Tag: Fire

Entrepreneurship and Poverty

We are surrounded by many entrepreneurs which go unnoticed and have nothing to do with the keywords like technology, unicorn, angel investors. A high chunk of these unnoticed entrepreneurs are poor entrepreneurs, almost a billion around the world. Nobel laureate economists Abhijit Banerjee and Esther Duflo studied such poor entrepreneurs which has created deep insights and answered many questions. Providing supporting capital – microcredit to such poor entrepreneurs is not the final answer to this riddle.

Paying close attention to the larger fraction of the poor entrepreneurs

Monthly Revenue of a ‘Chai-wala’

It is very common discussion among group of youngsters to roughly estimate revenue of their “Snacks n’ Tea” seller while enjoying that short break. The discussion ends when the earnings estimate from that seller’s business reaches to a figure which is far bigger than what these “highly qualified” youngsters actually earn thereby inspiring them to think about pursuing their own business, start-up. What actually happens after such short surge of inspiration is also a common knowledge. Very few of such people actually work on entrepreneurship, their business idea and again very few of these truly taste the success. Social media, mainstream media have also positively affected and boosted the startup mentality, entrepreneur mentality among the youngsters through TV-series, reality shows, success stories, popular talk shows, podcasts and nonetheless video platforms like YouTube. The “F.I.R.E. culture” (Financially independent, Retire early) is also one wave of thought which inspires such entrepreneurs to create something of value, turn it into a business and sell it at higher valuation to gain financial independence early in life. (Although, FIRE is not limited to financial freedom through entrepreneurship only). Following their passion and working over it to create a start-up and then becoming a wealthy person is also one famous new career route for today’s youngsters.

In short, for our generation, entrepreneurship holds the key to financial independence thereby key to the freedom (materialistic freedom to be more specific) – life living on their own terms, without any terms and conditions.

When looked through “the pop-cultural” lens towards entrepreneurship one will see all the glamour, money, popularity, angel investors, “unicorn startup” funds and success stories. In reality there are very few practical examples in these enterprises which successfully fit to all such criterion, which really have created value in the society; most of them are actually just publicized bubbles rather black holes sucking in the attention, time and money of the investors.

The Reality of Entrepreneurship Around the World

Start-ups represent only the early developmental part of an entrepreneurship. Even though they represent such an early and small part of the concept of entrepreneurship, start-up stands as the biggest lamp, biggest fire attracting the youth like moths.

Here are some interesting facts:

9 out of 10 startups fail

7.5 out of 10 venture-backed startups fail

2 out of 10 new businesses fail in the first year of operations

Only 1% of startups become unicorn firms like Uber, Airbnb, Slack, Stripe, and Docker

The success percentage for first-time founders is 18%

20% start-ups fail before the end of their 1st year, and almost 70% start-ups end by their 10th year.

These facts are not presented to demean the value of stat-ups or to negatively criticize start-ups thereby idea of entrepreneurship (although there are some people who also try to capitalize their failure in both the good and bad ways). When you will look at the complementary positive data on start-ups you will realize that the successful start-ups even being low in numbers created value to the society in totally different ways, they changed the ways of working and doing things through the exploitation of technology.

The glamour while portraying the concept of entrepreneurship is actually overshadowing the key idea behind it which is “ingenuity”.

Poor Entrepreneurs

What is the definition of an entrepreneur? The dictionary definition goes like this- “a person who sets up a business or businesses, taking on financial risks in the hope of profit.” Literally, a person who runs an enterprise. Now look at the pictures above, can you tell which one of these is an entrepreneur?

This will make us realize that how the glamour built around the word entrepreneur is actually a mirage. The basic idea in entrepreneurship is the risk taking for the gaining profit. We are surrounded by such small entrepreneurs in our day-to-day life, most of these are poor entrepreneurs. World renowned Nobel laureate economists Abhijit Banerjee and Esther Duflo have contributed to uncover the reality of such poor entrepreneurs and many questions associated with such poverty.

Why should one be interested in poor entrepreneurs?

According to the data collected by Abhijit Banerjee and his team roughly 12% of the population in rich countries calls themselves as self-employed i.e., entrepreneurs. The interesting thing is that the poor countries have far higher percentage of self-employed people. Nearly 70% people call themselves entrepreneurs – self-employed in poor countries. These are the people who are mostly single person entrepreneurs like tailors, bricklayers, auto-drivers, street-vendors, shopkeepers.

“…most income groups in poor countries seem to be more entrepreneurial than their counterparts in the developed world-the poor no less so than others… ”

Abhijit Banerjee and Esther Duflo, Poor Economics – rethinking poverty and the ways to end it

Looks like bigger chunk of the entrepreneurial population of the world is not really glamorous and full of revenues, capital and resources. The intention to focus on this information is not to degrade entrepreneurship, rather it is to understand why the percentage of entrepreneurship is huge in poor countries where availability of resources and capital is already hitting rock bottom low? How do they manage such ventures in low margins? Do these entrepreneurial ventures bring them out of the poverty? If yes then, how? If not then why?

