Austrian economists talk a lot about “time preference,” the willingness for people to wait before they are paid income, capital gains, interest or dividends.
Whether you are a student, business person, investor or consumer, waiting is a fact of life — it takes time to earn a degree, make money in a business, take profits on an investment or have enough money to retire.
Today more than ever, the two most common words I hear are “Please wait.”
We arrive early at the airport to get our ticket and then have to wait in line to go through government security. If the flight is delayed, we may have to wait for a couple of hours before flying. At the end of the flight, the flight attendant will inevitably say, “Thank you for your patience.”
Waiting on the telephone is inevitable. “Please wait” is the first phrase I hear when calling a company or the government. My son recently waited 15 hours for a real person from the IRS to answer the agency’s 800 number. But it’s not just the government. It is also private companies. Every time I call my bank message center to find out my balance or if a check has cleared, at some point the voice will say “please wait.”
One time I didn’t even have to wait in a store for something, and the clerk said almost automatically, “Thanks for your patience.”
Private enterprise is more keenly aware of the customers’ need for speed and will usually act quickly if customers start waiting in line at a grocery store or a bookstore. Sadly, the same can’t be said about the U.S. Post Office, the Department of Motor Vehicles, the Transportation Security Administration, the IRS or other government agencies. You can count on hearing the two most common words, “Please wait.” And wait, and wait.
There is a natural tendency for private enterprise to increase services and for government agencies to reduce them. Perhaps privatization is the answer. Waiting may not be eliminated (it still exists in the private sector), but it might be minimized.
Investors have to be patient in the marketplace. Jack Bogle, the founder of the Vanguard Group, emphasizes the need to be patient. “Time is your friend,” Bogle said. “Impulse is your enemy.” Many a sound company has seen its stock price fall in the short term but recover in the long run and move to a record price. Don’t panic, and you’ll be rewarded. J. Paul Getty, America’s first billionaire, said it best: “The big profits go to the intelligent, careful and patient investor, not to the reckless and overeager speculator.”
You Blew It! World’s Free University is Sadly Biased
Bengali-American educator Salman Khan is a brilliant reformer who wants to bring a free education to everyone in the world. With degrees from the Massachusetts Institute of Technology and Harvard University, and a background in the financial world, he decided to create a “free, world-class education for anyone, anywhere” through his Khan Academy.
His story is a classic example of democratic capitalism and the growing equality in the world. Rich or poor, you can now have access to a first-rate education. Thomas Piketty should take note! Inequality is shrinking, not growing, when it comes to useful goods and services.
Khan has been wildly successful and was recently named one of Time magazine’s 100 Most Influential People in the World.
He has produced 4,800 video lessons teaching a wide spectrum of academic subjects in mathematics and the sciences.
And now he is adding economics. But there’s the rub. As a professor who has taught economics, finance and business at Columbia Business School and now Chapman University, I was surprised how one-sided (teaching primarily Keynesian economics) his macroeconomics course is at the Khan Academy… with students reading and discussing only one book (Piketty’s “neo-Marxist” work, “Capital in the 21st Century”).
I just finished preparing a video course in “Modern Political Economy: Who’s Winning the Battle of Ideas?” for the Teaching Co., and I go to great pains presenting the entire spectrum of economic philosophy and schools of thought, whether Keynesian, Marxist, Austrian, Chicago, supply side, etc. I divide them into the Big Three in Economics (title of my book): Adam Smith, Marx and Keynes. Students love this balanced approach to learning economics. Salman Khan is doing his students a disservice by focusing on primarily one viewpoint.
In case you missed it, I encourage you to read my e-letter column from last week about how to avoid the most dangerous investment strategy. I also invite you to comment in the space provided below.