Creating Wealth Is the Honorable Thing to Do
- Date: 05/13/2007
- Author: Dr. Luis M. Proenza (President, The University of Akron)
- Location: UA Commencement
Most of you may be too young to remember the 1967 movie, "The Graduate" in which the main character, Dustin Hoffman, is cornered by a friend of the family and given advice about his future. He is told to remember just one word of prophetic opportunity - PLASTICS!
As graduates of The University of Akron, I am sure you agree that Hollywood should have known better - the word should have been POLYMERS, of which plastics is merely a subset.
Graduation advice is usually more idealistic, however, and commencement speakers might quote Henry David Thoreau: "Go confidently in the direction of your dreams. Live the life you've imagined."
(Quoteland.com)Or they might urge you to "search for the truth" "reach for the stars," or "stretch to grab the gold ring."
And then, there was the all-too-practical advice of Chicago Tribune newspaper columnist Mary Schmich, who urged graduates to wear sunscreen, because "The long-term benefits of sunscreen have been proved by" scientific research, whereas any other advice she might offer would have "...no basis more reliable than (her) own meandering experience."
(Schmich, Mary, "Advice, Like Youth, Probably Just Wasted On the Young," Chicago Tribune, June 1, 1997)And so, in this long-standing tradition of offering advice at graduation ceremonies, allow me to offer one more University of Akron lesson...this one from me.
My message to you, our 2007 graduates is this: Forget high-minded idealistic advice. Instead, create wealth. It is the honorable thing to do.
Now, please notice that I did not say accumulate wealth; I said create wealth. While both are permissible and central to the free enterprise system, they are very different.
Accumulating wealth leads only to individual riches. Creating wealth, on the other hand, lets you enrich the community by allowing the economy to expand for the good of the whole.
Business columnist Daniel Akst, puts it this way: "If you have a good education, you shouldn't just consider getting rich. Creating...wealth is a moral obligation. Do so and you can take comfort not just in financing public services but in knowing that you are giving people what they need and want..."
(Akst, Daniel, "Graduates, Take Heed," The Wall Street Journal, June 11, 2004, p. A13)The primary contributors to wealth creation are, of course, entrepreneurs - the risk-takers - and research universities, such as The University of Akron, play a significant role in helping entrepreneurs help the economy grow.
Research, you see, creates new knowledge which is then quantified in a market environment. And that, in turn, creates fuller employment, capital formation, growing profits and surpluses for reinvestment. In short, new knowledge is the fuel that allows an economy to expand.
Now, it is important that you recognize an inescapable aspect of any growing economy, and that is that an expanding economy adds new jobs at the leading edge just a bit faster than it destroys old jobs at the trailing edge. And what that means is that you cannot expect to "rest on your laurels" in a single job because chances are that whatever job you first hold will be "lost" as an economy grows and new skills will be required for the new jobs that the economy creates in place of the old at an ever-increasing, faster and faster pace.
And that means that it will not be uncommon for you to change professions three, five or more times during your lifetime, if not even more.
And that also means that you must keep on learning and learning and learning, which is the meaning of the phrase "life-long learning." You must learn new things and new skills just to keep pace with the changing demands of a growing economy or, otherwise, you will be left behind.
As it happens, many aspects of wealth creation are exemplified by the popular board game, "Monopoly."
Charles Darrow, an unemployed salesman from Pennsylvania, created the game concept following the great stock market crash of 1929. Fondly remembering his summers in Atlantic City, he began drawing a layout of the resort on the kitchen tablecloth and family and friends would gather around the table, pretending to buy and sell Atlantic City real estate.
Darrow submitted his game concept to Parker Brothers, which initially showed no interest, because, among other concerns, the game took too long to play. For the record, let me point out that according to Hasbro, the parent company of Parker Brothers, the longest game of Monopoly ever played took nearly 1,700 hours or 70 straight days.
(Hasbro, Inc.)Still, undaunted by Parker Brothers' initial rejection, Darrow began selling his home-made games for $4 each, and as its popularity grew, so did Parker Brothers' interest.
When the toy company began distribution of Monopoly in 1935, the game was an instant success. By the end of the first year of production, Monopoly had become the number-one selling board game in America.
In his book, Everything I Know About Business I Learned From Monopoly, Alan Axelrod points out that when Monopoly was introduced to the public, "...America, like the rest of the world, was deep in economic depression... Families were losing their farms and their homes" ...and many were losing their jobs.
(Axelrod, Alan, Everything I Know About Business I Learned From Monopoly, Running Press Book Publishers, Philadelphia, March 1, 2004, p.14-15)"Then along came a game that modeled capitalism...And this game of free-flowing capital and financial risk, in the depths of an economic depression, became a bestseller of unprecedented magnitude."
(Axelrod, Ibid, p.15)Monopoly also offered an escape from reality. Like the rich and famous, the players could own expensive real estate, run railroads and utilities, buy and sell property, support philanthropy through the "Community Chest," collect rent on houses and hotels while trying to stay out of jail.
And, they could accomplish this knowing that much of their future was based on "Chance."
"People were not only willing to face reality," wrote Axelrod, "but had a good time doing so, because the reality of Monopoly was governed by rules and, like any good drama, had a beginning, a middle and an end."
(Axelrod, Ibid, p.16)
Today, Monopoly remains one of the world's most popular games and claims an estimated half-billion players since its creation. Each year, Parker Brother prints about $50 billion in Monopoly money and manufactures 100-million houses - made from polymers, of course - and the game is published in 26 languages.
(Hasbro, Inc)In many respects, the game of Monopoly is a microcosm of the real business world. It shows that significant economic development occurs in the process, including real estate transactions, construction, tax payments and support for charity.
What the game also teaches us is that wealth creation does not happen without risk, knowing that the outcome could go either way and often is as unpredictable as the roll of the dice.
"Monopoly is not about saving money," Axelrod writes, "Monopoly is about risking money intelligently."
(Axelrod, Ibid, p. 53)Indeed, whether it is in the game of Monopoly or in the game of life... one thing you must learn and come to understand is that every choice you make involves an element of risk, and that it is your education that gives you the knowledge by which you can accurately weigh the risks inherent in opportunity.
(Bernstein Peter L., Against the Gods: The Remarkable Story of Risk, October 1996)The knowledge you have gained at The University of Akron, and that which you must continue to learn, is most important to your future, because the biggest "risk" to your success would be your failure to take an informed and educated chance.
So graduates...go forth and create wealth!
(The theme for this commencement address was suggested by a reading of Daniel Akst's Wall Street Journal article entitled: Graduates, Take Heed," June 11, 2001, p. A13)- Filed in: