SAN LUIS OBISPO, Calif. (MarketWatch) — Ayn Rand, high priestess of capitalism, reincarnated in an American hedge fund? Deep in the collective conscience of the world’s leading hedge fund, the $122 billion Bridgewater?

Yes, Rand’s spirit is alive, in the vision of the iconic Ray Dalio, the perfect capitalist, 55th on the 2010 Forbes 400 with $5 billion, a guy who could easily be cast as Howard Roark, the ultimate individualist in “The Fountainhead.” Here’s his secret: Why his flagship fund Pure Alpha II returned 44.8% in 2010.

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Actually Bridgewater’s 1,200 employees see Dalio more as the reincarnation of Socrates, the perfect mentor (his new title), because of his uncompromising insistence that “above all else, I want you to think for yourself—to decide 1) what you want, 2) what is true and 3) what to do about it … in a clear-headed thoughtful way, so that you get what you want,” says Dalio in his online book, “Principles,” which should be required reading for every MBA student.

Yes, Dalio “wants you to get what you want.” Why? Because that way Bridgewater gets what it wants. For decades Dalio has been realigning those 1,200 minds into a single-minded global hedging powerhouse that’s light-years ahead of Ray Kurzweil’s best thinking in “The Age of Spiritual Machines.”

How? Simple. Dalio says: “I am going to ask only two things of you — 1) that you be open-minded and 2) that you honestly answer some questions about what you want, what is true and what you want to do about it.” And “if you can’t do these things, you should reflect on why that is, because you probably have discovered one of your greatest impediments to getting what you want out of life.” Thus begins the secret to winning big.

Backstory: hedge fund capitalism merges with Big Sur psychology

Dalio’s “Principles” caught my attention recently while waiting for my wife, a psychotherapist. We were headed to a Byron Katie workshop at the Esalen Institute in the Big Sur. I was waiting, reading Bloomberg Markets’ issue on the “50 Most Influential in Global Finance.” Dalio’s “Principles” were mentioned.

For decades Dalio’s been telling his Bridgewater staff that, when practiced, the “Principles” will “evolve from ‘Ray’s principles,’ to ‘our principles,’ and Ray will fade out of the picture” as “people only pay attention to what works” in their lives and become part of the Bridgewater “machine” (his term).

In “digesting each principle,” says Dalio, “please, ask yourself, ‘Is it true?’” That grabbed me. Why? Because that’s also the first of four questions Katie always asks when challenging a person’s belief system: “Is it true?” For me an ah-ha moment: Both Dalio’s and Katie’s work are anchored in an identical challenge: “Is it true?”

So, before we left for the Big Sur, I copied and packed Dalio’s “Principles” alongside Katie’s materials. That weekend I read Dalio with my left-brain while listening to Katie with my right-brain, triggering many questions. As a result, Dalio’s own words inspired me to challenge Bridgewater’s “Principles:” Are they true? For all America? Or just hedge funds?

Bridgewater’s secret ‘Principles,’ but are they really ‘true?’

As valuable as Dalio’s “Principles” may be for an MBA finance major or hedge fund, they soon began sounding too much like the Ayn Rand ideology that has taken over the financial industry’s collective conscience this past generation. Rand’s capitalism is clear:

“When I say ‘capitalism,’ I mean a pure, uncontrolled, unregulated laissez-faire capitalism, with a separation of economics, in the same way and for the same reasons as a separation of state and church. Capitalism is the only system that can make freedom, individuality, and the pursuit of values possible in practice because capitalism demands the best of every man, his rationality, and rewards him accordingly. It leaves every man free to choose the work he likes, to specialize in it, to trade his product for the products of others, and to go as far on the road of achievement as his ability and ambition will carry him.” Sound familiar?

Ayn Rand: An extreme ideology with no moral compass

Rand’s neo-capitalist ideology has drifted far off the moral high-ground set by Adam Smith, prompting an earlier USA Today op-ed piece, “Ayn Rand and Jesus,” by Stephen Prothero, a professor of religion: “Christian morality has no place in an ‘Atlas Shrugged’ world.” Instead, Ayn Rand is the “new savior,” warns Prothero. “While Jesus says, ‘Blessed are the poor,’ she sings Hosannas to the rich. The heroes of ‘Atlas Shrugged’ …are the captains of industry … The villains are the ‘looters and moochers’” stealing “the hard-won earnings” of wealthy capitalists

Rand turns “traditional Christian morality” on its head warns Prothero: “Altruism is immoral and selfishness is good. … there isn’t a problem in the world that laissez-faire capitalism can’t solve if left alone to perform its miracles.” Yes, capitalism works miracles.

But ask: “Is that true? Does our financial industry have any responsibility for America’s increasing poverty? Dying middle class? The truth is, America’s financial industry does fit perfectly in the Ayn Rand capitalism mold … they love money, know where and how to make it, how to get rich … they don’t care whether the market’s going up or going down … they get rich on the action, the trade, up or down they make money, they love high volatility … and yes, they are in denial of the real world outside their bubble.

So, yes, the financial industry, hedge fund machine, super-rich all get richer and more powerful marching in lockstep to a cadence that matches an overarching ideology that rejects Adam Smith’s moral code. It has taken over America’s brain, an ideology canonized by Milton Friedman, Alan Greenspan and Ronald Reagan, with Ayn Rand their high priestess.

