When I was an MBA student in the U.S, Mr. Warren Buffett came to my school for a speech. Mr. Buffett has been well known as the most successful investor in common stocks and businesses in the U.S. He had been the richest person in the U.S. until Mr. Bill Gates of Microsoft passed him by in the mid-1990s (His name has one more “t” after a common word, “buffet”). He also is known as a down-to-earth businessman and a performance-oriented, straight talker of no non-sense management.
He began his speech before an audience of MBA students to the following effect. “We need three qualities to be happy and successful in life. First, energy. Second, intelligence.” He went on, “I know you guys have energy, because you are young.” (The average age of MBA students in the U.S. is approximately 27) He added, “I know you have intelligence, because you study for an MBA in a good school.” (The school is the University of Florida). Mr. Buffett then dropped a bomb. “However, unless you have the third quality, the first two will kill you.” He paused for a second or so. My brain fast whirled around to figure out the third quality, without which we will be killed by our energy and intelligence. Mr. Buffet boomed, “Integrity!”
When I teach economics, finance, investment, and financial analysis, I never fail to relate Mr. Buffet’s speech in the first class and again in the final class. I also add another story. A new worker was hired for a local store. On his first day of work, the owner instructed him how to discreetly cheat on customers for extra profit. The worker immediately refused to follow the instruction. The owner also immediately fired him on the spot even before the worker began to work. The worker began to pack up to leave. Then he turned to the owner. “Sir, if you hire a person who will follow your instructions, he would also cheat on you behind your back.” The owner immediately implored the worker, “I’m sorry. Please don’t leave. Stay with me, please.”
An economic principle is a value of scarcity. Diamonds have a great value in some industrial processes. However, we can have a normal life without them. How about the air we breathe in and out constantly? We can live without water for a few days. We can survive several weeks without food. Without air, however, we all become dead within several minutes. Why then is diamond we can live a good life without so expensive, while the air so critical every moment for our survival is free? An economist’s answer: the value of scarcity.
We are fortunate that we can have a normal, happy life without scarce and expensive diamonds. We are so fortunate that the air is supplied so abundantly that it has no economic price attached to it. It’s free! Integrity, so critical for a happy and successful life, is not so abundant around us, however. Because of its scarcity, therefore, integrity is even more valuable than the air. Integrity is, of course, much more precious than a diamond, because of its criticality for our happy and successful life.
The three legs of a stool - energy, intelligence, and integrity - make us enjoy a happy and successful life. Without integrity, however, the stool collapses, and we may well be hurt and killed by our high energy and strong intelligence.
