The deal is central to many human endeavors, from countries making trade deals, international agencies brokering agreements between nations, OPEC countries coming to an understanding to price-fix in order to have an optimal price of oil in international markets and entering into a relationship. Tycoons agreeing to build railroads across America to transport oil or entrepreneurs finalizing a financing contract with investors. Even something as simple as you going to the grocery store and exchanging money for groceries.
In many ways the deal is just as central to economic growth as entrepreneurship, and just as central to politics as nations or legislation. The foundation format for a deal, is that you have multiple parties that have something that the other parties want, and every party have their view of what such a deal should look like. To continue on the grocery store example, the grocer wants the price for the items you want, to yield the highest possible margin for him, you want the item to cost as little as possible for you. In his view the optimal deal is one wherein you pay the maximum amount over what he paid for the products. In your view, you don’t care if he makes a profit.
So, you come to a compromise where you are both OK with making the deal, but neither of you are maximally happy with the deal. Another example is where the OPEC states and Russia, meet to discuss the state of the oil price, the obvious solution to the low price is to limit supply. However, Russia and OPEC, in an ideal world want the other party to shut down their production, while they maintain theirs. So far, no compromise has been reached.
A compromise seems to be an innocent thing, it is defined by Merriam-Webster as:
a way of reaching agreement in which each person or group gives up something that was wanted in order to end an argument or dispute 
It’s a way of getting progress on a deal by each party agreeing to make the deal less optimal to them. Rather than, “I am going to get the best deal” each party is saying “I’m going to get the best deal I can get”. This is rather sensible, it plays to getting progress towards a desired end, even if one has to compromise on that end.
Merriam-Webster also has a second definition of the word compromise which is:
a change that makes something worse and that is not done for a good reason
In this definition, a compromise hardly seems like something a person would want to do. It makes something worse, and it is not done due to solid reasoning or cold hard facts. One could argue if one desired to construct a skyscraper in a location, yet found that the location was such that a skyscraper could not be built, then it would be a good compromise to move the location to a more suitable one. It is made for good reason, and it does not make it worse, as the building collapsing would be much worse than moving it to a slightly less desirable location.
Why compromises are bad
People often wonder why politicians cannot seem to get things done. There are a multitude of reasons for this, but often the case is that in order to get A, a politician has to make compromises to add B and C as well. B and C can be detrimental to A. To put this in an example.
Politician 1: I want a new factory for my state (A), because of reasons X, Y and Z.
Politician 2: OK, if you want A, then I want increased taxes in your state (B), and I want stronger EPA enforcement (C)
In this case, B and C are anti-employment/establishment factors for any businessman trying to determine whether to put the factory in the state represented by 1 and 2, or in another state. Property laws and zoning issues are mentioned in the book “The Art of the Deal” by Donald Trump, but the issues of compromises between politicians/local government and business interests are frequent and often detrimental. My favorite example was the republican view of Obamacare at one time “We like some parts of it that we want to keep, we just want to get rid of some parts of it” when the parts they wanted to get rid of paid for the parts they wanted to keep.
So, isn’t this a contradiction of the point that I made earlier, that compromises are in embryo the lube of a deal? Yes it is, and the reason for it is that while a compromise can often expedite an agreement, it often comes with a poison pill. Therefore, the compromise pushes problems ahead in time, where the have unknown consequences, vs keeping them in the present when they have known consequences. To illustrate again:
Party A and Party B agree that they want to make a deal because of a set of reasons.
Party A and Party B publicize that they want to make a deal, to the public, to shareholders, to stakeholders or whatever.
Party A and Party B sit down to negotiate, and find that they are approaching the deal from two very different points of view. Therefore they find it difficult to come to an agreement.
Now we are at a crossroads where the sides can:
A) Become deadlocked.
A means that they have to go tell their shareholders, the public or whoever else that they have not reached an agreement, and it now becomes a game of who can spin it so that the other party gets blamed.
B means that they put making the deal over the results of the deal, and therefore can tell their shareholders that the deal has gone through, and they are moving forward. At which point the work with ensuring that the deal is enforced, enacted or executed lays with someone else.
It creates an image of action that conceals inaction. It’s the equivalent of agreeing that you and a buddy will bet on different horses in a race, then shooting the horses. You can’t be blamed for both of you losing, the fuckin’ horses were dead.
The red pill issue
Some of you may wonder why I wrote a post in the gendernomics series, and I have yet to mention the red pill, women, men or relationships. To be honest, it was a compromise I had to make in order to avoid going off on a tangent earlier in the article. The truth is that there is one area where men constantly make compromises that end badly for them, and that is relationships. There are bigger and smaller compromises, and some are always going to be needed in relationships. How to decorate the house, where to live, and other issues that would come just as natural if it wasn’t a romantic relationship. Even if you have a roommate you are going to have to come to an agreement on basic rules to avoid killing each other.
