Win-Win...or Lose

An excerpt from Bill's best-selling book, Un-Civilizing America: How Win-Win Deals Make Us Better

[Ed. Note: Members of the Bonner Private Research team are spending time with respective family and friends over the holiday period. But we didn’t want to leave you, our dear reader, empty handed. So please enjoy these complimentary excerpts from Bill’s best-selling book, Un-Civilizing America: How Win-Win Deals Make Us Better, available on Amazon, here.

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Win-­Win... or Lose 

By Bill Bonner

The message of Genesis is that in the most vital areas of human life there can be no progress, only an unending struggle with our own nature. 

— Philosopher John Gray 

We are going to back up to the very beginning, ab ovo, just to make sure we’re all in the same coop. There are only two ways to get what you want: win-win deals or win-lose deals. There is no other way. You either cooperate or you defect. You either give to get . . . or try to get without giving anything in return. It’s either reciprocal or it’s not. It’s either voluntary or it’s forced. 

Of course, there are gray areas. The two parties to a transaction can have very different opinions about what actually went down. Juries are often asked to decide when a woman has succumbed to seduction... or when she has been raped. Likewise, sometimes salesmen are so persuasive that customers later feel like they’ve been robbed. Over hundreds of years, people learned how best to manage these frontier areas. They developed the “common law” as a way of settling disputes and establishing a legal principle to help judges and juries make their decisions. Stare decisis means “to follow precedent.” It is a conservative legal principle, allowing each new generation to build on the decisions of the past. 

But while it is “conservative,” it is not trying to stop progress. Instead, common law is cumulative. One decision helps bring forth another one. Judges and juries don’t have to figure it out from scratch. They just have to plug the facts into similar fact patterns. Then, they are expected to follow the precedent decision while continually taking old principles and applying them to new situations, helping people figure out—even in entirely new circumstances— what is acceptable behavior... and what is not. 

The frontier between the two is never fixed or permanently settled. One set of facts falls in the “good salesmanship” category. Another is considered “fraud.” One man is shamed as an “aggressive cad.” Another is convicted of “rape.” Following precedent removes some of the uncertainty, clarifies the acceptable limits of win-win deals, and maps out the borderlands between civilization and barbarism. Like market prices, right and wrong are discovered, not decreed, in real time... as the future happens. 

Jesus simplified. He described how to do cooperative deals—in business, in personal matters, and in all other aspects of life: 

Do unto others as you would have them do unto you. 

Why does the rule work so well? Why is it so important? Win-win deals are voluntary. They do not need to be enforced or policed. Theft, by contrast, is a win-lose proposition. Even if it weren’t illegal, the civilized vernacular has turned against theft (more on that shortly). Proscribed by the polizei and spurned by his fellow man, the thief must operate in the dark. He must hide his ill-gotten gains; he must protect them, too, from other thieves, who operate on the same uncivilized code as his own. All of these things increase his costs (including lifestyle, psychological, and status costs). 

A win-win transaction can be as simple as exchanging currency for a boat; it can be done in a few minutes. No muss, no fuss. The buyer can immediately enjoy his new yacht. But the thief gets no rest. He has to overcome police, alarms, locks, and other Win-Win... or Lose 129 barriers... And not just at the moment of stealing the boat—further downstream (so to speak), he has to avoid detection, reclamation, and punishment. He will find it hard to enjoy his tub at all! 

In a modern economy, crime doesn’t pay very well—again, unless it is approved by the feds. Wealth is relatively easier to create than to steal. The risk-return ratio in banking, fishing, baking, or almost any other profession, is probably better than it is for larceny. 

The Importance of the Vernacular 

An important term to understand in this chapter is “vernacular.” As defined by the dictionary, it means a dialect or language native to a culture or region. Why do Northerners wonder “how everybody is keeping,” for example, but Southerners inquire “how y’all are doing”? Vernacular. 

If you hear someone speaking a foreign language, you can go to the grammar books and dictionaries to try to find out what he is saying. There, you’ll find out not what he is actually saying, but what he’s supposed to be saying. In English, for example, a proper response to the statement, “I’m looking for Mr. Jones,” could be: “I am the person of whom you speak.” 

But people don’t say that. They say: “That’s me.” That response is welcome if you are serving a summons. But it causes grammarians to squirm. 

The vernacular evolves... often in response to the formal rules. Many people today are afraid of the word “me.” They recall vaguely that the grammarians disapprove of it. So, they go with “myself,” even though it doesn’t make much sense. 

“Who was playing the guitar?” “Joe and myself.” 

They are also afraid of being politically incorrect. So, instead of saying, “Everyone thinks he should speak correctly,” they say, “Everyone thinks they should speak correctly,” which is both incorrect and idiotic. Still, it seems to have become the new, officially approved grammar. Winston Churchill once mocked people who tried to speak “correctly,” saying: “This is the sort of bloody nonsense up with which I will not put.” 

But let’s not get sidetracked... We’re stalking bigger game here. There are formal structures—ordained by law, legislation, and official proclamation. And there are other things that better describe how we really speak, do business, and get along with each other. This we know as the vernacular. 

