#103 We’re All Agents

The Christian Economist

#103  We’re All Agents

We all act as agents for someone.  Christians should be agents of God’s calling, creating goods and services that enrich our neighbors.  

The First Organizational Structure

In Exodus 18:13, we find the first story of organizational structure. It reads:
Moses took his seat to serve as judge for the people, and they stood around him from morning till evening.
14 When his father-in-law saw all that Moses was doing for the people, he said, “What is this you are doing for the people? Why do you alone sit as judge, while all these people stand around you from morning till evening?”
15 Moses answered him, “Because the people come to me to seek God’s will.
16 Whenever they have a dispute, it is brought to me, and I decide between the parties and inform them of God’s decrees and instructions.”
17 Moses’ father-in-law replied, “What you are doing is not good.
18 You and these people who come to you will only wear yourselves out. The work is too heavy for you; you cannot handle it alone.”

Skipping now to verse 24:
24 Moses listened to his father-in-law and did everything he said.
25 He chose capable men from all Israel and made them leaders of the people, officials over thousands, hundreds, fifties and tens.
26 They served as judges for the people at all times. The difficult cases they brought to Moses, but the simple ones they decided themselves.”

This is a pretty good description of the US legal system with the Supreme Court at the top, appeals courts in the middle, and district courts at the more local level. 

Here’s the point of Jethro’s instructions to Moses: Find people to serve as agents for you, and thus for God.  We could think of the agency relationship being created here.  Although, even earlier, Adam and Eve were agents, but their agency was not very successful. 

Adam Smith, called it Division of Labor and got his face on the back of the 20 pound note in the UK for his contribution.  

Free Agent Nation

It’s my view that traditional organizational structure will mostly go away and be replaced by outsourcing.  I explain some of this in Podcast #51 God’s Gig Economy.  Short-term “gigs” provide a more efficient use of human resources, because labor is free to move where it produces the highest economic value.  I did not say structure will totally be replaced, but to some degree, it will.  And the degree to which it is replaced depends on industry and firm-specific characteristics. 

In the classroom, I end my lecture on Organizational Design with a review of three books that I think explain the new structure effectively. 

The first is The Third Wave, by Alvin Toffler.  Written way back in 1984, Toffler explains three economic eras: Agriculture, Industry, and Information.  90% of Americans worked in Agriculture in 1800, and the number had fallen to 60% by 1900.  That’s good, by the way.  Food comes first.  And, the more people you can free from food production, supplies more labor to produce other goods, like the shoes on your feet, and that computer you’re staring at right now.  It’s now 2.5% in the United States.  That means 97.5% are free to provide other goods and services.  I’m not really concerned with an exact date for when the agricultural era ended, but it faded sometime after the end of the Civil War in 1865.  It was followed by the Industrial Era that ruled our economy from about the turn of the century in 1900 to about mid-century.  We are now in the information age.  Some would say we’re even in a fourth age, the computer age, but that even magnifies my point today.   

The second book in this progression is Job Shift by William Bridges in 1995.  He makes the point that work was a shifting cluster of tasks during the agricultural era, so it could not be packaged in jobs.  It was during the industrial era that work was packaged in jobs: About 40 hours a week, about 50 weeks a year.  But it was only packaged that way, because work in the industrial era was repetitive and there were great gains to be had from repetition.  His conclusion is that work should NOT be packaged in jobs in the information era.  But it is.  He writes about the Hollywood model, where many people have work, but not jobs.   We often call those short-term assignments, gigs.

The third book is Free Agent Nation, by Daniel Pink, written in 2002.  He writes that free agents, who move from one gig to another in succession, provide greater job satisfaction for the individual, and create more economic value for the organizations for which they consult.  He continues the theme from William Bridges, writing that Free Agents move their labor more efficiently and effectively than workers who are captured by the organization and work for the same organization week after week, year after year.  

Free.  Isn’t that a powerful term?  I often say that the intersection of Christianity and Economics is freedom.  Being free is good.  I won’t take the time today to prove the assertion that free economies are richer than controlled economies, that’s a waste of my time.  As Christians who follow the Christian Worldview, we understand that people can’t be totally free because of their fallen nature.  But, we want people to be as free as possible.  This is one of the occasions when Christianity and Economics agree: Christians believe in freedom as an input, and Economists support it as an outcome. 

But the word in the title that I wanted to address is the term “Agent.”  In Free Agent Nation, Daniel Pink explains how the nation should be full of laborers, freely supplying their expertise as agents for themselves.  It’s the ultimate micro-organization of one.  If each person is a free agent for him or herself, that person will be free to sell his labor for the equilibrium wage that is offered from potentially hundreds of buyers.  That’s real economic freedom.  

But the main learning aspect from Free Agent Nation for the Christian Economist, is that the person is still an agent, but for him or herself.  That’s the greatest economic freedom. 