If entrepreneurship is supposed to give people freedom to operate on their own conditions, freedom to be their own boss, freedom to take control over their own lives, bring their ideas into the society then why poor countries where the entrepreneurial fraction is huge are not coming out of poverty? Why most of such poor entrepreneurs remain poor even after embarking on the journey of self-employment?

Trust me the answer is not related to ‘lower rates of returns’ only!

Ingenuity of the Poor Entrepreneurs

Let us understand the challenges faced by the poor entrepreneurs listed as below:

  1. Being poor, they are inherently low on capital (obviously)
  2. They have low or no access to formal financing institutions like banks, insurance companies
  3. As they have no access to formal finance, they approach local moneylenders and borrow with high rates of interest
  4. They have very low risk-taking capacity because any investment other than that for sustenance is a survival challenge
  5. They have very crude social support in terms of materialistic and emotional levels. They are surrounded by people having same difficult lives. They rarely have good connections with people who will trust them, people who will have access to better conditions capital-wise or relation-wise   

Even after having these challenges, the fraction of entrepreneurs in poor countries is surprisingly high. How is this possible?

As Abhijit Banerjee explains, the poor entrepreneurs have clever ideas to run their businesses even at low capital. The unavailability of resources, material/ capital means forces them to find out new creative ways to make living. You will see many such innovative entrepreneurs around who try to make living by using some really interesting ideas e.g., the human hair collectors roaming around town to exchange with utensils/toys, the scrap collectors who collect specific types of waste only and sell them to bigger scrap dealers in bulk, there are some dust collectors in the gold markets of many cities in India where poor people collect road dust around the gold shops and try to extract tiny amount of gold from such collected dust to sell it.

But how many of these innovative, creative and ventures with true ingenuity actually turn into a unicorn or a big company? In simple words, one knows how costly are the hair extensions/ wigs are then why the hair collectors are not getting rich with their business? If gold is that precious then why these dust collectors are not getting rich with this gold dust collection ventures?

This is where the insights created by Abhijit Banerjee play a very vital role. In his book “Poor Economics – rethinking poverty and ways to end it” co-authored by Esther Duflo, he has given very important insights into the world of poor people, the challenges they face and ways to uplift them.

Let us deep dive into the key concepts to understand the economics of such entrepreneurs.

Representation of the Poverty

Figure 1 The S-shaped curve and the poverty trap
Source: Poor Economics – rethinking poverty and the ways to end it by Abhijit Banerjee and Esther Duflo

Economists use the diagram shown above to indicate the relation between income of today and the income a person will earn in the future. You will see an S -shaped curve forming. The red zone indicates the poverty trap zone where a poor person starts from A1 earns a meager amount which is not enough to sustain making the net income negative thereby proceeding to A2 which is backward directed/ decline in income. This reduced income restricts his/her freedom to choose (as the words go “beggars cannot be choosers”), risk-taking ability, reduction in available capital thereby scarcity of capital disposable to meet the daily basic requirements. So, the ventures in which poor people are engaged are down-valuing ventures according to this representation – which is used to represent “The Poverty Trap”. For those who think that the ventures of poor people always end up in losses thereby degrading their existing states, this curve in red zone represents that vicious cycle.

Most of the economists think that poverty is not a vicious cycle. By providing minimum enough capital/ resources to the lowermost group, their lives can be kick-started where the ventures will give net positive incomes, thereby gradually increasing their income over the time. That is why the world around us is explained by blue shaded part of the diagram, known as inverted L-shaped curve.

Figure 2 The inverted L-shaped curve
Source: Poor Economics – rethinking poverty and the ways to end it by Abhijit Banerjee and Esther Duflo

Please note one interesting detail in this diagram which we will bring further in our discussion. The initial slope of the curve is steep indicating substantial valuation increase in income but as the curve proceeds slope of the curve ends into flat thereby indicating less or no increase in valuation of the income over the longer period.

 In very simple words, a venture can only sustain over the time if there is some net gain over the time (always remaining net positive, even if it becomes smaller and stagnant over time). Very few people and actually no one would engage in a venture where they see their future valuation, future earnings dropping over the long-time horizon. That why most of the economist accept Figure 2 to represent the incomes of today and tomorrow for anyone.

Asking the Right Questions

Now that we have realized that it will take very small amount of effort and capital to uplift the poor entrepreneurs why doesn’t that help them immediately? Abhijit Banerjee in his studies asked some important questions which reveal why just giving poor enough money won’t solve the complete problem. Abhijit Banerjee clarifies that it is the inherent nature of the enterprises/ businesses, societal conditions and even the mindset of the poor entrepreneurs that makes them stagnant in their ventures. Even if they are running their small businesses successfully, they will always make just enough to sustain in long time horizon, very few will be the outliers which come out of this stagnancy.

Abhijit Banerjee pointed out that most of the poor entrepreneurs repay their loans on high interest rates. The high returns rates are attributed to the lending from informal financiers like local money lenders, relatives. If poor entrepreneurs are successfully repaying such high interest loans while sustaining through the business, then that means that their overall rate/ fraction of earning for the capital invested is also very high.

So, why don’t they become relatively wealthy even after running business with high rate of overall returns?  

