Dear Big Cheeses Who Run the World

This is so fantastically brilliant. Read it. Umair Haque smacks it down in the Harvard Business Review. I swear that the put-downs in this piece are some of the best I’ve ever read.

WARNING: You may want to read this in a place where you can whoop and cheer.

Dear Big Cheeses Who Run the World,

We regret to inform that you’re fired. We’re really, truly sorry about this, but we’re going to have to let you go. It’s time for you to pursue other opportunities.

In case you haven’t noticed (and who can blame you? It’s pretty hard to see it from private jets, mega-yachts, 158th floor boardrooms, and members-only backrooms) times are pretty tough lately, and we’ve got to cut back somewhere. In fact, that we’re beginning to suspect that maybe, just maybe the entire contract between us, you, and tomorrow — the Washington Consensus, yesterday’s blueprint for building economies, communities, and societies — is fatally broken.

Yes, though it did fuel a dismal sort of prosperity, we’d like to aim slightly higher than McGrowth. Because what that seems to have led to, at the end of the day, is a level-five epidemic of austerity. Your solution? Well, it’s all a little too Dr Frankenstein for us, frankly — undead companies, banks, funds, and boards, patched and stitched piecemeal back together, shocked back into life via the electric jolt of yet another bailout, stimulus, or special exemption so they can stagger on into a desolate tomorrow.

Thanks — really — but no thanks. We’d like to pass on your very kind, rather creepy plan for a Frankenfuture. It’s time, instead, for us to take a quantum leap into the 21st century; to, once again, with steadfast determination, unyielding courage, and just a little bit of trembling trepidation, leave the past behind — and furiously pioneer a better tomorrow.

Please don’t worry about us, though — because we’re not worried about you. Gambling away other peoples’ money, glad-handing each other, double-crossing Planet Earth, and driving companies and entire economies into the red — these are highly employable skills, and we’re sure you’ll land on your feet. We’ll be happy to provide a reference spelling out your expertise at being zombie overlords, should you ever need one.

Just in case, though, you’re in need of some totally utopian, rather idealistic, hopelessly naive, laughably unrealistic, stupidly hopeful, colossally constructive, thoroughly impertinent reading material, here’s a little crib sheet we’re leaving behind for you. It’s a brief, crude stab at a new set of design principles that might, just might, be able to spark 21st century economies, communities, and societies, and ignite a more authentic, enduring prosperity.

Call it, if you like, the Generation M* Consensus — the growing consensus of a global movement dedicated to toppling the old order, by doing meaningful stuff that matters the most.

• The Empty Vessel Rule.

Government, Arthur Okun famously argued, is a leaky bucket — one which leaks money at every turn. Yet, though the government may be often a leaky bucket, the corporation is just as often an empty vessel: bereft of any purpose higher than profit. What the private sector offers in terms of efficiency, it subtracts in terms of virtue. So what we really need to do today isn’t merely to privatize what used to be public, or the reverse, nationalization. We need to meld the efficiency of the private sector with the virtues of the public sector — to pioneer the legal, financial, and contractual basis for new corporate forms, like forporations, that balance obligations to shareholders and the many kinds of stakeholders; that exist “for” a higher purpose than mere near-term profit.

• Shadow Tax Cuts.

Low taxes are the next item on the Washington Consensus’s agenda: nice, but not nearly good enough. Sure, sky-high taxes will kill prosperity dead. So what about the hidden taxes we all pay every second of every day? Consider. The fumes smogging up our skies are a tax. The junkfood lining the bleak exurban shelves is a tax. Most big-box stores are taxes sucking the life, heart, and soul out of town. Wall Street’s “innovations” turned out to be a tax. The hidden charges and unfair fees that constitute most “business models” are the epitome of a tax. Where the Washington Consensus ignores all these very real taxes just a little too conveniently, the M Consensus suggests it’s time to see them, face them, and eliminate them: steep enough shadow taxes will render all growth meaningless and illusory, because value has simply been extracted — not actually created.

• The Lessig Principle.

