Thrift: Thoughtful Exercise in Authenticity
As the global economy continues to drag, the word "thrift" is being tossed around with increasing frequency. Unfortunately, the meaning of the word is often mistaken purely for "saving". This would reside as an esoteric, etymological argument only if the two words did not represent two very different visions of the future.
The definition of "thrift" is a careful and diligent use of resources. The definition of "saving" is to refrain from using resources. Even though consensus reflects thinking that "saving" should become a more important aspect of consumer driven economies, especially in the United States, it will not help facilitate global economy recovery. Wholesale hoarding of cash does nothing to actively bring about economic recovery.
Much of the consumer "saving" going on now in developed economies is driven by fear, an emotional reaction to current economic uncertainties. It is essentially the other side of the emotional exuberance that helped create the mess the global economy finds itself in now. Financial and economic decisions that are driven by fear, or exuberance, have little or no long-term positive traction after the emotions wane.
When money was cheap and financial engineering drove compensation for bankers and pseudo-entrepreneurs the concept of thriftiness was of little to no value. The focus was answer rushing, any situation in which speed of delivery was more valuable than the content being delivered. Credit flowed fast and deep but left a large shallow wake of ruin. Business decisions that had material impact on the global economy were anything but careful and diligent. Victims of a $50+ billion Ponzi scheme, selected hedge fund clients and companies that require hundreds of billions of taxpayer's money to survive, did not arrive at such a juncture by exercising decision-making with thoughtfulness and diligence.
The concept of thrift, a careful and diligent use of resources, could contribute a meaningful, integral cultural influence on the global economy. Since thrift is action based (i.e. spending carefully), as opposed to "saving", which is the absence of proactive action (i.e. not spending), it can be a catalyst for cultural change in business decision-making. For example, using the broad concepts of thrift allows for investment in innovation, particularly if integrated into the strategic thinking of business and political leaders. Hording cash and saving may minimize spending on innovation and extend the current economic malaise.
Thriftiness is an exercise in thoughtfulness because it demands decision-makers to make tough choices while simultaneously having to consider numerous constraints. Authenticity is also a major aspect of thrift. To make thrifty decisions requires a special attention to detail in terms of robustness of information and data. Thrifty decisions can be made only after considering alternatives for available resources and a full review of spin-off problems and consequences that will follow. This demands authentic information and curiosity, which encourages forward thinking and visionary decisions.
Integrating the concepts of thrift into decision-making and leadership could play a significant part to a successful global economy because it promotes thoughtfulness and authenticity, two major beacons for navigating complexity and uncertainty.
Originally published April 22, 2009