In Praise of the AK-47

Financial Lessons from the World’s Most Ubiquitous Combat Rifle

When the AK-47 was released, it earned the contempt of Western armies. It continues to earn the contempt of many gun enthusiasts today.

It is cheaply made. It has, at best, average accuracy. It is an incredibly old design (the “47” refers to 1947, its first year of production, though there are more modern variants around today). It is outperformed on many measures by many other combat rifles.

Yet, it is regarded by many as the most important and successful combat weapon of all time. Perhaps as many as 100 million AK-47’s have been made, making it the world’s most ubiquitous firearm. The AK-47 is still used throughout the world today. And, in a sad and morbid sense, if you were to define “success” by how many folks it’s killed, the AK-47 is likely the most “successful” weapon ever made.

There are far more accurate weapons. For almost any single situation, there is probably a better weapon. You would never, ever see a well-financed elite military or police unit carrying an AK-47.

So what is so awesome about the AK-47? Absolutely nothing.

Its design is the exact opposite of awesomeness. It is intentionally made with loose tolerances (space between moving parts) – it’s less accurate by design. It didn’t contain any fancy new technologies, and it is cheaply made from stamped parts.

But that is the secret of its success: glorious simplicity.

Simple is Better

Its designer, Mikhail Kalashnikov, didn’t take the primary purpose of the rifle – shooting bullets – and start adding on additional features, like super accuracy, to make the greatest possible weapon. He took that primary purpose and then considered all of the things that could keep it from being achieved:

• Lack of training
• Lack of maintenance
• Terrible conditions (cold / dirt / sand / goo / grime / water)
• Jams
• Expensive or difficult production

How did he counter these threats?

• It\’s extremely easy to use. Training is simple. A child can be trained on the AK-47 in a matter of hours (and sadly, often is…)
• It\’s extremely easy to maintain and service, has a small number of moving parts, and will still fire even if it’s neglected
• The loose tolerances that make it less accurate often allow it to still fire if it’s got dirt / sand / goo / grime in it and make jams rare
• Cheap parts and simple design make it easy to produce

Kalashnikov didn’t design a rifle to achieve greatness, he designed it to achieve averageness – under any possible conditions.

This simplicity is the beauty of the AK-47. It was designed to fire bullets. It could be treated horribly and still fire bullets. It could be handed to someone lacking all training and still fire bullets.

Why is this so important? Why would you treat a rifle horribly, or give it to an untrained soldier?

Because it’s war. Adequate time, conditions, and equipment to clean a rifle are often luxuries in war. So are replacement parts. So is time to train soldiers properly – to clean a rifle, to use a rifle, to shoot straight (and if you can’t shoot straight, having a less accurate rifle really isn’t a drawback at all…).

The beautiful simplicity of the AK-47 have led many to conclude it was a far superior weapon to the U.S.-made M16 in the Vietnam War. The M16 was more accurate and fancy, but it was much harder to maintain in jungle conditions and failed more often at its primary, most critical task: shooting bullets.

Many still love the AK-47 for its simplicity today, and you’ll still find this rifle in every major conflict zone in the world. Its success is based on acknowledging how things can go wrong with people (they won’t do what they’re supposed to do, can’t / won’t deal with complexity, and are lazy) and the environment (if something bad can happen, it will) and neutralizing them.

The more clever and complex we try to be, the further away from a primary objective we get, the more extravagantly we fail. The risks that Kalashnikov was designing around aren’t unique to rifles, or war. They’re everywhere.

So let’s apply Kalashnikov’s elegance of simplicity to some major financial decisions:

Life insurance – should it:

• Pay you money if you die; OR
• Pay you money if you die…and serve as a complex investment vehicle, have a cash surrender value, pay you dividends if earnings in underlying investments exceed a certain return, and provide a source of borrowing

Car – should it:

• Transport you safely from point A to point B; OR
• Transport you safely from point A to point B…and have a symphony sound system, have a navigation system, have TV’s built in, be able to remember how your body and that of 4 other drivers best fit, heat your bottom, give you a massage (seriously), be able to offroad in case the roads of the world are all simultaneously demolished, be able to call for help by itself, help you drive and park, keep you awake, serve as a status symbol to shame your rivals and impress your friends, make you feel better about yourself, and allow you to enjoy intimate relations with members of the opposite sex

Job – should it:

• Pay you money; OR
• Pay you money…and serve as a key source of friends and social life, provide you with tons of non-financial perqs, dominate your free time, and give your life meaning

House – should it:

• Provide you shelter from the elements; OR
• Provide you shelter…and serve as an “investment”; provide a huge showcase for furniture, art, and antiques; serve as a museum for your or your kids’ activities and accomplishments; function as an extremely complicated supply chain whereby you buy, store, and then discard countless consumer products; give you a place to swim; give you multiple identical options to store and cook food; serve as a status symbol to shame your rivals and impress your friends; make you feel better about yourself; create artificial ecosystems that would fall apart without lots of care and maintenance; and allow you to employ a small army of helpers to manage it

Kids – should you:

• Provide them with unconditional love; OR
• Provide them with unconditional love…and get them in the best kindergarten and sports teams, give them the best music lessons, ensure they have the best clothes / latest electronics / most awesome gadgets, fight to give them the best teachers, put them in the best prep schools, give them the best car, ensure they get into the best college, and give them everything you lacked growing up

Investments – should they:

• Provide a market return that allows you to meet your financial goals; OR
• Provide a market return (maybe)…and allow you or your trusted advisor to chase higher-than-market returns across different companies, sectors, countries, and asset classes; allow you to time the market; and let you selectively share successes with others to shame your rivals and impress your friends

Phone – should it:

• Allow you to communicate with other people; OR
• Allow you to communicate…and ensure the world doesn’t go 5 minutes without your social media update, give you apps for critical needed activities like launching birds at buildings and shooting dinosaurs, allow you to watch movies and TV, let you read books, measure your heart rate, let you meet comely members of the opposite sex, and give you an anchor for your eyes to ensure you never have to make small-talk with anyone ever again

I’m not saying that simpler is always better. But in each case above, the further you get away from your primary objective, the more likely you’re receiving less value, unnecessarily complicating your financial life, and risking the very objective you initially set out to achieve.

So whenever you come across a choice of simple versus complex in a product or service, remember this humble combat rifle from a simple Russian. Ask yourself:

• What is the primary function I need, and which is more likely to deliver that?
• Which is simpler, and less burdened by complexity, bells, and whistles?
• What could go wrong, and which choice will do better when it does?

Your first instinct should always be for the AK-47 equivalent. It should be a long, tough, uphill battle for you to choose anything else. And if the awesome features of the more complicated choice are just too alluring, also ask yourself how you can combine the simple solution with other simple solutions to reach the same place.

Stick with simplicity in all of your financial matters. Comrade Kalashnikov would approve.