The Blog of Dato' Dr Anuar Md Nor

We read an interesting article by Jonathan Black in Financial Times on June 24^th, 2019.

He wrote that most people do not seem to think that deploying patience is a viable course of action at work. The word, which originates from the Latin word for “suffer”, nowadays tends to suggest passivity, forbearance, tolerance and even resignation. None of which are prized in the working world. Yet it has a distinguished history, with the first known use of the phrase “patience is a virtue” in the late 14th century poem “Piers Plowman”, by William Langland. And patience was listed as one of the seven heavenly virtues by the Roman Christian poet Prudentius 1,000 years earlier in his book, Psychomachia (Battle of the Soul). Patience may be unfashionable, but it is making a modest comeback.

He had interviewed a number of people working across a variety of sectors — the law, banking, the civil service and scientific research — all of whom thought patience could be active and effective. Most of them saw it as an important workplace skill, along with teamwork, leadership and communication.

An interviewee thinks patience can be an asset in the civil service: “If you can crack patience as a tool, then you stand a good chance of being seen as professional and reliable.” Yet he had sometimes seen patient people being marginalised by more dynamic and impatient colleagues. And he notes that “patience should not, however, be seen as an excuse for indecision.” While those who are naturally impatient can use it as a tool, they too have to learn how to manage their impatience and use it wisely. He considers that patience is learned, often through mistakes, rather than taught and concludes that patience can be used as one of many, interconnected skills.

Another interviewee, who recently retired after a career as a senior corporate tax adviser, agrees that “patience is a hard learned and useful art form”. She reflects that passing her professional exams required stamina, resilience and an element of impatience, in order to qualify as quickly as possible. In contrast, she says, “clients had to be managed with saintly patience, as did senior staff with unrealistic expectations of workload management”. More broadly, she found that “patience is useful when you are faced with a lack of understanding, political motivation to block, or just misogyny and racism. That said, too much patience allows these factors to hold you back.”

A third interviewee, who is a senior postdoctoral researcher, reported that her career in life sciences academic research has depended on patience. Success is based, she thinks, on “resilience and perseverance and is mostly incremental wins, while plagued by failures and disappointments in experiments, paper and funding application rejections”. She also cites the need to exercise patience with managers who are measuring success in tangible outcomes, while waiting for her detailed experiments that can take months to reveal significant results. She thinks that patience gives her the courage and confidence to stand her ground against the “avalanche of information and alluring possibilities, the fear of missing out, and the infliction of instant gratification”. In these instances, patience at work is not to be confused with complacency, but is rather a learned stillness that allows us to evaluate before advancing strategically with intention and enthusiasm.

Mr. Black noted that technology has been the big enabler of impatience and speed: having letters typed and proofread involved a built-in reflection period that allowed time to reconsider and ideas to develop.

New graduates enter the workplace having been trained by social media that they can, and therefore are expected to, respond instantly. The 24-hour news cycle creates a febrile atmosphere in which patient deliberation can be seen as a personal weakness. No one wants to be seen as inactive in case it looks like inability to act or complacency. And it is easy to confuse activity with progress — whereas allowing time for consideration and just letting things play out can be a more effective approach. An interviewee observes that “even if one is impatient to act, you still have to time when to strike; that can require patience itself.” Patience at work is not to be confused with complacency, but is rather a learned stillness that allows us to evaluate before advancing strategically.

Mr. Black noted that when we are impatient for change — is also a useful tool for managing one’s entire career. An interviewee thinks that “impatience for change is critical for a successful career”. This was echoed more formally by another interviewee, who every three years asks himself: “Do I like what I’m doing and should I stay?”

In some fields, patience and impatience are built into the career development structure. An interviewee, who left the British Royal Navy as a commodore in 2002, says that after becoming a lieutenant commander, promotion relies on being selected from the pool, or “zone”. Officers do not enter the zone for promotion to the next rank for a period of years, in order to consolidate skills and experience — an approach which he describes as, “guided patience”.

An interviewee views her career as a “purposeful continuum, which requires assessing my current position and strategizing the next; if done mindfully, this requires time and patience”. The urge to act quickly — responding immediately to an email or chasing a promotion — may have underlying behavioural reasons.

Economists call this tendency hyperbolic discounting, or “present bias”, in which humans place a higher value on the more imminent reward when considering two future events. Taking action immediately can give a psychological pay-off and show how engaged you are — even though ultimately it may be less effective at making progress. With decision-making timeframes under increasing pressure, the virtues of both patience and deliberate impatience risk being forgotten at work and when we think about our long-term career plans.

According to Mr. Black, while we do learn from our mistakes, teaching the importance of patience may result in fewer mistakes in the first place — which is surely the better outcome.

Advice from Mr. Black on to use patience as a tool at work

If you are going to be patient, or impatient, do it deliberately. Include “wait and see”, or “do nothing yet”, as an option for all decision making.

