The Parallel Parliament

by Glen Pearson

Tag: capitalism

Innovation Agents

 

335

ONE OF THE GREAT CRITICISMS THAT HAS that always confronted the World Economic Summit in Davos each and every year is that its pronouncements sounds so grandiose and global when in fact little, if anything, concrete seems to come from all that talk and collaboration. We need evidence, the kind that is supposed to emerge when connected minds and collaborative intelligence get together and map out a way forward. Proof of what is possible is far more important to the billions in this world than mere projections of what could be.

In numerous and provocative dimensions this is what billionaire and elite rebel Nick Hanauer has been prodding his peers to do: get real. Yet he understands that financial reform will prove impossible without political renewal. As long as the political spectrum remains as rigid and ideologically fixed as it has shown in recent decades, any sense of change in world finance won’t find a willing partner in transformation politics.

Hanauer points out that many of the greatest democratic movements occurred far away from the apex of power, in regional areas where citizens successfully mobilized on issues ranging from pensions to affordable health care. Often the reason is not merely due to the dynamic resources of those pressing for change, but the demoralizing inflexibility coming from party central – all parties.

“The politicians just don’t get it, and haven’t for years,” he observes. “The Right screams for growth and the Left keeps calling for fairness – and they both just keep losing legitimacy.”

It’s really not in the nature of government to innovate, except on rare occasions. Governments have historically been viewed as providing stability, maintaining the status quo, but that has become precisely the problem in the modern era. Political parties remain entrenched, making renewal all but impossible. In such a setting, how will they take risks, thinking radically outside the box, or even take the lead from outside forces. It’s true that governments around the world became far too easily influenced by free market ideologies, but that has now left both politics and capitalism as appearing unable to solve our greatest problems. While political leaders in places like Davos acknowledge that financial inequality has become one of our greatest challenges, they see no desire for change from the financial order and so remain mired in their redundancy. The status quo no longer works because far too many people are being left out of the wealth being generated.

Not even a year ago, the Coordination of National Digital Strategy of Mexico launched a program called “Innovation Agent.” They invited leaders from within both government and capitalism and asked them to think of the great global challenges in the way average people would see them. Over the course of time the organizers easily spotted the true innovators from both sectors and were amazed at how they worked together to formulate solutions.

Yet the success of the exercise wasn’t so much predicated upon the ability of the participants to start thinking like average people as it was the freedom the innovators felt once removed from the stifling orthodoxies and ideologies of both politics and business. The business innovators showed remarkable dexterity, not only in admitting corporate failures but of the need for governments to take on a more equitable leadership role. And the politicians? Once they were freed from partisan constraints, they were far more effective in designing collaborate solutions that showed promise.

Participants in the exercise acknowledged that in order to build governments and businesses that truly apply themselves to the challenges before the world they must get out of being isolated from citizens in general. Innovation didn’t come for the participants until they were willing to entertain the possibility of destroying the old paradigms and partisan leanings.

To succeed in reforming both politics and business we must find some way to get them outside of their comfortable confines and into communities where the greatest kinds of innovations play out. The governing and corporate sectors have come to be exclusively defined by three general terms – size, money, and power. Until they both work together to change that perception, it will only be a matter of time, as Hanauer repeatedly claims, until everything collapses due to irrelevance.

Pitchfork Democracy

zs004web

THE DAVOS MEETINGS HAVE CONCLUDED AND, as always, we await the results. Warnings were coming from everywhere prior to the exclusive sessions – possible recessions, the lowering price of oil, global inequality. But as far back as last summer, one of those in the world’s most elite financial club was already sounding the alarm at various levels.

Nick Hanauer helped launch 30 businesses, including Amazon, owns a bank, his own plane, a huge yacht, and qualifies, not as a member of the 1%, but of the .01%. He says that one of his keenest strengths is to possess a kind of instinctive sense of what the future will bring.

What is his sense picking up now? “I see pitchforks,” he states confidently.

“Our problem is that inequality is at historically high levels and getting worse every day. Our country (the U.S.) is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.”

