It was in December of 1972 that I closed the deal to buy the Sea Gull restaurant in Mendocino from Martin and Marlene Hall. That was 47 years ago. Martin has left us but I’m still close to Marlene. Many of my friends are from those wonderful years still fresh in my memory. A few of the posts on this site detail some of the Sea Gull stories I remember.
The thing about the art of the deal as I would frame it is that it must not be a zero-sum but a win-win negotiation. I think of life generally in the same way. To interact with another human being or with any living thing or with the environment however you define it requires a give and take and a balancing of sometimes competing or even conflicting points of view, ideas, needs and desires.
Recently I wrote a short piece about the materialist and the spiritual views of life followed by a plea for trust to save us from ourselves. My point of view is my own and it’s obvious there are many competing points of view all around today. I agree with the philosopher Walter Kaufmann on many things, especially this:
I don’t mind living in a world in which people have different beliefs. Diversity helps to prevent stagnation and smugness; and a teacher should acquaint his students with diversity and prize careful criticism far above agreement. His noblest duty is to lead others to think for themselves. Walter Kaufmann, The Faith of a Heretic
The field of economics that I studied for many years is a narrow stream with limited application in the wide ocean of life. The “business of America may be business” but the business of life is much more.
To quote from a novel that I’m about to publish: The monotonous pursuit of a daily vocation, never living, only working, never thinking, hypnotizing yourself by the routine and punctuality of your life—this turns a man into a mechanical toy, wound up tightly and fated to go on only for so long, then to stop when death takes him.(Behind the Locked Door, soon to be published–look for more on this blog about where to find and how to purchase.)
Ever since Adam Smith economics has been dominated by a laissez faire attitude. In short, that attitude is “the market knows best.” This is a deep truth but markets differ. Some are free, some aren’t. Some allow for reasonable competition, some don’t. Many important considerations are external to the market, lie outside it (pollution for example or global warming). The simple fact is that markets are not “perfect” in the way they need to be to justify “the market knows best.” Anyone who carefully studies economics knows this. Yet, even a Nobel Prize economist like Milton Friedman tends to put market failures to the side in order to focus on “the market knows best” world he so greatly admires.
In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom. Milton Friedman, The Social Responsibility of Business is to Increase its Profits
He mentions the basic rules of society embodied both in law and custom almost as an afterthought. As if these are somehow less important. But they are everything for most thinking people, for those who don’t want to end up as some “mechanical toy, wound up tightly and fated to go on only for so long, then to stop when death takes him.”
For Friedman, whom I greatly admire (I wrote a paper on his monetary ideas in college and devoured his monumental A Monetary History of the United States), business takes center stage. The personal, much messier and difficult to comprehend, is something he accepts but pushes to the side.
Of course, the corporate executive is also a person in his own right. As a person, he may have many other responsibilities that he recognizes or assumes voluntarily–to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country. He may feel impelled by these responsibilities to devote part of his income to causes he regards as worthy, to refuse to work for particular corporations, even to leave his job, for example, to join his country’s armed forces. If we wish, we may refer to some of these responsibilities as “social responsibilities.” But in these respects he is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are “social responsibilities,” they are the social responsibilities of individuals, not business. (Friedman)
It’s okay to be civic-minded but for God’s sake don’t imperil the profitability of the almighty corporation, the goose that lays the golden egg.
This worship of laissez faire is what gets us into trouble and leads to the art of the bad deal.
The bad deal will ultimately undermine your credibility as a dealmaker and destroy the trust that is essential in dealmaking. And, one more thing. Those who love laissez faire capitalism must ultimately come to grips with these two facts:
Inequality is an inevitable product of capitalist activity, and expanding equality of opportunity only increases it — because some individuals and communities are simply better able than others to exploit the opportunities for development and advancement that capitalism affords.
Despite what many on the right think, however, this is a problem for everybody, not just those who are doing poorly or those who are ideologically committed to egalitarianism — because if left unaddressed, rising inequality and economic insecurity can erode social order and generate a populist backlash against the capitalist system at large.
David Graeber, Soak the Rich, The Baffler