Burgess COMMENTARY

Peter Burgess

Reinventing Our Economy: Part I — The Need for Core ValuesOctober 18, 2013 Our economy is changing rapidly. The Great Recession has caused people to wake up and realize that our current system is broken. There is growing interest in alternative economic models. Many of us want to see an economy that looks beyond profit. We want businesses to provide social benefits. Terms such as social entrepreneurship and impact investing are being used more frequently. I share this desire to have an economy that is based on values. But what core values are needed? The Trouble with Doing Good When I first learned about social entrepreneurship, I became very interested and intrigued. But the more I thought about it, the more I realized that something about it bothers me. At first, I couldn’t quite put my finger on it. First of all, I noticed that people who are interested in social good like to go off to Third World countries and help the people there. They post pictures of themselves with poor African children. I support this type of humanitarian work and I’m very much an idealist myself, but sometimes I can’t help but wonder if the main benefit is for the volunteer, not the recipients of aid. I thought to myself: “What if the poor African children were actually happy before we came, despite living in terrible conditions? Are they really better off because of us? What if this desire to volunteer and help people is just a selfish attempt to fill the emptiness in our own souls?” IMAGE africanchildren I also stumbled over the meaning of the term “social entrepreneurship.” A social enterprise might be defined as a type of venture that solves social problems. But I thought: “Isn’t that what all businesses are supposed to do: solve a problem, meet someone’s needs, make something better? Isn’t profit the reward for doing this?” The situation reminds me of how the corporate world reacted when social media started coming online. Traditional companies saw the changes and realized they needed to do something. So they said, “We’ve got to get in on this social media stuff. Let’s hire some smart young people to help us do social media.” But the companies that really understand social media know that it’s not a job; it’s a skill. At one time people were hired as typists, but now typing is a skill required for every office job. It’s the same with social media. So why do we need to have a separate enterprise class that’s focused on social good? Shouldn’t this be a part of every business? Also, how do we define what is considered good? Getting Beyond Politics and Finding the Free Lunch I bring up these points to show that we tend to make a separation in our minds. We see doing “good” as an activity that is separate from everyday life and traditional capitalism. Instead of serving people in our hometowns and in our everyday lives, we feel the need to go to some distant land. Instead of running a business that happens to provide social benefits, we run a business specifically so that it can provide social benefits. This separation seems to correlate with society’s divergent political values – with conservatism being perceived as the old, broken capitalist system that’s holding us back from higher values. Perhaps I am overgeneralizing, but I think I can safely say that the majority of people interested in social entrepreneurship and impact investing are left-leaning. That being said, there is growing interest in economic models that blend social values with market forces, allowing people to do good while doing well. It can also be argued that profit is an essential part of sustainability. In my opinion, neither conservatism nor liberalism in isolation gives us the solutions that we need. That’s because assumptions of scarcity and materialism are at the root of both sides. I’m reminded of the famous talk given by Solzhetinsyn at Harvard College in 1978. He described a world split apart by differing political ideologies, but he acknowledged that materialism is at the root of both Western capitalism and Soviet communism. Not by coincidence, all of Communism’s meaningless pledges and oaths are about Man, with a capital M, and his earthly happiness. At first glance it seems an ugly parallel: common traits in the thinking and way of life of today’s West and today’s East? But such is the logic of materialistic development. Today, conservatism reminds us that there is no free lunch, and modern liberalism seeks for a more equitable distribution of the lunch. free lunch When we talk about idealism, we might bring up goals such as reducing inequality or alleviating poverty, but I think we have to acknowledge the materialistic assumptions embedded in those desires. We have to recognize that elimination of poverty is not an end in itself. We want to escape poverty because we don’t want to waste our lives just trying to survive. We want to do other things; we want to use our time in meaningful ways. The Things We Don’t Talk About Materialism typically refers to the pursuit of wealth. But it can also have a broader philosophical meaning, referring to the belief that the physical, material world is the only reality that matters. We tend to avoid discussions of religion and spirituality. This is because these topics tend to divide people. But maybe we should stop being so afraid. After all, isn’t idealism based on the notion that non-material values matter? How can we know which non-material values to pursue, if we’re unable to have serious discussion about what non-materialism means? I think this goes beyond slapping a Coexist bumper sticker on our car. We ought to really make the effort to understand one another and appreciate values that are different from our own. What Does a Utopia Look Like? I think that most everyone would agree that one of the defining characteristics of a successful utopia would have to be shared core values. Does that mean everyone has to be of the same religion or worldview? I don’t think so. But there have to be certain values that hold the group together. A utopia is oriented toward the non-material – the belief that there is something “more” out there than just this physical world. Otherwise, there wouldn’t be sufficient motivation to make the needed sacrifices. You might be thinking, “Utopia? Aren’t you getting a little carried away? You can wish for a free lunch, but wishing doesn’t make it a reality!” Utopians have gotten a bad rap, because they are perceived to be too much in the realm of idealism. But I think this is part of the struggle we are meant to deal with – material vs non-material, idealism vs pragmatism. Our existence is a duality, and we progress by learning to reconcile and synthesize the opposite sides of our nature. Getting Off the Treadmill I think the treadmill metaphor accurately describes pure materialism. We keep moving as if we’re pursuing something, but we don’t get anywhere. It’s something that we feel, but it also represents economic reality. Our debt-based money is constantly being devalued, and the system demands ever-increasing resources just to survive. Most people walk the treadmill in ignorance, trying their best to get by. But more and more people are asking themselves, “Why is it that I can never seem to get ahead?” exitThe good news is that changes are taking place which, in my opinion, will allow people to effectively opt out of the economic treadmill. I think we’re just beginning to understand the net effects of social media and the peer-to-peer revolution. As social media and Web 2.0 blossomed over the last decade, people started having more interactions with each other. One of the effects of social media is that instead of interacting with institutions, people instead started interacting with individuals within an organization. Now we’re taking that trend to the next level, where we’re not just having social interactions; we’re actually collaborating, working together, and creating new ventures together. The net effect of this trend is that it allows people to look beyond traditional institutions and form new social structures to meet their needs. And so as we move into Web 3.0, this will not only involve new social structures but also new economic structures. In my opinion, this creates the opportunity for people to separate themselves from the current system (step off the treadmill) and create the alternate structures needed to sustain the lifestyle they desire. So it’s not about overthrowing the old, broken system. It’s about letting wheat and tares grow together. Core Values Help Us Organize There is growing interest in peer-to-peer finance and crowdfunding, but it still feels very much like the Wild West. Crowdfunding today is kind of like being in a room where everyone’s shouting and talking over each other. There is a need to organize. Having core values can help add some structure to a nebulous new environment and unite people to a common purpose. It’s important to understand the connection between group behavior and individual motivation. We can’t expect to create a functioning system, if we as individuals aren’t willing to go along with it. To achieve broad systemic change, we have to change our behavior as individuals. In upcoming posts, I will propose three core values that I think will be helpful in shaping the future as we reinvent the economy. Reinventing Our Economy Series Part I — The Need For Core Values Part II — Alignment Through Ownership Part III — Long-term Focus on Value Creation Part IV — Local Self-reliance Part V — Summing Up Images by hdptcar and Sam Howzit