Can Capitalism be Fixed?

I had the privilege of participating in a panel titled "Making Capitalism Great Again"   My first thought was - when was it ever great. Do people not remember slavery?

I was on this panel with a Nobel Prize Winning Economist!  I not only held my own - others on the panel started using my lensing. So I was clearly qualified to discuss this with a Nobel Prize winner. And yes - now that you know how awesome I am - you should totally take at least ONE of my courses. (https://humanistlearning.com/jennifer-hancock/)

First off - let me say - I do like capitalism. I just don't have any delusions that it's ever been all that great. Being better than the alternatives - does not making something great. It just makes it better than the alternative. 

Second, we have never ever ever ever gotten anywhere close to the ideal of how capitalism should work as laid out by Hayuk in his book The Road to Serfdom. Hayuk makes the case for capitalism (as opposed to socialism) by explaining the ideal - which is that free markets provide for the best distribution of goods and services and wealth by allowing people to compete for resources. Those with the most need - end up with the needed resources through the process of fair competition.

Obviously - this is NOT how our system has ever worked. Mostly because - we actively and intentionally exclude people from being able to compete in the system.  And yes - I am once again - talking about slavery. We've always allowed for criminal exploitation in our capitalism. Exploitation handicaps the system  and distorts the market and creates unfair advantages. Allowing exploitation (whether of people, or of resources) prevents the full promise of what capitalism can deliver. 

Third - exploited people - don't like being exploited. So it should NOT surprise anyone who wants to advocate for capitalism that some people equate capitalism with exploitation - and don't like it.  Want to fix capitalism and make it great?  Acknowledging how we have collectively failed to deliver on that ideal - is necessary first step. 

Finally - I am optimistic.  Given how badly we've totally and completely failed to create the necessary conditions (an even playing field) which is required for capitalism to function - it's astonishing how much we have accomplished. We live in the safest time to be alive. We have gone the moon and explored the starts. We have made deadly diseases a thing of the past. I can now search the internet from my phone - oh and we have phones and can talk to anyone on earth whenever we want!  How awesome is that.  And we've accomplished all that - while handicapped and with one arm tied behind our back. Imagine what could accomplish if we actually allowed EVERYONE to participate in the system!  And I mean EVERYONE! 

What follows are the notes I made for myself about - how to fix capitalism and make it "great." 

• False dichotomies  - we tend to think in terms of false dichotomies and we need to stop. Seriously - it's preventing us from seeing the obvious solution right in front of us.  Examples of false dichotomies?
• Competition vs. Cooperation. Many pro-capitalist people focus on the competitive nature of capitalism. The reality is the best way to compete - is through cooperation. The most effective teams - collaborate. We must do both - compete and cooperate. If we focus on one or the other we fail.
• Capitalism vs. socialism is another false dichotomy. We actually can do both at the same time. And we should be doing both. Crazy I know.
• Politicians like to tell us - we either do capitalism or we do socialism. We can do both. They rightly point out - the problems of socialism. But they always seem to fail to mention the problems with capitalism. For a list of these - read Marx's Das Kapital. 
• Both capitalism and socialism have pros and cons. We should be figuring  out how to maximize the benefits of both (competition and cooperation) and we should work to minimize the harm caused by both capitalism and socialism. 
• To do this - we need to not be afraid of either capitalism or socialism and instead understand that we need to compete cooperatively and seek balance and avoid extremes. 

