Tami Simon: You’re listening to Insights at the Edge. Today my guest is Fred Kofman. Fred holds a PhD in economics from the University of California at Berkley where he was distinguished as an outstanding instructor. He has created and taught programs of leadership, personal mastery, team learning, organizational effectiveness, and coaching for tens of thousands of participants. His clients include leaders such as Microsoft, Shell, Yahoo!, and General Motors. With Sounds True, he is the author of the book Conscious Business: How to Build Value Through Values as well as a nine-and-a-half hour audio training course Conscious Business: Transforming Your Workplace (and Yourself) By Changing the Way You Think, Act, and Communicate. In this audio series, Fred invites listeners to have an open mind and to transform their workplace into an adaptive and resilient community that cultivates intelligence, creativity, and integrity in every member.
In this episode of Insights at the Edge, Fred and I spoke about the greatest challenge he faces as a consultant, how to be ultimately greedy in a way that actually benefits the whole, and how his life as a dharma practitioner relates to his life as a business consultant. Here’s my very provocative and interesting conversation with Fred Kofman.
The term “conscious business” has now entered our vocabulary. And I think people mean different things when they use the terms conscious business. So to begin with, what do you mean by those two words together, Fred—”conscious business”?
Fred Kofman: First, I would say it’s a business, but it’s run by conscious human beings. I do not believe that any organization has some kind of collective consciousness. I believe that the organization is the nomination for the actions and interactions of individuals who are more or less conscious in those individual actions or their collective action. So I would turn your question into, what does it mean that a business is run by conscious individuals in a conscious way? For me, that means that people are in touch with what is really meaningful to them and they see this business as a vehicle to manifest that which calls them to initiate the enterprise. There are different levels of this consciousness, but the essence of the adjective “conscious” means being aware and in touch, with what really matters to you. [It means] expressing that important thing in your behavior with your partners or your colleagues in the business, and more importantly, as you work together to serve the needs of those who are outside—the customers, the suppliers, all of those communities which today are called stakeholders.
The different range of things can go from very basic levels—where a group of people can be concerned about providing for their physical needs, security, food, shelter—all the way to the upper ranges of the hierarchy. We can use [Abraham] Maslow[‘s hierarchy of needs], for example, to [explain] self-actualization and even self-transcendence through service. So that would be my definition. I’m not claiming that this is true and that I have the right one. It’s one that works for me and allows me to interact with people in an open manner and hold them back to what’s really important to them.
TS: So what’s important to me is very internally defined, and I’m curious: Can we see [it] from the outside? Can we look at a business and say, “Here’s a litmus test to see if this is a conscious business or not”?
FK: Not without interviewing the people who are running the business. I couldn’t do that. I could say whether the business acts as a conscious business with my experience of its behavior, so I can see people behaving. But it would be presumptuous to interpret that behavior without talking to them. So it’s an interesting question. I never thought of trying to assess a business without interacting with the people who are leading and working in it. And even the communities that are being served.
TS: Interesting. So the crux of your definition is really the internally defined experience. Am I coming to work to accomplish something that’s important to my heart? Something like that, I’m rephrasing this in sort of friendly language here.
FK: Well, no, I wouldn’t say that. I think you’re trying to make me clap with one hand, and you [actually] clap with both hands, at least outside of the Zen tradition. [Clapping with] one hand is just what you described, a turn-on experience—the values and the purpose that animates the people who are coming to work at this company or this organization in general. Business doesn’t have to be for profit—it can be any kind of enterprise that is designed to serve the needs of the external constituencies. But the other part is how do you execute? How do you manifest that set of principles, values, and purposes in action? If you imagine the clap—what I said was you cannot assess the consciousness of a business without talking and interviewing the people who participate in this business, but equally, I would say you cannot assess the consciousness of the business by only interviewing. You have to see how these people manifest those principles and the purpose that animates them in action, in the real world. That’s the other side of the equation.
TS: Okay, good, so let’s talk a little bit about that side of the equation. What would you want to see in a business to [be able to] say “that’s a conscious business,” in terms of how people are interacting with each other?
