I was in Austin a couple of weeks ago and had a very interesting cab driver who looked like one of the wild and crazy guys from the classic Saturday Night Live skits played by Dan Ackroyd and Steve Martin as the two brothers from Czechoslovakia. Here is a picture of him from the backseat. A very cool dude for sure.
It’s pretty obvious from his getup that his glasses are a very important accessory, a la Elton John. I very much appreciated that he was quite prepared in the event he lost a pair, one broke, or he wanted to change up his look.
Finally, I loved his confidence as this was his key chain.
The driver kept asking me if I wanted him to go in the carpool lane. He seemed like a knowledgeable, somewhat aggressive driver so I was a little perplexed as to why he was asking me what I wanted him to do. I assumed that he would figure out what the best route would be and take it. Now with that being said, the carpool lane was quite crowded so it was not an obvious choice to go there and he elected to stay in the non-carpool lanes and made much better progress.
As we made progress down the freeway our lanes starting getting congested and the carpool lane started opening up. He once again asked me if I wanted to go in the carpool lane. I assumed that there were periodic openings to get into the lane and he knew one was coming up so he wanted to know what I wanted to do. There were cones lined up creating a barrier to entering. I honestly thought they were made of a hard substance so as to stop people from dangerously cutting over. You can imagine my surprise (shock?) when he started pulling over to the left to go into the carpool lane and was about to cross over those cones. I was quite taken aback, and admittedly a little frightened because I thought we were going to be going into a solid set of objects. Now, of course, that was an irrational thought, because I was quite sure that he was not on some sort of self-destructive mission. I then realized that they were not solid and immobile but flexible and rubbery cones that allowed him to cross into that carpool lane without damaging the car. I don’t think that was legal to do but I did then understand why he kept asking me if it was okay.
Apparently only a couple of days before he had picked up a woman who was going to the airport and she was at a real risk of missing her flight so rather than asking her permission he just cut over into the carpool lane. He said she completely freaked out when he did that without her permission and she literally almost passed out. I was much more open-minded to it as well as to other ways he could express his creativity to get to the airport in the fastest way without materially increasing the risk to our safety. He did a marvelous job.
After I got to the airport I ordered a small mushroom pizza and sat down at a table across from two young guys who seemed to be in sales. The younger one asked his co-worker about someone they worked with and if he thought he had some sociopathic qualities as he thought he had no empathy. They were selling a product that was perhaps of dubious quality or effectiveness as it was in the healthcare and dieting field. They started getting into a philosophical discussion about whose responsibility is it to do due diligence when buying a good or service. The younger person was of the belief that, for example, if there is a used car that you’re buying and the seller is covering up some defects then the buyer should have recourse against that seller. The other guy was more libertarian and said it’s up to you and that people should take responsibility for their actions and so people do this anymore. They believe that the government or other people should take care of them and shield them from all risks. He said that people should be responsible for their own due diligence and they should hire a mechanic to evaluate the car. The other guy asked “what if the mechanic doesn’t find these issues?” The libertarian said then you hire a second mechanic and get a second opinion.
All of that sounds good on paper and has misplaced faith that people will do the right thing without having incentives to do so or constraints to penalize those who take advantage of others.
Buyer beware pre-supposes a lot for it to work completely on its own. When one has an information advantage or a wide audience then one of the parties is in the position of taking advantage of the other one by selling a defective good or over-promising with regard to a service or by one taking advantage of his or her platform and broadcasting exaggerations or untruths. The latter situation has become a reality with the advent of online reviews which can serve to lessen the risk of the former. Sellers are much more paranoid about negative reviews so it is in their best interest to treat their customers fairly. This does not mean they should be shaken down for people to get something for free, for less money, or to carry out a vindictive campaign. The power dynamics have shifted and this puts the onus on the consumer to communicate the truth and to operate from integrity rather than malice.
There was a time when consumers and investors were constantly being taken advantage of. This led to regulations and laws to create consequences for this type of behavior. We have a lot of investor regulations because there was asymmetrical information in an age when it was difficult to uncover the truth and it was virtually impossible to have recourse against the people who took advantage of their information and were able to financially profit from that in a way that had the information been disclosed, the investors would not have parted with their money. As a result, we have the SEC that was created and we have investor protection acts that were passed in the1930s and still live today. They are still around because they have been effective at lessening investor fraud, although of course it has not been eliminated and never will.