Did the folks at Davos hear this message? It seems likely, and from numerous sources. The problem is that many of those who attended the World Economic Forum last week are of the investment kind. They attend because they sincerely want to hear of the problems in order to know where to place their funds. They aren’t out to solve the problems, but to stay clear of the greatest risk to their resources. Hanauer knows this reality and so put his challenge in plain terms: “And so I have a message for my fellow filthy rich, for all of us who live our gated bubble world: Wake up, people. It won’t last.”

Many in the financial order actually appreciate his forthrightness and candour, but figure they can avoid the troubles he speaks of. What they don’t comprehend is that Hanaeur is saying this great challenge before them isn’t financial but democratic and human. Just so they wouldn’t misinterpret him, he defined it for them:

“If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this didn’t see the pitchforks eventually come out. There are no counterexamples. None. It’s not if, it’s when.”

We’ll explore more regarding his reasonings in the next post, but for now the contrast between his language and that used in Davos is profound, even exasperating. The jargon largely used in Davos is of the corporate style – technical and vaguely antiseptic. While organizations like Oxfam were providing a clear contrast, speaking with pathos and urgency, the prevailing language is always one of neutrality and a morally numbing kind of objectivity. It focuses on the great problems of the day by analyzing their implications rather than solving their harsh realities. Yes, the great needs of the world are there – poverty, women’s rights, climate change, poor governance, even greed – but they are gathered effectively on the outside, looking in. The fundamental driving force of meetings like those in Davos is how to grow prosperity in order to overcome these problems rather than clearly solving them in human terms.

Just one other thought. If, as presented at the Swiss village last week, over half of the world’s wealth is about to be owned by the 1%, how can we expect them to tackle the great challenges of the age if it would necessarily cut into their profits if more effective measures at reducing inequality were to be undertaken?

This is where Hanauer is helpful, because he speaks from inside the gates, reminding his peers that if they have the most of the wealth, then they will have to apply themselves to the solutions. If democracy is not merely about deregulation, supportive corporate legislation, or access to hordes of capital, but angry citizens coming together, then a day of reckoning might indeed be on the horizon, the modern equivalent of pitchforks everywhere.

The Time for Tinkering is Over

Screen Shot 2015-01-21 at 8.27.55 PM

THE FEDERAL LIBERALS CAUCUSED IN LONDON this week and it was good to see some old friends. Justin Trudeau was struggling through a bout of food poisoning and his caucus was focusing on the one issue they believe will prove critical to the coming election: the economy.

I get it. Each party is talking about our struggling economy, hoping to leverage some advantage from it, one way or the other. But I wanted to ask my Liberal friends one question: will you stop tinkering this time? All parties have been doing so, but this occasion in London could represent a turning point within the party.

We all understand that each time we bounce back from some kind of recession, severe or light, that we never land back where we were. The unemployment rate continues to climb, as do the obstacles confronting the poor. On other occasions, all parties have focused on economic solutions but they never quite pulled it off. Yes, deficits were slayed, or, yes, trade was enhanced, but the growing disillusionment and worry among Canadians is inevitably creeping up to the levels found in the United States. People don’t really trust government to get things right anymore because, well, our problems have grown regardless of who was in power.

The real problem confronting the political order these days is not financial capital but social capital. Somewhere along the line, the political order lost touch with the mood of the people and now everything is about pursuing the vote of a relatively few number of people in order to gain power. We, as Canadians, understand that. But will you go back to the origins of our difficulties and repair them from their very source? There was a time when the corporate good transcended the public good and ever since then we have watched as wealth has been accumulated in record measures at the same time as less and less of it went to average Canadians.

In a very real and increasingly tragic way, Canadians have felt the withdrawal of institutional supports, both private and public. This has created a crisis in confidence that can’t be simply solved by an election. Forget talking about the lower, middle, or upper class; this is about the “anxious” class, and how the worry they feel about the future of their kids and a more dangerous world is far more serious than any political party’s electioneering. These people are struggling to preserve their standing, their sense of worth in an increasingly alienated culture. And now they have slowly begun pursuing individual survival over social solidarity. Signs of this are everywhere, but it’s important to acknowledge that the political and financial classes oversaw this development, and to merely give us the same-old, same-old, will only erode that reality further.