FK: Well, I would want [for] people [to be] clear about what they are trying to express together. So how they interact with one another would involve an important discussion about why we’re doing this, why it’s important, how we’re serving those people that use our goods or services. They would also ask each other what’s meaningful in terms of values in their lives and how they want to behave. What are the operating principles that are going to make them proud to work together and to provide goods or services to their customers or to buy things from their suppliers? In terms of the interaction of people inside the company, I would want to see this discussion being very prominent and continuous. Not like, at the beginning of the company we’re going to have a founding conversation and then we put [those] documents on the shelf. And then people say, “What’s the vision of your company?” and then people say, “Oh, wait a minute, I have to go check.” And you have to go to your computer to look for the old file where you wrote what the visions, mission, and the values. That would be a red mark against you in my book in terms of evaluating the consciousness of the business.
On the other hand, I would want to see—perhaps even more importantly, I would want to see how the members of these organizations interact with the external constituencies. How do they take care of them? How do they listen to them? How do they understand that their existence depends on making the other people’s lives better? Not just by selling whatever they sell, but also by understanding what needs their products cover, helping people make wise choices about what products to buy, and in essence attempting to make people’s lives better. This is one of the things that I feel surprised when people talk about economics and business from a fairly superficial perspective.
I understand why because—without going too deeply into the history of economic thought—the neoclassical perspective of economics, the one that summarizes or creates a caricature of man as a “homoeconomicus,” is really shallow. It’s a very superficial way to interpret the human being as a moneymaking entity. The truth is we don’t care about the money. We care about what money can buy. Money is always a medium to achieve other satisfactions, which could be very animalistic, like the satisfaction of instincts to go all the way down, to something angelic, [to go] all the way up to the highest reaches of bodhisattvic consciousness.
Economics is totally open in terms of the whole range. It doesn’t say “this is good,” or “this is bad,” or “we’re only going to look at the lower part of the spectrum.” What economics says is you as a human being are trying to expand your life, and the only way you can do this is in a peaceful cooperation with other people who are going to find value in your service because your service allows them to expand their lives in a way they see fit. So it’s a very open, caring approach to doing business, where I realize people pay me because I’m doing something for them that they consider improves their lives more than what they have to loose in order to pay me and abstain from buying something else with that money. I would say [for] a business, [what is important] in terms of consciousness is that people realize that their primary job, the most important thing they can do, is make the lives of their customers better and not consume too many resources that could be available to others in society.
Now, if I have to say this in economic terms, you’re adding value, because you’re creating value with little use of resources. And that’s how you make money. You buy cheap and you sell expensive. (I’m going from the lofty language to the crass one.) Buying cheap means you’re using resources that are relatively plentiful and that are not in high demand by other members of society. You’re turning these plentiful resources into goods and services that are relatively scarce, that people want and don’t have enough [for], and that’s why they’re willing to pay a higher price for them. So in a conscious business, people would be businessmen and businesswomen, meaning it’s not charity because they would feel the commitment to self-regeneration.
There has to be an ecological balance between what comes in and what goes out. And if that balance is broken, the business is not going to survive. But at the same time, people would see that in order to maximize the addition of value and the profits and the compensation to all the participants in this business, they have to make the lives of everybody better: the lives of their customers, the lives of their employees, the lives of their suppliers, the lives of the community in which they live. And that, ironically, and what I guess many people believe, is the ultimate best way to make money in the long term.
TS: So, once again, I’ll rephrase and you tell me if I’m clapping with one or both hands. But I don’t want to know what the sound of one hand clapping is. I don’t want to know that.
FK: [Laughs] Okay, good. That I couldn’t say.
TS: But serving other people is actually what you’re describing as the engine of a successful business, versus some idea that greed and my own “what I want to get out of this” [attitude]—you’re really saying if I serve all of the stakeholders, I’ll be successful.
FK: Yes, but let me tell you I once heard the Dalai Lama say. He was talking about selfishness. He said, “The problem is not being selfish, the problem is being stupid. If you want to be selfish, be smart about being selfish. Be really, really selfish. What is the best way to be selfish? Well, you can have the best life if you really love, if you connect with other people, if you’re generous, if you have deep relationships.” I’m paraphrasing, he didn’t exactly say this. That was the gist, that was what I remember. I found that very touching.
I want to say the same about greed. If you want to be greedy, be really greedy. Like, go for it! Go to the ultimate greed, which is you want to make the most money that anybody could make. How are you going to do that? How can you maximize your profits, absolutely? Just increase the service with no end. Find a way to not demand any resource. If you could produce with nothing, and give something that is infinitely valuable, then you’ll be immensely rich. And that’s the greediest you could ever be. And then after you have all the money in the world, then you can say, “What’s left?” Well, then you can continue making life better and then people will admire you and love you and whatever you want.