How? Here’s one way to counterbalance shadow taxes. Property rights, the next bullet point in the Washington Consensus’s agenda, are essential to growth — and so they’ve got to be enshrined, embraced, and extended. And have they ever been. The original term of copyright was, for example 14 years; today, it’s nearly ten times that: up to 120 years. Given that growth rate, by 2100, the copyright on this blog post will last for approximately 47 billion years. Yet, as Mike Masnick tirelessly points out , building on the work of scholars like Larry Lessig, draconian intellectual property rights regimes stifle innovation, entrepreneurship, and disruption, at the expense of protecting tired, lazy incumbents (here’s an eloquent explanation on why from Lewis Hyde). So where the Washington Consensus argues for a heavy, rigid approach to property rights, the M Consensus pushes for feather-light rights, knowing that the scarcer special privilege is, the more real value everyone’s likely to enjoy.

• The Porter Rule.

While IP rights, are of course, a form of regulation, the next item on the Washington Consensus’s agenda is deregulation in almost all other respects. A giant oil spill, an even more gigantic financial crisis, and an even more gigantic lost decade all evoke the dangers of a dogmatic devotion to deregulation. The M Consensus, instead, subscribes to Michael Porter’s path-breaking Porter Hypothesis: crudely put, that stricter regulation isn’t what stifles competitiveness — it can be exactly what induces it, by encouraging disruptive innovations to spark and catch fire.

• The People Principle.

Perhaps the biggest incentive we can give corporations to start getting serious about real innovation again, then, is what might be called humanization. The next item of the Washington Consensus’s moldy agenda is legally protecting the corporation. It’s been taken to an absurd extreme, with the doctrine that corporations must enjoy legal personhood. But (Earth to beancounters) corporations aren’t people — only people are people. The former face few of the obligations citizens do, can’t face the same kinds of punishments, are legally bound to maximize profit in ways that citizens aren’t, and tend to have thousands of times more cash, time, and power, which means they can afford to de facto buy rights almost no person on earth has (like hiring batteries of lawyers to fight cases for decades). Corporations, like hammers, are just tools. And for the same reason we don’t anthropomorphize hammers, nor should we empower corporations with the same rights and powers as people. Where the Washington Consensus humanizes corporations, and dehumanizes people, the M consensus suggests unhumanizing corporations, and rehumanizing people.

• The Uninterest Rate.

So where the last item in the Washington Consensus’s agenda is interest rates, set by markets, to knock governments, people, and communities into shape, the final item in the M Consensus’s agenda is what I call an uninterest rate: the rate at which income isn’t transformed into outcomes. It’s outcomes that count. Though we got a little bit richer, did we actually realize tangible, enduring benefits that mattered? Or did we just get more insecure, obese, unhappy, and disconnected? If the uninterest rate is high, it means income isn’t translating into outcomes; because our economy’s engines and engineers — corporations, CEOs, investors — are uninterested in making stuff that actually makes us better off; they’re just interested in making a quick buck. The higher the uninterest rate, the more corporations are likely to be knocked into shape — by fed-up people, communities, society, and investors alike. If it’s low, incomes equal better outcomes, and the mere paper wealth we may have earned actually matters in human terms.

The plight of the global economy looks a lot less like a headsplitting hangover and a lot more like what tends to happen to a two-pack-a-day smoker after twenty years. So what I’ve just described is really this: the agenda for the kind of innovation that’s scarce, rare, and valuable today: institutional innovation. That’s the kind of innovation we need to restore economic health. And every day, I see more and more organizations signing off on it, in ways big and small — from Starbucks, to Pepsi, to Timberland, to Wal-Mart, to Nike, to Google, to Tata.

There endeth (for now, anyways) the M Consensus. Truth be told, of course, it’s not really a consensus, at least not yet. It’s just a highly flawed, surely imperfect, quickly written blog post with just a few ideas — no, not a comprehensive set of answers — for what tomorrow’s great consensus could be. So fire away in the comments with your own suggestions, questions, examples, and additions.

*Yes, I’m fully aware I don’t speak for everyone under the age of 25, 35, 45, or 95. Nor am I trying to. There are plenty of exceptions that prove the rule that Millennials put meaning, fulfillment, and purpose first. That said, the “M” in Gen M doesn’t stand for Millennials. It stands for “a movement to do meaningful stuff that matters the most”. It’s not about your age — it’s about your values, your vision, and your calling.