Adam Smith Econ 490 fall 2019

Throughout my life, most of my interactions at work have fallen under the category of the standard principal-agent model. However, the position I had over the summer fits the triangle model quite well. As I discussed in my previous post, this past summer, I was a college financial representative for a mutual insurance company. A mutual insurance company is one in which the company is owned entirely by the policyholders. Therefore, as an associate, I worked as an agent for both my clients and the firm. I was quite literally an independent contractor working for the company, in which my tax form filed was 1098. From the company’s side, they expected me to do an exceptional job finding and scouting out new clients to meet sales goals. It was a process known as “building a book of business” in the sales world. Through these clients, they pushed me to do my best to sell the different products the company had to offer. Certain products were able to catch the company a g...

Conflict arises every day in the professional world. Whether it is internal or external, tailoring a solution to the problem is essential to ensuring the business continues to thrive. Throughout my lifetime, I have experienced many different types of conflicts. However, when thinking about a conflict at work or at an RSO, there is one that comes to mind. Last summer, I was an intern for an insurance agency in Chicago. My job title was set at a college financial advisor, and I was tasked with identifying any financial needs for clients and help them reach their goals. The hard part of the job was that I had to build my own book of business. Being a 22-year-old, many people didn’t take me seriously and were not willing to work with me and share their personal financial information. It became very tough for me to find new people to reach out to due and overtime I exhausted my network of friends and family. One day when there were only a few hours left in the workday, my ...

Workplace discipline walks a very fine line, especially in today’s society. More than ever before, as a society we are becoming aware of the discriminatory practices and taking action against them to ensure equality for all. In the last post, we talked about how to share the marbles. Similarly, how to discipline may affect how the “marbles” are distributed amongst the workplace. Take for example a young man who starts working for a company with a commission-based structure. He is outperforming everyone in the organization and in turn, receives compensation and rewards that pull away from the other workers’ pay. However, the audit staff one day finds out that the young man had been engaging in toxic business practices, terminating his employment contract. This would, therefore, restore the payment to other workers. Obviously, there are a lot of variables at play here but imagine the business was operating in one city with a fixed number of customers, businesses, and pe...

After reading through the three articles, it was quite obvious that there is an unfair distribution of wealth in our country and that people act in their own self-interest. When taking wealth into account, it is human nature to act greedy and use their wealth to better themselves. Adam Smith was spot on when describing the concept of the Invisible Hand and how it drives the economy as a whole. The first piece, How to Get the Rich to Share Marbles by Jonathan Haidt, brought up some very interesting findings on how children performing the same amount of work share their “income.” In the experiment, the kids shared their wealth when they had both been required to pull the rope together. The kids who were lucky enough to get a rope that produced more marbles were less likely to split the wealth, even though they were both doing the same type and amount of work. There are lots of people pulling the rope in this country who receive a smaller piece of the pie. To be born with opp...