The beauty of business is that it’s an amazing cauldron. It’s like an alchemical reaction where you transform this greed into service. Not because it’s a different thing, but because service in inherent in this spirit of greed. Greed, you could say, is the lower octave of service. But in business, greed gets channeled in the crucible with the heat of competition, and the heat of the demands of all these constituencies. This greed gets transformed into service. Now, without this heat, without the constraints, when people feel empowered to use violence to achieve their goals, then they can satisfy their greed by abusing others. So when you use violence like a thief or a kidnapper, or any sort of criminal, then you go and steal and say, “Yes, I’m going to take without giving anything in return.” But that’s a crime. That’s theft or assault. But that’s not business. In business, it has to be voluntary. The other person has to want to trade with you and the only way they are going to want to trade with you is if what you are offering is more important to them than what you ask from them. So the best way to be greedy, the smart way to be greedy, is to be of service.
TS: I love that! The smart way to be greedy. You’re talking right to me, Fred.
FK: [Laughs] Good.
TS: Now imagine somebody who says, “Okay, the smart way to be greedy. I get how I can be of service and that will make me a certain amount of money because I can figure this out. I’m cagey and I have stuff I can give, resources that are easily available that I can turn into a product that somebody will want, or a service that somebody will want. But the truth is my heart’s not really in it. My heart’s not really in it but I’m going to do it because I need the money.” Is that conscious business?
FK: Well, let me just paraphrase what you are saying and then we’ll make a decision together. First, it cannot be easy. It may be easy for you, but if it were easy for anybody then you will have some competitor that would beat you to the punch or would compete all the profits away. So business is quite challenging because it’s not enough that you find a way to do it. You have to find a way that’s continually better than what anybody else can find, because if you have other people that figure out what you’re doing, well, they will undercut your price just a little bit but then if you want to sell anything, you have to match them. And then new people will come in and undercut everybody just a little bit until you make no profits. So you can’t stand still in the way that you serve people. You have to be permanently looking for new ways, new technologies, new markets, new things, because it’s not just what you do, it’s what you do in relationship to anybody else who could fulfill their purpose or their satisfaction of needs through these means. So it’s quite a discipline to be in business and to sustain the profits that you’re earning.
I would say that and then the other thing is if your heart is not in it, you have to [ask yourself], is it worth all the money you are making? As a human being, you have a whole range of things you could do. You could work as an employee for someone else, you could start another business, you could go be a monk, and you can kill yourself. I mean, I don’t know. You have an infinite range of opportunities in front of you. And at any moment in your life, if you are cautious, you are making a choice into what opportunity are you going to press. What are you going to energize with your life force so that it manifests? Whatever you do, it has to be the best possible thing you can imagine doing at the time. That’s the nature of any human being if you are cautious.
Now, if you’re behaving unconsciously, like if you’re drugged or you’re asleep, then it’s not a conscious choice. But as long as you’re awake and you’re reasonably sober, anything you do, more or less meditated, it’s the best choice that you experience in the moment. Even if you jump off a cliff and you break a leg or something, and someone says, “Why did you jump?” the answer has to be, “Well, it seemed like a good idea at the time.” And that’s always the answer. Whatever you do, it has to seem like a good idea when you do it. Five seconds later, you might go, “Oh no, what did I do,” and now you call it a mistake. But you never consciously make a mistake—even when you say, “This is a mistake.” Maybe you don’t like it, but you still think it’s the best thing you could do in the moment given the conditions in which you find yourself.
So when a person starts a business or they choose to work in a business, it is the best thing they can do in the moment. Now you might do it “unreflectively,” and you might do it through instincts without paying attention, and do it in a way that also curtails your future possibilities with a very small time horizon. I would say that is not only irrational, but that is relatively unconscious. You can think of consciousness as a light that has a dimmer. You can have a very low light, where you just see a little bit into the future and around you. To use the metaphor of the circles of care and compassion, you can have a circle of care and compassion and time horizon that is rather small. So you’re holding a flashlight or a lantern that is very, very weak, or you can create a huge surge of energy and now this lantern is massive. And you have this bright light that’s illuminating all the way to the outer confines of the galaxy or eternity, and you’re thinking, “Twenty generations ahead, how this is going to affect all human beings and all sentient beings in this world and other possible worlds.” And that’s part of your choice. You’re making choices that in the short term may look ridiculous and may look almost sacrificial to someone who doesn’t see. But for you it’s an investment, because you’re taking the pain in the moment, because you see the purpose that animates you and the goal in the long-term.
