I noted in an earlier post that Judith Warner said that one could not fault the pharmaceutical companies from selling inappropriate drugs to children because they were in the business of “making money.” I bewailed that fact then — and do again. Surely the purpose of business is to serve their customers — and making money is the reward for doing that. Today George Akerlof & Rachel Kranton bring a nice riposte in the form of “identity economics,” claiming that “In organisations that work well, employees identify with their work and their organisations. People want to do a good job because they think they should and because it is the right thing to do. In organisations that function effectively, the goals of the workers and of the organisation are aligned. There is little conflict of interest and little need for performance pay.” In other words, a pharmaceutical company that is run well should be full of people who desire to do right by their customers. Their primary reward is personal satisfaction; their secondary satisfaction is pay for a job well done. As they note, Captain Sully Sullenberger performed heroics because he saw it as his job, not because he thought that it would lead to some oversized bonus or because he thought that he was in the flying business to make money. Sadly, I think that our business schools have focused far too much attention on the making money bit and far too little on the just doing one’s job bit.
Dallas had a record snow fall this month — an unheard of 12 inches — which caused huge destruction of trees everywhere in the city. Everywhere one goes in the city one sees piles of debris stacked high on the sidewalk. Who is going to pick this stuff up? And who is going to pay for it? Everyone from the most conservative Republican to the most progressive Democrat has simply dumped their brush wood on the street expecting that someone else will come along and pick it up. The much maligned guv’mint perhaps or maybe the tooth fairy? I’ve yet to hear anyone suggest that we should pay a special levy to have this trash collected. Some amorphous “other” will pick it all up — apparently for free — why should we pay. (Yes we did pay taxes but those don’t cover the costs of a record breaking snow fall. That was NOT in the city’s budget. Picking up all this extra trash will mean that someone will get laid off next year or some program will be underfunded. But, that’s not our problem.) I think it is emblematic of much that ails our society today.
John Lloyd’s, “Boomers rage against the dying of the light” and Michael Skapinker’s “The purpose of business is to win respect” formed an interesting pair of columns in today’s Financial Times. Lloyd contrasted a picture of a vast number of smelly, senile people nodding off in restaurants while financially supported by a small number of young people with the possibility of those elderly still being productively employed. Skapinker pondered on the purpose of business and moved beyond the notion that it existed for the purpose of just making money and concluded that it should all be about “making profits and serving customers by doing something we can be proud of.” I would have put the profits at the end of that sentence or even left it out altogether. Profit, after all, is no different than wages and interest — it is the return that one gets from doing something — not an end in itself. So, a better version of the purpose of business is simply to serve customers by doing something we can be proud of. My sense is that purpose ties back nicely to the continued involvement of the elderly. If we are to get through the autumnal passage of the large contingent of baby boomers, then it is essential that all hands be on deck and if everyone is doing something that they can be proud of in serving others, then this involvement could be meaningful for all involved. After writing this, I heard Judith Warner on NPR talking about the pharmaceuticals saying, “Well one can’t fault the drug companies — they’re in the business of making money.” Oh dear, how sad, I thought!
There was a juxtaposition of articles in the Financial Times today that was quite fascinating. Clive Crook was opining in “America can square its fiscal circle” that “American voters want more public services than they are willing to pay for. He went on to elaborate on how the gridlock in Washington and the unwillingness of people across the country to negotiate with one another was leading the country toward bankruptcy. There was a sense in the article of a country that was “developed,” saw no further need of “developing” and was going to sit tight on what it had. Many of us see a financial catastrophe ahead if nothing is done, but there seems to be an unwillingness to come to grips with the future — perhaps, because we’d have to look ourselves squarely in the face?
On the previous page, Richard Lapper in “Out of the bottle” was describing how South Africa, an undeveloped country in many ways, was turning away from the developed West and turning towards other developing countries such as Brazil, Russia, India, and China. There was a sense in this article of people on the move. Partly because they are not developed, these countries seem to have a much greater sense of the need to develop. Problems abound, difficulties are everywhere at hand, but there is an almost Victorian optimism in the air. Unlike the USA where Obama’s “yes we can” seems to have run aground in the sands of “no you can’t” there appears to be in the developing world a bracing sense of “yes we will.” If life is about rising to challenges, then the Brics would appear to be the more lively.