Tuesday, October 29, 2013

Choosing Community-Based Capitalism

We are lucky to live in a primarily capitalist economy that enables wealth accumulation and investment, depends on personal freedom, and fosters invention and the efficient use of resources.  Indeed, capitalism is increasingly the world-wide system of choice, although its manifestations vary widely from a free-market tilt to more circumscribed capitalist enterprise in authoritarian countries.

Like any system, capitalism can be abused.  In the U.S., great wealth is controlled by powerful interests with a bent toward social Darwinism, rather than equal opportunity, human rights, and the value of the commons.  True free-market capitalism naturally enables human greed and self-interest.  For example, freed by the past 30 years of deregulation, leaders of the financial industry have reaped huge personal fortunes at the expense of millions of individuals.

So, capitalism can’t just roll along like “ole man river;” it must guard against potential abuses through legislation, regulation and, often, legal action.  It must also be strategic, anticipating shifts in human and natural resource supplies (e.g. location, availability, and suitability), so that profits can continue to be accumulated and reinvested for further growth.  

Refreshingly, after decades of this country’s self-indulgence in a “me-oriented,” materialistic society, a new kind of capitalism is emerging.  It is a grass-roots capitalism that pursues reasonable profits as well as human rights, natural resource conservation, community-building, and a modest material life.  I’ve called it community-based capitalism. This capitalism values durable over disposable products, sharing over personal ownership, recycling and reusing over trashing, and mindful over mindless consumption.  It recognizes that resources are finite, equal opportunity is essential to economic growth, human societies are interdependent around the globe, and that chasing more “stuff” (beyond the basics) is inimical to meeting life’s major challenges of health, security, happiness, and stewardship of our environment.  And, it seeks profit for reinvestment and economic growth, the hallmark of capitalism.

Consider Neal Gorenflo who has described “The Sharing Economy” in FastCompany Magazine.  Among other things, Neal shares a nanny with his neighbor and makes loans to others, known and unknown, through a peer-to-peer banking site called Lending Club.  When in San Francisco, he uses a Prius through City CarShare, a not-for-profit version of Zipcar.  Once a corporate executive for strategic planning, Gorenflo quit his job to downsize his life, “removing all the things that don’t add value and concentrating on the things that deliver value.”  He has since started Shareable, a non-profit website that provides a playbook for how to share anything and everything.  

Neal is only one of thousands world-wide who have found new motivation for thinking creatively, productively, and in ways that yield a good living - while doing good for their communities and the earth.  These “new capitalists” and entrepreneurs see the world reflexively in terms of a triple bottom-line: profits plus community plus Mother Nature.  Another “sharing guru,” ex-corporate innovation consultant Rachel Botsman, advocates that access to goods and skills is more important than owning them. In her book, What’s Mine is Yours: The Rise of Collaborative Consumption, she concludes that community-based capitalism “could be as big as the Industrial Revolution in the way we think about ownership.”  Nor is it without economic value: Botsman predicts the sharing economy could be a $110 billion plus market.

Another type of community-based capitalism includes “social enterprise,” which addresses social issues using market-based income, blurring the line between for-profit and not-for-profit models. A growing grass-roots effort is the use of community currency, paper scrip circulated and banked within a local region to empower new business growth and stronger community ties.  Most grass-roots of all are Time Banks, community website accounts through which people trade hours of service, one hour for one hour, to help each other accomplish real-world tasks. This is the good news of trends in today’s capitalism!

 




Tuesday, October 15, 2013

Greed is Good

In the movie Wall Street, Gordon Gekko claims, “Greed is good. Greed works.  Greed clarifies…and captures the essence of the evolutionary spirit.”   Bernie Madoff, a real life greedster, once justified his behavior as simply leveraging client greed, as everyone on Wall Street did.  Economist Milton Friedman forcefully asserted that all societies are driven by greed and “that the world runs on individuals pursuing their separate interests,” essentially saying capitalism’s success depends on greed.

T
hese men describe a world in which greed is paramount, valued, and productive, a human nature imperative in which all that counts is the self.  They also portray life’s economic activities as a zero-sum game: “You win, I lose” or more preferably “I win, you lose.” Neo-Social Darwinists, they assert that greed is the backbone of survival of the fittest.  

In the eyes of most humankind, however, greed is far from good.  For many it is one of the seven deadly sins.  And while it is part of human nature, greed is only one of human nature's many facets.  Most of us have seen poignant instances of greed’s direct biological opposite, altruism, when a member of a group sacrifices his/her life for another group member. 
 
