Tom McCallum

Hacking Understanding Economics

how the economic macihine works

We all learn differently. One learning model is “VAK”, as we each have varying levels of focus on :

  • Visual — Seeing and Reading
  • Auditory — Listening and Speaking
  • Kinesthetic — Touching and Doing

Within this, we are seeing an increasing level of learning via video, online courses, and if anyone has children in their teens or below, many of them get their learning, news, entertainment from YouTube. Text books ? Hmm.

So, I consider this site, where daily I both muse on and share what i have learned around leadership principles and tools. My posts have pictures, videos, links to other sites, but perhaps I could also look to video myself rather than write ?

I’ll consider that (!), but for today let me share some remarkable videos around how the Economy works by two amazingly smart people who abundantly share their knowledge, and also then highlight three more brilliant people who share and explain how the economy works crisply and clearly.

The first is Ray Dalio. He leads Bridgewater Associates, one of the largest funds in the world, and a key to that success is a concept he calls “Radical Transparency”, which I’ve covered in “Radical Transparency — Humility balanced with Audacity” and which absolutely fascinates me (as you know, I’m really obsessed with leadership and new paradigms of leadership!).

However, before focussing on topics such as leadership of any type of organisation or movement, it is important to have foundational understanding of basic principles.

To digress a little, I believe that two skills any leader should have but few do are a) the ability to fluently read a set of financial statements, and b) a core understanding of how the economy works.

On the first, the other day in a mentoring session, I reminded my mentee that, though he is in the middle of a world class MBA and readying to pivot his career, that it is of real value for him to remember that he is a Scottish Chartered Accountant and that this means he has understanding of what, to so many, is a core language of business that is foreign to them.

On the second, so many skim the surface of understanding Economics as it seems dense and boring (and perhaps also as Economists make it seem dense, boring and complex!).

Now, what if you could “hack” understanding Economics and build that base of understanding by watching one video for an hour. You can, right here, right now.

All you need to do is watch Ray Dalio’s “simple but not simplistic” video, “how the economic machine works” and 31" minutes later you will “get it”. By the way, this video has only been watched about 5 million times. I wonder why every Economics professor in the world isn’t making it mandatory viewing for all their students ? Hmm, perhaps a behavioural economist could give us a rational and incentive based explanation for that ? I can guess of one !

Ray Dalio is one of the two amazingly smart people I mentioned earlier.

The second is Steve McIntosh, who first showed me the economic machine video. I love being around people smarter than me, and Steve is certainly that ! A friend, mentee and fellow Scottish / Caymanian dual national, over the years I’ve learned a lot from Steve as he passionately pursues educating and changing the Cayman Islands by supporting the economy at multiple levels.

Steve took the idea of Ray Dalio’s video and himself then led an initiative to inform the broader public of the Cayman Islands on how the Cayman economy works (eg “with no income or corporate tax, how does the government fund itself ?”. For those who know me personally, to save you listening to me explain it when you ask, you can watch all the videos on growthmatters.ky , and below is the first one as an example. If you’d like to save yourself the trouble of listening to folk like Steve or myself explain to you why “no, Cayman is not a tax haven”, you can watch these videos instead :)

Now, of all the economists I’ve met, only a very few explain how the world works and do it clearly, concisely, and without ego. I don’t think it is coincidental that they are all women ! I strongly advise you to go on twitter and follow Marla Dukharan, Kate Raworth and Megan Greene. Three brilliant and wise women who crisply take vast knowledge and explain how the world works !

So. in closing, you can hack learning in different ways. Watch videos, follow really smart people who share abundantly. Whatever you do, chart your own path. I leave you with a link to the words of Chris Guillebeau, author of “The Art of non-conformity”.

“You can learn from others who’ve gone before (because after all, no one is truly self-taught). Other people will help you along the way. But there’s no cookie-cutter model that will tell you exactly how to do it. You have to build the model.

Originally published at Tom McCallum.

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