Here we can take support of the inverted L-shaped curve for poor entrepreneurs and build on that further.

Figure 3 Diminishing marginal returns in poor enterprises
Figure created from the explanation in the book Poor Economics – rethinking poverty and the ways to end it by Abhijit Banerjee and Esther Duflo

Abhijit Banerjee explained the reasons for the stagnancy in poor enterprises in practical ways based on his field research. He explains the important behavior of marginal returns in terms of the poor enterprises. Marginal returns are the what left after an entrepreneur pays off everything – like payment on tools, payment of the wages to the workers, payment of the things bought to sell. Marginal return is take-home money after the business is done.

Now let us see the inverted L-shaped curve in figure 3 for poor enterprises. At the start of the business the marginal returns (shown as the height of the vertical blue arrow) are very high for the extra capital invested (shown as the length of the black horizontal arrow). The early investments in the business yields higher returns – higher marginal returns.

But, as the curve proceeds, due to the inherent nature of the businesses poor entrepreneurs are involved in as the capital investment goes on increasing, for every unit increase in such investment the marginal returns go on reducing and diminish further.

You can see in the figure 3, there are four different instances of extra capital investment in the poor enterprises. The L-shaped curve increases rapidly at early investment stage but as the capital investment goes on increasing the curve quickly flattens out, indicating the stagnancy.

In poor enterprises any new unit capital investment will give diminished marginal returns over the time

This behavior can be explained by the example of local fruits and vegetable vendors. First a person starts out with very few 2 or 3 vegetables (potato, tomato, onions for example). Being the commodity vegetables, they are sold very easily, fast and margins are also pretty good for the amount invested to buy them in wholesale. So, with those good returns he/she now buys different vegetables and now provide more options to his/ her customers. Now you will realize that not everyone buys every vegetable he/she has to offer, the sell of potato, tomato, onions may still remain good. But in order to expand he/she cannot depend on selling those only, and as he/ she expands into new varieties there comes the uncertainty of not everyone buying it. Perishable nature of these products is also one problem over which he/she has no control. The overall return may increase by incorporating more variety of items or by buying a cart to access many customers but for every new investment further done to grow this business, the guarantee of higher returns is very low.

So, the vegetable/ fruit vendor realizes this at a stage in his/her business that buying only those items which would sell, items which will not perish immediately with limited customer accessibility through cart is the only option to survive. You have to understand the limitations created by the nature of the businesses poor entrepreneurs are invested in.

That is exactly why only giving money to poor entrepreneurs won’t bring them out of the poverty. The businesses they can perform stagnate very rapidly.

Now, someone should ask the question for the case of the vegetable/ fruit vendor.

The questions could be asked as follows,

  1. The vendor should buy a vehicle so that he will contact more customers, why doesn’t he / she do so?
  2. The vendor should go to the wholesale market to buy the vegetables and fruits even at low rates to increase his margins, what stops him/ her?
  3. The vendor should rent a place in cold storage to maintain his items fresh till they are sold to the end customer, what is the hurdle?

Now, let us assume ourselves as this vendor and try to answer these questions.

  1. If the sell is stagnant even with a cart, why should one put exceedingly high amount in a vehicle purchase. This will be a big capital step. As the accessibility to formal lending is difficult, it brings capital in but the returns will be very low due to the borrowing at higher rates of interest.
  2. In order to buy at wholesale low rates connections with the wholesale tycoons are vital. Such connections are based on mutual benefits which the poor entrepreneurs hardly have access to.
  3. Cold storage rentals are significantly high for the amounts they earn so that goes there.

You must understand that these are not some contrived examples created to prove certain points. These are real life challenges and questions faced by poor entrepreneurs. It is only because of such challenges the poor entrepreneurs have that creative mindset, low cost, less capital-intensive problem-solving mindset. This also the reason economists found that poor entrepreneurs have very low number of people involved per business, they cannot afford to employ others due to the stagnancy.

As the study done by Abhijit Banerjee indicates, even if you provide some extra marginal income to the poor entrepreneurs so that they can access such options where extra capital is required, they will still choose to not invest that extra amount in the business because they know that for that extra investment the returns will not be that high over the longer period. (Abhijit Banerjee experimented with such extra capital provisions to poor entrepreneurs in Sri Lanka through lottery system, these entrepreneurs chose to invest that extra money in their livelihoods instead of businesses)  

The Big Gap to Fill

Now you should understand that even when extra capital is provided, that extra capital definitely won’t go into the growth of the poor enterprises. The question now comes that why poor entrepreneurs don’t have wide mindset? Why can’t they think big? Looks like the horizons and the mindset of poor entrepreneurs are so narrow that they are scared of risk taking. For the exact reasons the micro-financing institutions have tried to disseminate finance education, entrepreneurial education to the poor entrepreneur they lent money. But economists found that it is the inherent nature of the enterprises that poor can and are involved in, which makes them to think so.

