FINANCE, OR THE POINT OF VANISHING INTEREST
understand high finance are of two kinds: those who have vast
fortunes of their own and those who have nothing at all. To the
actual millionaire a million dollars is something real and
comprehensible. To the applied mathematician and the lecturer in
economics (assuming both to be practically starving) a million
dollars is at least as real as a thousand, they having never
possessed either sum. But the world is full of people who fall
between these two categories, knowing nothing of millions but well
accustomed to think in thousands, and it is of these that finance
committees are mostly comprised. The result is a phenomenon that
has often been observed but never yet investigated. It might be
termed the Law of Triviality. Briefly stated, it means that the
time spent on any item of the agenda will be in inverse proportion
to the sum involved.
thoughts, the statement that this law has never been investigated
is not entirely accurate. Some work has actually been done in this
field, but the investigators pursued a line of inquiry that led
them nowhere. They assumed that the greatest significance should
attach to the order in which items of the agenda are taken. They
assumed, further, that most of the available time will be spent on
items one to seven and that the later items will be allowed
automatically to pass. The result is well known. The derision with
which Dr. Guggenheim's lecture was received at the Muttworth
Conference may have been thought excessive at the time, but all
further discussions on this topic have tended to show that his
critics were right. Years had been wasted in a research of which
the basic assumptions were wrong. We realize now that position on
the agenda is a minor consideration, so far, at least, as this
problem is concerned. We consider also that Dr. Guggenheim was
lucky to escape as he did, in his underwear. Had he dared to put
his lame conclusions before the later conference in September, he
would have faced something more than derision. The view would have
been taken that he was deliberately wasting time.
If we are to
make further progress in this investigation we must ignore all
that has so far been done. We must start at the beginning and
understand fully the way in which a finance committee actually
works. For the sake of the general reader this can be put in
dramatic form thus:
We come now to Item Nine. Our Treasurer, Mr. McPhail, will report.
The estimate for the Atomic Reactor is before you, sir, set forth
in Appendix H of the subcommittee's report. You will see that the
general design and layout has been approved by Professor McFission.
The total cost will amount to $10,000,000. The contractors,
Messrs. McNab and McHash, consider that the work should be
complete by April, 1959. Mr. McFee, the consulting engineer, warns
us that we should not count on completion before October, at the
earliest. In this view he is supported by Dr. McHeap, the
well-known geophysicist, who refers to the probable need for
piling at the lower end of the site. The plan of the main building
is before you--see Appendix IX--and the blueprint is laid on the
table. I shall be glad to give any further information that
members of this committee may require.
Thank you, Mr. McPhail, for your very lucid explanation of the
plan as proposed. I will now invite the members present to give us
It is necessary
to pause at this point and consider what views the members are
likely to have. Let us suppose that they number eleven, including
the Chairman but excluding the Secretary. Of these eleven members,
four--including the chairman--do not know what a reactor is. Of
the remainder, three do not know what it is for. Of those who know
its purpose, only two have the least idea of what it should cost.
One of these is Mr. Isaacson, the other is Mr. Brickworth. Either
is in a position to say something. We may suppose that Mr.
Isaacson is the first to speak.
Well, Mr. Chairman. I could wish that I felt more confidence in
our contractors and consultant. Had we gone to Professor Levi in
the first instance, and had the contract been given to Messrs.
David and Goliath, I should have been happier about the whole
scheme. Mr. Lyon-Daniels would not have wasted our time with wild
guesses about the possible delay in completion, and Dr. Moses
Bullrush would have told us definitely whether piling would be
wanted or not.
I am sure we all appreciate Mr. Isaacson's anxiety to complete
this work in the best possible way. I feel, however, that it is
rather late in the day to call in new technical advisers. I admit
that the main contract has still to be signed, but we have already
spent very large sums. If we reject the advice for which we have
paid, we shall have to pay as much again.
I should like my observation to be minuted.
Certainly. Perhaps Mr. Brickworth also has something to say on
Brickworth is almost the only man there who knows what he is
talking about. There is a great deal he could say. He distrusts
that round figure of $10,000,000. Why should it come out to
exactly that? Why need they demolish the old building to make room
for the new approach? Why is so large a sum set aside for
"contingencies"? And who is McHeap, anyway? Is he the man who was
sued last year by the Trickle and Driedup Oil Corporation? But
Brickworth does not know where to begin. The other members could
not read the blueprint if he referred to it. He would have to
begin by explaining what a reactor is and no one there would admit
that he did not already know. Better to say nothing.