The big compromises men make is to marry the grenade they jumped on when one of their friends wanted to bang “the friend“. It is to not be cognizant of their own value, when they negotiated their relationship contract. More than anything, it is the constant and inevitable chipping away at their personality and pride throughout a relationship. For some strange reason, relationships have a way of progressing through the same stage of compromises, where the woman gets the man to change something under the guise of it being for the best of the both of them.
To draw a business parallel, it’s the equivalent to one 50% owner telling the other 50% owner, “You should take less dividends this year” or “You should devote more of your resources“. A good deal would be for it to be a fair trade, not one where the man changes something and the woman remains static. When a woman uses the phrase “We need to talk” or any variation thereof, what she is saying is “I want to renegotiate our relationship contract to benefit me more“.
Men end up making these deals over and over again, never asking what the other side is putting on the table. In essence, women present in-equitable compromises as equitable compromises.
Sometimes you also get the “for your own good” compromise such as “Smoking is bad for you, you should quit, so you’ll live longer” this is ostensibly an argument to improve your health, it’s also a demand that you give up something you enjoy. For instance, I enjoy quality coffee and Cuban cigars very much. If I were to give them up, that means my happiness goes down. Therefore, it follows that the happiness needs to be replaced by something else.
Making Good Deals
Making deals is a complicated topic, but broken down it seems to come down to roughly the following elements:
A) Knowing what you want out of the deal.
If you go into a negotiation blind, or hoping to “play off” your adversary, you are at an immediate disadvantage. If you are very aware of what you want, it gives you a goal to focus on. Sometimes you will have to enter a deal blind, such as with the “We need to talk“, however be very wary of agreeing to anything in such a situation. Hear the pitch, say you need time to think, and then walk away from the table.
B) Having an idea of, or knowing what the other party wants out of the deal
By understanding your opponent, you are at an advantage and you can identify areas where you can make it appear as if you are giving them the world, when in reality what they wanted was of no consequence to you. Make sure to always act as if what you are giving up, is a huge point to you, as this opens them up to a reciprocity ploy later.
C) Knowing what points you are willing to negotiate on
If you know what points you are willing to negotiate on, you have a map in your mind of what can be sacrificed without it having a major effect on you. For instance, she wants to paint the living-room shock-pink, but you hate shock pink, but you may be OK with a darker shade of pink. Though, always remember to make it out as if you are doing her a massive favor.
D) Knowing what is non-negotiable for you
Kenny Rogers said this the best in the song “The Gambler” when he sings “Know when to walk away, know when to run“. Some deals are simply not worth making, as they are too costly. This is in my opinion the area where most men struggle when it comes to their relationships with women. They simply do not have a point where they will walk away from the table. Many men enter relationships that are valuable to them, but through a string of poorly executed negotiations, where the lack the will to walk away, they end up living lives of quiet desperation (paraphrased from Henry David Thoreau). If you find yourself reading this 3 – 5 years into a relationship, where you pay for a whole house, yet most of your stuff is in the garage, where you get less sex than when you were single and where you have given up most, if not all of your hobbies, then you are the victim of many poorly executed negotiations.
In addition, you have to ensure that you are aware of at all times, that making the deal is a means to an end, not an end in itself. If you start to view signing the contract as more valuable than what is in the contract, you are heading to a slaughterhouse. Perhaps the most important point is that you are not responsible for, financially, morally or anything else, for your adversary getting a fair deal. That is on them, if they are willing to concede point after point and compromise on everything and you see no detriments to yourself, then that is their problem.
This plays into what I call the “salesman catch 22” where a salesperson will over-promise, to a point where his co-workers will be unable to deliver even close to what was promised at a given price. Which is also what happens to many men and women who date not as themselves, but as their representative.
If you take anything from this post, please let it be “be wary of compromises“, you can compromise yourself into a divorce, into bankruptcy, and into many other non-desirable positions merely by being unaware of the points I listed earlier. As humans we negotiate much more than we are aware of, about things ranging from billion dollar joint ventures to who does the dishes.
Most relationships start off as very equitable deals. The start of a relationship is where you cannot keep your hands off each other, you spend time with her when you want to, you have your hobbies and buddies and largely control your own life. However, as a relationship progresses, the woman seeks to change the dynamic in her favor, as females are the masters of bait and switch. There is no denying that both genders engage in certain levels of bait & switch in the phases of early dating, however women follow up their initial bait and switch pressures towards more compromises. When you are first dating, she is dressed to the nines, always pays attention and is always in a good mood. Once she has moved in with you, the flannels and sweatpants come out more and more often. You try to talk, and find yourself out-gamed by an I-pad and her facebook friends.
Females only really perform until they lock you down, and with each locking stage, your deal becomes less equitable. Moving in together means she’ll put in a little less effort, get married, she puts in a little bit less, have a kid or two, her effort virtually disappears.
The Art of the Deal by Donald Trump
The Rational Male by Rollo Tomassi