Abhijit Banerjee here clarifies what exactly is the difference between the poor entrepreneurs and the rich entrepreneurs. For that let us look at the figure 4

Figure 4 Combining technologies and S-shaped curve of entrepreneurship
Source: Poor Economics – rethinking poverty and the ways to end it by Abhijit Banerjee and Esther Duflo

You must appreciate the beauty with which Abhijit Banerjee has explained the difference between poor and rich entrepreneurs. Any incorporation of production technology in an enterprise will improve the productivity. Buying machinery, tools, infrastructures can largely boost the business performance. This boost due to production technology is shown as curve QR.

What does the curve OP represent?

As you have already seen, curve OP starts with no to less capital investment and flatten out immediately. It is the curve of poor entrepreneurship.

Now you must understand that in order to gain marginally/ exceptionally high returns one needs to start with high up-front capital in hand (Indicated as capital OQ). The big tech startups, the big supermarket chains start exactly from here where there are high chances of success (This is also why rich start-ups or any non-poor start-ups demand high funding).

In the case of high marginal returns in poor enterprises in their early stages of development we can easily think that high marginal returns should create the foundation of a successful long-term business. These high margins will allow the person to invest more in the same business, to employ more people to expand the workforce, to purchase new machinery, new tools. But these high marginal returns could never fill that capital gap for poor. This is what majorly differentiates between poor and rich entrepreneurs.

So, one has to really appreciate the gap lying between poor and rich entrepreneurs. This gap of capital to create production technology is too large for poor entrepreneurs and for the business they run. It is not just their narrow mindset, rather they are so close to the harsh reality that they prefer not to follow such seemingly “imaginary” paths.

Conclusion

Entrepreneurship for our young generation seems like a glamorous venture with big money, new technologies, new ideas, new technologies, “angel” investors and “unicorn” start-ups but we always forget that we are surrounded by many entrepreneurs which go unnoticed and have less to nothing to do with the keywords explained here.

A high chunk of these unnoticed entrepreneurs are poor entrepreneurs. They are part of our lives in a big way – you can think of the vendors of every small thing you use in your whole day.

Most of the people in poor countries are self-employed or entrepreneurs. This proportion is far less in developed nations.

Poor entrepreneurs seem to make high returns in their business but most of those high returns go to the repayment of the loans at high interest rates due to the inaccessibility to formal financial institutes which can lend at relatively lesser rates of interest. These businesses are very small and unprofitable over the time even though the rates of returns are exceptionally high.

Providing capital and opportunities to poor to start their business is not the solution to their improvement. Even after such provisions they will engage in the enterprises which rapidly stagnate over the time.

In order to come out of such stagnation they will need to fill that huge gap capital to incorporate production technologies which is impossible without the involvement of anti-poverty policies which will create opportunities and involvement of big formal institutes to provide no risk capital.    

“The idea of the entrepreneurial poor is helping to secure a place within the overall anti-poverty policy disclosure where big business and high finance feel comfortable getting involved.”

C. K Prahlad, taken from the book Poor Economics by Abhijit Banerjee and Esther Dulfo

Poor entrepreneurs have less risk-taking ability, no to less business connections, no credit/ loan capability when compared to their rich entrepreneur counterparts. They have to fill that huge gap of up-front capital which could have brought new production technology, employed more skilled labor. Filling this high capital gap is impossible for poor entrepreneurs. That is exactly why a smart, ingenuous street vendor even while having the best and the original ideas cannot expand his/ her business into big industries, companies and malls.

When we are understanding that poor enterprises rarely promote multiple employment/ connected employments, we should understand that supporting the poor entrepreneurship won’t drastically improve the employment rates of the nation, especially the poor nations. This is also why creation of good jobs is very important.

References:

  1. Poor Economics – rethinking poverty and the ways to end it by Abhijit Banerjee and Esther Duflo
  2. MIT OpenCourseWare – 22. Entrepreneurs and workers – Lecture by Abhijit Banerjee
  3. 106 Must-Know Startup Statistics for 2023
  4. 90% Of Startups Fail: Here’s What You Need To Know About The 10%
  5. News reference – Sifting through sludge for a sprinkle of gold – The Times of India

The Book of Five Rings – The Fire Book

Miyamoto Musashi’s ‘The Fire Book’ from the Book of Five Rings focuses on detailed one-to-one combat strategies and warfare tactics. But, it is not limited to enemy warfare and combat. The Fire Book dives deep into the true grit, the consistency and the perseverance required to fight and win the greatest battle – the battle of life, the battle of survival.

Miyamoto Musashi’s philosophy for 21st century

Miyamoto-san in his ‘The Fire Book’ amongst the Book of Five Rings explains in detail about combat and war tactics. We already saw how he explained the importance of fundamentals, importance of managing skills and resources in the Ground Book; the importance of habits, behaviors, small steps and fluidity in the Water Book. The Fire Book explained hereafter is about the fierce attitude of living a life full of challenges. Although, initial reading gives the impression of clear fighting instructions but do not get fooled by the limited words/ sentence choices of Miyamoto Musashi. As he has already explained in the previous books, the reader has to see greater ways in the limited knowledge Miyamoto-san has presented in these books.

