Better Capitalism Requires 3 Reforms

image of Market Street in Paris France - Delightability Rick Steves Tour

[This article is from a talk I gave to members of the Olympic Club on May 10, 2018, A Better Capitalism. The current economic and political framework (capitalism) is failing too many stakeholders. Evidence abounds and isn’t the subject of the talk. With 3 simple policy reforms we are on our way to a better capitalism. This may seem impossible at first. But, so was putting in place policies that enabled the building of massive towers of wealth while doing harm to people, communities, and the environment. I’ve turned off comments but feel free to reach me directly or comment and share on social media.

A Better Capitalism  – an 8 minute talk and an even quicker read

I’m a pragmatist. I believe we can all do better, as individuals, organizations, even the world community. So, I’m optimistic. But, I also live in the real world. In my world view, I see things as connected. They don’t sit artificially isolated from one another. Here are the connections that I see:

  • Growth in the city and tents in the parks and spaces in-between
  • Record corporate profits and the unpaid shadow work each of us perform
  • Globalization, offshore profits, flattening wages, and boomerang kids
  • Hollowed out communities and politicians desperate to remake them
  • Indebted consumers addicted to things and stuff to distract them
  • Marginalized and outraged citizens and the tone-deaf politicians elected to represent
  • Registered voters not participating in a country divided with scapegoats aplenty

We can have lawful, dignified, respectable capitalism or we can have unbridled greed, wanton destruction, and divisive crony capitalism with fewer winners supported at the expense of the public and the environment.

I’d like a better capitalism where we get the spoils of competition, continuous innovation and benefits for the many. I love that our trade and industry are privately owned and operated for profit.

I love capitalism. But, I’d love a better capitalism, even better.

What might that look like? That’s what I’ve been pondering. That’s what I want to tell you. I only have time to tell you about 3 big ideas. Here they are.

Big idea #1 – We need to decouple healthcare and employment.

Here is why. The world of work has changed. There is more and more automation. Companies are paring down employment. They use on-demand help, independent contractors, and are pushing more people to part-time to avoid the full costs of employees.

Uber and Lyft have declared themselves platforms, not transportation companies, even though their main business is providing transportation services. It’s innovative, but make no mistake this is about internalizing gains while externalizing costs to the public.

Imagine instead of fighting innovation, we embraced more of it. Free the innovators. Embrace the gig economy but don’t further cripple labor in the process. We need to decouple healthcare and employment to give 99% of the people a little bit more.

Imagine US businesses were free to focus on their core purpose and could compete more effectively with other developed nations, nations where employees already enjoy national healthcare.

Free businesses from providing healthcare and watch innovation flourish and entrepreneurship soar. American businesses will be more competitive and without adding a single tariff. What this likely means is a #MedicareForAll #SinglePayer system. That is the least expensive healthcare program we have in this country with the best health outcomes. It would also be focused on healthcare as opposed to for-profit sickcare. Get used to hearing that idea. It will come back again and again until it finally arrives.

Big Idea #2 – We need a Parasitic Index.

For too long people have been duped into believing maximizing corporate profits is synonymous with increasing shareholder value. It isn’t the same thing. You can do massive harm to customers, employees, and the environment in the name of short-term profits but you’ll have destroyed shareholder value. Just ask Volkswagen. Ask the CEO of the now defunct Peanut Butter Corporation of America who sits in a jail cell. Ask the former makers of Asbestos.

Maximizing shareholder value should mean providing reasonable returns to shareholders while acting in harmony with the environment, communities, customers, and employees. You balance stakeholders not pit one against the other.

A Parasitic Index would show how much a corporation leeches off society’s infrastructure and labor force – while killing its host in the process. Is the corporation a partner to the community or merely a beneficiary?

Imagine a world in which corporations didn’t extort cities and states for unneeded tax breaks but instead became partners in building stronger communities, improving the environment, and creating more stable democracies. Capitalism that serves is a better breed of capitalism than the unbridled greed varietal.

I just returned from a trip to central and Eastern Oregon. One of the cities I drove through was Prineville. That’s where Les Schwab founded and grew his $1B dollar tire retail chain. His motto was Doing the Right Thing Since 1952. If Jeff Bezos embraced that motto Amazon might look different and they probably wouldn’t have halted downtown development in light of the city council’s proposed “Head Tax.”

Image of Living Wage Sign in Dashi Sushi Coffee Shop Window - Bath England - better capitalism needed
Companies Who Pay a Living Wage Would Score Lower on the Parasitic Index Whereas Companies with Massive CEO-to-Worker Pay Ratios Would Score Higher
image of WPA Plaque Main Entrance Timberline Lodge Mt Hood Oregon - better capitalism needed
When Capitalism Fails Government Steps in to Alleviate Suffering as it did with the Federal Emergency Relief Act which brought economic livelihood and meaning for people with the WPA and CCC

Big Idea #3 – We need Congress to give federal prosecutors the ability to revoke a state-granted corporate charter.

