.)

To learn more about the long his­to­ry of basic income ideas, see this chronol­o­gy at the Basic Income Earth Net­work. Watts men­tions his own source for many of his ideas on the sub­ject, Robert Theobald, whose 1963 Free Men and Free Mar­kets defied left and right ortho­dox­ies, and was con­sis­tent­ly mis­tak­en for one or the oth­er. (Theobald intro­duced the term guar­an­teed basic income.) Watts, who would be 101 today, had oth­er thoughts on eco­nom­ics in his essay “Wealth Ver­sus Mon­ey.” Some of these now seem, writes Maria Popo­va at Brain Pick­ings, “bit­ter­sweet­ly naïve” in ret­ro­spect. But when it came to tech­no­log­i­cal “dis­rup­tions” of cap­i­tal­ism and the effect on work, Watts was can­ni­ly per­cep­tive. Per­haps his ideas about basic income were as well.

Note: An ear­li­er ver­sion of this post appeared on our site in 2017.

Relat­ed Con­tent:

When John May­nard Keynes Pre­dict­ed a 15-Hour Work­week “in a Hun­dred Year’s Time” (1930)

Bertrand Rus­sell & Buck­min­ster Fuller on Why We Should Work Less, and Live and Learn More

Charles Bukows­ki Rails Against 9‑to‑5 Jobs in a Bru­tal­ly Hon­est Let­ter (1986)

The Employ­ment: A Prize-Win­ning Ani­ma­tion About Why We’re So Dis­en­chant­ed with Work Today

Josh Jones is a writer and musi­cian based in Durham, NC. Fol­low him at @jdmagness

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What Was Smoot-Hawley, and Why Are We Doing It Again? Anyone? Anyone?

When most Amer­i­cans think of the Smoot-Haw­ley Tar­iffs, they think of eco­nom­ic dis­as­ter. But if you ask why, most Amer­i­cans may need a short refresh­er course. Below, you will find just that. Appear­ing on Derek Thomp­son’s Plain His­to­ry pod­cast, Dou­glas Irwin (an econ­o­mist and his­to­ri­an at Dart­mouth) revis­its the 1930 Smoot-Haw­ley Tar­iff Act, which raised tar­iffs on over 20,000 prod­ucts import­ed into the Unit­ed States. The law was passed despite warn­ings from exec­u­tives like Hen­ry Ford (who called the tar­iff act “an eco­nom­ic stu­pid­i­ty”) and a peti­tion signed by 1,028 Amer­i­can econ­o­mists, who argued that the tar­iffs would raise prices and spark a trade war, leav­ing the Unit­ed States iso­lat­ed. Their con­cerns were ulti­mate­ly well-found­ed. The Smoot-Haw­ley Tar­iffs, sup­port­ed by a Repub­li­can pres­i­dent and Con­gress, had the unin­tend­ed con­se­quence of deep­en­ing, not end­ing, the Great Depres­sion.

Mark Twain alleged­ly said that “His­to­ry doesn’t repeat itself, but it often rhymes.” But some­times his­to­ry may well repeat itself or come very close, and that’s where we seem to be head­ed right now. As in 1930, we have Repub­li­cans imple­ment­ing new tar­iffs, but this time with the hope of re-engi­neer­ing the world econ­o­my and bring­ing man­u­fac­tur­ing back to Amer­i­ca. Mean­while, econ­o­mists (even con­ser­v­a­tive ones) warn that these poli­cies risk repeat­ing the mis­takes of Smoot-Haw­ley.

Below you can hear the assess­ment of the eco­nom­ic his­to­ri­an Niall Fer­gu­son, who, in speak­ing with Bari Weiss, explains why Don­ald Trump’s tar­iffs will fail to re-indus­tri­al­ize Amer­i­ca. The gold­en age of man­u­fac­tur­ing in Amer­i­ca is long gone, and it’s not com­ing back, part­ly thanks to automa­tion. (Mor­gan Housel has more to say on that.) But even worse, the chaot­ic imple­men­ta­tion of these poli­cies risks trig­ger­ing a trade war, “a major finan­cial cri­sis com­pa­ra­ble in scale to 2008,” or even a mil­i­tary cri­sis that an iso­lat­ed Amer­i­ca would be ill-equipped to han­dle. Speak­ing on Meet the Press this week­end, investor Ray Dalio omi­nous­ly voiced very sim­i­lar con­cerns, say­ing “some­thing worse than reces­sion” may be on the hori­zon.

