As Napoleon’s army approached Moscow in 1812, the city’s residents hastily evacuated, taking with them whatever belongings they could manage. Leo Tolstoy’s masterpiece, War and Peace, vividly captures Russia’s tumultuous struggle against the invading French army. Its key characters are inspired by the Romanovs, the ruling family of Russia, and one of the wealthiest in the world. In one scene, Natasha Rostova, the central heroine, shows a keen discernment amidst chaos, selecting only the most valuable fine china, while relinquishing those of lesser value.
What makes this seemingly trivial action from Tolstoy’s epic notable today, more than 200 years after the Napoleonic Wars, is that our post-industrial society has an abundance of items of all kinds, making consumption a significant part of the economy. While we need to purchase goods that are indispensable in conducting our daily lives, we are inundated with non-essentials, the majority of which are imports that substitute domestic counterparts. There is a danger in the continuation of this trend, as it greatly undermines the integrity of maintaining manufacturing capacity at home, and foster a culture of mindless consumption.
One way to help reverse these conditions is by refining our taste, which can yield substantial benefits, both personally and socially. By understanding the value of each purchase beyond its price, including how and where the product is made, individuals make fewer purchases and mistakes, thereby saving money in the long run. Additionally, not consuming cheaper imports, especially when domestic alternatives are available, such as clothing and household items, helps vitalize manufacturing at home. When spending translates into incomes for domestic workers, their subsequent consumption, in turn, supports the original consumers, creating a virtuous cycle of economic activity. However, achieving it requires a concerted effort by the populace, who consider their economic activities not just as simple transactions but as actions that have an impact beyond the personal level, affecting society at large.
In reality, we are drifting farther away from building a society centered around cooperation, as the citizenry seems to be increasingly focused on elevating their status among their peers. An illustration of this trend is the sales of luxury goods, which has been increasing in recent years, potentially due to the fact that one of the most accessible ways to signal status is acquiring such symbols. Despite the premium price tags and aura of exclusivity, the majority of customers for luxury products are not the likes of the Rostovs, but the middle class. For many in this demographic, this type of spending may not be financially prudent, as they could be using the funds to build assets for their future. Furthermore, the perceived prestige associated with luxury goods often belies their actual value, making most luxury purchases a wasteful use of one’s finite resources.
These discrepancies between perception and reality are exemplified by products, including canvas bags that cost over two thousand dollars from a well-known brand, whose vinyl coating disintegrates over time, rendering the items sticky and unusable. The actual value of these bags, including the cost of material and labor, would be a fraction of the full retail price. Moreover, these “luxury” brands often employ deceptive tactics to create scarcity by destroying their inventory and controlling supply. Once individuals get ensnared in a cycle of consumerism, they tend to be insensible to limits, losing the capability to be satisfied no matter how much money they spend. Tolstoy’s War and Peace offers an antidote to such a socio-economic ailment of the modern times.
After the French army occupied an empty city of Moscow, they quickly ran out of supplies and had to retreat from the city when a bitter winter set in. Meanwhile, the Russian army, led by General Kutuzov, had been positioned on the city’s outskirts. He faced pressure from both the Tsar and the public to pursue the fleeing French army. However, he opted not to attack them, which was in Tolstoy’s depiction, “melting”, as they retreated. Kutuzov chose to avoid unnecessary loss of his men who had already endured gruesome battles, by refraining from pursuing an enemy force that had already been defeated. While complying with the requests of the Tsar and the public might have taken his prominence and status still higher, he prioritized the well-being of his soldiers over personal glory.
Such self-restraint for the benefit of the larger group, as demonstrated by General Kutuzov, can be pivotal in a world where individuals often struggle to find contentment with their circumstances. While it is respectable for one to strive for accomplishments, it is harmful, when it is done solely for personal gain and in comparison with others of similar backgrounds. This pursuit is driven by, and in turn creates in others, socially discordant forces such as envy and selfishness. One will find that no matter how much one achieves, there will always be someone who has accomplished more. Further, there are things unattainable with money, including lineage, genuine affections and friendships. What is important, therefore, is to realize that true fulfillment comes only internally, through self-awareness and acceptance.
Ultimately, our role in the economy extends beyond mere financial transactions, encompassing our values, and societal cohesion. Having discerning taste and knowing what’s enough can facilitate the process of maximizing the value of our economic activities, which can free us from unnecessary comparisons with others, toward building a more cooperative and humanistic world.
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The Well Tempered Investor 