2021

The Tragic of Milton Friedman

Milton Friedman is one of the few intellectuals I have encountered several times in my management education and corporate trainings. I even believe, without being able to say for sure, that he is the only one so far. Unfortunately – and this is the first tragedy – each time as a distorted image.

Of course, it's always about his stance on corporate social responsibility. The tragedy begins because his core argument is missed: Friedman writes, of course, that (1) the tenuous definition of "social responsibility" makes debates impossible. And he is probably also right that (2) many companies simply place economically motivated projects under this heading, i.e. they cheat. That (3) employed managers want to look like benefactors at the expense of their owners – the classic prinicpal agent problem – is probably also true. But Friedman's main point is a different one. Capitalism and Freedom, the book in which he lays out his thoughts on this, is primarily about freedom. Friedman is above all an apologist of freedom, that interactions, cooperation and business are based on the free will of the individuals involved. He sees this freedom best realized in the economic system, which is why he defends its freedom with passion.

The main problem Friedman sees with a social responsibility of corporations that goes beyond economic goals is the danger that certain approaches to social responsibility politicize the sphere of freedom, the economy. Political systems make binding decisions that everyone must abide by, whether they agree or not. The political system is necessarily not based on the free will of individuals.

One can disagree with Friedman's argument. But one thing is indisputable: that everyday life and the economy have become politicized since Friedman's time. That is the second tragedy: If postmodernism means that the different subsystems of society spill over into one another, that is, there is a juridification outside the original legal system, an economization outside the economic sphere and also a politicization of the whole of life - and I believe there is little opposition to this today - then there is really only room for Friedman as a distorted image in the discourse. He then defends a freedom in the economy in distance from politics that has long since been lost.



2020

Disruptive times, truly?

I don't know how many times I've heard this: We live in disruptive times. More disruptive than ever before. Typical evidence: the user growth at Facebook & TikTok. The disruptive superlative is nonsense, of course. Heuristic: Imagine presenting this thought to a person born in 1880 in Königsberg. Or to a person born in Frankfurt in 1820. Or one born in Paris in 1760. It won’t be convincing - Facebook(!) TikTok(!) user growth(!) are simply not a measure of weight in terms of disrupting ways of lives. Greetings from the literature of Klaus Kordon.

Until now, I thought the superlative was a sign of naivety, but all in all unproblematic. However, I am no longer sure about that: Because the thinking of living in special times has one disadvantage: It blocks the possibility of learning from the past and thus cuts oneself off from one of the most important sources of knowledge and innovation. With good reason, one of the most successful and innovative managers in truly disruptive times, Field Marshal Moltke (youth: Dane, cavalry charges with saber – older: Prussian, artillery engagements) in one of his greatest innovations, the Great General Staff, established as one of four departments one for war history. His later success proved him right: history is an important source for innovations.


Assessment Center

School and university examinations have something artificial: never again in professional life will the performance evaluation be so compressed to a very concrete examination situation. There is no equivalent for exams in professional life.

The closest thing to university examinations in professional life are assessment center before hiring or a promotion. However, if the university exams are about a specific subject whose performative knowledge is being tested, assessment center are about something different: can the applicant (1) recognize and (2) fulfil the expectations placed on him. Already the first task poses a challenge: Different corporations with different officially announced cultures also have different requirements for the habitus of their new recruits. Expectations can also shift above hierarchical levels. It is the job of the applicants to know these expectations. And then it is also necessary to fill this recognized expectation spontaneously and possibly in an artificially induced stress situation through demonstrated behaviour.

Thus, the assessment center has the artificial situation in common with the university examination, but unlike the latter, skills are tested that are decisive for professional success: Being able to recognize and fulfil expectations is an essential cornerstone of a corporate career. In the subject matter of the examination, the assessment center is therefore true-to-life.


Two observations

(i) Since we’re forced to work from home and I am therefore permanently sitting in front of a monitor, a mouse, and a keyboard, I have created many more PowerPoint slides myself. In recent years I have only rarely done this. Most of the time I only made handwritten sketches, shared them, and then commented on the finished slides in short meetings. Typical manager.

(ii) My private standard device used to be a common laptop, of course with a physical keyboard. Most of the idle time I spent typing something into this keyboard. Either a text or I did some programming or just played around with the console of one of my servers. Today my standard device is a tablet - without a physical keyboard. Most of my time now I spend reading texts. I reach most websites by using favorites or auto-complete after entering the first two or three characters.

Maybe the tool determines the craft more than one could wish for.


Endgame Fallacy

Being able to reduce complexity and thereby make facts discussable and, above all, problems solvable is one of the core skills in modernity. There are various tricks for this. One trick that I encounter from time to time is what I call endgame analysis: Sometimes developments are complex, but one can describe relatively well what kind of state there is at their end. So you describe this final state and then derive actions from it without having to discuss every intermediate stage.

But this reduction in complexity is usually accompanied by the loss of temporality. And that is often problematic. For in most cases it does play a role whether the end state is reached very soon or in the distant future - and above all whether its occurrence is brought about earlier or delayed.

An example: "In the long run we're all dead" (Keynes) is undoubtedly correct. But whether one dies sooner or later is not unimportant. "If I'm dead in the endgame anyway, I can actually (today) also stop eating" is therefore also an obviously stupid suggestion. However, relatively often I encounter endgame considerations, where exactly such a thing is derived.

So be on your guard against this fallacy. Unless you want to cheat - for that, endgame considerations are relatively well suited...


Categories: General considerations | Technology | Corporate culture
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