Greed is not good. We have only to observe what happens when greed takes ahold of ourselves, to recognize that an unbalanced desire for wealth, and a willingness to do anything to get it, leads to an ignoble form of the human person.
Yet decades of economists have taught us that it’s pure self-interest that drives the marketplace. Theory after theory states that exchange is built on the principle of people looking out for number one. And the words of Gordon Gekko in the 1987 film Wall Street (and many films since) unabashedly proclaim that “greed is good,” and what fuels commerce. Even in recent years, the mantra of the “occupy” movement rails against corporations that care about nothing but the bottom line. At best, business is perhaps a necessary evil – it gets us the things we want. But we’re suspicious of its origins, and wary to look too deep, lest we see the avaricious monster lurking underneath.
But that’s no way to run a company, and leads to self-doubt, self-loathing, and self-sabotage. Greed is bad. Business is good. It’s lifted the global standard of living by tremendous leaps and bounds over the last century. Greed is not intrinsic to business. It’s a weakness of human nature which surfaces irrespective of context. In fact, far from being its engine house, greed corrupts business, just like people, and leads to their demise.
How so, you may ask? Well, I’m glad you asked. 🙂
Imagine you care about someone very much. Imagine you know this person really well. You know their likes and dislikes, their moods and what makes them happy. You want to do something special for them, and with the knowledge you have about them, you use your resources to concoct something up: maybe it’s a special meal, maybe it’s a birdhouse for their garden, maybe it’s a special trip to the beach, you name it. Now you give this gift to this person – they may not have been expecting it, they may not even know what it is until you show them, but they really enjoy it and thank you warmly. And in time, because of the ongoing relationship you have, they do the same for you.
Might I humbly submit, this is what a business owner does.
The truly innovative entrepreneur is not the one who has the greatest greed, but the one who has the greatest care for their customer. That care naturally drives them to learn the likes and dislikes, moods, and what makes their customers happy. They then put their capital at risk, monetary and intellectual, coming up with something that they think will make their customers’ lives better. All with no promise of return. They then bring their product to market with an excitement and giddiness, and see if anybody likes it enough to give anything in return. This, I propose, is what makes a true capitalist. And is the reason why George Gilder suggests, “profits are an index of altruism.”
Businesses create value that they give into the lives of their customers. They do this by pricing less than the cost to produce that value, thereby demonstrating themselves good stewards of the resources at their disposal. Businesses provide a good working environment for their teams, and a way for them to apply their efforts to a cause that counts, while sharing in the fruits of that labor. Businesses provide investors a vehicle to catalyze good change in the world, and return thanks for their willingness to risk, enabling them to do the same again, catalyzing even more good. Business is the meeting place for all these parties to collaborate in making a positive impact on the world.
Now make no mistake, greed can, and frankly does, creep into the picture. Business is, well, a risky business. Sometimes they’d rather entrench themselves than take risks. They’ll look to the government for protection, lobbying for regulations that create artificial barriers to entry. They’ll look to squeeze the wages of the worker as a way of maintaining otherwise shrinking profit margins that are the result of their failure to innovate new better margin value. They’ll look to push their costs into areas harder to see, be it environmental, geographical, or other. But in the long-term, greed always fails, because it’s self-oriented, not other-oriented. The more it becomes disconnected from the other it serves and who it purports to care about, the more it becomes unfit to exchange. That’s why free markets, governed by the rule of law and private property rights, are the best arbiters of wealth distribution – the people speak and reward those who are contributing to the good.
So what does all this mean for small accounting firm owners? Number one, know that as a business owner, we are doing good for others. We should think about what that good is – the clearer we can see it, the deeper we can connect with our customers, and more we can inspire our teams. Number two, be sure we’re structuring our businesses to serve our stakeholders, and realizing that risk-taking is the role we’re called to play in that service. And number three, let’s help other entrepreneurs see their businesses in this light too – we can truly be a help to them in their own venture and impact on the world.
Accounting firm owners: let’s lift high our heads, and love our craft!
(As originally posted on the Thriveal blog.)