For anoth­er take, you can hear Preet Bharara’s con­ver­sa­tion with Justin Wolfers, where the Aus­tralian econ­o­mist warns that Trump’s tar­iffs may have few ben­e­fits and most­ly costs, some quite pro­found. By launch­ing a trade war, Amer­i­ca will trade less and find its glob­al influ­ence dimin­ished, leav­ing a void that Chi­na can fill. Echo­ing Niall Fer­gu­son, Wolfers also cau­tions that you can’t turn back the eco­nom­ic clock. He notes:

A hun­dred years ago, we had actu­al­ly the same debate, but it was because we were mov­ing from the land, from a pre­dom­i­nant­ly agri­cul­tur­al econ­o­my, to a man­u­fac­tur­ing-based econ­o­my. And we moved from an enor­mous share of the pop­u­la­tion work­ing in agri­cul­ture to work­ing in man­u­fac­tur­ing, and that raised the Amer­i­can mid­dle class.

There was a lot of nos­tal­gia. Why aren’t we back on the land? And the sub­se­quent stage of eco­nom­ic devel­op­ment is we move out of the fac­to­ries, and we move and become engi­neers and com­put­er sci­en­tists and soft­ware design­ers. And we’re in a much more cog­ni­tive econ­o­my.
And we are not inhal­ing black soot in our mines or in our fac­to­ries dur­ing the day. And that’s the future of the Amer­i­can econ­o­my. And it’s one that speaks well to the skills that Amer­i­cans have.

We’re the most edu­cat­ed work­force in the world. And so pre­sum­ably the jobs of the future are those, the jobs we want are those that cater to the extreme pro­duc­tiv­i­ty and edu­ca­tion of Amer­i­can work­ers.

How have we reached the point where we’re run­ning the same failed exper­i­ments again, all to reclaim an illu­so­ry bygone eco­nom­ic age? It’s a hard ques­tion to con­tem­plate, but I ask that ques­tion again. Any­one? Any­one? Any­one?

Relat­ed Con­tent 

The Steps a Pres­i­dent Would Take to Destroy His Nation, Accord­ing to Elon Musk’s AI Chat­bot, Grok

Free Online Eco­nom­ics & Finance Cours­es

Strik­ing Poster Col­lec­tion from the Great Depres­sion Shows That the US Gov­ern­ment Once Sup­port­ed the Arts in Amer­i­ca

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How Italy Became the Most Divided Country in Europe: Understanding the Great Divide Between North & South

Pra­da, Alfa Romeo, Pel­le­gri­no, Fer­rari, Illy, Lam­borgh­i­ni, Guc­ci: these are a few Ital­ian cor­po­ra­tions we all know, though we don’t nec­es­sar­i­ly know that they’re all from the north of Italy. The same is true, in fact, of most Ital­ian brands that now enjoy glob­al recog­ni­tion, and accord­ing to the analy­sis pre­sent­ed in the Real­LifeLore video above, that’s not a coin­ci­dence. More than 160 years after the uni­fi­ca­tion of Italy, the south remains an eco­nom­ic and social under-per­former com­pared to the north, reflect­ed in mea­sures like the Human Devel­op­ment Index, GDP per capi­ta, and even vot­er turnout. At this point, the dis­par­i­ty between the two halves of the coun­try looks stark­er than that between the for­mer East and West Ger­many.

The rea­sons begin with geog­ra­phy: besides its obvi­ous prox­im­i­ty to the rest of Europe, north­ern Italy is home to the high­ly nav­i­ga­ble Po Riv­er and its sur­round­ing val­ley, the fresh­wa­ter (and hydro­elec­tric pow­er) sources of the Alps, and the deep-water ports at Tri­este and Genoa. What’s more, it does­n’t much over­lap with the fault zone under the Apen­nine Moun­tains of cen­tral and south­ern Italy, and thus isn’t as exposed to the earth­quakes that have tak­en such a toll over the cen­turies. Nor are any of the coun­try’s active vol­ca­noes — includ­ing Mt. Vesu­vius, which destroyed Pom­peii in the year 79 and killed thou­sands of Neapoli­tans in 1631 — locat­ed in the north.

After the fall of the Roman Empire, the polit­i­cal fates of what would become north­ern and south­ern Italy also diverged. Large parts of the south expe­ri­enced rule by Greeks, Arabs, Nor­mans, Spaniards, and Aus­tri­an Hab­s­burgs. As the video’s nar­ra­tion tells the sto­ry, “The long reign of for­eign pow­ers through­out south­ern Italy estab­lished a cul­ture of absen­tee land­lords, large land hold­ings worked by peas­ants, and feu­dal­ism that per­sist­ed for much longer than it did in the north, which for cen­turies after the Mid­dle Ages was con­trolled by var­i­ous thriv­ing, inde­pen­dent­ly gov­erned com­munes and city-states that built up large amounts of trust, or social cap­i­tal, between the peo­ple who lived there and the insti­tu­tions they built.”