As for all three financial titans, they should have taken a biology class to learn that greed tends to be antithetical to evolutionary success.  Darwin’s theory of natural selection describes a gradual biological process in which a system of diverse life forms is mutually shaped, or evolves, over time through progressive adaptation to the demands of the constantly changing environment.  Evolution is a function of interacting adjustment in which all parts support each other for survival.  Metaphorically speaking, individuals who thrust their necks outside the system are likely to lose their heads. 

It seems that these men have projected their own narrow self-interest onto other individuals, and even whole societies, mesmerized (like Narcissus) by their own mirror reflection.  Their narrow beliefs have been reinforced by surrounding themselves with like-minded masters of the universe who also pursue selfish goals.  And, most likely, their skills are somewhat limited, better suited to selfish manipulation than to achieving productive outcomes.

It can be admirable to grow significant personal wealth, the goal of many capitalists. But if our society sanctions obtaining wealth through greedy behavior and values, then democracy and the promise of capitalism are at risk.  This is not a theoretical argument.  Today, after the debacle caused by greed in the financial markets, 1% of the U.S. population owns more wealth than the bottom 90% (or 99%), many of whom are middle-class, long-term jobless, and homeless.  Small businesses are strangling while big banks report record profits.  Government policy making is dominated by Wall Street cronies who can’t see beyond their conventional wisdom.

Can you have equal rights without free and fair elections that haven’t been bought?  Can you have capitalism in a monopolistic financial marketplace that limits access by entrepreneurs to start-up and growth funding?  No and no!  Highly concentrated wealth held by self-interested people hurts the U.S. economy and its social fabric. Indeed, the dictates of systems theory suggest that greed isn’t even good for the greedy in the long run!  

Tuesday, October 1, 2013

Doing Good

A sustainable society is on the horizon. If we just believe and act, we can draw it closer to reality! Businesses are inventing ways to support social causes; non-profits are inventing ways to generate steady income through business enterprise: two signs of a changing economic consciousness. The triple bottom line - people, planet, and profits – is gaining adherents among corporations, small business owners, and entrepreneurs. The B Corporation – legally required to pursue the triple bottom line – is growing in numbers.

We are seeing the confluence of necessity, humane values, and instinct as a new economic order. Necessity, generated by a brutal economy and the concentration of wealth at the top of society, is creating dis-ease in the declining middle class. As comforts diminish, rebellious edges and creative responses are sharpened. Humane values, enabled by a level of economic comfort and global consciousness never before known in societies, help us to stand more knowledgeably in each others’ shoes. Instinct, the biological truth that “no man (or woman) is an island,” drives us to assist others as a means of protecting ourselves.
 
We may last long enough as a species to solidify this shift – or we may not – but it’s underway and each of us can do our small part to reinforce it, to live with hope. I’ve written often about this topic, evident in so many ways, not least in the Occupy Wall Street movement. Here are a few small, random examples. 
 
1. Inc. Magazine’s May 2011 issue has a special report on the innovative business models social entrepreneurs are inventing It features 22 companies in the vanguard of our changing economy, including Cascade Engineering. Fred Keller, the CEO of the $250 million Grand Rapids business, has helped uplift an entire community by steadfastly asking the question: What good can we do? It is a B Corporation. 

2. “The National Center for Charitable Statistics estimates that nearly 70 percent of the $1.4 trillion generated by nonprofits in 2008 came from the sale of goods and services,” reports Inc. Magazine. An example: The 3.3 million members of the Girl Scouts earn $700 million+ in annual revenues from selling cookies.

3. Milkshake is a daily email that highlights businesses that do good. Its website says, “Read about a chic watch made of recycled wood, then click to buy and support a tree-planting initiative (or) learn about an organization that is selling gum and mints to fund the education of children in Africa.” A recent Milkshake find is the IOU Project which allows you to buy (without the middleman) sustainable, artisan-made clothing, watch videos of the Indian and Egyptian artisans at work, and upload videos of you wearing their products. 
 
4. Tyler Merrick, the founder of Project 7, sells consumer products and donates about 50% of his profits to help end hunger, promote conservation, and assist the homeless, among other philanthropic efforts. His first successful sale was made to a Whole Foods buyer who bought Merrick’s philanthropic idea, more than he bought Project 7’s initial product of chewing gum. Now Merrick’s business is in 4,000 stores nationwide.
 
Make no mistake: We’re all required now to look truthfully at where we are as a society and at our global context, and to act constructively in response. As a biological anthropologist friend once told me when I was fighting an undeniable biological fact, “The truth shall set you free, Jima.” That holds for all of us. Invite your social consciousness to choose what you buy, what your business sells, how your business uses its profits, and how your non-profit can make a steady income. Not an easy shift, of course. But, as we try harder, as we focus on the precepts and practices of this emerging economic model, as we BELIEVE, we will improve the health and sustainability of our world.