There used to be a time when individual identity and social identity crisscrossed repeatedly in Canada. In rural communities and big cities there was always the sense that this country was “under construction” and going somewhere. Now we have no idea where the politicos are taking us, and our confidence in the future and ourselves is eroding.

Liberals have always prided themselves as the party of balance. Okay, but our sense of equilibrium has been shot for some time now. All parties played a role in that disruption and we won’t get things right unless we go back to the origins of our difficulties. Why has the political class forced us to choose between trade and jobs, between comfortable houses and homelessness, between remaining in the middle-class or poverty, between meager governments or no governments at all? These are sincere questions that should be asked of all parties.

Even at the best of times in recent decades we have felt the tearing at the fabric of the Canadian identity. We have failed our aboriginal people seriously enough that we can’t even muster the strength or sense of social justice to launch a commission to locate the roughly 1,000 missing or murdered aboriginal women in this country. What is that about? Is this the vitality of our social consciousness these days? Must we watch as parties bludgeon themselves to a depraved degree and walk away with any sense of hope diminished?

You believe in balance, right? But can we all bring ourselves to acknowledge that we lost that tenuous tension that was Confederation years ago? The number of poor is growing. Good jobs are becoming scarce. Veterans are being denied. Seniors are fretting. And students can’t even afford to learn anymore. This is not the Canada we envision in our finest moments. So, enough with balance already; let’s get on with finding answers to these, our deepest problems.

In the U.S., Obama has opted to use the last two years of his tenure to attempt to bring about social and economic change. Yet there was a time when people thought he would start with such things, not end with them in a lame duck scenario. Enough with institutional cynicism; get on with the task of remaking the country on the basis of our progressive ideals and not some corporate ideology.

This is about the battle for the heart and soul, not of the Liberal Party, but of the country. The sweet spot isn’t the middle-class, but the aspirations of a good people. The time for tinkering is over; the time for renaissance has come.

 

Firms of Endearment

529x270xmisconception.jpg-529x270.jpg.pagespeed.ic.5gu9aBKAeU

 

I LOVE THIS TITLE, BUT IT DIDN’T ORIGINATE WITH ME. It came from Raj Sisodia, professor of marketing at Bentley University and formed part of the title from his book, Firms of Endearment: How World-Class Companies Profit From Passion and Purpose.

Sisodia is a firm believer that modern capitalism has departed from its early tenets and principles and is suffering a global meltdown in reputation as a result. He co-founded the Conscious Capitalism Institute in order to promote a dual message that capitalism has gone off course but that its recovery is essential if humanity is to progress.

His is a voice we need, in part because we have too frequently castigated capitalism as the great culprit of all our ills when in reality we have also been blessed by it. In our search for solutions as citizens we have taken to simplifying our problems. We have done with capitalism what we did with church, politics, and the media – been so universal in our condemnation that we forget the better qualities of people involved in such institutions. Before we go completely overboard in such an outlook we need to bear in mind some history of what the capitalist movement has accomplished. Consider:

  • Since 1800, average income per capita globally has increased 1600%. The standard of living for average Westerners has increased 10,000% in that time.
  • 200 years ago, 85% of the world’s population lived in extreme poverty – a number now reduced to 16%.
  • In that same period, as a result of better material lives, the average life expectancy across the world has increased to 68 years from its historical average of 30 years or less.
  • In the past 40 years, the percentage of undernourished people in the world has dropped from 26% to 13%.
  • In 1800 almost the entire world was illiterate. Today, 84% of adults globally can now read.

All of this forms something of a revelation to many of us and we have overlooked the part the capitalism has played in such development. Today, it is popular to pit capitalism against democracy, but lets remember that it was only 120 years ago that no one lived in countries with governments elected by universal suffrage. As of this year, 53% of people now live in such countries. Most researchers give a large portion of the praise for this development on the economic freedoms provided by capitalism itself.