Do not respond to all requests instantly; even the urgent or important may need time for consideration.

Do let people know what you are doing. If naturally impatient, use the phrase, “I need to think about this before I can respond”.

If you are too patient, especially on your career, do not wait for others to look after you. Set yourself deadlines, tell other people your plans, and act on them.

Biodata

Mr. Jonathan Black is Director of Career Service, Oxford University, UK.

We have created a new category, Economic Matters, which features economic topics which would be useful to innovators in understanding how economies work.

Today, we highlighted the article written by Martin Wolf, a well-known economist of Financial Times, on 29th, May, 2019.

According to Martin Wolf, the state is the most important of all our institutions.  It is the ultimate guarantor of security. But its power makes it frightening. For this reason, people sometimes pretend it is weaker than it is.

In one area of economics, this is particularly true; money. Money is a creature  of the state. Modern monetary theory, a controversial account of this truth is analytically correct, so far it goes. But where it does not go is crucial: money is a powerful tool, but it can be abused.

L Randall Wray of the University of Missouri-Kansas City set out these ideas in Modern Monetary Theory (MMT). They have the following fundamental elements:

First, taxes drive money. This doctrine is called “chartalism”. Governments can force their citizens to use the money it issues, because that is how people pay their taxes. The state’s money will thus become the money used for domestic transactions.

Banks depend upon the government’s bank-the central bank- as lender of last resort. The lOUs  of banks-the predominant form of money in today’s economies-are imperfect substitutes for such sovereign money. They are imperfect, because banks may become illiquid or insolvent and so may default  That is why banking crises are common.

Second, contrary to conventional wisdom, no mechanical relationship exists between holdings of central bank  liabilities by banks (that is, reserves) and the creation of bank money. Since the financial crises, central bank balance sheets and bank reserves have grown hugely, but broader monetary aggregates have not. The explanation is that the dominant driver of the money supply is the (risk adjusted) profitability of lending, which is high in boom times and low in busts. The weakness of credit also explains why inflation has remained low.

Third, governments need never default on loans in their own currency. The government does not need to raise tax or borrow to pay its way; it is possible for it to create money it needs. This makes it simple for governments to run deficits, in order to ensure full employment.

Fourth, only inflation sets limits on a government’s ability to spend. But, if inflation emerges, the government has to tighten demand, by raising taxes.

Finally, governments do not need to issue bonds in order to fund themselves. The reason for borrowing is to manage demand, by altering interest rates, or the supply of reserves to the banks.

This analysis is correct, up to a point.  It has also implications for policy. A sovereign government can always spend, in order to support demand. Again the expansion of the central bank balance sheet does not make high inflation likely, let alone inevitable.

Some believers in MMT argue that the power to create money should be used to offer jobs  guarantee or finance programmes such as the Green New Deal proposed by Democrats in the US. But such ideas do not follow from their analysis. These are suggestions for where the state should spend.

What then are the problems with MMT?

These are twofold: economic and political

An important economic difficulty, clear from the painful western experience in the 1970s, is that it is hard to know where “full employment”  lies. Excess demand may exist in some sectors or regions, and deficient demand elsewhere. Full employment is a highly uncertain range, not a single point.

A still more important economic mistake is to ignore the expectations that drive people’s behaviour. Suppose holders of money fear that government is prepared to spend on its high priority items, regardless of how overheated the economy might become. Suppose holders of money fear that the central bank has also become entirely subject to the government’s whims (which has happened often enough in the past). They are then likely to dump money in favour of some other asset, causing a collapsing currency, soaring asset prices and booming demand for durables. This many not lead to outright hyperinflation. But it would lead to a burst of high inflation, which becomes entrenched.

The focus of MMT’s proponents on balance sheet and indifference to expectations that drive behaviour are huge errors.

The mistakes are economic ones but there is a related and far worse political error, as Sebastian Edwards of University of California, Los Angeles, has argued. If politicians think they do not need to worry about the possibility of default, only about inflation, their tendency may be to assume output can be driven far higher, and unemployment far lower, than it is possible without triggering an upsurge in inflation.

That happened to many western countries in the 1970s. It has happened more often to developing countries, especially in Latin America. But the economic and social consequences of big spikes in inflation can be very damaging.

Yet the same is also true for high employment.

So in managing a modern monetary economy, one has to avoid two gross errors. One is to rely on private sector to much, since that can all too easily end up with highly destructive financial booms and busts.

The opposite error is to rely on government-led demand too much, since that may well generate destructive inflation booms and busts. 

The solution, nearly all the time, is to delegate the needed discretion to independent central banks and financial regulators. Yet proponents of MMT are right that during a period of structurally feeble private demand (as in Japan since 1990) or a deep slump, a sovereign government must and can act, on its own or in cooperation with the central bank, to offset private weaknesses. 

There is then no reason to fear the constraints. It should just go for it.