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Podcast With John Ray, Host of The Price and Value Journey (Part 1)

John Ray is a show host and producer of North Fulton Business Radio and The Price and Value Journey. North Fulton Business Radio, a Business RadioX affiliate, is the longest running podcast in the North Fulton region of Georgia, featuring a wide range of business and community leaders. The Price and Value Journey is devoted to solo and small firm professional services providers and covers issues such as pricing, value, and business development.

 

John invited me onto his Price and Value Journey podcast for a lively discussion of topics of interest to him and his business audiences. Here are the links to John’s website and our podcast, where you can learn more about John, his work, and his recent book, The Generosity Mindset: A Journey to Business Success by Raising Your Confidence, Value, and Prices.


The remainder of this post is the overview John wrote about Part 1 of our conversation. Naturally, I hope you enjoy participating by listening as much as John and I did by recording.


Image Credit: John Ray


Paul Knowlton on How Misreading Adam Smith Broke Capitalism, Why the “Invisible Hand” Never Meant What You Think, and Whether Generosity Actually Works in Business (The Price and Value Journey, Episode 159)

 

In part one of a two-part conversation, Paul Knowlton, patent attorney and co-author of Better Capitalism: Jesus, Adam Smith, Ayn Rand, and MLK Jr. on Moving from Plantation to Partnership Economics, joins host John Ray on The Price and Value Journey to discuss why 50 years of misreading Adam Smith has broken capitalism and left professionals wondering whether an “others first” mentality actually works anymore.


Paul’s framework addresses something bigger than pricing strategy. It’s about the ethics that govern our entire economic system.


Since Milton Friedman declared in 1970 that the only social responsibility of business is to maximize profits, we’ve operated under an extraction-based model that rewards dishonesty, celebrates greed as somehow serving the greater good through market forces, and has made generous professionals question whether their values are just naive.


Paul traces this error back to a fundamental misreading of Adam Smith. The “invisible hand” appears exactly once in the 1,000-page Wealth of Nations, and it doesn’t mean selfishness becomes social good through market magic. The actual framework Adam Smith presents in The Theory of Moral Sentiments requires an “impartial spectator” evaluating whether both parties have both their own self-interest AND each other’s self-interest at heart. That’s mutual benefit, not extraction.


This conversation gives you a different lens. Paul explains plantation versus partnership economics, his two-part test (“Do I have my self-interest at heart and do I have your self-interest at heart?”), why chronic underpricing is plantation economics you practice on yourself, his landscaping contractor story showing partnership economics in action, and what his law firm is doing to restructure around sustainability and fulfillment instead of just maximizing profit.


If you’ve been immersed in extraction-based thinking for so long that you don’t realize there is an alternative, or if you’re weary of observing dishonest individuals succeed while you question whether generosity is merely foolishness, this episode provides a framework that is both ethical and sustainable.



Key Takeaways You Can Use from This Episode

  • Underpricing removes good actors from the marketplace. When you price unsustainably low, you eventually burn out and exit the profession. That’s not generosity. That’s self-imposed plantation economics.

  • Use Paul’s two-part test: “Do I have my self-interest at heart and do I have your self-interest at heart?” You need mutual benefit. If both parties don’t have both their own AND each other’s self-interest at heart, reconsider the arrangement.

  • Adam Smith’s “invisible hand” appears exactly once in the 1,000-page The Wealth of Nations. It doesn’t mean selfishness magically becomes social good. It means pursuing self-interest while considering how your actions appear to an impartial spectator.

  • The impartial spectator asks whether both parties have both their own self-interest AND each other’s self-interest at heart. Adam Smith’s actual framework from The Theory of Moral Sentiments requires mutual benefit, not just individual gain justified by market forces.

  • Partnership economics in action: Paul’s landscaping contractor gave him a price. Paul said, “I am not trying to negotiate your price. I anticipate that you are an exceptional professional who will not compromise on quality. The result? The outcome is exceptional work that doesn’t require Paul to fret or exert much effort.

  • Stanton Law’s mission: “Build a profitable and sustainable firm so that each of us can pursue a fulfilling and satisfying life.” Both parts matter. If the business isn’t sustainable, nobody will be fulfilled. If it’s only about sustainability without fulfillment, what’s the point?


Topics Discussed in this Episode

00:00 Introduction and Overview

00:25 The Generosity Mindset vs. Economic Exploitation

02:56 Introducing Paul Knowlton and His Framework

03:32 The Plantation System in Law Firms

09:44 Defining Plantation Economics

15:46 Partnership Economics Explained

17:29 Adam Smith and the Misinterpretation of His Work

32:57 Applying Ethical Business Practices

38:54 Conclusion and Teaser for Part Two


[Paul here: I encourage you to jump over to my conversation with John and hope you enjoy hearing and thinking about our exchange of ideas and their applications as much as we enjoyed recording.]


Fix Capitalism. Fix the American Dream.


Our vision is to benefit society by transforming capitalism's current core ethic of 'maximize shareholder value' to the better core ethic of 'optimize mutual value.' We achieve our vision by impacting learning, opinion, beliefs, and policy. Institute for Better Capitalism, Inc.




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