David R. Henderson  

Tribute to an Audience

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UPDATE below.

One of the lessons I tell my friends who want tips on speaking is one that, in the intensity of the moment, I often forget to do myself. Last Tuesday, I remembered. It is to lead with a tribute to your audience for what they do professionally.

I was giving a speech in Dallas to about 400 to 500 managers and executives of credit unions. I stood up and said the following:

I ran into a young man on the hotel elevator last night and we got talking. I asked him what he was in Frisco for and he said it was for a meeting of people with the pharmaceutical company he worked for. I asked him what kinds of drugs the company makes. "Vaccines," he answered. "Thank you," I said. He looked a little surprised. Last winter, I was skiing in Colorado and on a chair lift on the way up I sat beside a man about my age. I asked him what he did for a living. He said he had recently retired from a major oil company and had spent most of his career exploring for oil. "Thank you," I said. He also looked a little surprised.

Why did I thank them? Because both of them were involved in producing things that many of us badly want. Sure they were paid. But as Adam Smith, whom Bob Genetski quoted earlier today, wrote in the most famous passage in The Wealth of Nations, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner but from their regard for their own interest." Both the pharmaceutical man and the oil man were doing what they were doing to make money. But they had figured out, as most of us have, that the best way to make money is to serve others, to do things that those others want us to do.

So I want to thank you in the audience. You're trying to make money by lending to people who you think have a high probability of repaying it. And in doing so, you're serving them. They're using those loans for what are likely to be productive uses. In other words, they're trying to serve people too. Thank you for your service.

That's not just a throwaway line. If I were a giving a speech to employees of the U.S. Drug Enforcement Agency, I would not thank them for their service.


UPDATE: The story by Bob Murphy below motivated me to add this. About 10 years ago, I was seated on a flight from Newark to SFO. I got talking to my neighbor and asked him what he did for a living. He told me he was a detailer for a pharmaceutical company. "Which one," I asked. I can't remember his answer because it was a company I hadn't heard of. "I haven't heard of it. What are some of their more important drugs," I asked. He mentioned a few that were pretty important in going after disease. "Thank you," I said. "For what?" he said. "For helping get those drugs out so that you're making people better and sometimes saving their lives." "I've been in this business for over 20 years," he said, "and you're the first person who's ever thanked me."


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COMMENTS (21 to date)
Will writes:

Nicely said, David. And thank you for this blog.

David R. Henderson writes:

@Will,
Thank you, Will. And you're welcome.

I hope you were correct, David, in asserting that credit union managers try to make money by lending. I think of credit unions as being nonprofits. I assume credit unions are licensed by government to exist for the sake of doing good, not for making profit. My quick look at Wikipedia confirms this, although I might be mistaken.

I assume credit unions exist, with their distinctive character and services offered, becuase they are given special and favorable regulatory treatment. They survive in a niche created by preferential banking regulation. Unless I am mistaken.

Foobarista writes:

This is one of the worst elements of the human world: the idea that those in the employ of the state are somehow doing something selfless and wonderful by definition, while those in the market world are vile greedheads. This is also not a new thing: you see elements of this way of thinking going back thousands of years in numerous cultures all over the world.

In the modern world, if you work for government or a "non-profit", you work in the House of Caring and aren't a member of the House of Greed. The fact that the market world produces many useful, necessary, and "caring" goods and services is not relevant to far too many people.

Mike W writes:

If I were a giving a speech to employees of the U.S. Drug Enforcement Agency, I would not thank them for their service.

Really, despite the fact that more than 50% of the electorate wants them to be doing what they are doing...enforcing the prohibition on those substances society has deemed to be harmful?

A Gallup poll last year found opposition to marijuana legalization ran to about 54%...primarily seniors (68% opposed), 45-64 year olds (the ages of parents with teens, 57% opposed) and females (59% opposed). It appears that the family and child oriented constituencies do not want liberalized access and acceptance of even the recreational drug that is most widely agreed to be no more harmful than alcohol. I suspect that opposition to reduced prohibition of heroin, meth, crack, LSD, Ecstasy, etc. would likely be much higher.

