Moral, Meet Practical

And The Moneyball Method

Because good systems begin at the beginning, Part I of The Moneyball Method deals with economic philosophy. And to break that down, the book sets up five choices that seem to conflict but are in fact compatible and complementary. Known as false dichotomies, they are theory vs. practice, reason vs. emotion, faith vs. force, moral vs. practical and fact vs. value. This brief essay will highlight moral vs. practical.

Morality

The conflict boils down to principles vs. pragmatism. To illustrate, President Bush said in September 2008: “I’ve abandoned free-market principles to save the free-market system.” And immediately prior to the 2008 election, candidate Obama said: “We are five days away from fundamentally transforming the United States of America.”

For both men, the moral principles of rights, liberty and justice, were to be abandoned for the practicality of the State as omniscient overlord for the “common good.” On a far smaller scale, this can happen to anyone facing routine decisions. Raising children is a good example.

But the subjects of right and wrong or good and evil are abstract - they are layered with ideas, circumstances, priorities and consequences. And to make sense of it all, there must be a primary value for defining any moral code - one that guides action, rewards honor and penalizes offenses.

Practicality

Throughout history, religion has been the dominant source for principles of behavior that are beneficial or hostile to the ideals of a civilized society – and non-believers are inherently prone to immoral behavior. But what is the standard for a universally good system of morality? Is it the immortal soul? The well-being of others? The resilience of the family, the biological race, the church, the nation?

In those models, the rewards for an honorable life are to be received when that life has ended, but the penalties are to be felt in the here and now. The only practical outcome of that is guilt for not living up to an impossible code that demands submission and self-sacrifice.

However, when the standard is the life of the individual – as with every other living entity - and man’s capacity for reason is the absolute for survival, then the moral and the practical become perfectly aligned with logic. Individual rights demand liberty; rights are the primary standard - and that is America’s founding principle.

Moneyball

The same is true when making decisions that combine money with goals, markets with aspirations and risk capacity with a lifetime of purpose. Instead of predicting the future of capital markets and measuring performance looking backward, the Moneyball Method uses a forward-looking performance benchmark: the life of the investor – and historical data for the navigational chart. To further prove this theory, the next essay will deal with the fact vs. value dichotomy.