Corporate Level Strategy

The other course I teach at Dallas Baptist University, in addition to Economics, is Strategic Management.  In the section on Corporate Level Strategy, we provide answers to the question, “What business shall we be in?”  That section of the course always makes the interesting point that often, leaders of organizations make decisions that serve themselves, at the expense of their other stakeholders.  The assigned job of people in the C-Suite is to serve the stockholders.  But, they use instruments like the frightening figures you see on this diagram:  corporate raiders, hostile takeovers, there are white knights, golden parachutes, poison pills and even green mail.  C-Suite executives use these, and other financial instruments –  to protect their own personal interest, at the expense of the other organizational stakeholders.

This is a clear example of the fallen nature.  Even in a system that is carefully governed by the Securities and Exchange Commission, whose role is to serve the stockholders, C-Suite operators still find ways to serve themselves at the expense of other stakeholders. 

Political Agents

Politicians are supposed to be agents for their constituency.  But, in podcast #40, I explain how they are often agents for their own self-interest.  The title of that podcast is The Curse of Crony Capitalism.  You see, that’s not free-market capitalism.  I have been amazed that Pope Francis has stated that “Capitalism Kills.”  I think that’s because he is referring to the kind of crony capitalism that he experienced in his home country of Argentina.  That’s a classic case, where politicians are an agent for themselves, not for their constituents. 

The question should not be, “Why are so many other countries corrupt?”  The question should be, “Why is America so transparent?”  Our people are just as fallen as the population of other countries.  There is something called the Corruptions Perception Index.  The US is ranked 25th.  Our ranking has slipped about 10% over the last decade.  Our ranking falls every time more power is centralized by the Federal Government, because the index makes the assumption of the fallen nature of humans.  Here’s an example: The law establishing Social Security in 1935 was 32 pages.  Obamacare was 906 pages.  The additional pages were full of corruption.  They provided hand-outs and carve-outs for specific groups that were loyal to the writers of the legislation. 

When Willie Sutton explained “That’s where the money is,” he was explaining two things: 1. Why he robbed banks, and 2. why the four riches counties in the United States are suburbs of Washington, DC.  The more decision-making that is centralized in the US Capitol, the more rent-seekers there are to find ways to obtain largess for themselves.  Corporations and industries lobby, because it provides a high rate of return on investment.  

That’s because fallen legislators can’t resist the temptation to sell their votes for personal gain.  They are an agent for themselves, not their constituents. 

Human Resources

When I began my work career, we called it the Personnel department.  Now it’s called Human Resources.  But a resource is something that gets used up in the means of production.  People should be built up, not used up.  People who work with you should be gaining capabilities, not losing them.  So I have been predicting for years, that the name would change from Human Resources to something more Christian in nature. 

A few years ago, some NFL players were kneeling during the national anthem.  You can have whatever view of that you want.  But from the agency view, it was an astounding event.  The players had NFL contracts, they were playing in an NFL stadium on an NFL team, wearing an NFL uniform.  And the response from the NFL was “They can do what they please, because they are not our agents.”  What?!  This must have sent Human Resource lawyers and textbook authors searching to write new definitions of the term “agent.”  The NFL was weaseling out of their responsibility.  It was the most blatant lack of leadership in the history of pro sports.  What you mean, “They don’t represent the NFL?!”  They represent themselves?  Really?!  

When your pastor is in the pulpit of your church, he or she represents the church.  For her to say something blasphemous, then the elders cop out with a statement like, “She is not our agent,” would be the lowest point of agency.  She IS the agent for the church when she’s in the pulpit. 

When I’m teaching in the classroom at Dallas Baptist University, I am an agent for DBU.  What I say and do reflects directly on the institution.  You have these agency relationships also.  One of my favorite exercises in class is to ask students who they are an agent for.  The typical answer is their work agency, but they are also agents for their family and community and their church.  

We represent groups that we belong to.  

Many years ago, a member of the Texas Rangers baseball team was traded to the New York Yankees for an increase in salary.  But, after his reduction in pay from New York city and state taxes, he made less with the Yankees than he did with the Rangers.  Why did he agree to the trade?  Because his agent gets paid based on a percentage of the salary, and he did NOT live in New York City.  So it’s reasonable to inquire about who the agent was representing: The player, or himself?

Biblical Economic Policy

In the last chapter of Biblical Economic Policy, Sergiy Saydometov and I explain our Biblical view of the responsibility of three entities: The Individual, the church, and government.  It should come as no surprise that we find Biblical evidence for agency among individuals and churches, but not the government.  Individuals receive their agency assignment from the Capitalist Good Samaritan, and the church gets her assignment to care for widows and orphans.  We can’t find governmental agency in the Bible.  That’s because, the government has no money.  It must take before it can give.  There are multiple commands to give, but no command to take. 

Thus, we believe the Bible assigns agency to individuals and churches, but not to government. 

In the classic movie, The Blues Brothers, Jake shouts, “We’re on a mission from God.”  I believe we all are agents of God.  My friend Davey Naugle, writing in his book Worldview, says that we are God’s viceroys.  That’s a person who works for the King.  God bless you as you work for the King.

 

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