by Nathan Smith

It’s amazing how many intelligent people insist on believing in nonsensical things. I’m not talking about Zeus, aliens or romantic love. I’m referring to the illusion of “market prices” and why this single idea is ruining your brain.

Consider this story about house prices. Apparently, house prices just “rise” to “higher levels” or “tick up,” and it’s great when there are no “headwinds.” Notice the exact style of language. Finance is full of nautical terms: liquidity, flows, streams, currents, tides, waves, flotation, headwinds, tailwinds, headwinds, safe harbours, underwater, afloat, bailouts, navigating, sinking and income stream. This breed of language is manipulative because it makes you think there’s a disembodied, omnipotent force dictating how many zeroes a three-bedroom home costs on a Thursday afternoon.

The normal explanation for why nautical terms are used in finance is that the institution developed alongside maritime trade. Starting way back in Ancient Greece, European trading powers created systems for financing ships and insuring cargo. In fact, insurance, joint-stock companies, bonds, futures, central banking and securities markets are difficult to separate from the problem of moving goods across oceans.

But the purpose of this language is mainly to obscure by making it sound like there’s nothing you can do about prices. Like water, prices “ebb and flow.” They might “dry up,” and then you’ll be “swamped.” One day, these “choppy waters” will “recede,” the price will “change course,” and I will no longer be a “minnow” when my “ship comes in.” This is the language of storytelling, whispering that it’s ok to resign to that omnipotent force. If the price is X, then that’s that. Story finished. Pay up, sucker.

The idea of a “market price” is hurting you. I mean that pathologically. It’s all in your imagination. The truth is you are totally free to sell your property at any price you wish, at all times, to whomever you wish and for whatever reason you decide. There is no omnipotent “other” dictating the rules. Numbers and data do not control your life, despite what the good people at the Real Estate Institute of New Zealand want you to believe.

For example, if I click onto the REINZ website, the national median house price is roughly $760,000. In Auckland, the figure is substantially higher at about $940,000. Other figures on that website show that the national median value of a house is currently about $906,443. REINZ refers to these numbers as the “market price.”

But – and I know this sounds obvious and condescending – there is no law forcing you to sell your house at $940,000. Neither is it written in stone that any house has a value of $906,443. These figures are entirely made up. It does not help that they are based on statistics and data. These data appear to be linked to the real world, but that is an illusion. The data exists only on a computer somewhere in the REINZ offices. You can sell your property for whatever price you want.

Now, it is perfectly reasonable to sell your house at the “market” rate of $940,000. There are many reasons to do so. Maybe you don’t know how to think for yourself. That’s ok. Maybe you worship money. Maybe you’re in a competition with a friend to see who can sell their house for as close to the median value as possible. Maybe your favourite number is 940,000. That’s ok, too. Everyone has their thing. It’s not crazy to insist on using the market price for any piece of property.

What’s crazy is when people say the only price is the “market price,” treating it like water, always flowing, out of your control. What’s crazy is allowing data to decide your actions, without any attempt to think from first principles about what you really want. That’s crazy.

This is important because the secret truth of the universe is that everyone gets exactly what they want in life. The only frightening part about this truth will be when you are confronted by what exactly that thing was. Chances are it will not be what you told everyone you wanted. It will be much darker, much more obvious (in hindsight) and probably manufactured by some guy in a suit at an advertising firm who projected his fantasies and dreams onto you. Again, crazy.

Here’s what most people say they want: A decent life for their children, a peaceful society, a strong civic/national feeling of solidarity, respect for a proud history, clean roads, good schools, a robust culture and greater opportunity. These are all descriptions of a future, and the future is decided by the present. Any action you take right now will move us all closer or further away from any desired future. Individually and collectively, both at the micro and macro scales, our stories are always being written towards a conclusion. Who has control of the pen matters a lot.

So, for what price should you sell your house? Well, it depends on how you’d like your story to be written. If you want all the things listed above, the real question is: to whom should you sell your house? That is the only question that will have a direct impact on the future of your nation and extended family (which is another way of saying nation). The price is irrelevant compared to answering that question.

By allowing “the market” to dictate the price, you are effectively saying anyone who can afford it can be the buyer of your house. But that’s not all you’re saying. You are also revealing that the thing you wanted was not on that list. You don’t really believe in the future. All you believe in is tomorrow, which is not the future, and tomorrow is just a continuation of today, which is why you focus so much on the price of everything.

If you believed in a future that depended on the strength imparted by a mutually reinforcing series of closely related family groups, then the “market price” of property must be irrelevant. This is not to say that property should have no value. Instead, the true value of property – from the perspective of your desired future – is immeasurable. The very act of valuing a piece of property in dollars should be insane to any person who really believes in the future. I mean that pathologically.

Anyone who believed in the future would immediately see that the natural buyer of property should be your children or grandchildren. At the extreme end, it could be your nephews or perhaps a cousin. For someone who thinks from first principles about the best possible future, there is never any good reason to sell a piece of property to any person outside the immediate or extended family (the nation). This thought is simply not in the equation, because to include foreigners in the equation would inevitably destroy the future you claim to want to achieve. It is crazy.

That doesn’t mean the property should be handed over with no stipulations. The “price” of an object can be calculated in many ways besides money. Perhaps the condition of ownership is that whoever “buys” the house must have at minimum four children, increase the family wealth by 3x before a certain date, or any other “price” that makes sense to you and your family. But the rule is: anything handed down from family to family has no “market price.” These objects or property immediately and automatically enter a system that is above “the market,” and over which the data and statistics have no power. You must write your story, not REINZ.

My point is that the future is coming no matter what you do. If you’re not writing your own story to a conclusion, then someone else will. Those people have their own hopes and dreams, and they are writing their story to a conclusion in a way that does not involve you, your family or your nation. To them, you are just a number.

The only way to know the value of something is by truly believing in the future. More than anything, this will force you to think from first principles: What do you really want? You should decide quickly because tomorrow isn’t the continuation of today. It’s the past of your grandchildren’s future. So, don’t let someone else write your story to their conclusion.

Originally published on The Good Oil.