Navigating the Next Real Estate Crash, Socrates on the Conscience and the Art of Assimilation

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Appearance on Forward Guidance

I recently had the opportunity to appear on Jack Farley’s Forward Guidance, one of the best finance podcasts in the world today. Jack is a super astute financial mind, a polished interviewer, and an overall great guy. I highly recommend that you all subscribe to his show and follow him on Twitter. His thoughtful weekly coverage of happenings in financial markets will help keep you ahead of the curve.

In this wide ranging sober conversation, we cover everything from the banking crisis to the Fed’s policy conundrum to trends in on-the-ground real estate fundamentals in office, multifamily and housing. We try to leave no stone unturned as we examine what might happen next in the world of real estate. Hope you enjoy!

Socrates on How to Listen to Your Conscience

Despite popular conception, Socrates was a deeply pious man and believed that God was basically talking to us all the time through something that he called the daimon. You know that voice inside you that is there in your mind every time you are just about to make a bad decision? Well, that’s what he’s talking about. Our word for this is the “conscience.”

Now there are moments in life where what the conscience is saying is as clear as day. This is what happens when you are about to do something that you already know is wrong. The conscience will sort of yell at you from the inside: “Don’t do it!” and release the neurobiological signals for fear, guilt, and shame. But things are different in more ordinary moments of daily life. That little voice, which is so pestering there in the crisis, is rather hard to hear in a peaceful moment on a Sunday afternoon or while at your desk at work.

What are we supposed to do when our conscience has gone quiet? Fortunately for us, Socrates thought about this question too.

The story goes like this: Someone once told Socrates that the Oracle at Delphi had proclaimed that he was the wisest man alive. Not one to take things lightly, especially messages purportedly from God, Socrates set about trying to figure out what this meant. After some time, he came to believe that the only possible justification for the Oracle’s statement was that he was the only one willing to admit to himself that he didn’t know anything. This, in itself, is a profound insight but Socrates didn’t stop there. He thought to himself, “Ok, if that’s what makes me wise, maybe I should help other people come to the same realization.” Then he asked “Well, how can I do that?” And what he came up with was the idea to go around Athens challenging people to defend their proclamations of knowledge and truth.

There’s a lot going-on in this well-known anecdote but today I want to focus on just one aspect. Somewhere along the way Socrates figured out that listening to your conscience involves using your capacity for reason as well. You see, it’s not just about feelings or spirituality. There’s this other power that we possess and we absolutely need it to make sense of the world. What’s not explicit in this little story is that Socrates had to think with his rational power and use reason to get from the Oracle’s initial statement to the decision to practice philosophy all day in the agora.

The lesson here is that reason is the way to filter all the information that comes at you. Feelings, thoughts, ambitions, intuitions, moods, dreams, oracles– what happens to you in life. What’s happening around you in the world…All of this is the data of the conscience. And when the signal isn’t crystal clear as it is in moral crisis, your job is to use your reasoning, rational mind to try to interpret whether what you are doing is in fact consistent with your conscience or not. Of course, being a matter of interpretation, it’s possible to get things wrong but the idea is that the more you listen, the better chance you have.

The core message of Socrates is this: You should always listen to your conscience. Even if you aren’t 100% sure. Even if it means something really bad might happen to you. Even if it means you might die. Your mission in life is to keep listening with all of yourself, keeping reason at the table, and live with a kind of courageous faith, an unconditional commitment to always do what you think is right. Socrates did this, died in the process, and become one of the heroes of history.

The Art of Assimilation

“A person who reasons well, understands, and considers that if he joins himself to God, he shall go safely through his journey. How do you mean join himself to God? That whatever is the will of God may be his will too.”

It’s one thing to read great ideas. It’s another to actually understand them in an intellectual way. But it’s something else altogether, something way harder, to really know what they mean.

