The Gray Man Philosophy

The Gray Man Philosophy is centered around the idea of blending in and avoiding drawing attention to oneself. This philosophy draws its roots from survivalists and covert operations but also has financial considerations that can be explored for tangible benefits.

Macroeconomics, the Red Queen, Energy

In Lewis Carroll's 'Through the Looking-Glass,' the Red Queen famously tells Alice, "it takes all the running you can do, to keep in the same place." In my blog post dated April 7, 2023, titled "Promises," I emphasized the widening gap between the commitments we've made to our future selves and the productive capacity of our economic machinery.

Some of the debts we've incurred can be attributed to the production of known petroleum reserves. Debt has served as a tool to expedite the exploitation of vast caches of chemical energy. Naturally, petroleum energy producers have engaged in a process known as "high-grading," where they prioritize the extraction of their easiest and most profitable reserves, essentially picking the low-hanging fruit.

Much like the Red Queen, we find ourselves compelled to accumulate debt at an accelerating pace just to maintain an economic growth rate that prevents the unraveling of our financial system. This debt is used to access energy, which, in turn, fuels our economic engine.

Now, accessing this fuel has become more challenging, but our technologies have kept it within reach. However, these technologies are complex and also demand energy inputs. Our society must continually invest in the next generation of technologies to ensure consistent access to fuel. Over the last decade, there has been a significant shift in policy towards renewable energy sources like wind and solar. Nevertheless, errors in this transition process can lead to gaps in energy availability.

Focusing on renewables would be reasonable if it were accompanied by a corresponding shift in the societal narrative regarding economic growth. For example, if policymakers had unequivocally prioritized slowing economic growth. This is not necessarily my policy prescription; I'm not against it, but I am asserting that shifting energy policy towards renewables while continuing to emphasize exponential economic growth is incoherent. To the best of my knowledge, there is no historical precedent for a large-scale energy transition from a denser to a less dense fuel source that successfully preserved economic growth. If I am mistaken, I welcome any information to the contrary.

A quick aside: the fleeting dopamine rush from buying and customizing a new Jeep Gladiator pales in comparison to the enduring benefits of a consistent regimen of push-ups and lunges.

If our social and economic goal remains growth, we will have to seek and exploit increasingly denser sources of fuel. The proponents of nuclear energy are becoming more vocal and accepted, but the path to widespread adoption appears distant. Meanwhile, we have allocated resources and time to a path unlikely to yield the necessary fuel to sustain our current growth rate. Additionally, current fuel prices may be too low to stimulate the required capital investment for significant new resource extraction activities to bring substantial fuel reserves to the market.

Our debt-fueled race seems to be reaching a point where it can no longer maintain our current position. This phenomenon manifests as inflation. We should anticipate more inflation because the necessary investments have not been made. Inflation can be painful, but it also serves as a powerful teacher. Thus, we should expect that productive investments will eventually be made, but it's important to recognize that inflation will precede this.

What the Gray Man Philosophy Looks Like in Daily Life

An entire post could be dedicated to discussing the mechanics of this philosophy. For the sake of brevity, I'll present it as an axiom that our society is producing vulnerable individuals (here, here, here). Simultaneously, a significant portion of our cultural energy is devoted to messages about consumption. A growing population of vulnerable people is witnessing a world that is increasingly off-limits to them, especially within the context of a complex, stressful, and predominantly urban environment.

Embracing the Gray Man Philosophy reduces the chances of becoming a target. This philosophy isn't currently enjoying widespread adoption, likely because it's not associated with high social status. However, I posit that we are at an inflection point in this trend. Early adopters, those who anticipate the direction of societal change, stand to gain advantages over those who cling to outdated beliefs and patterns.

Applying the Gray Man Philosophy to one's financial life means purchasing a car outright, possibly opting for a used one. It involves cooking at home, living within a community of people we care about, potentially spanning multiple generations, broadening our knowledge across various subject areas instead of hyper-specialization, and investing in assets that don't trade on the NYSE. It also means accumulating substantial wealth without flaunting that status.

Benefits of Application

Every aspect of these ideas centers on shifting our focus from a standard of living (measured by consumption) to quality of life. Over the past year, this change in perspective has guided me. It's understandable why it may not be popular. Trying to think and live differently in a world where almost everyone is moving in the opposite direction can be uncomfortable. Nevertheless, it's undeniable that my household has made significant progress in balancing knowledge capital, time capital, living capital, material capital, emotional capital, and financial capital.

As a preemptive response to potential objections: in recent years, "Technology" has become a widely accepted 'savior.' I don't dispute that Artificial Intelligence and other technologies can enhance human prosperity. However, it would be unwise to rely solely on them. We should also consider the diminishing marginal utility of increasing our standard of living, especially if it occurs at the expense of other forms of capital.

In conclusion, adopting the Gray Man Philosophy is a valuable strategy that may lead to a higher quality of life and help manage the increasing social risks faced by a growing population of individuals navigating vulnerability. Ultimately, early adoption of Gray Man tactics may position us as leaders within our community as the social tide shifts and rewards those who anticipate the change.

Clients that I serve frequently discuss topics like this in our recurring meetings. Please send me a message if you’re interested in increasing your resilience and stewarding your financial capital.