Hayuk teaches us - capitalism only works if there is an even playing field. This is a requirement. If this condition is not met capitalism does not work and it’s NOT a free market. (distorted) 

• Our current problem? 
• We practice and reward exploitative capitalism instead of humanistic capitalism 
• Exploitation is a criminal enterprise masquerading as business. 
• Again, Hayuk tell us the role of government is to create - an even playing field. Instead - we have allowed criminals to use government to distory the playing field for their advantage. 
• Reality - We have ALWAYS subsidized exploitation and put barriers in the way of humanistic businesses. 
• Examples: 
•  Local to me - In my community - we had both slavery and cooperatively owned fishing ranchos. The government sided with the slave owners, and ran off the cooperatively owned business. Why? Because the existence of a cooperatively run business meant - the slaver - had trouble keeping his labor as they would run away to freedom and the right to work for themselves.  Did out government based on freedom support these freedom loving laborers? No - we used the military to force them to keep working for a person they didn't want to work for. This is what I mean by distorting the playing field and giving advantage to bad actors at the expense of good ones. 
• Currently - this is still a problem. Our government still some businesses over others. For instance - it's illegal to run a business to benefit the community.  If you do this - your shareholders can sue you. So people who want to run good community businesses - legally can't.  We prohibit employees from unionizing and maximizing their bargaining power - privileging employers over employees.
  Our tax codes - privilege ownership over actual work. 
• An even playing field - must treat EVERYONE equally. Everyone. Otherwise - we distort the system and the result is not good. For anyone except those who are legally privileged and protected. Everyone else - is prevented from competing and - the result is not capitalism as outlined by Hayuk. 

• 3) Solution? 
• Recognize Exploitation for what it is 
• b. Promote cooperation and humanistic businesses 
• c. Even the darned playing field – for everyone 
• i. Employers, employees, environment, etc.
• Create a Social safety net. 
• We can and should harness competition for this - but  must exist and be robust – otherwise – distortions will continue. If people are too poor to participate in the economy, then capitalism can't work it's magic. 

Is Big Business Bad?

I am pretty progressive, meaning - I think positive progress is possible and that we should be working towards making the world a better place. As a Humanist - I define better compassionately - if it helps people flourish - it's good. If it harms people - it's bad.

So … how do I feel about big business.  Answer? Well - it depends.

I try not to have a knee jerk reaction to anything and I consider each moral situation - independently.

Big businesses can be good or bad or both - good and bad - depending on the company and what metrics we are using to determine what we mean by "good" and "bad."

There was a really great article in The Atlantic on this:
https://www.theatlantic.com/magazine/archive/2018/04/learning-to-love-big-business/554096/

The subtitle is: Large corporations are vilified in a way that obscures the innovation they spur and the steady jobs they produce.

This doesn't mean that big business doesn't have legitimate problems. It totally does. It means we should be designing solutions to those problems in a way that doesn't cause - additional problems.

For instance - living wages?  Yeah - don't shut down the big businesses paying good wages and force everyone into smaller business that historically - don't have the resources to pay as well.  You get the idea.

To me - the debate over whether or not business is good or bad - is not about size.  It's about morality. Specifically - what model of business are we going to use.

Exploitative vs. Cooperative Capitalism.

I swear I am a capitalist. I've actually read Marx's book and understood it. I think capitalism offers a good mix of innovation and security and freedom as compared to other more restrictive systems. That doesn't mean I think laissez faire capitalism is good. Or that all forms of capitalism are good. I don't.
I only really like humanistic capitalism. Cooperative capitalism. And I've felt this way my whole life. I remember in high school - I was supposed to write an essay about our capitalistic system and I instead wrote about how we have a hybrid system that combines elements of both capitalism and socialism and I argued it was precisely because we have a hybrid system - that America - at the time - was flourishing. (Not to date myself - but I'm clearly now in 2019 - dating myself with that statement).

Exploitative forms of capitalism and business - are evil. 

This should not have to be said - but it does- exploitation is evil. It is harmful and any system built upon exploitation is evil because it actively harms people as part of the system.  I am a Humanist. Harm is bad. Exploitation causes harm and is therefore bad.  Socialists and communists are correct to state - that the exploitation of labor is evil. Because it is.

We should not and do not need to tolerate exploitation in our businesses or in capitalism.  It is not a necessary condition of the system and there are other models of capitalism and business that are built upon cooperation that are way more effective and it is those models we should be both pursuing and insisting on.

Let me give you an idea of what these differences are.

In my community - historically - we've had 2 basic capitalist economic systems in operation. One was exploitative (slavery) the other was literally - cooperative.  

