The Problem With The Bottom Line
"We are here to awaken from the illusion of separation" Thich Nhat Hanh.
One of the ways we perpetuate the separation
illusion is the cult of the fiscal bottom line. Last fall, at
the Booneville Fair, I talked with the fellows at the Republican
booth, just to see what they were thinking. I was told that Trump
was a good candidate because he was a businessman and understood
the bottom line.
Add up all the income, subtract all the costs, and you get a clear answer of how you are doing. I understand the attraction, the math is simple and the answer is unambiguous. I get pleasure out of balancing my checkbook to the penny, as it makes me feel like a responsible adult, and tells me where I stand with my finances. But this kind of accounting is actually deceptive, as it rests on several assumptions.
The first assumption is that everything of
value can be quantified with a number. Yet real values aren't
so simple. Your living heart is worth about $200,000 on the black
market, but would you really make the trade? How about the heart
of your child? If a value isn't quantified, it never shows up
in the accounting.
A second assumption is that all the true costs
are included in the accounting. That this is a fiction is recognized
by the accounting concept of "externalized costs". These
are real costs, which are unaccounted, that someone else has to
pay, thus skewing the validity of the bottom line. It's like throwing
your garbage over the fence for your neighbor to deal with. At
the least this is rude, and the worst it is theft.
A third assumption is that the product delivered
is actually of the quality specified. There is great incentive
for fraud as a way of reducing real costs, thus increasing the
Finally, there is consideration of the time frame involved. An extreme example is a Ponzi Scheme, where the transaction looks good in the short term, but fails in the long term. A textbook example in the late 90's, was the collapse of Enron, was which was a darling of Wall Street for many quarters, and collapsed to nothing in a few weeks.
In each of these cases, the bottom line by itself is only part of the true story. The problems of unaccounted values, incomplete costing, fraud and unsustainable business models require a social structure of regulation, ethics, morality, and a vision of the future, which is above and beyond the simple accounting of the bottom line. When we focus only on the bottom line, we lose much of what is important in life. So the next time you hear someone touting the bottom line, remember that they are at best incomplete in their thinking, or at worst, pitching theft or fraud.