Today, we read in the newspaper that fourty billionaires are following their colleagues Bill Gates and Warren Buffet in donating half of their fortune to charity. Good news and a good catalyst to write this blog about the role of generosity in economy. On the other hand, I want to extend this role of generosity a little...In the example above, generosity is typically associated with charity, and is only the result of economic activity. I state in the blog below that generosity is actually the best lubricant in the economic engine and it is even an essential fuel in the case of the innovative economy. "Generosity" needs a little realignment in our list of human virtues. Giving away money or time without expecting anything in return is simply not done in economy. "There is no such a thing as a free lunch". The tendency of employees to perform unpaid overtime for their employer does not classify as generosity, but rather as economic pressure, lack of realism in expectations, neurotic behaviour or modern slavery. MBA programs do not even mention the word generosity. They teach, on the contrary, how to squeeze out the very last drop from an already squeezed out lemon. Even in the world of charity, real generosity is often mixed with other motivations like the concern for a good image or release of feelings of guilt, but let us now accept this for inevitable.
The opposite of generosity is greed. If greed brought us into this economic crisis, generosity should get us out. If we all agree that the new economy shall be based on innovation, we need people to take risks and invest in new initiatives. Venture capitalists stress the importance of sound business plans. But in today's economy, this leads to a dead end. First, business plans can always be questioned; a minimum of belief is needed. But what if there is no place for belief, what if the risk averse behaviour always seems more rewarding than the risk prone behaviour, like today? Secondly, if if an investment takes place, the pressure for quick results (greed) often kills the early growth of the vulnerable initiative.
What we need are 'stupid' people who would spend their money anyhow, either because they have no alternative 'secure' job, because they detest the safe-secure status quo or because they don't want to live on society's back. This 'entrepreneurial spirit' has something to do with pride. These people exist, but society's pressure on these people is so huge now that they risk to become an extinct species. If it continues like this, the crisis will have a permanent effect on our economy. Let us pray for more generosity and entrepreneurship.
