Selling Hats to Each Other
Every once in a while I hear a term or quote that strikes me as amusing. This week I heard the same quote used in different frames of reference. The quote is "selling hats to each other".

The first reference I heard was quoted in regards to Jack Welch, former CEO of GE, who used to say that people were just selling hats to each other when they didn't evaluate each other fairly. At first this didn't seem to make since until I had time to think about it. While thinking about it, I heard the quote again. This time it was Jim Cramer talking about the U.S. economy on his television show "Mad Money". He was talking about how the U.S. has outsourcing all its manufacturing and is in the process of outsourcing many services. Jim says that pretty soon the U.S. will be full of people with an economy based on selling shirts to each other. (Note: Jim used the term shirts instead of hats but the concept is still the same.) Hearing Jim talk about this reminded me of the first reference and it all made sense to me. It was like a light bulb turned on and I was fairly amused.

In an economy based on selling hats to each other, nothing is ever really manufactured. Or another view is that nothing original is created. The value (profit) from a transaction is based on negotiated terms, and not the object, whether product or service, being sold. This is a very interesting concept and I would like to know how a whole economy can be based on this idea...
- posted by Unknown @ 12:13 PM