I live on land that was once "home" to over 200 enslaved people working at a sugar mill. This business required government support in the form of military assistance to keep the enslaved people enslaved and to kill Indians who were helping enslaved people - escape slavery.  In Florida - the United States government fought 3 costly wars to prop up this exploitative economic system before the rest of the country said no more. At which point - the civil war happened.

Down the way - was a cooperatively own fishing camp. This camp was run by white people with Spanish Indians who traded with Spanish colonies around the Caribbean. It was self sufficient and productive and profitable. It did not require government support and military assistance to operate. However, the military did shut it down because the local slaver was insistent that the cooperative business operating - basically next door - was hurting his business.

When you consider these 2 business models that literally operated side by side: it's pretty easy to see that the cooperative one - was the better one. The exploitative one - wasn't just morally reprehensible, it was economically unsustainable without the additional stealing of public wealth to prop the system up.

We don't have to accept the status quo if the status quo sucks. 

People who advocate for exploitative capitalism need to be seen for what they are. They are not good business men. And no good business is run in such a way.  Good business pay living wages and share the prosperity they create.

When exploitative evil people insist that sharing wealth is socialist and evil - understand they are lying to protect themselves. the only people taking welfare are the exploitative capitalist. They are stealing all our wealth for themselves while hurting the rest of us through exploitation.  We don't have to accept it and we should not tolerate it. What they are doing - isn't capitalism (the creation and distribution of capital).  It's exploitative and criminal.

Late Stage Capitalism, Extinction Bursts, and What Comes Next

Everywhere online, people are declaring that we are living through “late-stage capitalism.” Usually, what they mean is simple: things feel unstable, exploitative, unequal, and increasingly absurd.

They’re not wrong. Societies unstable, business is exploitative, income inequality is bad, and politicians are doing increasingly absurd things.  

But I think many people misunderstand what “late stage capitalism” actually means — especially if we look at capitalism through the lens of Das Kapital and modern behavioral science.

Ironically, what we are experiencing may not be the end of capitalism, but rather one of the predictable crisis points in its evolution.

And understanding that matters because panic rarely helps societies evolve wisely.

Marx Wasn’t Predicting Stability

One thing Marx understood correctly is that capitalism is not a stable system. It expands, concentrates wealth, generates inequality, experiences crisis, adapts, and then expands again.

The boom-and-bust cycle is not a bug in the system. It simply is something that is predicted to happen from time to time as capitalist systems grow, evolve and adapt. 

Over time, capital tends to become concentrated. Wealth and power becomes concentrated too because large concentrations of capital can outcompete smaller ones. But eventually that concentration creates instability:

• consumers lose purchasing power,
• workers lose security,
• institutions lose legitimacy,
• and economic shocks become larger and more widespread.

At that point, correction becomes unavoidable.

Historically, those corrections are painful:

• unemployment,
• market collapses,
• political unrest,
• social anxiety,
• institutional distrust.

But history also shows something else: societies often emerge from these crises with reforms that improve life for large numbers of people.

The Great Depression helped produce Social Security, banking reforms, labor protections, and stronger safety nets. The 2008 Financial Crisis triggered major conversations about financial regulation, inequality, healthcare access, and economic precarity.

Progress rarely happens because systems voluntarily surrender power during times of comfort. More often, systems change because instability forces adaptation.

The Extinction Burst

This is where behavioral psychology provides an interesting lens.

In behavioral science, there is something called an extinction burst. When a behavior that used to work stops producing the desired result, the organism often responds by intensifying the behavior before finally changing course.

A child screams louder before giving up a tantrum.
A gambler doubles down after losses.
A toxic workplace becomes more controlling when employees begin resisting.

Systems do this too.

When capitalism encounters instability, it often intensifies its own core behaviors:

• more extraction,
• more monetization,
• more consolidation,
• more financialization,
• more pressure for growth,
• more concentration of wealth.

This can feel terrifying when you’re living through it. And understandably so.

