This is really a great article, and so is Stephanie’s blog post on it.
The article quotes the famous saying from Ben Franklin, “Time is money.” For attorneys, a saying just as famous is Abraham Lincoln’s “Time is an attorney’s stock in trade.”
Both are nonsense, but in fairness at least Ben Franklin meant opportunity cost, so he was more correct than Lincoln. Let’s look at it.
Time is Money?
Franklin’s little saying has certainly infected the way in which businesspeople view the value of the goods and services they deliver; unfortunately, it is taken out of context. The saying was written in 1748—over 100 years prior to Marx’s labor theory of value—in a letter Franklin sent to a young businessperson just starting out who sought Franklin’s advice. Here is what Franklin wrote in its entirety on the subject of time in a letter entitled “Advice to a Young Tradesman”:
To my friend, A.B.:
As you have desired it of me, I write the following hints, which have been of service to me, and may, if observed, be so to you. Remember that time is money. He that can earn ten shillings a day by his labor, and goes abroad, or sits idle, one half of that day, though he spends but sixpence during his diversion or idleness, ought not to reckon that the only expense; he has really spent, or rather thrown away, five shillings besides.
Note Franklin was not speaking of value, nor price; he was articulating the concept of opportunity cost.
Cost means a foregone opportunity, the road not traveled, so to speak. In reality, every cost is an opportunity cost. This is the idea that every activity or product in the economy has an alternative use, and was coined by the Austrian economist Friedrich von Wieser [1851—1926].
It is an important economic principle, but a seller’s opportunity cost has little to do with the value provided to the customer. In fact, Franklin’s statement has been misinterpreted as validating the labor theory of value, yet it does no such thing. Opportunity cost may influence the quantity of a good offered, but not its value to the customer.
Time is certainly precious, as it is nonrenewable and cannot be stored. But even resources are useless until a purpose is found for them people will value. Recall oil was worthless to the farmer until the invention of the combustion engine.
The New York Times author said it well:
But the quest to spend time the way we do money is doomed to failure, because the time we experience bears little relation to time as read on a clock. The brain creates its own time, and it is this inner time, not clock time, that guides our actions. In the space of an hour, we can accomplish a great deal—or very little.
Believing time is money to lose, we perceive our shortage of time as stressful. Thus, our fight-or-flight instinct is engaged, and the regions of the brain we use to calmly and sensibly plan our time get switched off. We become fidgety, erratic and rash.
The remedy is to liberate ourselves from Franklin’s equation. Time is not money but “the element in which we exist,” as Joyce Carol Oates put it more than two decades ago (in a relatively leisurely era). “We are either borne along by it or drowned in it.”
And Stephanie in her post said it even better:
The billable hour becomes like an automatic metronome in our brains, setting an habitual cadence that influences us even when we are not at work. Know that rhythm? You can change the beat of the drum to which you march. The first step is self-awareness. Carefully watch how you relate to time today.
Time is time, we mortals are all subject to a limited amount. It’s not the quantity of time you have or work that is valued, but the results you produce with the time you commit.
This is why the billable hour and timesheets measure the wrong things. The two go hand-in-hand. Get rid of either, and the other must go as well.
When will professionals give up the ghost of Ben Franklin and Abe Lincoln with respect to the importance of time?