Charlie Munger, Don’t Be Evil and the Hippocratic Oath of Business

I have my friend Sree to thank for introducing me to the writings of Warren Buffet’s longtime investment partner, Charlie Munger. In his excellent book of investment (and other) advice, Poor Charlie’s Almanack, Munger offers 10 rules for investment success, one of which has been on my mind lately. Rule number 1: Measure Risk, includes a specific caution about the reputational risk of working with people of “questionable character.”

For-profit business offers an unusually hospitable environment for people who play fast and loose with the truth. In its more innocuous varieties this manifests as “spin”, “selling” or “putting a positive light on the facts.” Under pressure, it slides into lies of omission, and from there into outright fabrication and on into actively deceptive or even deliberately harmful business practices. Given the powerful cocktail of greed and raw competitive energy that fuels much business activity, a cynic (or anyone who follows the business press) might even consider deception to be the natural mode of the business world, notable only when it fails to make an appearance. In this context, following Charlie Munger’s advice probably requires a little more explicit boundary-setting.

They’ve taken considerable heat for how well they’re living up to it, but Google’s “Don’t Be Evil” pledge is a nice articulation of the same basic idea. My friends at Ignition have a related rule of thumb, if a little more crassly worded: “Don’t do business with a**holes.” Whenever I come across a business whose model is based on deceiving people (e.g., adware, typosquatting, etc.), or taking advantage of their baser instincts (e.g., Nigerian bank spam, offering “free” stuff to harvest emails and spam the hell out of people, etc.), I find myself thinking the same thought: it might be legal and it will probably make someone a bunch of money, but I don’t want any part of it.

I feel like the business world could learn something from the medical profession on this topic. Instead of subjecting MBA candidates and corporate executives to hours of meaningless “ethical training”, I propose a public oath to forswear all shady business practices no matter how much money they might make you. I don’t expect a tidal wave of followers on this, but here goes anyway. With you as my witness I hereby take the Hippocratic Oath of Business: “Go ahead, make a buck any way you want to. But first, do no harm.”