There is a difference between what is and what is supposed to be in other things, too. Over thousands of years, vernacular, architecture, manners, rules, transportation, law...  and even money... have evolved into what we know as civilized life. It is a life in which people can go along and get along, because civilization imposes standards that make the actions of others predictable. Usually, strangers won’t kill you. They won’t rob you. They won’t rape you. Instead, normally, they will say “please” and “thank you,” and will get along tolerably well. 

No government declared gold to be money, for example. Instead, it arose naturally as people found it useful. Later, governments declared other things to be “money.” These monies work more or less well than gold, but in a crisis, people tend to go back to the vernacular. 

No law requires people to say “please” and “thank you” either. But they generally do... And they generally find it makes casual exchanges more agreeable. Occasionally, as in the fervor of a revolution, these “bourgeois affectations” are dropped in favor of some ideologically correct claptrap. “Vive la Révolution!” was popular for a while. “Heil Hitler,” had a run, too. Both were soon dropped in favor of the vernacular. 

As far as we know, no government has tried to stop people from smiling. That, too, is a vernacular way of signaling that you have no harmful intentions toward others. However, in the Soviet Union, an example to which we will return often, the delicate fabric of civilized life was so rumpled and stretched during the 70 years from the Russian Revolution to the fall of the Berlin Wall in 1989 that, even today, people in Russia are reluctant to smile. 

Likewise, there is the formal government... and there are the informal rules, customs, and standards people use to govern themselves. Many of the colonies that gained independence after World War II, for example, took France, Britain, or the U.S. as their templates. Some created systems that, on paper, were almost exact copies of the U.S. or European dioramas. They had bicameral legislatures, independent judiciaries, checks and balances—the whole kit and caboodle. But the new democracies in Africa and Asia didn’t always function like their Western role models. 

A French joke illustrates the power of the vernacular: The mayor of an African town in one of France’s former colonies came to pay a visit to the mayor of a French town of more or less the same size. He was astonished at the mayor’s office. It was full of fine furniture, expensive paintings, and rich decorations. 

“How can you afford these things on a mayor’s salary?” he asked. The French mayor beckoned him over to the window. “See that bridge? 10%.” It took a moment for the African mayor to get the message. But his eyes lit up when he did. 

Years later, the French mayor visited the African town. In the mayor’s office, he was shocked to find even more luxury than in his own—including Aubusson carpets, delicate Chinese vases, and Old Master paintings. 

“Now, I have to ask you the same question you asked me,” he began. “How can you afford all these things?” The African mayor pointed out the window. “See that bridge?” he asked the French mayor. “Well...no... I don’t see any bridge,” replied the French mayor. 

“Right. 100%.” 

Now, in the U.S., the Constitution still sits in its glass case. The Supreme Court still sits on its bench. Members of Congress still sit in camera. And bureaucrats and nomenklatura still plop their fat derrières down in their seats of authority. 

Officially, nothing has changed. But in the vernacular, nothing is the same. Anyone with any brains knows his congressman is a scoundrel... Everyone knows his Constitution—except the Second Amendment!—is ancient history. Everyone knows his vote is mostly symbolic. And everyone knows that as long as the Dow is going up and unemployment is going down—even just on paper—he doesn’t give a damn. 

How did this happen? The answer, we believe, is in the word vernacular. 

The classic win-win deal is not the law of the land anywhere; it is the vernacular. It was never invented by anyone... No one got the Nobel Prize for coming up with it... And some of the smartest people on the planet don’t believe in it. Still, most people generally follow the rule on an everyday basis. If they want a burger, they give some money to the burger store. If they want money, they offer their time to an employer. If Ford wants to sell its pickup trucks, it does its best to make people want them. 

That is the commonly accepted way to get what you want and need in life. If you want a wife, you have to offer her something that makes it worth her while. If you want a loaf of bread, you have to give something of equal value to the baker. Whether it is love, respect, a fortune, or a bag of Frito-Lay corn chips you are after, the best way to get it is to make a win-win deal. 

Note also that this vernacular—this set of rules, manners, customs, money, language, and myths that make modern civilization possible—is a collective achievement. An individual can’t be “civilized” on his own. It is as meaningless as a phone system with only one phone. Civilization must be shared. It must be a system of interaction. When you smile, you must smile at someone. And it must be voluntary. 

Only crooks, cads, and governments operate on the uncivilized model. They do unto others, and they hope to God others can’t do likewise unto them. Attila was widely esteemed for robbing and murdering hundreds of thousands of strangers. He was probably one of the world’s richest people at the time. He probably would have been named TIME’s “Person of the Year” for 450 ce had the magazine existed at the time. 

But morals evolved with productivity. Today, the world’s richest people generally make their money by producing wealth rather than stealing it. Presumably, Attila would be unwelcome in today’s prosperous, polite society. At the very least, he would be exceptional. The vernacular has changed.

Regards,

Bill Bonner

[Ed. Note: If you’d like to pick up a copy of Bill’s book, Un-Civilizing America: How Win-Win Deals Make Us Better, for a spot of holiday reading, you can grab one on Amazon here.