Consider the popular passage from Epictetus, a famous Stoic philosopher, quoted above. If we can be honest with ourselves for a second, we have to admit that we have almost no idea what this actually means. We don’t even know where to begin really, especially in terms of practical application to daily life. For if we wanted to follow his advice, what precisely would we do?

One of the things I’ve been experimenting with is a practice that the mystics call “assimilation.” Assimilation is the art of applying ideas to the stuff of daily life. It’s about taking a big idea like courage and saying to yourself “Ok, how can I actually be courageous in my life? What does that look like on a daily basis?” The idea here is that it’s only when you attempt to be courageous that you actually understand what it means. Take, for example, the idea of love. Well, it’s pretty obvious to anyone who has actually been in love that no amount of reading or thinking could even come close to replicating the real-life experience. When we are in love, something very powerful happens to us at the physiological level that makes us understand the true meaning of the idea.

To be sure, there’s a certain kind of knowledge and a satisfaction that comes from just reading about or hearing great ideas. Certainly, it’s inspiring just to engage intellectually with ideas like courage or justice or selfless service. So much so, that you can spend a few hours reading about this stuff every day and just assume you are becoming a better person. But that’s not true. Not at all. Believe me, I’ve been caught up in this trap myself.

The hypothesis of assimilation is that in order to truly understand something you have to act it out in real life. There’s a critical and necessary link between action, truth and understanding. In other words, no matter how smart you are, you cannot just think your way to truth. Good Will Hunting, one of my all-time favorite films, is largely a drama about this exact point.

While rather intuitive, assimilation is the most challenging of all the self-help practices. Not only does it require an extreme capacity for self-discipline and present moment awareness, it demands also that we don’t fly in the face of our fears, doubts, and vulnerabilities. And it’s easy to mess things up, even when you have good intentions. Think of the times where you’ve loved in the wrong way, where because of your attachments and insecurities you were possessive or jealous. Well, the same possibility for mistake exists with all the virtues. Charity, justice, self-reliance, discipline, faith–as Socrates went at length to point out, these ideas are rather tricky to define let alone assimilate.

With mystical ideas things get even more complicated. Take, for example, Jesus urging us to “love thy neighbor as thyself.” This has to be one of the most widely known and quoted phrases in the world yet almost no one knows what it actually means. While we all might know the meaning of the individual words in the phrase, if we can be honest with ourselves again, it’s not obviously clear how to go about doing this. What, for example, does it mean to “love yourself”? With such a thin and confusing line between things like genuine self-love and the psychological traps of selfishness, egoism, and narcissism, where do you draw the line? Getting this right requires a seriousness and a sophistication that doesn’t come easily in life.

What I find so fascinating about the mystics is that, despite these inherent difficulties, they are willing to take the idea of assimilation all the way. For them, it’s not “love your neighbor as yourself when it’s convenient or when your heart is full or when you have some extra money or time,” it’s all the time, no matter what. Consider Meister Eckhart, a 13^th Century Christian monk. While Eckhart writes beautifully and clearly, he has a philosophic bent which makes his work somewhat opaque. He advises us with phrases like:

“God expects but one thing of you, and that is that you should come out of yourself in so far as you are a created being made and let God be God in you.”

Or

“The man who abides in the will of God will nothing else than what God is, and what He wills.”

Beautiful and inspiring language for sure, but what in the world does it all mean? Just how exactly do you go about letting “God be God in you” or doing “the will of God”? In the practical humdrum of daily life these feel like impossible ideas to assimilate.

My experiments to date have convinced me that assimilation is the most powerful of all the spiritual practices. There’s nothing more life-affirming than when you can act upon a virtue with intentionality. Something rather profound happens each time you love or act with courage or exercise self-restraint. These acts change you and your understanding at the same time. And while I feel quite far from being able to answer many of the questions posed here, the lives of mystics, saints and other great spiritual teachers give me some hope that this is all indeed possible. For now, I will just go-on experimenting.

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