In his identity Let’s all learn to fish. . . To sustain long-term economic growth Michael S. Fock, CFA, Lawrence B.
“People respond to incentives – economist Steven Landsberg writes that economics can be summed up in all four words – so, let’s encourage people to produce more.”
This is the underlying philosophy that drives Fox’s analysis Let’s all learn to fish And its follow-up, Go to work . . In our future.
Although Let’s all learn to fish. . . Inspired by government inefficiency and his frustration with the deplorable state of the US economy, Fock did not just point the finger at financial problems and lack of opportunities. To be sure, he identifies where our social security nets have become stable and unfavorable, but he suggests thoughtful steps to reform and increase them. He focuses on how these safety nets can be transformed and supplemented by trampolines, both of which keep people out of the poverty trap and help them maintain their economic ladder. He takes a deep dive, does the math, considers the motivations and comes back with well-reasoned, innovative and real-world solutions.
Of course, real-world solutions are not quite common in our current moment. And since Let’s all learn how to fish. . . Published in 2016, Fox identified problems have become more serious in the face of epidemics and deteriorating financial outlook. And Fock personally, has an urgent feeling: in September 2019, he was diagnosed with ALS. As a result, more imports have been made in facing these challenges and seeing the expansion of this dialogue.
With these issues in mind, I spoke via email with Fruit to explore his perspective on where the situation is today and how he believes we can use the tools of money to pave the way for a more prosperous future. If we go to work. . .
CFA Institute: For readers who may not be familiar, what Let’s all learn to fish. . . ? What did you want to achieve by writing this?
Michael S. Falk, CFA: My goal was to help create / facilitate the dialogue needed to make society fail. And, if successful, improve what lies ahead for all of us. I must admit that this policy and motivation was born out of a burning feeling of resentment and frustration that just didn’t help. However, I believe that if you don’t like something, don’t complain unless you have a solution to the proposal. Does my writing look stylish?
Hahaha, not at all. How would you describe the underlying philosophy of the book?
The old policies and incentives may have been well-planned, but they are now hurting. More specifically, safety nets are a good thing until they become a certain strength or support and tempting. We need trampolines to supplement our nets and need the right incentives to exist for every need.
My goal was to rethink the entitlements in such a way that if anyone is harmed and as a result we have a more sustainable growing economy. The word math would be a parito adaptation, but let’s not go there.
Now you have primarily applied that philosophy to health care, leisure and education challenges. What is the response to the coronavirus epidemic, which shows all these problems through the lens of that philosophy?
The short answer is that all safety nets are greatly affected by an epidemic – more people need help. The epidemic is affecting people from different socio-economic backgrounds very differently. For example, those with higher socioeconomic status are more likely to cope because they can work from the “front row” from home, have a lower income risk compared to increased job insecurity, and savings versus living pay-check pay-check. The socio-economic balance has deteriorated due to the epidemic. And the order to stay home has hurt the overall economy.
How do you choose between economy and a person’s health? Without adequate testing, without rapid test results, without looking for any kind of contact, or without universal use of masks, it is a lost-and-lost choice. I guess my philosophy has intersected again through paratroopathy, sorry.
For those who want to wear a mask (shorthand for all safety precautions) after testing negatively, allow contact, work should be allowed and the crowd should not accumulate. However, there should be a policy to protect both employers (from lawsuits) and employees (demanding safety concerns, not working and being fired).
Equality of opportunity is one of the central concepts of the book. How do you define it? What do you think is the main contributor? Which way do you see it going?
Equality of opportunity is defined as all children and young adults are able to jump between their adults from the same platform and everyone living in the lower part of Maslow. The definition easily extends to opportunities of equal benefit and equal power regardless of your gender, race, religion, etc.