I would say every person, whatever they do, they’re doing the best thing they can conceive at the time. So part of being conscious is not to poo-poo your choices. “Well, I hate this, but I’m gonna do it.” Well, if you hate this, and you need to do it because this is the best choice, then do it and appreciate yourself for doing it. However, while you do it, “consciousness” would mean asking yourself, “What have I done or not done in the past that has brought me to a situation where my choices are so limited that the best thing I can do is still something I hate doing? What am I going to do now in addition to this that I need to do right now, so that I don’t find myself in the same condition in a year from now?” And maybe when you do this business, which is enough to put food on the table and support your family or whatever you’re doing with it, you’re starting something different or you’re saving money to try a new endeavor, or to pursue your dreams or to help people in a different way—whatever it is. But that would require this extra consciousness that you’re not just doing this in the moment. You have a much longer time horizon, and you’re able to delay gratification now in the service of something that’s more important to you in the future.
In economics, that would mean you have a low discount rate. That’s a technical way to say that you feel the future [is] almost as present as the present. As opposed to someone who has [an undeveloped] consciousness would say, “I don’t know if I’ll be alive tomorrow.” Let me just use the case that I absolutely dislike, which says in the long term, we’re all dead anyway. So, you know, print money, and do all these crazy things that governments do that end up creating a lot of misery around them. That’s coming from [the idea that] in the long term, we’re all dead. Just live for today. The opposite of that for me is consciousness. Whatever you do is going to affect 50 generations, and it doesn’t matter if you’re alive or dead from a spiritual stand point. Your karma—if I can use that word—would project itself way beyond your physical existence. And you can consider perfectly well that in the moment you’re making the choice if your mind is wide enough to encompass the 50 generations.
TS: That works for me, the idea of a dimmer switch and increasing consciousness and reach of one’s whole being, body, mind. Now, Fred, our conversation has been relatively abstract so far. We’re talking about what imaginary people might be doing in the work place, and I’d like to make it more concrete. In your role, going into all kinds of companies as a consultant and trainer, I’m curious what you’re finding, in the businesses that you’re working in, is the greatest challenge that people are having in terms of wanting to be more conscious in business?
FK: The biggest challenge that I experience—and I confess it’s also my bias, because I have sensitivity towards that, so I can’t say that this is the biggest challenge. This is what appears as the challenge that we consider together because we both bring energy to the interaction. The biggest challenge is what I would call the shame of doing business unconsciously. People have a big inner demon that attacks them saying that they’re not good people because they’re making money. So some of them would say, “To hell with this, I’m just going to make money.” And some will say, “Yes, and I’m so sorry. I’m abusing people because I’m taking their money and this profit is exploitation of the workers and the surplus value,” and all this Marxist crap that assaults people as an inner critic. And then that brings them down into an area where it’s hard to think and grow.
The first part of my work is to invite people to feel the nobility of the true purpose that animates them. To find it in their heart and always no matter what you’re doing—you can be a banker, a baker, producing anything that satisfies a human need—if you go deep down, you’ll find some way in which that is connected to a noble purpose. There are things that are connected very tenuously, and we can go into some of those, but I don’t have clients that do those things. I mean, I’m thinking like gambling or something that puts people in a state of stupor.
I’ve worked for people who work for tobacco companies and they say, “Oh, but this is bad,” or alcohol companies and [they say,] “A lot of people say it’s bad,” but in some sense it’s a good that other people are buying. Since the beginning of humanity, people have been trying to alter their mind through substances—all sorts of substances. So I don’t have this opinion that I have to judge them and say that that’s wrong. But they judge themselves, not just because of what they felt, because they think somehow—and I think it’s in the culture—that you can only make money as a zero-sum game. Meaning, if you make money, you’re taking it from somewhere else and the pie is fixed, and the more you get, the less other people get, which is so wrong. It’s a mistake, technically in economics, and it’s a mistake humanly in terms of the richness and the value that people create together when they exist in a cooperative manner. They become peaceful and supportive of one another. The gains are immense, enormous, beyond calculations. So the first thing I help people do is to realize that it is possible to unleash all their strength and all their energy in a very noble way to pursue what matters to them—to virtually find the vision that they feel proud to pursue and they feel proud to pursue with their colleagues. And they can all come together and say, “We feel like our humanity is shining when we do this. We don’t have to hide it and we don’t have to be apologetic for doing this.”
