QR
Michael Yaziji writes for Harvard Business Review, Time to Rethink Capitalism?:
Today, it’s labor’s generation and use of knowledge that is the greatest source of advantage for most firms. It makes perfect sense that those contributing the most valuable resource—labor—should make the decisions and have the rights to [the bulk of] residual returns.
I respectfully take very minor askance with one and only one point of theory:
If a firm doesn’t give a risk-adjusted rate of return to investors, it won’t be able to attract and retain capital and will fail.
If firms, “deliver an attractive value proposition to customers,” as HBR rightly adds, then CAPITAL comes from CUSTOMERS. After all, how did the very first pump ever get primed? In the very beginning, there simply was no such thing as a VC or an outside investor. Aggregated capital emerged from the virtuous discipline of saving; saving emerged from the virtuous discipline of exchanging LABOR (whether embedded in livestock, produce, or services). Outside capital emerged from the creative impulse to extend that virtuous cycle. All real, tangible, fungible value ever emanates from labor, be it physical or intellectual. My neurons, your neurons, are each performing more REAL measurable work upon the tangible, physical universe than all of Steve Forbes’ capital at this very moment. The capital itself is nothing but a token. An important token, to be sure, but a token by its fundamental nature.
Capitalism++ extolls a virtuous cycle that helps to free both customers and merchants from the operational bondage of pure speculators who only ever seek to squeeze out all the juice, leaving the husk. Where do we think the obsession with “low hanging fruit” came from? It came from the vulture capitalist lust to vampire out all of the priceless pre-money energies that went into making any new thing possible in the first place. HBR does well to drive this point home when it clarifies, “Capital is a fungible, nondifferentiating resource that rarely provides a competitive edge.”
In theory, Capitalism++ helps to right-side and right-size the role of pure speculation back to Very Rarely Optional from its currently absurd and unsustainable Status Quo Mandatory misconfiguration.
In practice, Capitalism++ wrestles with entirely New Market Possibilities which it is primarily incumbent upon YOU, dear reader, to innovate. Sorry, but neatly wrapping up every last detail for an upgraded and rebooted fully functioning Global Economy for you in a single blog post is above even my lofty pay grade.
Surely, such efforts can include the incredibly difficult challenge of creating distributed, portable, mobile, information objects, entities, and methods that provide the best rate of return to those hoarders most willing to let go.
I’d enjoy nothing more than to see Market Innovations that would intrinsically motivate the Top 5% to move half or more of their Unsustainably Skewed and hoarded resources back into the Real Economy. After all, that’s where all the “missing money” really is, right? Periodically and perpetually printing more paper to make up for that which is hoarded is a dangerously explosive inflationary prospect, indeed; is it not? That said, the blunt tool of aggressively targeted taxation is always on the table, if everyone refuses to play nice in the sand box. I personally wish it wouldn’t have to come to that, but my expectations in this regard might be best described as Jaded Optimism.
One rudimentary experiment that seeks to evolve and adapt these principles in the context of rapidly growing social media video conversation, is the idea of User As Content. While a single idea may fail, among thousands of similar ideas and experiments, the most adaptive innovations will emerge and succeed.
The bottom line is that Open and Transparent Markets can and must work. Capitalism++ expresses the current non-nenegotiable global ultimatum to Increment, Evolve, Adapt, or Die. Live by the sword, die by the sword, right? The Larry Kudlow / Steve Forbes 19th Century Industrial Capitalists have forever harped upon those very principles; well, now it’s time for Kudlow-Forbes to increment, evolve, adapt, or die.
“How does it feel?”