You might need a little background here. The federal government doesn’t provide any mechanism to form a corporation. That is left up to the secretaries of state within each state.

Corporations have long figured out they can abuse employees, customers, and communities with impunity, to maximize profits. They can do so because if the state attorney general where they are incorporated were to harm them, the corporation can simply threaten to move to another “friendlier” state. So, companies based in Delaware, for example, are seldom sued by the State Attorney General of Delaware.

Without the ability to revoke a state-granted corporate charter, bad actors simply pay federal fines if caught in a misdeed and chalk it up to the cost of doing business. Wells Fargo recently paid a hefty federal fine but it was still tiny compared to its quarterly profit. Facebook has a long history of apologies. Losing their right to exist as a corporation would be a much stronger deterrent.

In Summary:

In society, there will always be bad actors because as Mr. Burnham points out there are people involved. Modern capitalism isn’t living up to its potential – maybe that’s because it’s not yet ruled by robots and artificial intelligence. There are still too many greedy humans in the mix.

The 3 ideas I shared will create a better capitalism. A better breed of capitalism for the good of the many, not the few. Let’s confront reality. There are too many forces leading us to a gig economy. Let’s not fight it. Let’s embrace it and flourish in its presence. People need healthcare, let’s make that a priority.

There will always be bad actors. Let’s make it more transparent and unpopular to be one. Like the #MeToo movement did for individual accountability amid sexual abuse a better capitalism includes a parasitic index to shine a light on corporate accountability in a sea of economic abuse.

And let’s give the most egregious organizations a death sentence when warranted. The ability to revoke corporate charters will allow our representatives to protect all of us from some of us.

It not cruel. It’s not personal. It’s just business AND it’s better capitalism.

about the author

image of author and consultant Gregory OlsonGregory Olson’s latest book is L’ impossipreneurs: A Hopeful Journey Through Tomorrow, a light-hearted and deadly serious book about a brighter future where we live more meaningful lives, governments invest in people and sustainable progress, and technology serves humans. Greg also authored The Experience Design Blueprint, a book about designing better experiences and then making them come true.

Greg is a virtual chief marketing officer to small and medium sized businesses. He founded Delightability, LLC. with the belief that if you delight customers success will follow.

Four Great Resources for Humans in a World of Work That Has Changed

Sushi Thai Seattle closed - middle class income disappearing in world of work that changed - DelightabilityThe World of Work Has Changed
The world of work has changed and it isn’t coming back as we once knew it. Once we accept these structural changes as individuals, organizations, and as a country we can go about our business to maximize opportunities for Americans to make a living, make a difference, and make an impact. Full employment for those that want it should be a national goal and priority for any great nation. But, sadly this isn’t part of our national conversation and it certainly doesn’t dominate the media headlines.  SushiThai Seattle, a place I enjoyed in my neighborhood recently closed. Your community has probably felt similar closures. Each restaurant closure or other business that shutters their doors, citing a lack of demand is a symptom of our world of work that has changed. Incomes of many ordinary workers have been decimated. This is a solvable problem if we think differently and work cooperatively.

office building world of work has changed - Delightability

Few Are Insulated in a World Changed
Whether your office is on the 70th floor, in a basement, in mahogany row, cubicle bay, the kitchen table, the operating room, the local coffee shop or a coworking space, you have to agree on this: The world of work has changed. Of course it has, because the world has changed. If you don’t see this, then you are not looking very hard or you are very insulated.

Three Major Forces Changing the Nature of Work
There have been three major forces in play for a while now that continue to shift the nature of work, employment, jobs, careers, etc. They are:

  1. industry consolidation;
  2. advances in technology;
  3. and trade policy.

And yes, there are other forces at play as well like accounting rules, tax policy and loopholes, and plain old fashioned human and corporate greed. But, I’ll leave those discussions for another time.

The Great Costs of Being Idle
Aside from the very visible restaurant and store closures, the ramifications of sidelined talent and organizations unwilling or unable to engage talent is decreased innovation, stalled human progress, and stymied organizations. Problems persist and opportunities go unaddressed. That means more broken experiences and poor service quality for us as consumers, citizens, customers, members, owners, passengers, travelers, etc. For those courageous leaders that do move forward, new possibilities await, in terms of products, services, market share, new ventures, brand loyalty, consumer habits, partnerships, etc.