But intensification is not always evidence that a system is permanently winning. Sometimes it is evidence that the system is struggling to maintain equilibrium.

That does not mean collapse is guaranteed.
It does not mean utopia is guaranteed either.

It means we are living through a period of pressure and adaptation.

Is it Really Late Stage Capitalism?

It is worth noting that what many people online call “late-stage capitalism” is not what Das Kapital actually predicts. Marx did not argue that capitalism would simply become miserable and then suddenly collapse. He believed capitalism would continue evolving by increasingly socializing production itself — creating vast interconnected systems where labor becomes more collective, coordinated, and interdependent over time. 

In Marx’s framework, the truly “late” stage would likely involve much broader forms of communal or worker ownership of the means of production than we currently see. Interestingly, we are beginning to see early versions of this emerge through employee-owned companies, cooperatives, profit-sharing models, open-source collaboration, and highly networked forms of collective production. But these models are still relatively limited within a system where ownership remains heavily concentrated with individuals. 

In other words, if Marx’s model is even partially correct, and so far everything he predicted would occur has, we may still have significant instability and painful corrections ahead before a more genuinely communalistic economic structure becomes dominant.

Stay Calm — But Prepare

I suspect another correction is coming.

Not because I think civilization is ending, but because concentrated systems eventually destabilize themselves. Historically, they always have.

The important question is not whether change is coming.

The important question is:
What kind of change will follow?

History shows that crises can produce remarkable human progress:

• stronger protections for workers,
• better public health systems,
• more democratic participation,
• broader access to education,
• expanded civil rights,
• stronger social safety nets.

But crises can also produce fear, scapegoating, authoritarianism, and cruelty.

That is why preparation matters.

Not panic.
Preparation.

We need emotionally resilient people who can think clearly during instability.
We need communities that cooperate instead of fracture.
We need leaders capable of long-term thinking rather than reactive fear.
And we need humanistic values guiding what comes next.

Because economic systems are not forces of nature. They are human creations. They evolve according to the incentives, behaviors, and values we reinforce.

If a correction is coming, then this is not the time to surrender to doomscrolling and despair.

It is the time to ask:

• What systems actually help people thrive?
• What structures reduce unnecessary suffering?
• How do we preserve freedom while increasing stability?
• How do we ensure technological and economic progress benefits humanity broadly instead of concentrating into fewer and fewer hands?

Those are the real questions of the future.

What Comes Next Is Not Automatic

One of the biggest misunderstandings people have about history is believing that progress is inevitable.

It isn’t.

Progress requires participation.

Every major improvement in human society came from people who chose to build better systems after periods of instability:

• labor organizers,
• reformers,
• educators,
• scientists,
• policymakers,
• community leaders,
• ordinary people trying to solve practical problems compassionately.

The future is not predetermined.

But history suggests that periods of instability often become turning points. They force societies to reconsider what is sustainable and what is not.

So yes — stay calm.

But prepare.

Because corrections create openings.
And what fills those openings depends on us.

Socially Good Businesses

Social good is a social necessity. There are a few ways we can approach economic activity – specifically capitalist activity. For too long, exploitative capitalism has been the model and has used the levers of power to crowd out humanistic forms of capitalism. To put it bluntly – people are fed up with exploitative capitalism and the various forms of supremacy exploitation leads to – to justify the dehumanization of the exploited people.

 It doesn’t have to be that way and more and more people are saying – enough. We won’t tolerate exploitative capitalism anymore. We demand humanistic capitalism.

I believe this is a necessity. Exploitative capitalism doesn’t just exploit labor. It exploits resources. We live in a tiny planet with limited resources. Our activities have been polluting our homes. This pollution is harming us. All of us.

It doesn’t have to be that way. We can pass laws to regulate pollution. These regulations work. Let me give you an example. I grew up in Los Angeles. We used to have smog days – days where the air quality was so bad – we weren’t allowed outside to play because it would damage our lungs. Catalytic converters and pollution regulation was implemented and by my 20s – I could see the mountains that ring LA. I had no idea they were there growing up as I couldn’t see them.