Even at the time of uni­fi­ca­tion, south­ern Italy had less infra­struc­ture than north­ern Italy, a dif­fer­ence that remains painful­ly obvi­ous to any trav­el­ers attempt­ing to make their way across the coun­try today. It also had quite a lot of catch­ing up to do with regard to indus­tri­al out­put and lit­er­a­cy rates. Though cer­tain gaps have nar­rowed, the north-south divide has actu­al­ly become more pro­nounced in cer­tain ways since, not least due to the recrude­s­cence of Mafia influ­ence since the Sec­ond World War (a major fac­tor in the per­sis­tent lack of a bridge to Sici­ly, as recent­ly fea­tured here on Open Cul­ture). Not to say that each half is homo­ge­neous with­in itself: spend enough time in any of the regions that con­sti­tute either one, and it will come to feel like a dis­tinct nation unto itself. Even­tu­al­ly, you may also find your­self in agree­ment with the Ital­ians who insist that Italy nev­er real­ly uni­fied in the first place.

Relat­ed con­tent:

Why There Isn’t a Bridge from Italy to Sici­ly – and Why the 2,000-Year-Old Dream of Build­ing the Bridge May Soon Be Real­ized

Based in Seoul, Col­in Marshall writes and broad­casts on cities, lan­guage, and cul­ture. His projects include the Sub­stack newslet­ter Books on Cities and the book The State­less City: a Walk through 21st-Cen­tu­ry Los Ange­les. Fol­low him on the social net­work for­mer­ly known as Twit­ter at @colinmarshall.

Hokusai’s The Great Wave off Kanagawa Now Appears on Japanese Banknotes

If you’ve lived or trav­eled in Japan, you know full well how much of dai­ly life in that cash-inten­sive soci­ety involves the use of thou­sand-yen bills. Once con­sid­ered the equiv­a­lent of the Amer­i­can ten-spot, the yen’s late­ly hav­ing fall­en to its low­est val­ue in decades means that it’s now worth clos­er to six U.S. dol­lars. This is good news for tourists, and espe­cial­ly so for tourists who appre­ci­ate the wood­block-print art of Hoku­sai, whose famous Great Wave off Kana­gawa adorns the brand new ¥1000 ban­knote. Issued just yes­ter­day by the Bank of Japan, it also bears the image of bac­te­ri­ol­o­gist Kitasato Shibasaburō, who co-dis­cov­ered the infec­tious agent of a bubon­ic plague out­break in 1894.

The last revi­sion of the ¥1000, twen­ty years ago, also fea­tured a bac­te­ri­ol­o­gist: Noguchi Hideyo, who iden­ti­fied syphilis as the cause of pro­gres­sive par­a­lyt­ic dis­ease. Before Noguchi, it bore the image of Nat­sume Sōse­ki, one of the most cel­e­brat­ed writ­ers in the his­to­ry of Japan­ese let­ters.

The Bank of Japan tends to roll out ban­knote designs for each offi­cial era, which begins when­ev­er a new emper­or ascends to the throne; the cur­rent one began in May of 2019, after Emper­or Aki­hi­to stepped down and his son Naruhi­to stepped up. Oth­er his­tor­i­cal fig­ures pic­tured on the cur­ren­cy of this Rei­wa era, as it’s called, include Tsu­da Uni­ver­si­ty founder Tsu­da Umeko and “father of Japan­ese cap­i­tal­ism” Shibu­sawa Eiichi.”

A not just respect­ed but pop­u­lar and com­mer­cial­ly suc­cess­ful artist, Hoku­sai knew a thing or two about cap­i­tal­ism him­self. Yet he also had an uncom­mon eye for the beau­ty of Japan, his dis­tinc­tive per­cep­tions of which have been high­ly influ­en­tial in both East­ern and West­ern art for near­ly two cen­turies now. Japan­ese ban­knotes have pre­vi­ous­ly fea­tured images of Mount Fuji, Oga­ta Kōrin’s six-pan­el paint­ing of iris­es, and a scene from the Tale of Gen­ji. But this is the first time any has drawn from ukiyo‑e, the “pic­tures of the float­ing world” of which Hoku­sai was one of sev­er­al mas­ters who worked from the sev­en­teenth through the nine­teenth cen­tu­ry. A Great Wave bill is some­thing to cel­e­brate, but giv­en that today hap­pens to be the Fourth of July, let it be said that the pyra­mid with the eye is also pret­ty cool.