Stop Waiting and Start Creating
But, you can’t mind meld with your future self or look through the prospectiscope and see future possibilities very clearly. When we do look forward, we tend to actually obsess on looking backwards at earnings, GDP, and the stock market. It is very easy to get quickly trapped by history, paint the future with the past and not see new possibilities. If you rewind the clock to look at iPhone sales and Android devices before those had been invented you’d see zero, 0, zed, nada. No revenue, no profit, no possibilities, especially if you were in an industry or market that was displaced as a result of the more open marketplaces that both of those ecosystems enabled. How wrong you’d be today. But, in your own industry, you may also be wrong. What if you are? How costly will that be?

It takes a special mindset to see what what you are not looking for.

Bigger Thinking is Needed for Larger Possibilities
Steve Jobs had vision. The Open Handset Alliance that collaborated to bring us the Android operating system had a vision and purpose. Kennedy’s man on the moon speech sparked a nation to action. Hundreds of thousands of jobs across a range of industries and institutions were the result. That would be a whole lot of employment today; it was an even larger percentage of workers in its day given there were fewer workers. We benefit from innovations of that era, to this day. Imagine the possibilities of our collective future if we only nudge our attention in the right direction. Imagine if the corporations sitting idle on a collective $1.95 trillion offshore were to put that money to innovative and good use in local communities, the nation, and in the world. Oh, the possibilities.

Each of Us Has a Role to Play in Our Collective Future

Whether you are an independent worker today, become one tomorrow, or hire independent workers, here are four resources to hopefully inspire and educate you on a World of Work that has forever changed:
image of The State of Independence in America report from MBO Partners - World of Work has Changed - Delightability1) The State of Independence in America report from MBO partners is a treasure trove of facts and figures that are sure to educate, inspire, challenge, and maybe even validate some of your observations and experiences. Chances are you won’t simply have a J-O-B as most have been accustomed to in the past. And, you won’t solely interact with others that have J-O-Bs. If you look around, you’ll notice this to be very true already, and getting more true.

Freelancers Union A Federation of the Unaffiliated smaller - The World of Work Has Changed - Delightability2) Freelancers Union is a website dedicated to being a Federation of the Unaffiliated. Founder and Executive Director, Sara Horowitz, participated in a panel discussion with Darren Walker, President of the Ford Foundation and President Bill Clinton, among others on June 24th, 2014 at the Clinton Global Initiative in Denver, Colorado. Sara represented the humongous and growing collective of freelancers and independents working in America. This is very important since most of these people are largely invisible. They don’t show up in unemployment or under-employment numbers. By the Bureau of Labor Statistics own admission in their Technical Paper 66 – Design and Methodology of the Current Population Survey, “The labor force concepts and definitions used in the CPS have undergone only slight modification since the survey’s inception in 1940.” Ah great – so basically the methodology for measuring labor force participation was invented shortly after the great depression and has yet to embrace a new reality that includes the internet, mobile phones, co-working spaces of all shapes and sizes,  liberation from land based telephone lines, social networking, etc. This is very wrong and why at Delightability we’ve taken a step in a new direction with number 3 on our list.

Please Count Me - Human Centered Community Project for Americans to Self Report Employment Status - Delightability3) Please Count Me is a community website for Americans to self report their own employment status whether fully-employed, super-employed, unemployed, or under-employed. This is a human centered community project we started at Delightability to shine a light on some of the structural changes in this country and the need to have a better conversation, reduce ignorance and rhetoric, and hopefully affect policy and lawmakers to do the right thing for the entire country not just the wealthy and influential that finance campaigns. Add yourself to the workers in more than half the states that have already added themselves to the count. Read the alternative jobs report.

book cover image - The Experience Design BLUEPRINT  by Gregory Olson of Delightability 4) Another resource is my book, The Experience Design BLUEPRINT: Recipes for Creating Happier Customers and Healthier Organizations. Aside from practical tools, exercises, and recipes that can be applied to any size and type of organization, the book specifically has a chapter with prescriptive guidance for large business, small business, underemployed, unemployed, coworking spaces, congress and other policy makers to work cooperatively toward full employment, human progress, and reaching our collective potential.  See Chapter is 14. The World of Work Has Changed.

Continue the Conversation
While these four resources I shared are US centric, my friends in Spain, the Netherlands, Canada, The United Kingdom, Germany, Hong Kong, Australia, and other countries will no doubt be sparked by localizing the concepts in these resources as well. Comments are closed here but please email me or message me on LinkedIn, Twitter, or Facebook with other resources you find inspiring. Thank you Sabine for making me aware of 400 Euro “mini-jobs” in Germany. More on that in a future post.