I Fought The Law (And The Law Won), Vol. 3

**David Gardner** (0:00)
I'm breaking rocks in the hot sun, I fought the law and the law won. I fought the law and the law won.
I needed money because I had none, I fought the law and the law won. The songwriter was Sonny Curtis, the year was 1958 I wasn't around back then to hear it, but then again, in this century, Rolling Stone put it as number 175, on the 500 greatest songs of all time list. The Crickets recorded it in 1959, as Sonny Curtis took the place of guitar from Buddy Holly, who tragically had been lost to a plane crash earlier that year. Well, speaking of laws, yeah, there are actually two right there, the law of gravity, the law of mortality, two laws. To me, rules govern many aspects of our lives, but are often, as is said, made to be broken, and breaking rules is of course what we're all about on this podcast, Breaking Rules in Investing, in Business and in Life. Rules are just rules, but laws, laws are different laws. Well, at least how I'm framing things here this week, they run deep.
The consequences of fighting them, not good. Many of these are natural, like the natural law of entropy, that matter over time, gravitates to its lowest, most disorganized state. Other laws are societal choices. Thou shalt not steal.
Well, this week, I want to bring you a fuller set of laws that apply to investing, business and life. Some are sublime, some are silly. Each will be explained and illustrated. And the aim, well, that's what the Motley Fool's aim always is, to make you smarter, happier, and richer, one law at a time. Only on this week's Rule Breaker Investing.

**SPEAKER_2** (1:55)
It's the Rule Breaker Investing Podcast with Motley Fool co-founder, David Gardner.

**David Gardner** (2:05)
Welcome back to Rule Breaker Investing. Happy June. On the face of it, laws and rules don't sound like the way that you and I might want to spend our time during, let's say, a 45-minute jog or cutting the lawn or driving somewhere, as many people do as they listen to this podcast. But just as I did with the first in this episodic series, which was September 1, 2021, I'm going to try to make it fun. Now, before we get to laws, let's talk briefly about rules. The main difference between rules and laws, as my Googling revealed earlier today, is the consequences of breaking them. You fight rules, you break them, you just might have improved the world forever. Maybe you knocked out a Goliath as you broke the rules, as you fought the rules, you replaced him with something better, in the same way that streaming video has ultimately replaced a few generations later. You remember these VHS tapes. You fight rules, you break them, you can break through, and breakthroughs power so much of our culture and our world today. That's breaking rules. But if you break laws, if you fight them, the consequences are, well, they're not going to be good. Breaking rocks in the hot sun is a great example of the consequence of fighting the law. What I want to do this week is to introduce you to six compelling insights that we'll put forward as laws or something very near it. Now, these are eponymous, which means each one carries the name, generally, of the individual who came up with it or to whom we ascribe this law. And we're going to go, as I already have, in the first two episodes of this series, we're going to go from the sublime to the silly. So perhaps not every one of these laws that we're going to be covering this week has such deep consequences of ignoring it. For each, we're going to discuss, number one, where it's from, number two, what it is, number three, how we can think about it, and finally, and number four, the takeaway. Without further ado, let's get started. Number one is the Diderot Effect.
Now, where is it from? Well, I first read about it in James Clear's book, Atomic Habits. In fact, I included it on a podcast a few years ago, as I briefly discussed that, it fits so nicely into I Fought the Law and the Law I, even if the Diderot Effect is an effect, not a law, that I wanted to lead off with it this week. The term was actually coined by anthropologist and scholar of consumption patterns, Grant McCracken. He did it in 1986 It is named after the French philosopher, Denis Diderot, who lived from 1713 to 1784 Diderot, who first described the effect in an essay titled, and I quote, regrets for my old dressing gown or a warning to those who have more taste than fortune. Succinctly stated, I'm going to use James Clear's words. Here is the Diderot effect. Obtaining a new possession often creates a spiral of consumption that leads to additional purchases.