Ideas Matter

John Mackey: Can Capitalism be "Conscious"?

Is the purpose of a business to maximize shareholder value? Yes and no. Obviously profit is one side of the coin. But as John Mackey of Whole Foods reminds us, purpose is the other. Both having and expressing that deeper purpose makes for a more holistic understanding of an organization and it's surrounding ecosystem. Ironically, that makes companies more profitable.

Entrepreneurs who understand both sides of the capitalist coin will create long term value and make the world a better place. But some people think that John Mackey's "conscious capitalism" is too squishy -- that it's really just good branding.

The Right of Exit

A video blogger captured this conversation. The debate is about "public goods." It's interesting because neither arguer wants to cede any territory. The protester has a half-baked definition of a public good -- which is generally defined as non-rivalrous and non-excludable. The anarchist fellow seems to think that every free-rider and collective action problem under the sun can be resolved through voluntary association. And he'd be right up to a point. But perhaps not in the way he thinks.

Michael Sandel Underestimates the Power of Choice

What I love about the Internet Age is that you and I can take a high-brow Harvard philosopher like Michael Sandel to task. Let's do that today.

He's right about one thing: the global economy and global communications apparatus means that Sandel is, himself, not standing in his local agora. He's talking to people all over the world. Indeed, I am critiquing him from thousands of miles away on a machine that was manufactured in hundreds of different places around the world. So yes, the scale of the global economy is such that the project of self-government is not entirely local, as the saying goes. But that's probably where our agreement ends.

Individualism: The Most Communitarian Game in Town

Cooperation is not collectivism. Community does not require coercion. If we come to acknowledge these facts, we may come to conclude that individualism is the most communitarian game in town.

To make such a statement, one has to understand that communitarians see ideal community as:

1. Situated in time and geography.
2. Composed of people who share memories, traditions and history.
3. Composed of people who have face-to-face contact and are governed by forces of trust, cooperation and giving.

Steven Johnson: Combining Hunches

Small hunches + Connectivity => Good ideas. (Or something like that.) That's what Steven Johnson argues is the best way to arrive at concepts that make the world a better place. Johnson's also correct, I think, that hunches incubate. It takes a while to round them out or connect them up with other ideas that give them traction. Most good ideas are, in fact, inherently social. That is, you can't make them work without connecting up with other people who have good ideas. So connecting with others -- whether to finish a half-formed idea or to render an idea as a venture -- is a critical stage of the process.

The Trouble with Tribes

Seth Godin is right, up to a point. We do need tribes. We are a tribal species; it's in our DNA. But there are good tribes and bad tribes. No, let me rephrase: there is good tribalism and bad tribalism. I should explain.

Is Michael Walzer evil or deeply confused?

I'm pleased to see that -- as of this writing -- only 98 people have viewed this video by Michael Walzer. Nevertheless I'm going to push up that number just a little, because I think Walzer's position lies somewhere between deeply confused and evil. I don't care that he has a cushy emeritus position at an Ivy League school. I'm going to shoot straight.

Incentives Matter... But So Does Eudaimonia

People are going bananas over the work of Daniel Pink. And I'm glad. There are way too many people out there still running organizations in old-school fashion. In contrast to what Pink recommends in this video, most companies remain locked in a hierarchical factory model complete with the micromanagers and people positioned as static cogs. Budgets and decision rights remain at the top. Task lists and drudgery remain at the subordinate layers. Middle management is asked to execute what may be a poorly conceived strategy -- so they get both abuse from above and low morale from below.

The focus in these hierarchical organizations lies mostly in faithful executing of plans -- like the Soviets had. Then, management evaluates inputs rather than results. Performance evaluations reflect this backward methodology. Productivity suffers.

Seniority remains a poor proxy of experience in these firms and compensation is often tied to it in a kind of corporate socialism that can create incentives to remain comfortable and quiet. For these orgs, not much has changed since the 1960s, even though they have the Web. They can often trundle along, but the high-performance organizations of the future -- their competitors -- are going to change their internal rules so they look more like networks than hierarchies.

Property Rights are Great (But how do you derive them?)

What's so great about property rights? Tom Bell explains in this video. But what he doesn't explain is how property rights are derived at all. That is, a) how do you "ground" them (so to speak) and b) how does you acquire them from the start? In other words, how does property pass from an unowned state to an owned state? Such questions take one to philosophical depths pretty quickly.

The Poverty Cure

The Acton Institute has a cool new "beta" project out called the Poverty Cure. The idea is simple: poverty is the rule and wealth is the exception. So we have to "rethink poverty." How can desperately poor people get wealthier?

The standard answer (from the foreign aid community) has been more or less to rain money on poor countries and send in the technocrats. Alas, this hasn't worked. We've been trying it since Bretton Woods. Although the Acton Institute is a religious organization, they understand variations on the foreign aid model don't work either. Indeed, the Poverty Cure is a refreshing departure from the "mission" model, as well, which is often little better than foreign aid with a religious twist.

In this video, Acton demonstrates commitment to institutional change of the sort we discuss on Ideas Matter. That is: new institutions, new innovations and more exchange -- or rules, tools and trade. Just one of these components is not sufficient. All are necessary. And the rules have to come first. If you don't get the rules right, little else is likely to emerge except, of course, the rot of corruption and the subjegation of the people. Acton shows us that poor people need elbow room. They need the space and freedom to launch ventures to rise out of poverty, organically, by serving each other's needs via entrepreneurship and exchange.

Note: you can see wonderful Free To Choose Network footage in this clip. We are a secular organization, but we are happy to partner with wonderful organizations like the Acton Institute.