Once [people] are free to use their whole mind and their whole heart and their gut in this pursuit, then we start thinking, okay, what would be the smartest, most courageous, most loving way to go into the world to do this? And I know you might say this is abstract, you’re talking to me [from] Sounds True—I swear to God this is the way that I talk to the CEO of a bank in Indonesia. I’m going in two weeks to Jakarta and I’ve been working with this bank for more than a year. It’s the biggest bank in Indonesia and I would say three-fourths of the people are Islamic and they are super committed to having a spiritual approach to what they are doing. And I’m going to help them find what they call “the noble purpose,” because they want to rethink what they have as a tagline and all this because it used to be more of a marketing thing, and through this work, they realized, “No, this is the heart of our company.” And now that we feel proud, we have to find a way to bring this pride in a way that 30,000 people that work with us in the bank could connect to it without necessarily spending all the time that we spend together. And I’m going back to help them do this and I speak to them like this.
I work with laboratories that are making medicine and I tell you, these research scientists, they love the possible patients, and they are thinking all the time. In fact, my daughter has asthma and uses one of the medicines that these people developed. I didn’t know [this,] but I saw the name of the medicine in one of the seminars that I was doing when some people were talking about that. And I said, “I can’t believe you are doing this,” and yes, they are the ones that developed the medicine. They are speaking about sick people and how to help them be better all the time.
Now again, I’m not so naïve that I don’t know that some people will commit fraud or will do other things that aren’t very noble in order to extract money. I just think that’s not only evil, but that is really unprofitable as well. I don’t appeal to people’s sense of morality because those who do wrong things, they know they’re wrong, but they think that they’re profitable. That’s why they make a mistake. And as they realize that it’s much more profitable to be ethical, then they actually realize that they don’t have to do this trade off, and it becomes very concrete and very, very practical. I work with car companies, insurance companies, airplane builders, chemical companies, oil companies, and again, everywhere [I ask] these question: “What would it take to free your mind, open your heart, and act with courage in order to provide the best service with the least consumption of resources?” That gets everybody excited. It’s so interesting. It’s so challenging. It’s such an amazing question to ponder and then to be able to act on it and to create worlds for people that depend on you for their existence or for their improved existence. That’s just the most interesting thing. I can’t imagine a better job for me. It just makes my heart sing to be a consultant and be permanently engaged in this conversation with all my clients.
TS: Now, Fred, I can imagine someone listening [and] thinking, “Oh, the conscious business consultant who’s happy to work with tobacco companies, oil companies, pharmaceutical companies,” and that there’s no sense of there being any contradiction in that for you. Like obviously pointing out to people how their products have created harm for different people, even if there’s a demand for it.
FK: Yes. But of course, I point out how their products could create harm, and I invite them to be conscious of that. I mean, I love that challenge. Can you use the voice and just challenge me, like—so say I’m not being conscious or I’m doing something that…
TS: Well, let’s just take the tobacco company. How could you possibly help a tobacco company be more successful in the sales of their cigarette knowing that it’s an addictive substance—one that will create harm and could potentially create the early death of millions of people, teenagers who become addicted at a young age because of their effective ads?
FK: Yes, to be honest, I don’t work any tobacco companies in selling tobacco. I think someone from my company worked with a division that was producing foods but it doesn’t matter. I’ll just take that because it’s a great…
TS: Well, it’s fun to challenge you Fred, because you’re so wicked smart. So it’s good. You know.
FK: Yeah, yeah, I know. I like that. I just want to be honest because I want to do a role-play and I don’t want pretend that I’m doing something real. But I feel everything I’m going to say would be the same, and I would work under certain conditions with a tobacco company that sold cigarettes. My answer would be first, lots of things shorten people’s lives. Are you going to tell me that you’re going to be the judge of how people want to shorten their lives? People like to climb mountains and lots of people die climbing mountain and you can hurt yourself. So then are you going to say that anybody who sells carabiners or ropes or climbing equipment is contributing to people dying? And the truth is they do! Or anybody who sells cars? There’s lots of people who die in cars. Lots of people die swimming. No matter what you choose, people can die doing anything. And I don’t feel that I have to be the judge of how people choose to take risks or not.