I have no comment to make.
Does any other member wish to speak? Very well. I may take it then
that the plans and estimates are approved? Thank you. May I now
sign the main contract on your behalf? (Murmur of agreement)
Thank you. We can now move on to Item Ten.
Allowing a few
seconds for rustling papers and unrolling diagrams, the time spent
on Item Nine will have been just two minutes and a half. The
meeting is going well. But some members feel uneasy about Item
Nine. They wonder inwardly whether they have really been pulling
their weight. It is too late to query that reactor scheme, but
they would like to demonstrate, before the meeting ends, that they
are alive to all that is going on.
Item Ten. Bicycle shed for the use of the clerical staff. An
estimate has been received from Messrs. Bodger and Woodworm, who
undertake to complete the work for the sum of $2350. Plans and
specification are before you, gentlemen.
Surely, Mr. Chairman, this sum is excessive. I note that the roof
is to be of aluminum. Would not asbestos be cheaper?
I agree with Mr. Softleigh about the cost, but the roof should, in
my opinion, be of galvanized iron. I incline to think that the
shed could be built for $2000, or even less.
I would go further, Mr. Chairman. I question whether this shed is
really necessary. We do too much for our staff as it is. They are
never satisfied, that is the trouble. They will be wanting garages
No, I can't support Mr. Daring on this occasion. I think that the
shed is needed. It is a question of material and cost...
The debate is
fairly launched. A sum of $2350 is well within everybody's
comprehension. Everyone can visualize a bicycle shed. Discussion
goes on, therefore, for forty-five minutes, with the possible
result of saving some $300. Members at length sit back with a
feeling of achievement.
Item Eleven. Refreshments supplied at meetings of the Joint
Welfare Committee. Monthly, $4.75.
What type of refreshment is supplied on these occasions?
Coffee, I understand.
And this means an annual charge of-- let me see--$57?
That is so.
Well, really, Mr. Chairman. I question whether this is justified.
How long do these meetings last?
Now begins an
even more acrimonious debate. There may be members of the
committee who might fail to distinguish between asbestos and
galvanized iron, but every man there knows about coffee--what it
is, how it should be made, where it should be bought--and whether
indeed it should be bought at all. This item on the agenda will
occupy the members for an hour and a quarter, and they will end by
asking the Secretary to procure further information, leaving the
matter to be decided at the next meeting.
It would be
natural to ask at this point whether a still smaller sum--$20,
perhaps, or $10--would occupy the Finance Committee for a
proportionately longer time. On this point, it must be admitted,
we are still ignorant. Our tentative conclusion must be that there
is a point at which the whole tendency is reversed, the committee
members concluding that the sum is beneath their notice. Research
has still to establish the point at which this reversal occurs.
The transition from the $50 debate (an hour and a quarter) to the
$20 debate (two and a half minutes) is indeed an abrupt one. It
would be the more interesting to establish the exact point at
which it occurs. More than that, it would be of practical value.
Supposing, for example, that the point of vanishing interest is
represented by the sum of $35, the Treasurer with an item of
$62.80 on the agenda might well decide to present it as two items,
one of $30.00 and the other of $32.80, with an evident saving in
time and effort.
this juncture can be merely tentative, but there is some reason to
suppose that the point of vanishing interest represents the sum
the individual committee member is willing to lose on a bet or
subscribe to a charity. An inquiry on these lines conducted on
racecourses and in Methodist chapels, might go far toward solving
the problem. Far greater difficulty may be encountered in
attempting to discover the exact point at which the sum involved
becomes too large to discuss at all. One thing apparent, however,
is that the time spent on $10,000,000 and on $10 may well prove to
be the same. The present estimated time of two and a half minutes
is by no means exact, but there is clearly a space of
time--something between two and four and a half minutes--which
suffices equally for the largest and the smallest sums.
investigation remains to be done, but the final results, when
published, cannot fail to be of absorbing interest and of
immediate value to mankind.