Philosophy and Finance

Water flows; its flow can be used to generate electricity. What can a philosopher’s thoughts generate? A longstanding answer from the classical tradition is that philosophy is an intimate part of the good life, having something to do with generating order in the human soul and in the political community.

The most famous philosopher of the last century once called philosophy sovereign but useless knowledge. But what good is something useless? With a strong and justified prejudice against uselessness in their hearts, men and women of practical affairs have always looked with some suspicion upon a discipline that wastes intellectual resources on questions that cannot be transferred into efficient application. Philosophers, for their part, when they have not turned up their noses to such objections, have, from time to time, therefore, felt compelled to speak of the practical benefits of their otherwise purely theoretical endeavor. Water flows; its flow can be used to generate electricity. What can a philosopher’s thoughts generate? A longstanding answer from the classical tradition is that philosophy is an intimate part of the good life, having something to do with generating order in the human soul and in the political community. That is why Socrates said that the philosopher is the justest of men. But although a well-ordered city and soul is perhaps the highest good, it is the harder to attain the higher it is. The early modern thinkers wanted to deliver something less exalted but more reliable and in greater demand: material comfort. Thus, philosophy took on the guise of science and made itself safe from persecution under the cover of the very practical benefits it provided as science. As the new philosophy-science succeeded, it gradually forgot its roots in disinterested contemplation, its essential uselessness, and its splendor.

Rather than succumbing to either of two extremes – one that insists that the less useful a thing is, the greater dignity it has, and another that wants to squeeze the last drop of its essence out through mere application, leaving nothing else to the imagination – philosophy, or those of us interested in it, should take up the middle ground that Aristotle said is the place of virtue. Courage is more than cowardice and less than rashness, and you don’t want to be either a spendthrift or a scrooge. As in archery, the sweet spot is the center. We are closer to the target when we acknowledge that philosophy has a special dignity as both a purely contemplative affair and a practice that improves practice. If you’ve read much Plato — and if you haven’t, take my word for it — then right about now, you should hear the little voice of Socrates starting to interrogate us: who improves the practice of fighters? Their trainers. Who improves the practice of sailing? A good ship’s captain. Who improves the practice of collective singing? A choirmaster. Why, then, do we look to the philosopher for improved practice and not to the various expert practitioners? When it comes to business, entrepreneurship, and money-making, what, if anything, can the philosopher add?

There was once a great man in Athens called Alcibiades. He was the most beautiful, daring, and promising youth. Socrates, by contrast, was old and ugly. The kind of people who look down on Socrates often look up to Alcibiades (action vs. talk, etc.). And yet, Alcibiades admired, or even loved, Socrates. So, on the authority of Alcibiades himself, Socrates deserves our attention. Similarly, the kind of people who look down on philosophy often look up to financial success. And yet, you can often find among the financially successful an admiration for philosophy, one that even gives it some credit for their financial success. So what have businessmen, entrepreneurs, and moneymakers themselves said about what philosophy contributes to their practice?

Naval Ravikant, the multimillionaire entrepreneur, has said that “a lot of the top investors, a lot of the top value investors…these people sound like philosophers,” and when recommending a course of study that helps with the “broad-based judgment and thinking” necessary for the investor, he says that “the best way to do that is to study everything, including a lot of philosophy.” Why? Philosophy, for Naval, helps with emotional regulation and, therefore, improves the quality of our judgment and decision-making.

Here’s how Robert G. Hagstrom describes the practical benefit of studying philosophy in his book on investing (Investing: The Last Liberal Art):

“The ‘cash-value’ of studying philosophy is very real. Put quite simply, it teaches you to think better. Once you commit yourself to philosophy, you find that you have set yourself on a course of critical thinking. You begin to look at situations differently and to approach investing in a different manner. You see more, you understand more. Because you recognize patterns, you are less afraid of sudden changes. With a perpetually open mind that relishes new ideas and knows what to do with them, you are set firmly on the right path.”