Now, let’s take an addictive substance. Lots of things are addictive. Sugar is addictive. All sort of food can be addictive. I think committed fraud is disgusting. So telling a person, “This is not going to get you addicted” when I know it is going to get them addicted, that is a crime. But you can sell milk with melanin—you don’t have to sell tobacco. The problem is being a criminal no matter what you do. You can build a bridge with bad cement that is going to fall and kill a lot of people. So I’m not talking about being a criminal. But let’s just talk about an honest tobacco executive, a person that is speaking the truth and telling people, “Look if you smoke, this is the thing that can happen to you and this is the truth. And I want you to take a responsible risk. If you think this is worthwhile, then do it.”
I personally would not want to be in that business. It doesn’t make my heart sing. It doesn’t feel like this is my calling, but if [it is for] someone, I mean, I don’t know. Where are you gonna go? To say we’re going to start another war on drugs, and start a war on tobacco and then put people in jail for selling tobacco. Where’s that taking you? That’s totally fascist. So I would like a world in which people can make responsible choices and anything that’s peaceful and anything that’s consensual is okay. As long as people are truthful and are making choices understanding the consequences, hey, you know, it’s your life. You live it any way you want. I may disagree with you, I may advocate against it. I will not sell things that I personally would not—sugary or fatty foods probably kill more people than tobacco. So I would probably have more problems working for a soda company that’s selling sugary things to young kids than for a tobacco company that’s letting responsible adults make a decision about how they want to live their life and what gives them enough pleasure to shorten that life, if they chose to do so. So anyway, that would be my advocacy for working with people that are coming with a spirit of openness and truthfulness to an economic transaction with other people who want to use whatever good or service they sell.
TS: Okay, I want to circle back to something because you said something very interesting: that the experience you have going into work with some highly successful, financially successful executives is this shame. “I’m making money at the expense of someone else in some way.” And you talked about this idea that there’s a limited pie, and if I take a big piece then other people aren’t getting their piece of the pie. As you were saying that, I realized that there’s clearly a part of me that believes that. And yet, you’re saying that’s totally false, that it doesn’t fit with what we know about genuine economic theory, and I’m wondering if you can explain that? How did that belief come into being?
FK: It’s an illusion. It’s like the belief that the sky is blue. You look up and you see that the sky is blue. Take an airplane and you’ll see that the sky isn’t blue. You see it blue, it looks blue, but it’s not blue. Just like the water may look green but if you take a bucket, you’ll see it’s not green. Even though you know it’s not green, you still see green. You can’t control what our eyes see. There’s a similar illusion with economic transactions. If you think about it, just for a minute, let me show you, it’s almost instantaneous. It’s so easy to see.
Let’s just sell you an apple. So you buy an apple, let’s say for 50 cents. Now, it has to be the case, it must be the case that the apple is worth at least 50 cents to you. You see that? If it was worth to you less than 50 cents, you would never pay 50 cents. Let’s just say if I ask you, “How much are willing to pay for an apple?” and you said, “25 [cents].” And I say, “Sorry, it’s 50.” You say then, “Okay, no deal.” Then you don’t buy [it]. You buy something else, because the apple is not worth 50 cents. Let me pause there, do you agree with me?
TS: I’m with you so far. I’m totally with you.
FK: The only thing we know is the apple is worth at least 50 cents. But perhaps you would be willing to pay a dollar or two or three. I don’t know how much you are willing to pay, but certainly more than 50 cents. Let’s say you’re willing to pay a dollar. Now I’m selling you the apple for 50 cents. It has to be the case that it costs me less than 50 cents to put that apple in your hand. If not, I would be losing money. So in terms of how much the apple is worth to me, if we’re talking simply about barter, or I can consume the apple or sell it to you, if I have to decide that then it’s a simple equation where we say: it’s worth more than 50 cents to you, it’s worth less than 50 cents to me, and that’s why we trade. In that trade, let’s just say the apple was worth 25 cents to me and a dollar to you. Well, we created a lot of value, because it’s not like Aristotle said—he was mistaken, too. He said the just price is the one that makes the two people equal. No, there’s no just price. Anything that’s voluntary, anything that’s peaceful is just.
