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How to Capture Creativity: Reward It With Equity (If Any)

Written by Gary North on June 9, 2014

My friend Murray Rothbard was a great economist. He did not do it for money. He did his greatest work when he was a teacher at a school that did not pay him well, and which offered no economics major: Brooklyn Polytechnic. It put food on his table. He created a movement in his spare time. His disciples were not paying students.

The same was true of Rothbard’s mentor, Ludwig von Mises. He was an unpaid “visiting” professor at New York University. Donors raised all of his salary. Mises was not in it for the money. He taught Rothbard, who was not a paying student. Rothbard sat in Mises’ graduate seminar as an auditor. Mises had taught a generation of disciples this way, in the 1920’s, in an unpaid seminar in Vienna. He did it in his spare time.

For things that matter most, a large salary is rarely the motivating factor. The sense of accomplishment is.

There is your job. It puts food on your table. Then there is your calling: the most important thing you can do in which you would be most difficult to replace. Your calling is more important than your job. I hope you have identified it. I hope you are working on it daily.

Here is a TED lecture by Dan Pink on motivation. It shows that bonuses don’t work. The management guru W. Edwards Deming had discovered this a generation earlier, but Pink does not mention this.

When companies find ways to fuse a person’s job and calling, they become highly profitable. It’s not based on bonuses.

Creativity is unpredictable. This was Mises’ insight on entrepreneurship. Better to pay a salary for predictable work, and offer a share of ownership for breakthroughs. Pay with salary; reward with equity. The lecturer ignored this two-part strategy. But it’s still a good lecture.

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5 thoughts on “How to Capture Creativity: Reward It With Equity (If Any)

  1. I learned a number of years ago that what I wanted to do with my life wasn't what put food on the table. I was very lucky in the leaps of faith that I took that drew me into a career path that built on my spare-time skills. Now I make a living doing at least 75% of what I love to do. Plus, my career polishes my talent for writing, making me better at my spare time calling.
    Thanks for the article. I enjoyed both the article and the TED talk.

  2. I worked for a man, at one point in my life, that thought it was all about money. He could be rude and insulting to employees in front of customers. When I gave my notice, he was hurt and insulted after "all he did for me". He even sent his number two man to berate me for leaving. They never appreciated all I did for them. That was expected. They also did not understand that respect works two ways. Then I worked to provide. Now I work at my calling. See my blog at http://cranky-conservative.blogspot.com That is my calling.

  3. Guest 1 says:

    Thank you, Dr. North! A needed reminder for me, and perhaps many, to work on what matters and not on what makes us commodities.

  4. tsimitpo says:

    Okay, take this a step further and ask yourself why you think a business would do something just because it makes more money. When you look at how large corporations basically rule the world, it becomes really obvious that they would rather have control of their destiny than have unbelievable earnings. There's a possible paradox in that for the corporation to achieve its highest objectives they may have to deny us ours.

    Just a thought…

  5. Excellence and joy of work is everything. Money is a matter but self satisfaction is more important to me. I believed on this and couple of years back I quit my high salaried job and started working on providing training from my home and believe me I love it so much. Now I am running my training academy in a metro city of India and trained around 200 students and professionals till date. Some of them are working in good companies some of them are working independently and successfully. It is so much mental satisfaction when an old student call me and ask me about many things. Additionally it helps me to upgrade my skills on regular basis.

    Really enjoyed your article and thanks for sharing this with us.