As the name goes, it is about keeping that fire of fierceness in you alive until you win your fight. On surface, it may seem like a set of clear instructions to adopt and implement combat and war strategies but it is important to understand that this is the wisdom to win the battle of life, battle of survival which the ultimate fight for every person.

“By using only their fingertips, they only know the benefit of three of the five inches of the wrist.”

Miyamoto-san make the readers aware that how some people think that they can achieve everything when they know some set of the techniques. He wants readers to appreciate the vast expanse and extents of the true wisdom. He expects everyone to not cling to their favorite techniques only. Miyamoto-san thus highlights the fact that one should strive to understand and imbibe anything and everything that is there to know in order to perfect the art of survival. This is only possible when one has urge to deep dive into the things happening around them. Miyamoto-san in some sense, abhors the superficiality of learning process and knowledge involved in it.

“In my strategy, the training for killing enemies is by way of many contests, fighting for survival, discovering the meaning of life, learning the Way of the sword, judging the strength of attacks and understanding the Way of the “edge and the ridge” of the sword.”

There is no single and only way to your goal. Going into the depths of the techniques gives the real advantage over the enemy and also in your own development. 

“You cannot profit from small techniques particularly when full armor is worn.”

When you are at some disadvantage, only one technique won’t help. You need to have multiple skill set to confirm your victory.

“Any man who wants to master the essence of my strategy must research this diligently, training morning and evening. Thus, can he polish his skill, become free from self, and realize extraordinary ability. “

Becoming ‘free from self’ actually refers to overcoming the physical limitations one has as a person, as a human being.

Then one by one Miyamoto dives deep into each and every combat technique and explains wherever required. As already seen in his previous books the Ground Book, the Water Book, Miyamoto-san always instructs readers to study and explore the wisdom presented on their own level and words will fail to explain the intricacies of the wisdom.

  • Depending on the Place

“Stand in the sun; that is, take up an attitude with the sun behind you. If the situation does not allow this, you must try to keep the sun on your right side. In buildings, you must stand with the entrance behind you or to your right. Make sure that you rear us unobstructed and that there is free space on your left, your right side being occupied with your side attitude. At night, if the enemy can be seen, keep the fire behind you and the entrance to your right and otherwise take up your attitude as above. You must look down on the enemy, and take up you attitude on slightly higher places.“

For what is written here, the idea is to clear the corners while entering any hostile environment. Taking the light source behind gives clear advantage of not getting overwhelmed by the intense light thus immediately giving you an edge over the enemy’s attack. It will be difficult for the enemy to understand your strokes if he is already overwhelmed by the intense light behind you. Furthermore, keeping the dominant side – right side ready for attack with space on the left will help to execute clean cut, clean attack. Keeping entrance to the right will help to counter the surprise attacks. Remaining on the top means always try to have as many as possible updates about the enemy moves. Top location will also help to plan surprise attack on the enemy.

“When the fight comes, always endeavor to chase the enemy around you left side. Chase him towards awkward places and try to keep him with his back to awkward places.”

Keeping enemy on the left will help to strike with dominant hand effectively. Miyamoto-san very smartly instructs to get the enemy in awkward corners where his attacks, blows will definitely fail thereby crushing his confidence.   

“In houses chase the enemy into the thresholds, lintels, doors, verandas, pillars and so on, again not letting him see his situation.“

  • Three Methods to Forestall the Enemy – 1) Ken No Sen 2) Tai No Sen 3) Tai Tai No Sen

Miyamoto-san very clearly establishes that when you will be in a combat there are only three possibilities. Either you will strike first or your enemy will strike first or you both will strike simultaneously. There is no other possibility. The idea is to forestall – to intentionally slow down and confuse enemy so that he can be dealt with easily. Miyamoto-san focuses on these ideas because one can win quickly by taking the lead. It’s like the first mover’s advantage.

Ken No Sen means to set the enemy up.

  1. When you attack the enemy first, make sure that you have one more intent to strike next- which is called as ‘reserved spirit’ by Miyamoto-san. Your first strike will be powerful but the next reserved strike will overwhelm your enemy, thereby crushing his confidence. 
  2. Or strike continuously to crush the enemy
  3. Or strike with a strong intent for once

The idea is to not let the enemy think of attacking you next, to overwhelm him

Tai No Sen means to wait for the initiative i.e., to let the enemy attack first. 

  1. When enemy attacks first, let him think that you are weak. Let him know that you don’t want to pursue this fight. When he becomes sure of such attitude from you then strike strongly on the moment the enemy relaxes
  2. Or when he attacks at first, counter it with even more strength thereby disturbing his rhythm and crushing his main planned intentions

Tai Tai No Sen means to accompany him and forestall him

  1. When enemy instantly starts attacking don’t stall in thinking the right attack; just attack strongly and then look out for the weak spot to attack
  2. Or if enemy is equivalent to you then let go with the flow. Accompany him to understand his movements, timings – float with him. When the rhythm is set then attack him strongly.

The intention to specially focus on these techniques is because, Miyamoto-san thinks that once you forestall the enemy it instantly crushes his spirit thereby making victory quick and possible.

  • To Hold Down a Pillow

This means not allowing enemy’s head to rise.

