Dear Amanda,

No offense taken.

Nevertheless, when I speak of thinkers and doers such as W. Edwards Deming or Buckminster Fuller, or Max DePree or Peter Drucker, I am still speaking of appropriate passion -- arete and phronesis rather than mere self-expression.

Professionals practice an art on behalf of legitimate stakeholders. As Harold Nelson and Erik Stolterman state in The Design Way, design involves service. This involves more than self-expression. It involves a passion for those we serve, and it requires prudence and wisdom.

Romantic self-expression is artistry. Artistry is the service of self. If I wish to gamble my own money, I may do so as a form of self-expression. When I take fiduciary responsibility for other people's money, other skills come into play.

Manufacturers and entrepreneurs must take risks. Financial slicing and dicing of weird instruments and options is something else. This is not creative destruction, but heedless destruction by those who collect their bonuses based on unwarranted returns created by falsely inflated values. This is not personal risk -- especially not when those who bankrupt companies bail out on golden parachutes leaving investors holding the empty bag they leave behind.

I won't go into the entire case for value investing based on financial discipline in the Benjamin Graham tradition. Those who wish to know more can visit Warren Buffett's web site and read his annual letter to shareholders. The key to Buffett's success is prudent investment in underlying values, and his own money is also at risk along with those who buy into Berkshire Hathaway. Like everyone, Buffett lost money in the current downturn -- but this is a result of the entire global economy, and not a result of wild financial instruments created from thin air. Most important, Buffett placed his own money on the line in his choices, more of it than anyone else has done, and he has not bailed or left anyone behind. To the degree that Buffett puts his own money where his mouth is, he has a legitimate claim to appropriate passion. That is not the case for the wheelers and dealers who do it all with OPM -- other people's money -- where the motto is, "Heads I win, tails you lose."

I understand that Thrift may not be speaking only to greed, but imprudent self-expression is a form of greed and the results are the same, especially when the winners in a risky game do collect big at bonus time.

I would not want my surgeon to practice unconstrained self-expression. I prefer a surgeon who operates based on evidence-based medical standards. Within reason, managers should do the same.

Most financial managers are not entrepreneurs. They get paid to work with other people's money, and they often find ways to make that money their own whether or not they've earned it -- insulating themselves from the risks of creative destruction while benefiting when their bets pay off. 

I have no argument with those who engage in entrepreneurial risk. I was an entrepreneur. At different points in my life, I have been quite wealthy, at least on paper. My money was on the line. My employees got paid first. My partners got paid second. I did indeed express myself, and I did so in a framework of appropriate passion. This is the nature of virtue, at least as I saw it, and virtue places demands and limits on our self-expression. Without virtue, passion leads to greed.

Best regards,

Ken

Ken Friedman, PhD, DSc (hc), FDRS
Professor
Dean

Swinburne Design
Swinburne University of Technology
Melbourne, Australia

Telephone +61 3 9214 6755 
www.swinburne.edu.au/design


Amanda Bill wrote:

Dear Ken, 
Please don't be offended. Obviously I didn't make Thrift's point clear. He doesn't say the passionate ethos of management had anything to do with greed - in fact he suggests the opposite. He's saying that a Romantic 'passionate' individualism was a 'way of being' that supported the growth of new financial markets, because it allowed managers and teams to take risks and feel they should enjoy the economic processes of creative destruction.              
Not too different to Webers ideas I guess. 
Just pointing out, as Terry has, that 'passion' is a slippery concept.  

Cheers

Amanda Bill PhD
Senior Lecturer, Fashion & Textile Design
College of Creative Arts
Massey University, Wellington
Telephone 644 801 2794 xt 6886