The Power of Embracing Competing Ideas

This year’s recommendation for vacation reading is a fascinating exploration of the sources of rising political polarization in the U.S. and how it can be addressed.

It is that time of year again, when summer deepens in the northern hemisphere, and many of us can take some time away from the office to recharge and hopefully pick up a good book.

Such a break feels particularly important this year as market-moving headlines—from trade policy to geopolitical shocks, from growth concerns to inflation risks—have battered investors with exhausting frequency.

In past summer reading blogs, we have shared works on innovation, courage in the face of crisis, globalization, tech disruption, and reconsidering and improving thinking processes. Given the variety of issues we have contended with this year, many of our previous suggestions would be worth reading for the first time or afresh, but this time we turn to the topic of political polarization.

Political Polarization

Underlying much of the volatility this year has been uncertainty on whether we are on the cusp of a regime shift in the role of government in society, often framed in terms of fiscal vs. monetary policy, executive vs. legislative responsibility, and the relationship of the U.S. with its key allies and partners.

The heated debates around these important issues are highlighting the increasing polarization of political discourse, a challenge that stalks the U.S. as well as many countries around the world. Indeed, such is the topic’s pervasiveness, we regularly include it in our list of key risks facing market participants, right up there with de-globalization and military conflict. 

In our summer reading selection, Love Your Enemies: How Decent People Can Save America from the Culture of Contempt, the Harvard University economist and former head of the American Enterprise Institute, Arthur Brooks, grapples with the sources of rising polarization in the U.S. and how it can be addressed. 

Driving this division is what Brooks calls the “outrage industrial complex”—cable news, social media and entertainment—which ultimately pits American against American, creating a “culture of contempt”.

Brooks begins his recommendations by explaining that we must first remove contempt from our interactions. If we become contemptuous of people with whom we disagree, we have severely limited our ability to engage in dialogue and gain understanding. He also notes that feeling contempt makes people unhappy, in general. 

Once we have moved past contempt, Brooks makes a radical proposal: that we aim higher than mere civility or tolerance for those with opposing viewpoints, but rather to be grateful for people who disagree with us. He asserts that engaging with competing ideas leads to the important benefit of being able to refine and deepen our own insights. 

This insight echoes a key learning from our 2021 summer read, Think Again, by Adam Grant, who counsels that we should embrace “the joy of being wrong” because having the humility to do so will allow us to challenge our own thinking and make better decisions.

Lessons for Investing

In reflecting on Brooks’ proposed approach, these insights can both be applied to improve political discourse as well as sharpen investment decision-making.

Brooks makes three key recommendations that can be applied here:

• First, get out of echo-chambers or bubbles.
• Second, willingly seek out those with different ideas; this is especially important in investment decision-making, where engaging a broad set of views, perspectives, backgrounds and thinking styles can make decisions more robust.
• Third, be grateful for those who disagree with you: their different outlook is a gift that can provide you deeper insight and gratitude has been shown to make people happy.

A final point from Love Your Enemies that resonates in the current environment is that ideas are like the climate: long-term and immutable, while politics is like the weather, unpredictable and changing all the time. If you can, therefore, try and look past the daily political weather, it should always be possible to have a constructive discussion about important ideas, particularly those impacting the world around us.

This framework brought to mind another key learning, this time from our very first summer read, Tolstoy’s War and Peace, which highlighted the importance of humility and of maintaining a long-term perspective.

Humility tells investors to be wary of investment decisions based on apparent certainties, and to diversify. Maintaining a long-term view enables investors to filter out short-term noise and focus instead on the underlying trends that are truly driving markets.

In today’s environment, where short-term noise has been particularly cacophonous and elevated uncertainty looks likely to continue, we believe these lessons can be particularly relevant.