Miyamoto-san establishes that it is bad for you if the enemy leads you, controls your moves. In order to win you must always lead on either side. On one side, you will lead your people to correct moves and on the other side you will lead the enemy by promoting his mistakes.   

“The important thing in strategy is to suppress the enemy’s useful actions but allow his useless actions.“

There is one more beautiful line where Miyamoto-san plays the game of words to convey his message to the students.

“The spirit is to check his attack at the syllable “at…,” when he jumps check his jump at the syllable “ju…” and check his cut at “cu…”“

Simply meaning that if you see something wrong happening with you, make sure that you do something before it comes to its fruition, its completion. Try to predict things and get ready to respond at the moment they happen in a combat.

  • Crossing at a Ford

Miyamoto-san explicitly wants to give a life lesson here. He used the analogy of the vast sea and one’s journey through it. Even though you have your friends at harbor, even though you are aware of the travel routes, condition of your ship, you should go out to explore the expanses of the sea. The conditions will not be favorable sometimes but you should try to defeat the vastness of the sea to achieve that which nobody has achieved yet.

The vast sea can be easily crossed by crossing area where it narrows the area called “a strait”, “a ford”. “The ford” is the weakest, narrow part of the vast sea.

Similarly, when in combat against a far superior and stronger enemy, don’t focus on his capabilities rather focus on your capabilities and try to cross at his weak point by using your strengths.

“If you succeed in crossing at the best place, you may take your ease. To cross at ford means to attack the enemy’s weak point and to put yourself in an advantageous position.“

  • To Know the Times

The idea is to understand the mentality, the nature, the habits or the way of thinking of the enemy and his people. When you will understand how the enemy involuntarily behaves, responds, then it becomes very easy for you to gain the advantage of the predictability.

Even in duels Miyamoto-san urges to identify the fighting style of the opponent during the act of forestalling. Once his school of style is known, you can easily take over on his weaknesses. The nature or the habits of the enemy are the involuntary clue that even the enemy himself cannot control and they are the mirrors of his intentions, so the idea is to understand his intentions, find weak spots in them and attack there.

“If you are thoroughly conversant with strategy, you will recognize the enemy’s intentions and thus have many opportunities to win.”

  • To Tread Down the Sword

“The spirit is to attack quickly while the enemy is still shooting with bows and guns.”

Miyamoto-san very cleverly gives a warfare strategy here. When the opponent first attacks with the bows and arrows or with the guns and cannons, you should not waste your time in drawing the arrows or filling the barrels with gun powder to counterattack. Instead, you should react instantly treading down i.e., use your brute force to avoid your confidence from going down. If you waste your time in drawing the arrows and filing the barrels, most of the damage would already weaken you in the process. Treading down means using the swift reacting forces, you have to not let enemy come up with second attack. If he is unable to come up with second attack then definitely, he will count his first successful attack only as a lucky one and will start doubting himself already. 

“You must achieve the spirit of not allowing the enemy to attack the second time this is the spirit of forestalling in every sense once at the enemy you should not aspire just to strike him but to cling after the attack.”

  • To Know “Collapse”

“Everything can collapse – houses bodies and enemies collapse when their rhythm becomes deranged.”

The idea is to spot the chaos among the enemy and let that chaos increase further to defeat him without investing many resources and efforts.

“Fix your eye on the enemy’s collapse and chase him attacking so that you do not let him recover.”

  • To Become the Enemy

Becoming the enemy is not only about thinking the way enemy thinks. Miyamoto-san wants the students to understand that if you see yourself as something you become that thing. So even if the enemy is practically strong and if you let yourself convince that you cannot defeat him then, surely you won’t be able to defeat him.

So, it is about your mindset to defeat the enemy.   

“He who is shut inside is a peasant, he enters to arrest is a hawk.”

It is also one way to say that any type of confidence is good confidence in modern and more relevant sense.

“In large-scale strategy, people are always under the impression that the enemy is strong so tend to become cautious. But if you have good soldiers, and if you understand the principles of strategy, and if you know how to beat the enemy, there is nothing to worry about.”

Becoming the enemy is about considering the whole world against ourselves and then using all that you have to win over the world. It is a strong personal advice from Miyamoto-san.

“If you think here is a master of the way who knows the principles of strategy then you will surely lose.”

  • To Release Four Hands

“To release 4 hands is used when you and the enemy are contending with the same spirit and the issue cannot be decided abandon the spirit and win through an alternative resource.”

When you realize that the enemy you are fighting is exactly you or equivalent of you then think out of the box. Do things which you won’t do normally. Such abnormal and creative ways of attacks will break the rhythm of your equivalent enemy.

“Immediately throw away the spirit and win with the technique the enemy does not expect.”

So, “releasing four hands” is the indication to create some unfair advantage through unconventional practices.

“We must defeat the enemy by changing our mind and applying a suitable technique according to his condition.”

  • To Move the Shade

“When you cannot see the enemy’s position, indicate that you are about to attack strongly to discover his resources. It is easy then to defeat him with a different method once you see his resources.”

