Honestly you can t earn big money
Can You Earn a Million Dollars Honestly?
Economists, ethicists, and business sages had persuaded us that honesty is the best policy, but their evidence seemed weak. Through extensive interviews we hoped to find data that would support their theories and thus, perhaps, encourage higher standards of business behavior.
To our surprise, our pet honestly you can t earn big money failed to stand up.
Treachery, we found, can pay. Honesty is, in fact, primarily a moral choice. Businesspeople do tell themselves that, in the long run, they will do well by doing good. But there is little factual or logical basis for this conviction. Without values, without a basic preference for right over wrong, trust based on such self-delusion would crumble in the face of temptation. Most of us choose virtue because we want to believe in ourselves and have others respect and believe in us.
12 Ways To Make Big Money In Life
When push comes to shove, hard-headed businessfolk usually ignore or fudge their dollars-and-cents calculations in order to keep their word. And for this, we should be happy. We can be proud of a system in which people are honest because they want to be, not because they have to be. Materially, too, trust based on morality provides great advantages.
It allows us to join in great and exciting enterprises that we could never undertake if we relied on economic incentives alone. Economists and game theorists tell us that trust is enforced in the marketplace honestly you can t earn big money retaliation and reputation. If you violate a trust, your victim is apt to seek revenge and others are likely to stop doing business with you, at least under favorable terms. A man or woman with a reputation for fair dealing will prosper. Therefore, profit maximizers are honest.
This sounds plausible enough until you look for concrete examples. Cases that apparently demonstrate the awful consequences of abusing trust turn out to be few and weak, while evidence that treachery can pay seems compelling. Hutton was brought down by its check-kiting fraud. The cost? But what do these fables prove? Check-kiting was only one manifestation of the widespread mismanagement that plagued Hutton and ultimately caused its demise.
Incompetently run companies going under is not news. Considering the low probability of a spill, was skimping on the promised cleanup equipment really a bad business decision at the time it was taken?
Compared with the few ambiguous tales of treachery punished, we can find numerous stories in which deceit was unquestionably rewarded. Philippe Kahn, in an interview with Inc.
How much of that is apocryphal? If it had failed, I would have had nowhere else to go. We figured the only way was somehow to convince them to extend us credit terms. What we did was, before the ad salesman came in—we existed in two small rooms, but I had hired extra people so we would look like a busy, venture-backed company—we prepared a chart with what we pretended was our media plan for the computer magazines. On the chart we had BYTE crossed out.
When the salesman arrived, we made sure the phones were ringing and the extras were scurrying around. In our study, one respondent cited the case of Rick Pitino, who had recently announced his decision to leave as coach of the New York Knicks basketball team with over three years left on his contract.
Pitino was quoted in the New York Times the week before as saying that he never broke a contract. The stupidity of it all is that they get their way. Without subterfuge, Borland International would almost certainly have folded.
And there is a hard dollar number with lots of zeros in it that professional athletes and coaches gain when they shed a contract. What of the long term? Does treachery eventually get punished?
Nothing in the record suggests it does. The robber barons who promoted them enjoyed great material rewards at the time—and their fortunes survived several generations. But they continue to prosper. Why do reputation and retaliation fail as mechanisms for enforcing trust? Power—the ability to do others great harm or great good—can induce widespread amnesia, it appears.
Its early deceit is remembered, if at all, as an amusing prank.
Why Be Honest If Honesty Doesn’t Pay
Prestigious New York department stores, several of our respondents told us, cavalierly break promises to suppliers. You used the wrong carrier. Financial types have taken control, the merchants are out. I delayed payments an average of 22 days from my predecessor at this woodies strategy for binary options of amount, and this is what I saved.
They have too much power—they screw one guy, and guys are waiting in line to take a shot at them again. Businesspeople do not stand on principle when it comes to dealing with abusers of power and trust. You have to adjust, we were told. If we dealt only with customers who share our ethical values, we would be out of business. But the deal was so good, I just accepted it, did the best I could, and had the lawyers make triply sure that everything was covered.
The auto parts supplier has to play ball with the Big Three, no matter how badly he or she has been treated in the past or expects to be treated in the future. Suppliers of fashion goods believe they absolutely have to take a chance on abusive department stores.
Power here totally replaces trust.
Nevertheless, even those with limited power can live down a poor record of trustworthiness. To illustrate, consider the angry letters the mail fraud unit of the U.
- Joking aside, I wanted to dive a little deeper into the idea of whether or not you can earn a million dollars honestly.
- Can You Earn a Million Dollars Honestly? – The Comm Entrepreneur
- Why Be Honest If Honesty Doesn’t Pay
Post Office gets every year from the victims of the fake charities it exposes. They want to avoid information that says they have trusted a fraud. When the expected reward is substantial and avoidance becomes really strong, reference checking goes out the window. In the eyes of people blinded by greed, the most tarnished reputations shine brightly. Such investors want to believe in the fabulous returns the broker has promised. The search for data that confirm wishful thinking is not restricted to naive medical practitioners dabbling in pork bellies.