Smog is something India and China are dealing with now. It’s a solvable problem. The solution involves the creation of businesses and the hiring of people and the application of science and technology.  We can both – protect our environment and engage in business.  Those that claim it’s either or – are not only mistaken, they are intentionally lying because they want the freedom to exploit resources – including human resources without paying for the harm they are causing.

People want companies working for the public good because the ones that aren’t – are actively harming us and in some cases, killing us. This is why there is a move away from exploitative capitalism to humanistic capitalism. It’s about survival of the species at this point.

I am a member of the International Humanistic Management Association. http://humanisticmanagement.international/ - consider joining us.

Balance: Everything Requires It

A man does not show his greatness by being at one extremity, but rather by touching both at once." ~ Blaise Pascal

 
I have several quotes I use to remind myself of philosophic truths to help me navigate difficult situations. This is one of them. It’s a reminder to me to see balance. Whenever I find myself drifting into a rigid ideology, or I find myself arguing with someone thinking I am right and they are wrong, I think of this quote. It’s a reminder to myself that we both can be right. The opposite of a great truth is often another great truth.

Holding one truth to the exclusion of other truths doesn’t help us solve our problems or win friends and influence others. Seeking a balance between extremes – both of which are true, is a good way to try and navigate life. That way you are taking advantage of all that is good and hopefully avoiding the pitfalls that come with being at an extreme.

Here are some opposites that are both good but that need to be balanced to achieve success.

Skepticism/Optimism

Skepticism is good. It keeps you honest and keeps you from making mistakes. But taken to an extreme and all things become equal and relative and it is impossible to make decisions because skepticism devolves into nihilism. Which isn’t good.

Optimism is also a good quality – in moderation. Taken to an extreme and you get unrealistic wishful thinking that not only doesn’t help you solve your problems, the lack of realistic thinking makes it nearly impossible to solve problems.

Balancing skepticism with optimism helps you be both skeptical and optimistic at the same time. Helping you to avoid nihilism and flights of fantasy to tread a more realistic path to your goals.

                Responsibility to self and to others

Responsibility is a good thing. It gives our lives meaning and purpose.  Too much responsibility and we become overwhelmed and break down.   If we only think of ourselves, we are selfish. If we only think of others, we are self-less, but not in a good way.

In order to thrive we need to balance self-care with care for others.  If we don’t care for ourselves, we cannot care for others. Balance is needed.

                Capitalism/Socialism

I am like aspects of both capitalism and socialism.  Capitalism is a pretty decent system for allowing individuals to work on what they think is important. Laissez faire capitalism is exploitative and cruel.

Socialism in moderation is also good. It helps us think of our impact on others and to collaborate for the public good. Socialism taken to an extreme, where only the community good matters, as with capitalism, also becomes exploitative and cruel. 

 The problem in both cases (extreme capitalism and extreme socialism) is that care and concern for individuals gets lost in the ideology when taken to extreme. This is unfortunate because in their moderate versions, they are both systems designed to promote the welfare of the individual!

Balance helps us remember in our pursuit of happiness (capitalism) that other people matter too  (socialism). Finding the middle ground helps us get the benefits of both systems without devolving into exploitation of the individual to advance a “greater good”

                Autonomy/Social Responsibility

This last one also requires balance. We are all autonomous individuals, but no one is or should be an island. Humans in isolation go crazy. We are tribal animals and need our tribe to feel secure. Which is why we need community.

But just as care of others (social responsibility) is a good thing, too much means the loss of the individual or the subsuming of the individual to the greater good of the community.

When we seek balance between our need for autonomy and the need to be socially responsible we realize that by helping the community thrive, we help ourselves thrive – as individuals. It’s not either or, we only really thrive when we do both – in balance.

Conclusion:

When you find yourself struggling along some dimension in your life, or in your work, the problem is probably caused  by you valuing one ideal over it’s opposite ideal and if you remind yourself to balance those competing ideals, you will probably get a better result.

