“(T)he purpose of free enterprise is human flourishing, not materialism.” – Arthur C. Brooks, “America’s New Culture War,” The Washington Post, May 23, 2010
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I don’t ever remember money being so controversial. We question if the euro will sustain as a viable currency. We worry Greece is going to run out of money and that California already has. Many are concerned that the federal government is borrowing more than we can ever repay. Corporations and especially banks are under attack for making too much. And we are still licking our wounds over the ill-gotten gains of the Ponzimeisters. Concerns abound about being taxed too much or not enough, not distributing money fairly and the loss of our ability to generate prosperity. Everyone seems concerned about the shortage of jobs – especially for men, blacks, new college grads – as a source of making money.
It is a tough time to be in the money business, whether you are a politician dealing with financial crisis, tax policy, spending and budget issues; or, a banker dealing with underwater mortgages, overdraft fees or executive bonus programs; or a financial adviser dealing with client worries of where they can invest safely. We seem confused, divided and wounded by issues of money.
It is not surprising that today our admiration for the military, fire fighters and police is so high. One reason is they seem to epitomize success more noble than just getting rich. We are in awe of soldiers in Iraq or Afghanistan who perform very dangerous and often heroic feats with no incentive of a bonus or commission.
Contrast that to how other major institutions are faring on the confidence and stewardship scale. According to a recent Wall Street Journal/NBC News poll, 20 years ago 42% of Americans said they trusted government always or just about to do the right thing. That number is now down to 25%. Gallup reports that over the last two decades, the share of Americans saying they have a great deal or quite a lot of confidence in banks has fallen to 22% from 32% and in big business to 16% from 26%.
At the core, these concerns have much to do with issues of money. Money more than ever has become central to politicians, lobbyists and getting re-elected. Our best and brightest from Harvard and other top schools have migrated to Wall Street in ever increasing numbers. As money has played a larger and more powerful role in just about everything, we have come to distrust and even loathe its influence.
We need some clarity about the role money should play in our society. I believe most have been fans of democracy and free enterprise not because we thought it would make us rich but because the two systems seemed to unleash the best in the human spirit. Somehow our focus on money has become the end rather than the means in a way that constrains, confuses and divides.
Arthur C. Brooks in his recent writings offers some clarity. First he states that the purpose of free enterprise is to promote human flourishing not materialism. When we define money as the primary purpose and output of our endeavors, we way overstate its value and importance. Freeing the human spirit to be committed, industrious, and innovative is much broader than just making money. Liberal or conservative, we have each in our own way put way too much stock in what money can do.
In the short run it can alleviate suffering but on its own money is relatively impotent to create lasting gain. A recent University of Chicago study found that doubling parental income would barely reduce dropout rates of the children. It would have a small effect on reducing teen pregnancy. It would barely improve child outcomes overall. Money alone is limited in improving things for the rich or the poor.
Second, Brooks makes the point that “earned success,” which involves the ability to create value honestly, is what drives human satisfaction. It is what parents feel when they raise great kids or artists feel when they create things of beauty. So much of the animus about the level of money made by Wall Street is that so many of the exotic products sold and money made created no real value. Would we be hearing all of the complaints about Fannie Mae, Freddie Mac, TARP and mortgage relief if everyone felt they in fact were really creating sustainable value? No. Real tax dollars, the product of earned success, seem unlikely to advance more earned success.
Finally, Brooks points out, earned success is not the same as money – it is merely a symbol, important not for what it can buy but for the “human flourishing” it enables. He cites studies of lottery winners to show that after a brief period of increased happiness, their moods often darken as they no longer derive the same enjoyment from the simple pleasures in life, and as the glow of buying things wears off. Likewise studies of welfare recipients show their relative unhappiness compared to those of similar income who were not welfare recipients. Even at the poverty level, earned success creates greater happiness. Unfortunately, we have come to confuse the symbol – money – and the thing it was supposed to symbolize – successful effort and the attendant satisfaction. Is seems as a society, we have placed our focus on spending and consuming when the real driver of satisfaction is earned success.
All this is enough to give money a bad name – and in many respects it has. Distrust has become the de facto brand for those in the money business. Here’s the deal: we were never in the money business – we are the business of helping humans flourish – politicians are, bankers are and so is everyone else. That’s a business worth being in. The role of marketing and the brand is to make that clear and to help make it so.
(Column appeared originally in ABA Bank Marketing magazine – July-August 2010)
By ROBERT E. HALL
Not to be reproduced without written permission. All rights reserved. © Copyright Robert E. Hall 2010