Of Adam Smith, Pyrrhic Victories, and your “Why?”
Of Adam Smith, Pyrrhic Victories, and your “Why?”
You are probably familiar with Adam Smith, often called the Father of Economics. Most people associate him with his book The Wealth of Nations which was published in 1776 and remains widely referenced (if not read) today. His lesser-known book published in 1759, The Theory of Moral Sentiments, lays out a case for why “man desires not only to be loved, but to be lovely”.
In one passage, Smith writes the following:
“The great source of both the misery and disorders of human life, seems to arise from over-rating the difference between one permanent situation and another. Avarice over-rates the difference between poverty and riches: ambition, that between a private and a public station: vain-glory, that between obscurity and extensive reputation. The person under the influence of any of those extravagant passions, is not only miserable in his actual situation, but is often disposed to disturb the peace of society, in order to arrive at that which he so foolishly admires.”
Smith continues by referencing a story about the King of Epirus:
“What the favourite of the king of Epirus said to his master, may be applied to men in all the ordinary situations of human life. When the King had recounted to him, in their proper order, all the conquests which he proposed to make, and had come to the last of them; And what does your Majesty propose to do then? said the Favourite.—I propose then, said the King, to enjoy myself with my friends, and endeavour to be good company over a bottle.—And what hinders your Majesty from doing so now? replied the Favourite.”
The story of Pyrrhus, King of Epirus is a reference to a passage from Plutarch’s Lives of the Noble Greeks and Romans. The “Favourite” referred to by Smith is Cineas, a great orator of the time. This sage attempted to help the king “count the cost” of his proposed endeavor. And like any wiseman dealing with a king, he asked questions instead of giving direct advice contrary to the king’s stated intentions.
Cineas was attempting to open the eyes of his ruler that he already had what he needed to enjoy the blessings of peace and prosperity without unnecessary conflict, hardship, and tragedy.
I was reminded of the two stories while having a conversation with another advisor in the industry. We both started our financial services careers around the same time. The fact that both of us are still in the business today, more than a decade later in a field where the failure rate is high, suggests we have both had lasting success in taking care of the clients we serve. In our conversation, he lamented that he wasn’t more accomplished than he is at this time. There certainly are more successful advisors if “success” is defined as assets under management or number of clients served. But my question to him was “Why do you want to grow? You have time with your kids. You have time with your wife. Clients that appreciate your work. And enough income to meet near-term and long-term goals. Why do you want to grow?”
He didn’t have an immediate answer. Without a doubt, he is a competitive person, and he wants to “win” in life. It is easy to point to a net worth statement, a tax return, or the size of business as a “scoreboard” measurement. It is much more difficult to point to the quality of our relationships and the legacy we leave.
Back to King Pyrrhus. The historic record suggests that he and his army won the Battle of Asculum, after which he is reported to have stated: “If we are victorious in one more battle with the Romans, we shall be utterly ruined”. What was gained in the “victory”? What was lost simply by leaving home?
To wrap this short history lesson up, I would like to leave you with a few questions.
How do you measure success? What is your “why”? How much is “enough”? What are you pursuing?
Keeping focused on those answers should help all your decisions, financial and otherwise, fall into place much, much easier.
Sincerely,
Craig Smith, CKA®, CFP®, CFA®
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.