Try it and let me know how it goes.

Donut Economics

 I came across an article about donut economics and I really really really like it as a concept and way to think about HOW we organize and to what end.

Here is the link: https://time.com/5930093/amsterdam-doughnut-economics/

Basically – there is level of ecological sustainability that we cannot surpass without killing ourselves.

There is also a bottom level of social sustainability (basically poverty) below which people can’t participate in society.

The goal is to have everyone living inside the donut hole space where we have both social sustainability and ecological sustainability.

Humanistic Management and Humanistic Capitalism

If you read my blog you know that I am an advocate for both humanistic management and humanistic capitalism. http://humanisthappiness.blogspot.com/search?q=capitalism

Demand drives the economy. Capitalism only works as a way to efficiently distribute resources if people CAN participate in the economy. If they can't, because they are too poor to or because they are excluded by discriminatory laws, then capitalism simply doesn't work. 

We need to be looking for ways to both eliminate poverty, but do so in a way that makes sure we don't overload our ecosystem. 

To me, it is pro-capitalist to have a social safety net. It is pro-capitalism to ensure ecological and environmental justice.  We must start rejecting the either/or false dichotomies and start looking for ways to help people and help the environment because doing both, will help the economy. 

Why am I talking about this so much?

Because as people concerned with humanistic management and humanistic leadership, we have an obligation to be leaders in this area. Our collective individual decisions is what leads to the big decisions. 

We absolutely must find the courage and the language to argue for sustainability and all that that means. We must start making the business case for this. Or nothing will change. 

Learn more: 

If you are in a leadership position and want to learn how to make better decisions consistent with the reality we all face - take my  Reality Based Decision Making Course: https://humanistlearning.com/realitybaseddecisionmaking/

If you want a more comprehensive leadership mindset shift - become a Certified Humanistic Leadership Professional. https://humanistlearning.com/certified-humanistic-leadership-professional/

Medicare fraud and the need for humanistic business management

Last year AARP magazine had an article on medicare fraud and the multi agency teams that fight against health care crooks. It was an eye opening and really upsetting article. But it also makes clear why we must move towards a humanistic conception of capitalism and reject as harmful exploitative forms of capitalism.

Here is the article: https://www.aarp.org/money/scams-fraud/info-2018/medicare-strike-force.html

This is a white collar crime that kills people. It's not harmless. It's  not simply a waste of tax payer dollars. People are suffering and dying as a result of it.

2nd, this is about businesses defrauding and killing people for profit. Want to know why people don't like capitalism? It's because of unethical people who use their businesses to exploit others for profit.

We should ALL be outraged about this.Instead, the businesses that are set up to exploit tax payer funding while hurting the people we want to help, those business people are often lauded by politicians whose votes they purchase. And this is actually true across a multitude of industries not just health care.

These businesses waste our money while not fixing the problem we are paying them to fix. And they are killing people - while stealing our money - all while posing as leaders of the community. They aren't and we should be treating them like they are.

We need to start distinguishing between good business and bad business. Good capitalism and bad capitalism. Not all businesses are good and not all forms of capitalism are good. This does not mean we need to take an extreme approach and throw the baby out with the bath water. What it means is - we need to start using ethical judgements about how we conduct business.

We need to start treating exploitative businesses that harm and kill people as the criminals they are. WE need to start demanding that our business behave in an ethical way and do good for our communities.

In short, we need to revolutionize how we think about the business of business. We need to no longer view profits as the end all be all metric of a good business. It's not. If your business requires you to kill people through neglect - yours is a bad bad bad bad business and you should not be rich. You should be in jail.

What is a good metric? Human wellfare. Wellbeing. Human flourishing. Our business must become about more than just the bottom line. Because if we don't change the status quo- we will NEVER  be able to root out the truly horrible business people who should never be allowed to run a business ever.

Rant over.

