SHORT TERM THINKING, LONG TERM COST

     Some years ago, a relative of mine who is a highly placed investment banker told me of a visit he made to a Japanese corporation as a part of work he was doing to put together a merger of several companies.  He was allowed to sit in on a meeting of the corporation’s board of directors, and he was stunned to hear them discussing the ongoing success of their one-hundred-year plan.  “Here I am,” he said, “being pounded on all sides to concern myself with the next quarter, and these guys are concentrating on the next century! I farily ran back to my firm and told them we had a few things to learn from the Japanese.”

     Apparently the lessons went unheeded.  There is virtually unanimous agreement among reputable scientists that, if we continue to pollute the environment at our present rate, our world population will face freakishly miserable consequences.  A huge chunk of Florida will be under water.  A goodly part of Manhattan will disappear.  A huge slice of the United States will be unihabitably hot.  Farm fields will be rendered worthless.  Globally, whole islands will disappear, and huge and densely populated parts of India and southeast Asia will be gone.

     This is, absent the cooperation of nations on immediate long-term thinking, planning and execution, guaranteed:  the world we leave to the next generation will be a decidedly worse place to live.  In response, however, those opposed announce that taking that action will adversely affect their bottom line.  We will have to pay for all of this pollution abatement, they say, and it will be expensive, and jobs will be lost, and, of course, the bottom line of fossil-fuel producers will be lessened.

     Well, as youngsters like to say today, Duh!  Right.  Cleaning up the mess we have made will cost us.  Had we all along acted in the long term interests of the country and the world, the problem would not exist.  It does exist, and now we have to pay for it.  More importantly, however, we have to stop making our decisions based upon the next quarter.  Business has to stop defining itself by profit alone and start realizing that, before it is a money machine, it is a vehicle functioning in a community, and it owes that community conduct in accord with that community’s best interests.

     Here is a way to grasp the importance of long-term thinking.  Talk to those who will have to pay for your abuses.  Sit your ten-year-old child or grandchild down and tell her or him the truth.  Say, “Jenny, my company is polluting the atmosphere, and there are steps that we could take now to correct that abuse.  However, it would hurt our bottom line for next quarter, so instead we are going to fight for the right [right!?!?] to continue to pollute, and we are going to let you pay for it in the future.”

     You are never going to have that conversation, because it is so absurdly inhumane and irresponsible.  If you are resisting pollution control now, for any reason, that, is, however, exactly what you are telling those children.

     Bottom line:  Business is every bit as much a moral activity as it is a profit making activity.  You owe those kids much more than you owe your shareholders.  Take that, Carl Icahn.

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