Clearly there are significant problems in the modern capitalist movement that have had almost universal tragic effects on humanity – environment degradation, the resurgence of the widening gap between rich and poor, the refusal to respect standards and legislation. These are the things that so much define capitalism today and our communities are feeling the effects. Our task should be to call for the reformation of the financial order as opposed to merely condemning it.

These recent posts on the need for such a new enlightened age for capitalism have been predicated on the belief that there is much inherent good yet within the system and that conscientious workers, leaders and investors are attempting to make change – just like churches, democratic parties, governments, and media contributors.

We must begin the process of finding out just who these companies and their leaders are and joining their efforts for a more responsible and community-centered way of doing business. Those seeking reform from within civil society itself must locate and partner with those inside the business community fighting for the same ends. It’s time to stop falling back on the adage that time changes things. Things are so serious at the moment, and the implications so ominous, that it’s time we changed them ourselves.

Putting Community Back Into Capitalism

community_mural-slide__slideshow

IT WAS THE GREAT REVERSAL THAT WASN’T.  Following the Great Recession there was lots of buzz about the financial community’s failures and the reforms that would be required to ensure such an economic calamity, like that of 2008, didn’t occur again. Stories of corporate greed, massive unemployment, bankruptcies, and mounting debt were everywhere. But what wasn’t sufficiently present in corporate or government communities was the actual desire to bring about the reforms. What people believe to have been a hopeful time of looking at our society in new ways eventually became the same-old, same-old.

American economist, Gary Becker, picked up the signs of decay early and went on to note:

I think you are not going to see a huge increase in the role of government in the economy. Economists will be struggling to understand how this crisis happened … but it will be nothing like the revolution in the role of government and in the thinking that dominated the economics profession for decades after the Great Depression.”

He proved to be correct, in large part because the governments of developed nations remained vulnerable to the hard lobbying of a financial system that just wanted to get back to business as usual. Or as New York Times writer Paul Krugman put it: “Powerful political factions find that bad economic analysis serves their objectives.” Right again.

Yet “business as usual” is how you could also describe the public’s response to both business and government – increasingly negative going into the recession and even more intense following the so-called recovery. Every instinctive politician now senses less trust from the electorate and it becomes clear that unemployment or environmental degradation show no signs of serious improvement.

That same instinct is making its presence felt in the business and financial communities as well. Just as politics attempts to talk about the middle-class as a means of recovering legitimacy, corporations refer increasingly to the importance of the customers and their lifestyles.

There is an outside chance that all this might be unlocking the key to a new capitalism in coming decades. Yes, it will about profits and the bottom line, but it will also be about increased investments in sustainability and social good. There is a sense where capitalist leaders comprehend that they live in a world of concentric circles unless they can broaden their connection with citizens, communities, and the planet in general. In other words, there is an emerging view, presently only in its fledgling stage, which reasons that success in the future must be a shared win between companies and communities.

The narrow management policies and short-term thinking have inevitably divided communities, countries, and the world in general. Citizens and their communities want back in, desire a share of the wealth that is supposedly being created but which seems to have passed them by. They look for wealth with jobs, profits with people, sales with sustainability, and capacities linked to community. Naturally, the overall financial order and manic culture of modern capitalism will press firms to continue with business as usual, but now communities are willing to fight and stand alongside those firms that will push back against this mindset.

It is always time to consider what value creation really means, never moreso than now. Social awareness is now expanding at a rapid rate and takes in that vast array of challenges each of our communities face. The days of the pitted battle between capitalism and community must be brought to within manageable limits if we are to work our way out of our present difficulties together.

Last month I wrote a London Free Press column on Tima Bansal, a professor at London’s Ivey Business School and Canadian Research Chair in Business Sustainability. You can read it here.  Tima travels the world encouraging the business leaders of tomorrow to actually think about tomorrow – forego the short-term thinking and build your business as though the future really matters for everyone and not just investors or shareholders. People just like her are emerging from within the business/corporate ranks and are cultivating expanding relationships with community and societal leaders to forge a new consensus over what our combined and collaborative future could look like. It’s the Timas of the world that might help us to close that tortured gap between productivity and community.

%d bloggers like this: