Short term vs. otherish

Of capitalism, James Surowiecki says that it’s “healthiest when people believe that the long-term benefits of fair dealing outweigh the short-term benefits of sharp dealing.”

This concept isn’t strictly limited to capitalism, which is not surprising since it comes from a book in which the author argues effectively that organizations can be—and when given the right configuration, often are—better at making decisions than individuals. So it is that families, the 501st Legionnaires, and the stock market are all healthiest when people are invested in the long-term stability of the organization and in the candid, unrestricted interaction of their respective constituents in pursuit of a common goal.

This is a concept that is especially relevant to anyone who wants to implement an otherish approach to business. In fact, it’s intimately related to the concept of otherishness to begin with. It means that in order to accomplish the greatest good that can come from capitalism, we must adopt a long-term perspective that emphasizes outcomes that are appropriate to the nature of the relationship rather than outcomes that will leave one or the other party feeling ill-used.

Dave Ramsey, one of my favorite thinkers, frequently says that two of the primary reasons to get out of debt are the ability to build wealth and the ability to start giving like crazy. And he pounds over and over again on the idea that our incomes are the most effective wealth-building tool we have. I love what he says. Once we’ve reached the point where we can reliably take care of our own needs, giving is one of the most consistently satisfying opportunities we have, and giving takes wealth.

Wealth is a funny word. Its root, weal, is derived from an Old English word that means well-being. Political scientists still use it in its archaic sense when they talk about the common weal, meaning the well-being that pertains to a society as a whole. Wealth, then, carries with it the concept of well-being that I think, sadly, only vaguely persists in most people’s minds.

A few years ago, after hearing Dave talk about building wealth and giving it away, I started to wonder: how much is “crazy”? Is giving away 10% of your income crazy? What about 50%? Or 90%? Is there a point at which giving like crazy is no longer good?

I’ve talked about the problem with charities before. I’ve also pointed out that while a gift that satisfies an immediate need is good, a greater gift is one in which the giver works face-to-face with the receiver and gives to him so that “his hand will be fortified so that he will not have to ask others [for alms].”

Here’s where we tie all these thoughts together.

Businesses, small and large, are the engines of our economy.

If it’s true, as Dave says, that the most effective wealth-building tool is a person’s income, then a business has two of the most effective tools for improving the well-being of its employees: (1) the ability to teach and hone valuable skills and (2) the ability to improve an employee’s income.

If it’s also true, as James says, that capitalism is healthiest when people act fairly toward others rather than trying to take short-term advantage, then to be otherish in business—that is, to see the business primarily as a means to have a positive impact on its employees by developing their skills and by paying them the highest possible wages rather than primarily as a means to benefit the owners—is a spectacular way to create healthy capitalism.

The best part of being otherish, in business or anywhere else, is that it creates a positive feedback loop; employees who recognize the investment made in their own well-being are more likely to reciprocate. Because the nature of the relationship is one where the employees’ well-being is a high priority, they will align their goals with the company’s goals and drive further growth. As long as the company maintains its employee-centric focus, the continued growth will compound on itself and help more employees more effectively.