So if you pay 50 cents, maybe the apple was worth five dollars to you. You made a sort of consumer profit of four and half dollars. I don’t know how much it was worth. I only know you were willing to pay 50 cents for it. Maybe it cost me 25 cents to produce or maybe it cost five cents to produce or maybe it cost me one cent to produce or maybe I got it for free. But who cares? So the value in the transaction is not 50 cents. Let’s just say it cost me 25 cents and it’s a worth a dollar to you, there’s a 75 cent net gain in the transaction where I took 25 cents, and you took 50 cents extra because when we traded for 50 cents, you made 50 cents more because it was worth a dollar. And I made 25 cents in monetary profits because I had a cost. The difference between a company and a normal consumer is that the company operates purely on basis of economic calculation as a rational entity that’s profit maximizing, whereas the consumer has all these other unknowable preferences inside his mind and his heart. If it’s a barter, then they only thing I can say is that I found that my best choice was to trade the apple with you and you found that your best choice was to trade your 50 cents with me. So we both must have gained in the transaction. There is never ever, ever a fixed pie. That [would happen] in the worst kind of transaction, where we have a thing and then we’re simply exchanging the thing.
But if you go into production—if you look at the evolution of the population in the world, from about 10 million years ago until the year 1800, the human population went from, I don’t know, just from a few thousand to about 700 million. So it took more than 10 million years to go from the beginning to 700 million. It only took three hundred years to go from 700 million to 7 billion. And if you look at the population currently, there’s an infliction point. It’s not just the number of people, it’s the years that people live, the decrease in child mortality, the health of people, the capacity to acquire good and services—I mean, every indicator that you look at has gone dramatically up. Of course, it can go a lot better and we’re nowhere close to the human potential, but if the world was a fixed pie, how can you explain that the carrying capacity of this world for millions and millions of years was less than 500 million people? And whenever you have more than that, people started dying and [there were] starvations and big blights and all sorts of pests that would kill people everywhere in the world. Then, something happened [and] human beings learned how to provide, for example, plumbing and sewage, which were the most important medical advances in the history of humanity. Then there were companies that started providing clean water and they learned how to build houses that would not make everybody sick with materials.
That [development] took a long time, but as soon as you start producing in a cooperative manner, as soon as you start dividing—the division of labor and taking advantage of the natural differences between human beings, so we can specialize and do what we do best and trade our services and work cooperatively to product something together, the gains of that are phenomenal. Adam Smith calculated, with a famous example of a pin factory, that the gains of having ten people, where everybody did one nail at a time, [if] you divided the ten people in functions, into whatever operations need to happen to make a nail, they went from 100 nails a day to 100,000. Something outrageous like 1,000 times or 10,000 times more productivity simply doing that without specializing, without learning, without any of that. So, I find it incredible that the illusion—I mean, if someone told me that the earth was flat, I would find it less laughable than when someone says there’s a fixed pie and when you make money, every great fortune is based on a great crime. If you make money you’re taking it from somewhere else. That is just ludicrous. It’s false. It’s one of the worst myths that are holding us back as a civilization and they don’t allow us to cooperate. So I would like to dispel it and I like for people to feel proud for cooperating with others and creating better and better lives for everybody.
TS: Now, I’m going to switch our conversation a little bit because I know you both as the author of the Sounds True book Conscious Business: How to Build Value Through Values, but also as a fellow dharma practitioner. I hope it’s okay for me to bring that forward.
FK: Yes, sure.
TS: [You are] someone that I’ve been to meditation retreats with and practiced alongside, and I’m curious if you see any contradiction at all between your spiritual life—the life of a meditator—and the work you do in business.
FK: No, not all. Not only not at all, but it’s the ultimate unity. Let me give you two examples. First I’ll give you an example from the Western tradition and then go towards the East, and then I’ll come from the Eastern tradition coming towards the West.
So first, there’s a beautiful article by an economist named Leonard Reed. He wrote it in the 1930s. It’s called “I Pencil.” The article is the autobiography of a number 2 pencil. There are thousands of places where you can find this article. It’s a classic article. What Leonard Reed says is to make this pencil—nobody in the world knows how to make a pencil. The very humble, simple thing like a pencil is almost unimaginably complex to produce, because to make that pencil, you have to cut the wood, then you need the iron and the metal to make the saws that cut the wood. Then you need the shipping of the wood. So it goes to factories that are in the United States. Then you need rubber in Brazil or Malay. And then the rubber has to be processed chemically with things that nobody even knows. It’s just the complexity, and you start going back into this very simple pencil and you discover the whole universe, and thousands of years of history, and the parents of the loggers that had to build houses close to the forest. I mean, you can on and on, and perhaps you could start feeling the similarity of this with the notion of “no- thing-ness”, emptiness, shunia, everything is empty because nothing is itself.