There are strong fighters for this. Think of those who have benefited from various platforms in the past. Many of those who have been fortunate feel that they have earned their own dignity. This is clearly a lie for most. When you are the beneficiary and do not acknowledge that this is not you, you protect your status. Those who have dignity have the power and influence to maintain their own favorable rules or at least their stability. The aspect of opportunity equality has been deteriorating for decades, but awareness is growing substantially. Although awareness has been focused on income and wealth inequality issues and these are both remnants of time and success, I care about input and the field of play. Think of everyone starting with the same minimal platform.
So how did it happen Go to work . . . What happened? How it creates the ideas and concepts you have given Let’s all learn to fish. . . ?
When I gave dozens of lectures in the first book, there were many questions about where all future jobs would come from. Understand that in 2016 I focused on my new ERA, which stood for “taking responsibility with people who are unable to take responsibility.”
My audience gave me an “Aha!” All these thoughts about the moment entitlement and I can miss the biggest entitlement of all of them, the job. I realized that I needed to explore this aha. But, can I add the power to write another book? During my exploration, I admitted that I needed to “work” on another book.
Go to work . . One piece of advice for all of us is how we can fix entitlements. I mean, it’s been four years since my first book. We need to gain respect for the way our current economy looks more and more different than before, and perhaps we need new ideas / perspectives.
Now, almost 10 years after the 10-ceiling crisis was inspired Let’s all learn to fish. . . And four since the book was first published and we’re here. What is your opinion of where we are today? Are you more or less optimistic that solutions are achievable? Or do things really have to be broken before they can be fixed?
Can I admit that I am not an optimistic person? Hope is not a strategy. The only way to make my idea or any other good idea come true is through grassroots. Politicians have many incentives to maintain stability. Hence my top chapter on governance in my recent book. The grassroots problem today is that the masses are polarizing more than ever. There is a tremendous level of misleading information out there and I don’t think literacy is enough on many of these topics.
I have this dream that my books help in literacy and help people understand that there is a middle ground here. Without an actual regime change, I would bet on a breakdown first. Know two things: I don’t gamble and breaking will be the most expensive way for all of us at first. Let’s all get cheaper now and get to work.
Remember that “it is better to be vaguely right than wrong,” which worries you the most about our collective future?
We have politicized everything and everyone thinks they are right. I’m sorry but not everyone can be right without at least not being aligned. If we don’t get together, we will be completely wrong.
Remember the prisoner’s hesitation? Those who think, “No, no, some will be right, others will be wrong,” I advise you what wrongdoers can do with those who have won. Protests around the world are unlikely to be more peaceful. Let’s all learn how. . . Communicate with each other!
And from a personal point of view, of course there is a way to force wisdom on us in situations. I imagine this is especially true for you over the past year. How has your own experience conveyed your thoughts about these issues and the important things in your life?
As I get stuck at home reading / watching what is happening in the world today, I feel more comfortable deciding to do the first chapter of my latest book on governance. I wanted to write about the topic but was worried that it would not fit well with the rest of my material.
On a more personal level, I have seen my level of gratitude and empathy grow. Maybe, just maybe, these two things will allow me to convey my thoughts more effectively. During the epidemic, I began to see silver lining in many places that I did not understand before. For example, the lowest paid workers in developed economies were invisible to some extent. This thought bothered me, but they are no longer invisible (good) because they delivered everything we ordered online (thanks).
Now, we must ask, if they are critical workers, are they in the minimum wage?
Do you have a third book?
No, articles specific to me at this stage. I finished a paper called “What You Need to Know About Investing” which should be published before the end of the year. And I completed a first draft with a co-author on a paper on moving society from a shareholder to a stakeholder mindset.
The time it takes me to research, write, and publish a book can only exceed my lifespan. So please buy Go to work . . . Earnings will go to an ALS foundation, who will help with less luck like me.
Thanks, Michael. Great to be able to talk to you as always. Be well.
To learn more from Michael S. Fock, CFA, see Let’s all learn to fish. . . To sustain long-term economic growth From the CFA Institute Research Foundation and Go to work . . In our future.
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All posts are the author’s opinion. As such, they should not be construed as investment advice, or the opinions expressed must not reflect the views of the CFA Institute or the author’s employer.
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