While I am working on my book World After Capital, I am also collecting ideas for an important project that I want to tackle afterwards: a compendium of principles. Before you think, oh Albert is going full on Ray Dalio, let me provide the definition of “principle” the Oxford Dictionary:
(1) A fundamental truth or proposition that serves as the foundation for a system of belief or behaviour or for a chain of reasoning.
(2) A general scientific theorem or law that has numerous special applications across a wide field.
I am interested in principles that represent a “fundamental truth” that serves as the “foundation” of all knowledge and hence has “numerous special applications.”
What is an example of such a principle? Feedback: entity A influencing entity B, which in turn influences entity A. There are quite a few truths we have figured out about both positive feedback and negative feedback.
Once you understand the principle of feedback you can see it pop up in lots of different contexts, from Jimmy Hendrix’s guitar play to the working of the cruise control in your car. That happens to be the point of compiling principles. They are incredibly powerful. And if you understand them you have that power at your disposal as you try to understand other knowledge or help contribute new knowledge.
In addition to general principles which are the foundations of all knowledge, I believe that major fields of knowledge, such as business, also have a limited number of powerful foundational principles. What is an example in business? Financing: any activity for which cash outflows precede cash inflows requires financing (unfortunately Wikipedia only has an entry for Funding, which doesn’t neatly capture this principle).
Again, once you understand the principle of financing there are a great many other things about business that you can understand faster and deeper, including venture capital.
I am always surprised how little attention is given to principles in most teaching, given how powerful they are. Hence my plan for a compendium. Going forward, I will periodically post some other principles. If you have suggestions for principles, please make them in the comments.
