My cousin Terry asked some questions that, I think, strike at some issues that are central to our nation's success. Here they are, and here are my answers.
When does a legitimate concern for stockholder returns (or high management compensation) cross the line to greed?
Companies exist for one purpose – to generate profit. That’s hard for me to remember all the time, because I like to see people working and supporting themselves and their families.
I think that companies can cross the line to greed when they become focused on short-term returns or profits over the long-term viability of the company. It’s important to keep track of where the company is financially on a short-term basis, but when a company wants to exceed its profit goals every month or quarter or year, then managers and executives can be implicitly or explicitly encouraged to do things that are unethical or even illegal. When that happens the company sacrifices its potential for long-term profitability because the wrong things they’re doing will catch up to them and the company may not survive the consequences of short sighted actions.
The answer to the question, then, is building a corporate culture of vision and foundation building. The story was told to me that at Toyota the new employees are told not to think about the stock price of the company or even its profitability in the present. They are directed to focus on the stock price and profitability of the company 50 years in the future, because someone 50 years in the past took care of today’s numbers.
We can have accounting standards and investment regulations and audits and everything else. In the end it comes down to the individual morality of the people running the companies and the culture that they foster that will prevent crossing the line between good profitability and greed.
The same goes for management compensation. If managers and executives know that the company values them and their work and that there is some reasonable assurance of a future there, they will have less cause to seek the quick reward of high compensation. There is always the risk-reward function in relationships. When risk is low, then the acceptable reward is lower, as well. When there is a high risk that an employee will not be valued enough to remain employed next year, the reward required for work in the present year is higher.
It is a matter of respect. Respect runs counter to our human instinct, though. If people are raised without a reason to respect others, be it religion, ethics, or some other code of conduct, their natural tendency is manifest in what we call the corruption of capitalism. Unfortunately a socialist, communist, or fascist system – and any other economic system for that matter – is equally susceptible to human corruption.
What would Jesus think?
The Beatitudes are some of my favorite verses of scripture. In them Jesus mentions virtually all of the suffering of the human condition and gives comforting words and blessings. Why?
Because the suffering of the world can bring us to a humble and teachable point. And when we are humble enough to be taught the things of goodness and godliness then we are blessed. Our minds can be enlightened and we can gain understanding of our own condition and the world around us. We can be blessed in ways that the rest of the world cannot understand. So, what about the meek inheriting the earth?
When do we inherit things? When the rightful owners have passed away. Scripture tells us that evil is a strong force in the world. We even read that Satan is the god of this world. Jesus is the god of a higher world, as he explained in his questioning before his crucifixion. So, when evil “passes away” or loses the final battle with goodness then the meek, who have been taught of God and blessed by his goodness, will inherit the earth, a symbol or metaphor for all that God has.
In the meantime, the meek will enjoy the blessing of peace in their lives. Jesus said the peace he gives us is not the same peace the world would give us, but a peace that can’t be understood by those who don’t know it. It is an overriding sense of wellbeing regardless of the troubles we find ourselves in. Pretty valuable in this old world we live in.
I think that Jesus’ heart breaks when he looks at the world as it is. I think he is pained by the suffering of so many of us; and that he is angered by those of us who inflict suffering on our brothers and sisters in the human family.
I think Jesus is a realist, too. He recognizes that human nature is corruptible and that utopian society is an ideal, but cannot become a reality until all mankind surrenders their desire for carnal satisfaction at the expense of another person or the world itself.
I’m not sure if Jesus is a capitalist, but I’m sure he is a fan of individual moral agency – the freedom to choose actions. And because he is God, I’m sure he is a fan of natural consequences to choices. Laws govern the universe. Laws certainly govern happiness. Laws even govern God. No one is free of choice and accountability in this life or the next.
Is hard work enough?
No. But neither is "luck".
I agree with you, Terry, that there is some other force acting on us. There are the consequences of our choices, the consequences of others’ choices, the culture we are raised in, the government under which we live, and myriad other factors that affect not only our ability, but our opportunity. I know many people who work hard and don’t “get ahead”. They seem to have been dealt a hard hand. Just “luck”.
I don’t know why these things are the way they are. I think that each of us has to look at the hand we’re dealt and make some choices about how we will treat others and ourselves. We have to examine what our opportunities are and see what our blessings, if you will, are too.
Then we need to feel and accept the sense of responsibility that comes with privilege or blessing to help others less fortunate. To contribute to the larger society and the individual needs of our neighbors around the world.
Part of that obligation is hard work.
How many people do you and I know who have been given talent, ability, and opportunity, yet squander all three? It happens every day. And how many people do you and I know who have limited talent, ability and opportunity, yet work their hearts out, giving 100% of what they have? It happens every day, too.
Luck, fortune, providence, whatever people want to call it, plays a large part in our personal outcomes in life. Our personal morality will play a larger part in the outcomes we deal to others and in our final outcome, as well.
I think you’re wise to discount the idea that we are at a station in life because we earned it or deserve it. Granted there are things we can control by our choices, but largely we are where we are because someone else put us here. I am not a raging drunk because I choose not to use alcohol. I have $10 more in my pocket because I don’t smoke 2 packs of cigarettes a week. I have a clean driving record because I drive within the legal limits of safe vehicle operation. I am married to my wife because I choose not to leave her. My children are not abused or neglected because I choose to treat them well.
But other things are different. I have a job that pays well because…. I have reasonably good health because…. I was born in the United States of America and not the United Arab Emirates because…. I had the opportunity of a good education because…. I was in the Army, but not sent to the Persian Gulf War because…. These are things that I can’t explain, but for which I owe two debts. First, I owe a debt of gratitude to parents, to ancestors, to friends, to Providence or God. Second, I owe a debt of service to others. Because of the advantages I have I MUST share.
If I can give work to someone, I must. If I can use my healthy body to help someone, I must. If I can use the liberties I enjoy as an American to benefit others, I must. If I can use my education to teach someone, I must. If I can use my life to bless another life, I must.
The root of the issue – and almost all issues – is the individual. If we will learn and exercise respect for ourselves, each other, society, nature, and whatever higher power we believe in, then the larger problems will dissolve. Some people call it “personal righteousness”. I think of it as “personal rightness”. When our mind and our hearts are right – and in the right place – then our actions follow and they are right, too. No right thought, feeling or act will harm another.
How’s that for idealism?
If we live our lives in that path, the “peaceful path”, as one of my professors called it, then we will be prepared for all of our interactions and decisions. We will even be prepared for interactions with others who are not on the “peaceful path” and our actions toward them will be guided by exceptional insight and compassion.
Unfortunately, the solution is one that must be found and implemented individually, as no government or law can make me think or feel a certain way. Government influence is limited to regulating behavior.
I think about the 55mph speed limit of the late 1970s. What was needed was for people to get 4 things into their heads: 1) Fast driving contributes to accidents; 2) it makes injuries exponentially more severe; 3) it wastes fuel; and 4) it has an adverse effect on the environment. But government couldn’t bring everyone to that point of realization. So they regulated behavior. So we ask ourselves, “What is the speed limit on this road?” We don’t often ask, “How fast should I be driving now?” But how much more powerful is the heart and mind?
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