This is one cunning and smart advice by Miyamoto-san. When you are unable to gauge the moves of the enemy or the enemy himself doesn’t want to leave any traces, you should create some fake opportunities of victory for the enemy so that he will expose all his capabilities to you. Once he is lured into such fake victories then you can gauge the strategies and plan a worthy surprise counterattack secretly.

  • To Hold Down a Shadow

“When the enemy embarks on an attack, if you make a show of strongly suppressing his technique, he will change his mind. Then altering your spirit, defeat him by forestalling him with a Void spirit.“

The idea is to embarrass the enemy if you are going for a strong counterattack. This saves you resources in next attack because the enemy would never come out to counterattack because of the embarrassment.

  • To Pass On

Miyamoto-san makes a very smart observation on some involuntary human habits like sleepiness, yawning. These can be passed on human to human. Even today’s neuroscience agrees that these are the habits which are easy to pass on because of the herd mentality, group behavior of humans.

Miyamoto-san advises as follows:

“Make a show of complete calmness and the enemy will be taken by this and will become relaxed when you see that this. Has been passed on you can bring about the enemies defeat by attacking strongly with a Void spirit.“

The idea is to pass on your careless, weak attitude on the surface to your enemy and once he is relaxed the bring out you real fierce attacking inner spirit to defeat him.

  • To Cause the Loss of Balance

“Without allowing him space for breath to recover from the fluctuation of spirit you must grasp the opportunity to win.”

In simple words, not giving an opportunity to recover the enemy from last attack. The enemy can be made to lose his balance by bringing in danger, creating difficulties and bringing in the surprise. Miyamoto-san speaks here very clearly as an experienced and seasoned teacher.

  • To Frighten

“Fright often occurs, caused by the unexpected.”

Miyamoto-san knows very well about the basic human mentality. We don’t like uncomfortable situations. The enemy’s confidence, spirit can be easily crushed by making him uncomfortable, by scaring him. Scary, unnerving, unsettling and panicky battle cries/ battle drums/ battle horns are one great example of that.

  • To Soak In

“When you have come to grips and are striving together with the enemy and you realize that you cannot advance you soak in and become one with the enemy.“

It is simply remaining in touch with the enemy to understand his moves. The moment you draw apart from your enemy, you will lose the advantage of the predictability.

  • To Injure the Corners

“It is difficult to move strong things by pushing directly so you should injure the corners.”

When the enemy is big in size and strength, the best way to start is to injure his corners as in his extended and weak parts. Once you bring down his morale then, even the big things will collapse down.

“In large-scale strategy it is beneficial to strike at the corners of the enemy’s force”

In the same sense if the opponent has strong army, start attacks from the most beneficial and weak spots, facing the initial defeats from such “corners” can bring down the spirit of the remaining strong forces.

  • To Throw in Confusion

“Victory is certain when the enemy is caught up in a rhythm which confuses his spirit“

Creating confusion is all about not letting enemy think that he has understood you. When he will be confused about your intentions, he will be less focused and then it will be easy to take him down. Miyamoto-san smartly establishes this idea for both one on one combat and a large-scale war.

“Feint a trust or cut or make the enemy think you are going to close with him and when he is confused you can easily win.“

  • The Three Shouts

Earlier Miyamoto-san suggested to scare the enemy with voices. He again highlights how voice can be incorporated into the fights to create rhythm. He divides the shouts in three seemingly obvious but smart by implementations as shouts before, during and after.

“The voice shows energy“

The attitude you want to present to the enemy can be easily demonstrated to the enemy simply just by your shouts instead of deploying valuable assets and resources into the battle or fights.

Shouting before the fight creates the rhythm, shouting during the battle in low pitch projects the effectiveness of our attack and the shouting at the end of the war can build instant morale boost and an escalating defeat of the enemy due to downgrading spirit.

  • To Mingle

Mingling is all about sticking and advancing into the enemy forces. If you are continuously stuck with the enemy forces and see that they are defeated at certain position then you attack their remaining sides with same strength thereby making space to advance through them. Once you see crushing at a location you build upon that to advance ahead.

“What is meant by mingling if the spirit of advancing and becoming engaged with the enemy and not withdrawing even one step.“

  • To Crush

Crushing is all about not giving even single opportunity to the enemy to recover from the last attack. When you sense his ultimate weakness getting exposed then crushing will ensure the last blow to get the victory in the battle.

“When we see that enemy has few men or if he has many men but his spirit is weak and disordered, we knock the hat over his eyes crushing him utterly. If we crush lightly, he may recover.”

  • The Mountain-Sea Change

“The mountain sea spirit means that it is bad to repeat the same thing several times when fighting the enemy there may be not hell but to do something twice but do not try it a third time.”

Miyamoto-san knows that every person, every fighter has preferences, comfortable, favorite moves. Playing such moves again and again can make the person predictable thereby vulnerable. He thus wants the warrior to demonstrate the spectrum of moves, moves of contradictions to effectively confuse the enemy.    

“If the enemy thinks of mountains attack like the sea and if he thinks of a sea attack like the mountains.”