Apartment owners are highly susceptible to being the recipients of negative reviews that have a personal agenda associated with them. That is not to say a lot of negative ones do not have validity but this is not the case for all of them. Power dynamics have shifted to the residents in the online realm and it forces apartment owners to do what they can to address the negative reviews, which of course is a good thing provided they are accurate. In some ways, however, there can be a perception among residents that they are in an adversarial relationship with landlords. After all, people are renting homes from the landlord. Many people believe the rent is too high and this can cloud their perception of the service level or how they are being treated, particularly if financial penalties are assessed for the rent being late or behavior that violates community rules. They may not like their station in life and they may be frustrated that they are renters versus homeowners. This is obviously a sensitive topic and there are a lot of dynamics at work that sometimes results in different motivations than communicating the truth. With that being said this is not an excuse for owners to not maintain their properties and respond promptly and effectively to service requests. It also opens up the opportunity for the consumer to utilize his power in a harmful way.
This is where we all have an obligation to utilize our online power with responsibility. This is especially the case when we are in an emotional state and it’s very easy to vent via social media about our upset. It’s better to take a few deep breaths, reflect on the situation, and try to put oneself in the other person’s position and see if you can see it from their perspective. Criticism may still be valid but not a personal diatribe that is more about shaming the other party and making you feel better than helping others become more informed about how the selling party is operating and what to possibly expect from your experience. It shouldn’t also be motivated by trying to get something that you haven’t earned or are entitled to.
I will sign off with one extreme example and some words of advice from Charlie Munger. In Schindler’s List, Oskar Schindler was visiting with the sadistic commander of the concentration camp. His quarters were situated high above the camp which gave him a bird’s eye view of what was going on. Just for kicks and out of boredom and his deep sadism, he would take his rifle and shoot at some of the Jewish prisoners (slaves) to show them how much power and control he had over them. He could play God and decide who lives and dies on a whim. Schindler observed one of these murderous sessions and was obviously horrified. Schindler had tremendous emotional intelligence and knew how to reach people on their own level. He said to the commander that anyone can do what he does and shoot innocent people from high above in which they have no ability to defend themselves except when they scramble seeking cover. That’s not power. True power is not exploiting your strength and saving it for when it’s really needed. The true man knows he has power and is satisfied with that knowledge versus having to show others that he has it. It’s akin to the black belt not seeking out confrontation to show others his strength. In fact, he does all he can to avoid since he knows he can destroy the other party. It’s an act of compassion to not put others in a position to be the recipient of his power. He only uses it when he absolutely has to.
I remember reading once that Charlie Munger said that one of the hallmarks and strategic advantages of Berkshire Hathaway is that it does not abuse its power. It can do that very easily because it has so much more financial strength than almost every other party it transacts with, especially when buying a business. It is a very trustworthy organization. As a result of that, they have many sellers that will come to them to sell businesses because they can be trusted to close and not take advantage of the position that they’re in.
This is from a profile of Charlie Munger.
The core ideology that has served him throughout life, Munger said, is the knowledge that the “safest way to try and get what you want is to try and deserve what you want.”
“By and large the people who have this ethos win in life, and they don’t win just money [or] just honors and emolument,” Munger told law students. “They win the respect, the deserved trust, of the people they deal with, and there is huge pleasure in life to be obtained from getting deserved trust.”
Munger’s rule mirrors a popular sentiment held by Adam Smith, the pioneer of Western economic philosophy. In his influential book, “The Theory of Moral Sentiments,” Smith wrote:
“No benevolent man ever lost altogether the fruits of his benevolence. If he doesn’t always gather them from the persons from whom he ought to have gathered them, he seldom fails to gather them from other people, and with a tenfold increase. Kindness is the parent of kindness.”
So I would just say that as a consumer, and as a provider of goods and services. Be cognizant of recognizing that you have power and that it is really a testament to your strength and character if you don’t abuse it. That’s not to say you shouldn’t stand up for your rights and communicate what’s important to you and the truth, but you shouldn’t use it to exploit and to take advantage.
That is what I basically ascertained from my quick eavesdropping in Austin after having a very interesting, colorful and adventurous cab ride to get to the airport!