Oligarchy vs. Capitalism

I was asked about this the other day.  Are people confusing oligarchy with capitalism and blaming capitalism for the excesses of oligarchy. I'm not an expert - but yes. 

The problem with oligarchy is that decisions are made to benefit the oligarchs - not to benefit the proletariat. And yes - I am going to go into Marx here. His model of how capitalism functions is still the most accurate ever produced. There are several things that happen that are bad over all in an oligarchical system.

1. abusing anyone is bad. There is no other justification required to demand it not happen. It's harmful. Period.
2. 2nd. When the people creating capital (the workers) do not get a share of the capital they create - that is inherently abusive and therefore bad.
3. 3rd - we start moving into economic issues. When workers cannot afford to consume the goods they create - the market for the goods is necessarily reduced. Businesses only exist if there are customers to purchase the goods and services being offered. No customers - no business. From a purely economic standpoint (if we ignore the moral problems with abusing people) - to create a healthy economy - we need to create consumers. Enough consumers to help fuel the economy. Paying workers too little means they don't have the means to consume basic goods and services. And this depresses the economy and collapses it. Workers must make a living wage or the economy suffers from lack of consumers as there are never enough oligarchs or bourgeoisie to fuel growth or consumption.
4. 4th - hoarding of wealth means money doesn't circulate. Think of money as the lifeblood of the economy. A healthy body is one where the blood flows freely throughout the body. If blood starts pooling and collecting in one part of the body - it's a toxic life threatening situation. The same is true of wealth. It has to flow and be consumed and move in order for the economic system to be healthy. When wealth starts to accumulate and get hoarded - it's been taken out of the system entirely. You are basically draining the system of it's life blood. The money cannot be used to create more wealth or goods or services. This happens because - hoarded wealth is not being distributed to the people people who helped create the wealth and who would actually spend it - the members of the proletariat. Basically - wealthy hoarding is stealing. It's inherently abusive.
5. 5th The income inequality that occurs by design in oligarchical systems creates income inequality - which is one of the leading drivers of societal violence. The more inequality there is - the more violence. The more equality there is - the less violence there is. Hoarding of wealth through oligarchy is bad not just because it restricts the flow of capital and harms the economy, and not just because it necessarily requires the exploitation of workers, but also because all of this increases the general levels of violence in society.

Oligarchies are not capitalist systems. They may look like unbridled capitalism - but a capitalist system is also a system of laws - laws that dictate the flow of capital. Oligarchies are systems of laws that allow for the hoarding of wealth - the exact opposite.

Basically- think of oligarchies as systems of legalized theft. The reason Russia has oligarchs - is they literally stole 52% of the wealth of the country - and took it out of the country. It's legalized theft.  A form of kleptocracy.

Capitalist systems allow for the flow of capital. Not the hoarding of capital.  Capitalist systems can be abusive, but they can also be humanistic.  Wealth creation is good for everyone, assuming the wealth created is equitably distributed and used to help improve society.  If wealth is created and hoarded and used to abuse - it's bad.

So - let's recognize wealth hoarding for what it is - abusive theft and start insisting that capital flow to everyone and be used to create and improve society - humanistically. 

Coffee and capitalism - the need for a humanistic model

File this under - why humanistic capitalism MUST become the norm.

Turns out - the story of how coffee became the drink of capitalist societies has everything to do with exploitation of workers.  And yes - every time I write that I think - wait - have I become a communist?  No. I have not. I am a humanist and I believe in the benefits of market economies.  The problem is and has been that our market economies are rarely capitalistic let alone humanistic.

The Atlantic magazine had a really interesting article by Michael Pollan reviewing a book by Augustine Sedgewick about Coffee and Capitalism. The book is called - Coffeeland. https://www.theatlantic.com/magazine/archive/2020/04/michael-pollan-coffee/606805/

What has coffee got to do with capitalism?  Well - workers would lag in the afternoon. Because - it's siesta time and our circadian rhythms naturally want to take a break and relax.

To fix that - workers decided they needed a coffee break and business owners agreed. Give people a break and allow them to take a drug - a stimulant and - magically - productivity in the afternoon increases. 