  • To Penetrate the Depths

“If his spirit is not extinguished, he may be beaten superficially yet undefeated in spirit deeps inside.“

Miyamoto-san very well knows the psychology of revenge and coming back with more preparedness to avenge the last fight. Thus, he wants the warrior to not only physically defeat the enemy but also to defeat them in their minds. 

“Penetrating the depths means penetrating with the long sword penetrating with the body and penetrating with the spirit.”

This shows how Miyamoto-san is serious about the mindset of warrior. He knows that you can easily defeat an enemy physically but if he is not defeated in his mind then surely, he will rise up again with possibly stronger counterattack.

“If the enemy remains spirited it is difficult to crush him.“

  • To Renew

““To renew” applies when we are fighting with the enemy and entangled spirit arises where there is no possible resolution, we must abandon our efforts, think of the situation in a fresh spirit then win the new rhythm.”

A great teacher with strongest techniques knows that there will be chances when his pupils may stand against each other. There may be chances when exactly same great techniques will be presented in front of each other. The great and smart teacher knows that such tie-making conditions will require new ways, new perspectives of thinking.

In simple words, when one feels stuck in repetition, the best way to solve such problems is to start from something new, unconventional and out of the box ideas.

This also shows how Miyamoto-san was open to accepting the idea that even his fool-proof, seasoned techniques will sometimes be challenged with equally potent different techniques. Thus, he demands creative thinking while solving such issues which is really smart for the times and personality he was.

  • Rat’s Head, Ox’s Neck

This is about leveraging the small details to bigger advantages in warfare. History has many examples where even a seemingly small thing changes the bigger course of the warfare, battles. Miyamoto-san here, similarly expects a warrior, a strategist to think with the ability of Rat to see at small levels and use that detail to strike back with the power of the Ox’s neck. One has to appreciate how Miyaomoto-san has distilled small-small details of everyday observations into his nectar of war strategies. 

“Whenever we have become preoccupied with small detail, we must suddenly change into a large spirit, interchanging large with small.“

  • The Commander Knows the Troops

“Using the wisdom of strategy, think of the enemy as your own troops.“

Miyamoto-san explains this idea in very few words, because he wants this idea to be understood only by those people who actually have grasped the thought process behind his Way of Strategy. Miyamoto-san implies here that if you understand the troops of the enemies well, then you can direct those troops in your ways thereby saving your resources. The various ideas explained before in the Fire Book relate to the human tendencies, psyche, group dynamics, group behavior. Using this knowledge if one becomes successful in understanding the mindset of his enemy troops, then is is impossible to defeat him.

  • To Let Go the Hilt

“There is the spirit of winning without a sword. There is also the spirit of holding the long sword but not winning.“

Hilt means the handle – the grip of the weapon. Here again Miyamoto-san is limiting his words but the message to be conveyed is precise. He implies that having the greatest weapon in your hands does not guarantee absolute victory. You can win the fight without the weapon too. It is all about the mindset. If you have that mindset of the fierceness of the fire in your fights then, it is nearly impossible to defeat you. Don’t become too much attached to your lavish, expensive, sophisticated equipment and tools. Understand that you can be easily defeated in exceptions when you won’t have these tools. So, accept that in order to win – sometimes you may have to let go of your priced possessions. It should be always you deciding the fate of your battles and not the tools, weapons that you use to win those battles. Detachments from such tools will bring out the real fighter within you.

  • The Body of a Rock

The body of rock is implied to the feeling of not getting disturbed by what is happening around you. This mindset will not only defeat one on one enemy but will also build the attitude of fierce fire when the warrior will face thousands of enemies alone. Again, it is all about mindset.

Conclusion

Miyamoto-san in the Fire Book gives almost 27 techniques to win in a one-to-one combat, in a battle or in a long-term, large scale warfare. The consistencies of these techniques and ideas with some real-world examples and practical advises show the true scholar of Miyamoto-san.

Creating breathing space to fight aggressively, rising on the top locations in the battle places, to engulf the enemy even from small advantages, to have the ability to spread swiftly and influence immediately, to have the ability to begin again even from a small spark or embers, to remain unpredictable, to remain attached to the enemy are the tendencies of the fire. These minute behaviors of the fire are closely studied and imbibed into the real life by Miyamoto Musashi, they are the key to the Fire Book.  

You must understand why this section is called the Fire Book. Obviously as the name goes the techniques are built around the behavior of the Fire. The important thing is that everyone would have seen a fire many times in their lives but it is the observant and thoughtful mind of the warrior like Miyamoto-san who extracted the wisdom of Combat and warfare from the Fire. Please bear in mind that these tactics are still relevant in modern warfare and battle strategies.

“Of course, men who study in this way thing that they are training the body and spirit, but it is an obstacle to true Way, and its bad influence remains forever. Thus, the true way of strategy is becoming decadent and dying out.“

Thus, the Fire Book is about the grit, the perseverance in fighting and winning the greatest battle – the battle of life, the battle of survival.

Links for further reading:

  1. The Book of Five Rings – The Ground Book
  2. The Book of Five Rings – The Water Book
  3. The Book of Five Rings – The Fire Book
  4. The Book of Five Rings – The Wind Book
  5. The Book of Five Rings – The Book of the Void