So if the DEA agents are just doing what the public wants them doing...a dangerous job that requires them to interact with some of the lowest elements of society...why don't they also rate a "thank you"?

kebko writes:

Mike W.: Would you have thanked g men in the 20s? Do you have fond feelings for alcohol prohibition because it also enjoyed support from benign sounding demographic groups?

kebko writes:

Mike W. : It seems, by the same logic, you would also give a thank you to law enforcement officers who defended Jim Crow. They had violent run ins with seedy elements and enjoyed support from family types and seniors also.

Ken P writes:

@ David, Thanks for the story. I've had friends talk about how terrible it is that some people create a good company and then fail to give anything back to society. It's hard to explain to them that with a few exceptions (like cronyism), they must have given something to society or they would not have succeded.

Dano writes:
So I want to thank you in the audience. You're trying to make money by lending to people who you think have a high probability of repaying it.
In the modern world, if you work for government or a "non-profit", you work in the House of Caring and aren't a member of the House of Greed.

I agree with what David and Foobarista but in this case, credit unions are not for profit organization.

Tom E. Snyder writes:
...Adam Smith...wrote in the most famous passage in The Wealth of Nations, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner but from their regard for their own interest." Both the pharmaceutical man and the oil man were doing what they were doing to make money. But they had figured out, as most of us have, that the best way to make money is to serve others, to do things that those others want us to do.

And yet people read Atlas Shrugged and criticize Henry Reardon because all he wants do do is make money.

Ted Levy writes:

Mike W, Dr. Henderson didn't say NO ONE should thank the DEA officials, merely that he wouldn't. That's because he's not one of those you mention who support their efforts. In this regard he is more thoughtful than "more than 50% of the electorate". Admittedly, this amounts to the faintest of praise.

Troy Camplin writes:

One should never thank anyone who is doing something unethical, no matter how popular that job may be.

Seth writes:

@Richard O. Hammer:

It's common to mistake the form of the organization (profit, nonprofit, etc) with the incentives that induce the members of that organization to do what they do.

Even nonprofits try to 'make money' for their causes. I founded a 5k race to raise money for a worthy cause several years ago. It's a 'nonprofit' event, but if it didn't 'make money' for the cause, we would stop putting it on.

Credit unions are typically owned by the account holders with the goal to 'make money' for those account holders, which they realize as interest income on their savings and lower interest rates on their borrowings.

Bob Murphy writes:

You are an interesting fellow, David R. Henderson...

One of the things I've found is a lot of people working in the oil sector are really grateful when someone explains why they actually are helping things. A lot of went into just because it made financial sense at the time, and they never read free-market economics etc. So when oil prices were really high they felt embarrassed at family picnics etc. and were glad to have some outsiders explaining why their work was socially productive.

(Ironically, they were simultaneously being criticized for destroying the climate *and* for charging too much for their product.)

Mike W writes:

@Seth

It seems more likely to me that the incentives of non-profits have to do with that which benefits the insiders. Credit union managements are probably more motivated to maximize their own well-being than that of their account holder-customers. Similarly, insiders in universities are probably more interested in maintaining government subsidies to students and a high inflow of students than they are with actually educating those students.

David R. Henderson writes:

@Bob Murphy,
You are an interesting fellow, David R. Henderson...
Thanks, Bob, I think. :-)

Re your story, yes, I find that because we take it for granted that they're doing something valuable, we think that they think it too. But some of them don't. Your story motivated me to do an update, which I'll do shortly.

John Fembup writes:

Tom E. Snyder commented "And yet people read Atlas Shrugged and criticize Henry Reardon because all he wants do do is make money."

I would guess - and wouldn't you, too ? - that someone who might voice that criticism of Hank Reardon likely never read Atlas Shrugged, but only read some negative review of it somewhere.