The Wall Street Journal recently detailed how a year-old conglomerateur perpetrated a gigantic fraud on sophisticated financial institutions such as Citibank, the Bank of New England, and a host of Wall Street firms. A Salomon Brothers team that conducted due diligence on the wunderkind pronounced him highly moral and ethical. A few months later… Even with a fully disclosed public record of bad faith, hard-nosed businesspeople will still try to find reasons to trust.
Lured by high yields, junk bond investors choose to believe that their relationship will be different: Wyatt had to break his contracts when energy prices rose; and a junk bond is so much more, well, binding than a mere supply contract. Similarly, we can imagine, every new Pitino employer believes the last has done Pitino wrong. Their relationship will last forever. Ambiguity and complexity can also take the edge off reputational enforcement.
When we trust others to and keep complexity their word, we simultaneously rely on their integrity, native ability, and favorable external circumstances.
So when a trust appears to be breached, there can be so much ambiguity that even the aggrieved parties cannot apprehend what happened. Was the breach due to bad faith, incompetence, or circumstances that made it impossible to perform as promised? No one knows. Yet without such knowledge, we cannot determine in what respect someone has proved untrustworthy: basic integrity, susceptibility to temptation, or realism in making promises.
We own the market. Then the company went on the skids. The funny thing is, afterwards he bought the business back from us, put a substantial amount of his own capital in, and still has not turned it around. He was independently wealthy from another sale anyway, and I think he wanted to prove that he was a great businessman and that we just screwed the business up.
If he was a charlatan, why would he have cared? That difficulty is compounded by the ambiguity of communication. Aggrieved parties may underplay or hide past unpleasantnesses out of embarrassment or fear of lawsuits.
A final factor protecting the treacherous from their reputations is that it usually pays to take people at face value. Assuming that others are trustworthy, at least in their initial intentions, is a sensible policy. Most respond to circumstances, and their integrity honestly you can t earn big money trustworthiness can depend as much on how they are treated as on their basic character.
Initiating a relationship assuming that the other party is going to try to get you may induce him or her to do exactly that. Overlooking past lapses can make good business sense too. People and companies do change. It is more than likely that once Borland International got off the ground, Kahn never pulled a fast one on an ad salesman again. Trust breakers are not only unhindered by bad reputations, they are also usually spared retaliation by parties they injure. Many of the same factors apply.
Power, for example: attacking a more powerful transgressor is considered foolhardy. Getting even can be expensive; even thinking about broken trusts can be debilitating. Businesspeople consider retaliation a wasteful distraction because they have a lot of projects in hand and constantly expect to find new opportunities to pursue. The loss suffered through any individual breach of trust is therefore relatively small, and revenge is regarded as a distraction from other, more promising activities.
It will take away from everything else. You will take it out on the kids at home, and you will where to trade options on the exchange it out on your wife.
You will do lousy business. In general, our interviews suggested, businesspeople would rather switch than fight. An employee caught cheating on expenses is quietly let go. Customers who are always cutting corners on payments are, if practicable, dropped.
No fuss, no muss. Our interviewees also seemed remarkably willing to forget injuries and to repair broken relationships. A supplier is dropped, an employee or sales rep is let go. Then months or years later the parties try again, invoking some real or imaginary change of circumstances or heart. What about the supposed benefits of retaliation?
Game theorists argue that retaliation sends a signal that you are not to be toyed with. This signal, we believe, has some value when harm is suffered outside a trusting relationship: in cases of patent infringement or software piracy, for example.
But when a close trusting relationship exists, as it does, say, with an employee, the inevitable ambiguity about who was at fault often distorts the signal retaliation sends. Without convincing proof of one-sided fault, the retaliator may get a reputation for vindictiveness and scare even honorable men and women away from establishing close relationships.
Even the cathartic satisfaction of getting even seems limited. Trustworthy behavior does provide protection against the loss of power and against invisible sniping.
But these protections are intangible, and their dollars-and-cents value does not make a compelling case for trustworthiness. A good track record can protect against the loss of power. Long-suppressed memories of past abuses may then come to the fore, past victims may gang up to get you.
A deal maker cited the fate of an investment bank that was once the only source of financing for certain kinds of transactions. The industry knew that this is what you had to expect; our people had no choice. Now that the bank has run into legal problems and there are other sources of funds, people are flocking elsewhere. At the first opportunity to desert, people did—and with a certain amount of glee.
They are getting no goodwill benefit from their client base because when they were holding all the cards they screwed everybody. There are parabola curves in all businesses, and people still supported me, even though we had a low, because they believed in me.
If a client tries to jerk me around, I mark up my fees.