Relat­ed con­tent:

An Intro­duc­tion to Hokusai’s Great Wave, One of the Most Rec­og­niz­able Art­works in the World

The Evo­lu­tion of Hokusai’s Great Wave: A Study of 113 Known Copies of the Icon­ic Wood­block Print

Watch Hokusai’s The Great Wave off Kana­gawa Get Entire­ly Recre­at­ed with 50,000 LEGO Bricks

Hokusai’s Action-Packed Illus­tra­tions of Japan­ese & Chi­nese War­riors (1836)

Alan Tur­ing Will Be Fea­tured on England’s New £50 Ban­knote

‘Pride and Prej­u­dice’ Author Jane Austen Will Appear on the £10 Note

Based in Seoul, Col­in Marshall writes and broad­casts on cities, lan­guage, and cul­ture. His projects include the Sub­stack newslet­ter Books on Cities and the book The State­less City: a Walk through 21st-Cen­tu­ry Los Ange­les. Fol­low him on Twit­ter at @colinmarshall or on Face­book.

Nobel Prize-Winning Psychologist Daniel Kahneman (RIP) Explains the Key Question Every Investor Must Ask, and Why It’s a Fool’s Errand to Pick Stocks

This past week, the influ­en­tial psy­chol­o­gist and econ­o­mist Daniel Kah­ne­man passed away at age 90. The win­ner of the 2002 Nobel Prize in Eco­nom­ic Sci­ences, Kah­ne­man wrote the best­selling book Think­ing, Fast and Slow where he explained the two sys­tems of think­ing that shape human deci­sions. These include “Sys­tem 1,” which relies on fast, auto­mat­ic and uncon­scious think­ing, and then “Sys­tem 2,” which requires atten­tion and con­cen­tra­tion and works more slow­ly. And it’s the inter­play of these two sys­tems that pro­found­ly shapes the qual­i­ty of our deci­sions in dif­fer­ent parts of our lives, includ­ing invest­ing.

In the inter­view above, Steve Forbes asks why indi­vid­ual investors per­sist in believ­ing that they can pick stocks suc­cess­ful­ly over time, despite ample evi­dence to the con­trary. Draw­ing on his research, Kah­ne­man describes the “illu­sion of skill,” where investors “get the imme­di­ate feel­ing that [they] under­stand some­thing,” which is much “more com­pelling than the knowl­edge of sta­tis­tics that tells you that you don’t know any­thing.” Here, Sys­tem 1 cre­ates the “illu­sion of skill,” and it over­whelms the slow­er ana­lyt­i­cal think­ing found in Sys­tem 2—the Sys­tem that could use data to deter­mine that stock pick­ing is a fool’s errand. When Forbes asks if investors should ulti­mate­ly opt for index funds instead of indi­vid­ual stocks, Kah­ne­man replies “I am a believ­er in index funds,” that is, unless you have very rare infor­ma­tion that allows you to pick stocks suc­cess­ful­ly.

Lat­er in the inter­view, Kah­ne­man touch­es on anoth­er impor­tant sub­ject. In his mind, the first ques­tion every investor should ask is not how much mon­ey should I plan to make, but rather, “How much can I afford to lose.” Every investor should assess their risk tol­er­ance, in part so that you can han­dle tur­bu­lence in the mar­ket and stick with your ini­tial invest­ment plan. If you are not aware of your risk tol­er­ance, “when things go bad, you will want to change what you are doing, and that’s the dis­as­ter in invest­ing… Loss aver­sion can kill you.” He con­tin­ues, “Emo­tions are indeed your ene­my. The worst thing that could hap­pen to you …  is to make a deci­sion and not stick with it, so that you bail out when things go bad­ly, so that you sell low and buy high. That is not a recipe for doing well in the stock mar­ket, or any­where.” Ide­al­ly, you should fig­ure out upfront how much you want to put in the stock mar­ket, and how much you want to keep out, so that you can psy­cho­log­i­cal­ly man­age the ups and downs of invest­ing.

From here, Kah­ne­man comes to his most impor­tant piece of advice for investors: Know your­self in terms of what you could regret. If you are prone to regret, if invest­ing makes you feel inse­cure and lose sleep at night, then you should adopt a “regret min­i­miza­tion strat­e­gy” and cre­ate a more con­ser­v­a­tive port­fo­lio to match it. Read more about that here. Also see Chap­ters 31 (Risk Poli­cies) and 32 (Keep Score) in Think­ing, Fast and Slow where Kah­ne­man talks more about invest­ing.

This post orig­i­nal­ly appeared on our sis­ter/­side-project site, Open Per­son­al Finance.

Relat­ed Con­tent on Open Per­son­al Finance: 

All the Finan­cial Advice You’ll Ever Need Fits on a Sin­gle Index Card

Why You Should Diver­si­fy: A Key Invest­ment Les­son from Econ­o­mist Alex Tabar­rok & Van­guard Founder John Bogle

Essen­tial Advice for Any Investor from Jack Bogle, the Founder of Van­guard

War­ren Buf­fett Explains the Pow­er of Com­pound Inter­est

 

 

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