Bad Politician Good Politician

In a previous post I had proposed that the following extract from Economics In One Lesson: The Shortest and Surest Way to Understand Basic Economics by Henry Hazlitt applies to managers too:

The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequence of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.

However, it is more apt for the politicians. Just replace the word economist with politician in the above extract and you have the snapshot of the chaos that is created by the government's knee-jerk reaction to the Telegana problem.

In fact, the paragraph actually describes all politicians. All. So it is worth repeating the whole paragraph with appropriate words:

The bad politician sees only what immediately strikes the eye; the good politician also looks beyond. The bad politician sees only the direct consequence of a proposed course; the good politician looks also at the longer and indirect consequences. The bad politician sees only what effect of a given policy has been or will be on one particular group; the good politician inquires also what the effect of the policy will be on all groups.

Of course, some of you may argue that 'good politician' is something of an oxymoron.

Need versus Demand

I am in danger of quoting the complete book. I am so taken by it.

Here's another gem from Economics In One Lesson: The Shortest and Surest Way to Understand Basic Economics by Henry Hazlitt

But need is not demand. Effective economic demand requires not merely need but corresponding purchasing power. The needs of India today [the book was updated in 1962, remember] are incomparably greater than the needs of America. But its purchasing power, and therefore the "new business" that it can simulate, are incomparably small.

Things have now obviously changed for the better. India has the need and a better purchasing power than it had in 1962. But those who are in marketing profession (and that means all employees of a company, actually - designating a separate department as the Marketing department is the biggest mistake all company do. They should call it front-end or something similar and get all other employees to start thinking like marketing chaps - but I am digressing) should take this lesson to heart: Quantitative and Qualitative Market Research will give you the 'need'; do not confuse it with 'demand'.

Good Manager, Bad Manager, Good Economist, Bad Economist

Any book that has the following statement is worth reading:

The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequence of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.

For a second I thought this was one of the many post-meltdown books that are flooding the markets today. (All those who could not predict it are now explaining it, funny!) But no. Economics In One Lesson: The Shortest and Surest Way to Understand Basic Economics by Henry Hazlitt was first published in 1946 that is not a typo - it is 1946) and then updated in 1962.

Actually, if I were a plagiarist I could replace the word 'economist' by 'manager' and publish a sure shot best seller. This is how ...

The bad manager sees only what immediately strikes the eye; the good manager also looks beyond. The bad manager sees only the direct consequence of a proposed course; the good manager looks also at the longer and indirect consequences. The bad manager sees only what effect of a given decision has been or will be on one particular group; the good manager inquires also what the effect of the decision will be on all groups.

Hmmm.... May be I will learn a lot about management by reading this gem of a book on economics.