That criticism would be akin to saying that all Bill Gates wanted to do is make money. Or that the Yankees show up at the Stadium, night after night, just because they want to keep score.

After all, Ayn Rand is very clear that Reardon focused his intellect and life's work on creating Reardon metal - and he expected to cash in on it. He had not done that for the benefit of some railroad - but for his regard for his own interest.

Pave Low John writes:

This debate always strikes me as a very either/or kind of thing. Either you are a Gordon Gekko/Monopoly Man caricature with a monocle and spats (who cares only about money) or you are a selfless paragon of caring and benevolence a la Mother Teresa or Father Damien de Veuster (who cares nothing at all about money). Neither one of those stereotypes seems plausible when looking at the vast majority of men and women that I have run across so far.


For instance, my father ran a small-town pharmacy for over 30 years and made a lot of money doing it. He also gave free medicine under the table to poor families that couldn't pay their bills. When I once asked him about it, he said he did it for a mixture of two reasons:

1) It was the right thing to do and it wouldn't hurt the bottom line of the store in the long run, as far as he could tell. But, and this was something that I remember vividly, he also included a more subtle reason.

2) People don't stay down forever. If you take care of them and their families during the rough times, they will remember it and either pay you back later on or spread the word about your generosity, giving you the best kind of advertising in the world. In other words, it's good for business. And that meant more money, in the long run, for him.

My dad understood something about business that a lot of people just can't conceptualize. In the long run, doing the right thing will almost always help your business. It may take a while to realize (I know some of those people he helped never paid him back, but then again, he never really asked them to either), but a little short-term loss can bring a lot more business down the road if you do it right. It isn't something you can really write down, you just have to have a feel for it. He knew which folks to help and which ones to just leave alone. Just intuition and gut-feel, from what I gathered.

Ironically, my dad was a blue dog, conservative-as-they-come Democrat, born and raised in the mountains of north Georgia. He died in 2006, so he never lived to see the rise of Obama and the passage of the ACA, but I have a feeling he wouldn't be a big fan of getting the Feds more involved in healthcare. If a pharmacist works for a government-run program, they don't get to do the things my dad did to help people. You either follow the federally-mandated guidelines contained in the 2,000+ pages of rules and regulations or else.

But what would my dad know, right? Pharmacists are just a bunch of money-grubbing businessmen, ripping off people by over-charging them for medicine that they should just get for free from Uncle Sam. Or so I've been told by one person who was ranting and raving about the need for free prescriptions and free medical care for everyone in the U.S. I think it was because of 'social justice' or something equally weird...

Krishnan writes:

I have had on occassion to write and complain about service from different companies. Sometimes they respond and it is indeed good to see that they seem to care about their customers and that they would fix the problem.

What I have also done is write to "Thank" companies that have provided a good service. I remember a letter I wrote to a delivery company thanking them for something they had done (as part of their business, but they did it well). I got a response back - thanking me profusely for the letter. They seemed almost shocked that a customer would write a letter of appreciation (and not complaint).

I wish more people would recognize how our lives are better because of the millions who do what they want to do and earn a living - so few of us recognize how much better our lives are because of the millions who do work (seemingly) for their own benefit - and yet benefiting us all.

And on this note - thanks to all at econlog (!) - you all are doing a terrific job educating through opinion pieces, discussions, arguments/counter arguments and so on. Keep it up!

mark graeve writes:

I would be inclined to Thank the DEA but honestly I don't know all of what they do. The Credit Union is not just sitting there as some niche in the regulatory structure of the banking industry. They push for rules to be changed that benefit them and may also benefit me but I wouldn't assume their interests and my interests are perfectly aligned. Generally, I agree with you David that assuming the best and saying Thank you is the way to go. Greed may or may not be good but gratitude certainly is.

David R. Henderson writes:

@mark graeve,
I'm not sure that you paid attention to what I wrote. Notice that my thank you was for their service, not for their lobbying for special rules.

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