Charlie Munger at Har vard-Westlak e | 3

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all the disciplines and get synthesis and reality across the disciplines. Tey are rewarded in their own little shop for being silly and monomaniacal and with their high IQs. Tey do all this terrible mischief because they don’t know in a functional way what they teach in Psychology 101. Te psychology professors who invented and discovered a lot that is very important, they are not really helping the wider civilization all that much. W e’re better oﬀ havin g them than not having them [but] in terms of what is the best that can be in academia, it has failed us horribly. With hard science and engineering excepted - [and] I think the cognition of medicine tends to be quite good in the best places and biology also tends to be good - but boy, you get into the rest of the social sciences and you have to be very wary because there is an asininity trying to clobber you up behind every rock. With academia failing us, now we turn to what happened with our regulators. W ell, Alan Greenspan at the Federal Reserve overdosed on Ayn Rand. Basically he kind of thought anything that happened in the free market, even if it was a n axe murde r, had to be ok . He’ s a smart man and [a] good man, but he got it wrong. Generally, an over-belief in any one ideology is going to do you in if you extrapolate it too hard, and that’s what happened in economics. What happened in economics that caused Alan Greenspan ’s cognitive failure is very simple. Tey reasoned correctly that a free market would be way more predictive than anything else, and they reasoned correctly that once you had a fairly advanced capitalist system – if the people that were putting up the capital could sell their pieces of ownership in the company to other people, they’d be more inclined to invest because it gave them an option to get out if they wanted to leave. It’s not like buying

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