Another famous philosopher-entrepreneur, Reid Hoffman, has discussed the influence that philosophy had on his understanding of human nature, which informed the design of his business platform, LinkedIn. (You can listen to his interview about that here). Peter Thiel, the billionaire entrepreneur, has written about and taught a range of great thinkers and philosophers, including Rene Girard, Carl Schmitt, Leo Strauss, Alexander Kojeve, Karl Löwith, and Vladimir Solovyov. Elon Musk credits a book that he considers philosophical, The Hitchhiker’s Guide to the Galaxy, with orienting his creative wonder and technical skill towards the formulation of ever richer questions. You can find Marc Andreessen of a16z discussing Nietzsche, Stoicism, Agamben, and others. Writing in 2022, Andreessen said that over the previous five years, his “entire conception of the structure of society” — something clearly relevant to making investment decisions — had become much more “grounded in history and philosophy” than it was previously. Apparently, the world makes better sense with the assistance of philosophical insight than without it. The popular leader of El Salvador, Nayib Bukele, who refers to himself as “CEO of El Salvador,” also calls himself a “Philosopher King,” indicating with these two titles a link between philosophy, on one hand, and business, on the other, and for Bukele, business is good (“Bukele has amassed a genuine support base by measurably improving the lives of many Salvadors,” Foreign Policy reports).

Iosif Gershteyn, CEO of ImmuVia and my business partner at VisionXForm.com, explains the significance of philosophy for entrepreneurs as follows:

“I think there is one simple selling point, which is burnout. If you’re working hard and that work is not connected to a deep meaning, then there’s a much higher chance that you will quit the marathon because you’re treating it like a sprint. The other question, which is arguably worse, let’s say you get to the finish line but there’s nothing there, and you feel empty. You’ve spent all this time in your life to get to some sum in your bank account but no feeling of accomplishment or a feeling of emptiness. Well, that would probably be worse in some ways than failing. ‘What is the value of gaining the world if you lose your soul’? So thinking about what is your soul, what am I willing to do, what am I not willing to do, and more importantly, what am I trying to accomplish and why am I doing this? …Does this connect to something that resonates inside me and that can be an expression of my being that I can be proud of?”

Although I began my trajectory towards business from a starting point in pure philosophy and Iosif moved towards philosophy from a starting point in pure business, we discovered a sweet spot at the intersection of philosophy and entrepreneurship, devoting many conversations to analyzing our lives and business with the help of philosophical approaches. Thinking about ends, purposes, aims, and meaningfulness, in general, about the telos of business, and also about the ideal of human flourishing involved in being engaged, was one element that philosophy helped with, as reflected in the quote above. But there was much more. Wittgensteinian language games help with developing flexibility of thought. Platonic dialogues on gain shine light on the relationship between profit, value, worth, and expertise. Machiavelli and, more broadly, the tradition in political philosophy that discusses the founder presents fruitful parallels for the startup founder. Nietzsche’s description of his most intense creative moments writing Zarathustra provides actionable insight into how to be open to subtle ideas intuitively received. Philosophers provide resources for understanding power without becoming slave to it or to the desire for it, and desire itself is a great theme in writings throughout the history of philosophy.

Perhaps the most surprising application of philosophy to entrepreneurship is the novel use of Martin Heidegger’s fundamental ontology in management consulting and executive coaching. Heidegger is the philosopher I mentioned at the outset of these remarks, the one who called philosophy sovereign but useless knowledge. In fact, his philosophy has been put to use in a way that, in my opinion, at least, remains true to his important discoveries about the nature of being human. Together with his coauthors Charles Spinosa and Hubery Dreyfus (a Heideggerian scholar of artificial intelligence), Fernando Flores, who once served as Cabinet Minister in Allende’s government in Chile, has very thoughtfully used Heidegger to discuss entrepreneurship in his book Disclosing New Worlds. In organized, practical workshops and seminars, thousands of businesses and leaders have been influenced by the largely Heideggerian methodology of Werner Erhard’s EST and Landmark training programs, as discussed in detail in the book Speaking Being and in the foundational coursework at VisionXForm.com.

In short, despite conspicuous claims to the contrary, philosophy does not need to see itself as useless and does not need to be regarded as such by practical men and women. From Plato to Heidegger, the great thoughts, methods, ideas, and discoveries of philosophers have made a valuable contribution to the real work of entrepreneurs and investors, not only the most famous ones like Thiel, Musk, and Andreessen but also to small businesses and even so-called solopreneurs.

As a closing note, consider the following. My neighborhood barber, an immigrant from the Dominican Republic, once said to me, “Philosophy saved my life.” Add to that the fact that one of the two most famous deaths in the history of the world, Socrates’, was the happy death of a man whose life became synonymous with philosophy (the great Plato dedicated his unmatched talents to the dramatic depiction of that life). Philosophy — something so good that it is good for the local barber, big-time investors, and even leaders of countries, so good for both living and dying — might sound too good to be true. Then again, where but in philosophy do you turn your attention so fully to the beautiful questions: what is good and what is true?

Join the Club

Like this story? You’ll love our monthly newsletter.

Thank you for subscribing to the newsletter.

Oops. Something went wrong. Please try again later.