Everything is in everything and you can’t find any boundary. As soon as you start penetrating more into the thing, you see that it dissolves like water—it falls through your fingers. There’s nothing to grasp. So you could say, “What could be more graspable than a pencil? You can hold it in your hand.” Oh, no, no, big mistake. If you are really conscious, you will see that this pencil dissolves in utter nothingness—in the mystery of the beginningless beginning, all the way to the endless end. And you have absolutely no idea how this came to be, and all the infinite things that had to happen for this very humble pencil to rest in your hands. So that’s one.
And then let me go from the other side. I finish my book with this story because it’s so touching. When you look at the Ox Herding Pictures, the ten woodcarvings that define the path to enlightenment according to the Zen tradition—this is from China in the 12th or 13th century—it’s an incredible map that starts with a picture that says that the ox is lost. The herder is in the middle of the forest. He can’t find the ox. He’s looking everywhere. And the ox, of course, is the mind, and the herder is anyone of us, that we’ve lost our mind, and we see that there’s signs of our mind everywhere, but we don’t know where it’s wandered because it’s so undisciplined. Our mind goes in its own direction. We don’t have any way to discipline and manage it. So throughout the carvings, this herder tracks the ox, finds the ox, tames the ox, brings milk home, and learns to meditate and finally becomes one with the mind. Then number nine, beautifully, is emptiness. And it’s great! That’s what you think of Zen. And then you get to the end and it’s the emptiness that you’ve been seeking all along—the unity that dissolves into emptiness.
But there’s the problem, because that’s number nine. I remember when I read this, [I thought,] what the hell is going to be ten? This is it. This is where it ends. So I turned the page and carving number 10 is called literally, “Coming back to the market with open hands.” And you have this Buddha laughing, going to the marketplace, with the intention to help. Now that’s the end of the path of enlightenment, which is to become a businessman. And it’s just not what I say, this is the Zen monk saying, “Look, once you get there, you go back to the market place open-handedly serving other people,” and I would say, laughing all the way to the bank because you’re making so much money doing it. Then you can help more people, and it’s all great. And there’s nobody doing it because it’s just happening in this emptiness, the compassion, and the love for other people arises and it manifests as service that doesn’t consume resources. So that would be the meditators way, the Zen way to talk about enlightenment while you’re still embodied and operating as a human being. So both from East to West and West to East, I would say there not only is not conflict, but there’s a perfect harmony.
TS: So I have one final question for you Fred. What I feel in you as we speak is a kind of very interesting warrior energy. A sense of being a warrior for what you believe in, for what you’ve discovered, and I’m curious how you would describe it if you relate to this idea of being a warrior and if so, what you’re warrior in the name of? What you stand for?
FK: Hmm. When you said that, the immediate thought I had was Shiva. And rather than a warrior, I feel more like a destroyer of the illusion that creates suffering. What I find most deeply in my heart is the lover. It’s my love and my desire to see people shine and grow and thrive. That’s what makes my heart sing. I don’t like to fight so much. I get a little excited because I see all these ties that create suffering, and I would love to release all these human beings that are struggling from that suffering—which is mostly imagined and self-inflicted because they are struggling with their own demons and shadows that don’t exist. Like the story of the snake that is really a rope. There’s no need to kill this snake. I’m not a warrior killing snakes, I’m more a warrior turning on the light and laughing and saying it’s rope, don’t worry about it. Just pass by it and go forward. What animates me more is this desire and this love I feel for people. And when I see them grow, it’s just such a beautiful thing when I see people able to shine and find their truth, and then manifest their truth and make other people shine with their service. It’s the most beautiful sight in the world for me.
TS: Wonderful. I’ve been speaking with Fred Kofman. He’s the author of a book from Sounds True called Conscious Business: How to Build Value Through Values, and the book Conscious Business, which actually goes into quite some detail about how you can implement many very practical, on-the-ground principles in working in a business. It’s a book that’s been so helpful to our entire team here at Sound True. Fred is also the creator of a nine-and-a-half hour audio training course on Conscious Business: Transforming Your Workplace (and Yourself) by Changing the Way You Think, Act, and Communicate—also a very practical program with all kinds of role plays and examples of how to change the way you think, act, and communicate in the workplace. Fred, it’s always wonderful, stimulating, provocative to talk with you. Thank you so much.
FK: Thank you. It was equally wonderful for me to talk to you again.
TS: SoundsTrue.com. Many Voices. One Journey. Thanks for listening.