Positive Sum

CHAPTER TWOTHE UNSUNG WISDOM OF ADAM SMITH AND MILTON FRIEDMAN: LISTENING TO WHAT TWO ECONOMIC GENIUSES ACTUALLY HAD TO SAY

Nature, which formed men for that mutual kindness so necessary for their happiness, renders every man the peculiar object of kindness to the persons to whom he himself has been kind.

—Adam Smith¹

For the chairman of Johnson & Johnson, the phone call that put a dent in corporate America's zero‐sum habit came at the worst possible moment. It's an old story you may have heard, but you might not know what it has to say about the conscience of capitalism.

On Friday, October 1, 1982, James Burke was looking forward to the weekend when the phone shattered his peace. The voice of a reporter from the Chicago Tribune carried impossible news: seven people had just died after taking Tylenol. The Chicago medical examiner was saying the capsules had been laced with cyanide. What did Burke have to say about it?

His first instinct was to follow a zero‐sum template outlined in every crisis management playbook. This isn't our fault. Someone tampered with our product after it left our facilities. We can't be held responsible for the actions of a madman.

Any reasonable corporate lawyer—and Burke had plenty—would have advised damage control, limited liability, and protecting company assets. After all, Tylenol represented 37 percent of the over‐the‐counter painkiller market, generating $1.2 billion in annual revenue. Under the circumstances, conventional reasoning suggested ...