Synchronicity: Bridgewater’s ‘Principles’ vs. Ayn Rand’s ‘theories’

Now compare Rand’s capitalism with the “Principles” deep inside the collective conscience of Bridgewater’s “Machine.” Dalio is a master at motivational psychology and behavioral economics. He builds on the eternal conflicts in the human brain, between reality and wishful thinking that can impede Bridgewater’s growth:

Fortunately, he also discovered “if I accepted the realities rather than wished that they didn’t exist and if I learned how to work with them rather than fight them, I could figure out how to get to my goals.” That demands absolute trust in his “most fundamental principle: Truth … an accurate understanding of reality.”

Dalio also discovered that “one of the greatest sources of problems in our society arises from people having loads of wrong theories in their heads.” Get it? Most people’s heads are loaded with “wrong theories,” a limitation for world leaders — financial, corporate and political — as well as the 99% masses.

Worse, we also know leaders armed with “wrong theories” can do lots of damage in the name of their ideologies. So take a moment, compare the following Bridgewater’s “Principles” with Rand’s earlier description of capitalism. My challenges are italicized. Then ask yourself: “What’s The Truth?” …

Dalio: “Self-interest and society’s interests are generally symbiotic: more than anything else, it is pursuit of self interest that motivates people to push themselves to do the difficult things that benefit them and that contribute to society.” [Is that really true? Does individual self-interest always make the best contribution to society in general? Or is that just an unproven, possibly even “wrong theory?”]

“Self-interest and society’s interests are generally symbiotic: more than anything else, it is pursuit of self interest that motivates people to push themselves to do the difficult things that benefit them and that contribute to society.” [Is that really true? Does individual self-interest always make the best contribution to society in general? Or is that just an unproven, possibly even “wrong theory?”] Dalio: “In return, society rewards those who give it what it wants. That is why how much money people have earned is a rough measure of how much they gave society what it wanted.” [Ask yourself: Is it really true that society as a whole wants unregulated derivatives as much as Goldman Sachs’s executives?]

“In return, society rewards those who give it what it wants. That is why how much money people have earned is a rough measure of how much they gave society what it wanted.” [Ask yourself: Is it really true that society as a whole wants unregulated derivatives as much as Goldman Sachs’s executives?] Dalio: “Look at what caused people to make a lot of money and you will see that usually it is in proportion to their production of what the society wanted.” [Ask yourself: Is it true that a Lloyd Blankfein produces more of what society really wants than, for example, a Steve Jobs, Daniel Kahneman, Rod Stewart or Dalai Lama?]

“Look at what caused people to make a lot of money and you will see that usually it is in proportion to their production of what the society wanted.” [Ask yourself: Is it true that a Lloyd Blankfein produces more of what society really wants than, for example, a Steve Jobs, Daniel Kahneman, Rod Stewart or Dalai Lama?] Dalio: “There are many people who have made a lot of money who never made making a lot of money their primary goal.” [But isn’t it true that “making a lot of money” is the main goal of the financial industry, its insiders and stockholders?]

“There are many people who have made a lot of money who never made making a lot of money their primary goal.” [But isn’t it true that “making a lot of money” is the main goal of the financial industry, its insiders and stockholders?] Dalio: “There is an excellent correlation between giving society what it wants and making money, and almost no correlation between the desire to make money and how much money one makes. I know that this is true for me.” [But is this really true for the other 99% of Americans, tens of millions unemployed or living in poverty?]

“There is an excellent correlation between giving society what it wants and making money, and almost no correlation between the desire to make money and how much money one makes. I know that this is true for me.” [But is this really true for the other 99% of Americans, tens of millions unemployed or living in poverty?] Dalio: “So what is success? I believe that it is nothing more than getting what you want — and that it is up to you to decide what that is for you.” [But is it really true that you can omit what’s best for society at large from a success equation, by assuming that some magical “invisible hand” plus the collective selfishness of individuals will guarantee the public interest is best served? Or could this be a “wrong theory?”]

Since my days at Morgan Stanley, I’ve been watching capitalism in action. Bottom line: These “Principles” are actually unproven hypotheses, not scientific theories, speculations on a limited equation that works inside Bridgewater’s bubble but not out in the real world.

Moreover, by ignoring the public interest and the original moral foundations of capitalism, these “Principles” are not the capitalism imbedded in Adam Smith’s original “Theory on Moral Sentiments and Wealth of Nations.” Rather they are extensions of Ayn Rand’s hypotheses in “Capitalism: The Unknown Ideal,” “The Virtue of Selfishness,” “The Fountainhead” and “Atlas Shrugged.”

Is it the truth? Or a mind-set loaded with ‘wrong theories?’

Remember Dalio’s earlier warning: “One of the greatest sources of problems in our society arises from people having loads of wrong theories in their heads.” Shouldn’t that implied Socratic challenge also apply to the unproven “hypotheses” above?

Ask yourself: Do these “hypotheses” have anything to do with the death of the middle class? Rise of poverty? Rapid concentration of more wealth at the top? Risk of another global economic collapse? Class warfare? Revolutions?

Ask yourself: What is the Truth? Is Rand’s self-centered neo-capitalist ideology serving the greater good? Or just the special interests of financial-industry insiders? What about the rest of America? Dalio’s “most fundamental principle is the Truth:” Go deeper, ask yourself: What is “the Truth?”

Bridgewater’s challenge: Ask yourself, are we really “thinking for ourselves” in our bubble? Ignoring the rest of America? Do we have a responsibility to go deeper, to reexamine our core beliefs, their moral foundation?

Is it possible that our “Principles” may actually be the evolution of the unconscious, imperceptibly slow absorption of ideas from the dark shadows of Ayn Rand’s extreme mind, an ideology that has gradually taken over America’s collective conscience by taking over millions of individual brains in one brief generation, a takeover that is both oddly unquestioned and assumed to be a new “reality,” rather than just a bunch of “wrong theories in people’s heads.”

What is the “Truth?”