The problem is - growing enough coffee to keep workers working. Coffee is a stimulant. It allows owners to get more work out of their employees.

In order to grow coffee - they need workers and the places that grow coffee - turns out - the people who lived there - had no need to work for a coffee plantation. They were self sufficient in terms of food production.  In order to get locals to work on the coffee plantations - they had to impoverish the local population otherwise they had no reason to work on the coffee plantations. 

To do that - they privatized the land and instituted totalitarian monoculture - because as long as there was free food growing all around them - people had no incentive to work. Planned and intentional hunger was a pre-requisite for the coffee economy to function at all.  The result - brutal oligarchy in El Salvador (where a lot of coffee was grown), diminished eco-systems and exploited and starving people who were only starving because that is what the oligarchs needed to keep control of their workforce which had gone from sustainable ecosystems to exploited worker.

A Humanistic Perspective: 

A Humanistic vision for the economy is how do we help people flourish.  The answer - exploiting people not only isn't necessary - it's counter productive. Exploitation is only necessary if you want to control people and not share the wealth. It’s bad for people, it’s bad for the economy, it’s bad for the environment.

I have been a human rights advocate and worker - since I was in my teens and able to volunteer. What happened in El Salvador was brutal. And it was brutal because it wasn't a fair market economy. It was built by exploitation to sell a product to other business owners so they could exploit their workers.

We need to get the idea of exploitation as necessary out of our heads.  Capitalism is driven by demand. But it must be community demand. If an individual demands the right to exploit others to create personal wealth - understand - that person - is NOT a job creator. They are a psychopath posing as a business person. 

Imagine how different the world would be if humanistic economies were the norm. We would still have market economies. We would still have the innovations that market economies demand and therefore create. What we wouldn't have - is all this intentional and constructed suffering. 

Because honestly - if your business can only function if people starve - then something is wrong with your business. 

Humanistic Tendencies in Business

Not everyone has Humanistic Tendencies. But maybe they should.

The problem with living in a capitalistic system is that we have to struggle to work to get money to pay for things like housing and food. In a barter economy people would either build a house themselves and farm for themselves or barter to get what they didn’t have.

Don’t get me wrong, I consider myself to be a capitalist. I think the improvement in human welfare that has come with capitalism has been overall beneficial. It’s just that I recognize the social limitations of the system. For instance we have a homelessness problem that capitalism is incapable of fixing because the people who are homeless are homeless because they don’t have the funds to secure housing. It isn’t just “bums” and “winos” who are homeless anymore. It’s also families who are what we now refer to as the working poor.

Capitalism only works as a system to create and distribute the goods required by society to function when people have the capital or funds to consume the goods created or produced. When people don’t have the means (ie: enough capital) to consume goods and services, they are unable to participate in the system or benefit from it. If enough people are impoverished enough that they can’t consume anything the system produces, then the system either collapses and/or distributes good in an incredibly unequal way.  And that’s where we’ve been as a society in the past 10 years.

One of the things that Marx figured out in Das Capital was the importance of worker’s wages to the maintenance of the system. A lot of people in the west haven’t read the book – it’s a huge work. Volume 1 has over 1,000 pages and it’s filled with math and philosophy. But it’s also one of the most accurate models of how a capitalist system works that’s ever been written.  He accurately predicted the booms and busts the system would generate and he accurately predicted how labor would respond to these booms and busts.

What causes the booms and busts? Labor’s wages. When labor is not paid enough to consume the goods they create, the system collapses. The engine of capitalism isn’t the capitalists (or owners). It’s the consumer. No customer, no business. Who are the customers? The laborers. Failure to understand this causes a huge number of problems for a business and for the economy.

This isn’t to say that if you are making jumbo jets you should pay your employees the amount they need to purchase one. Only that you need to pay them enough that they can participate in society and afford food, housing and the basics plus a little more to consume a few modest extras.

The problem is that capitalist forces tend to drive labor wages down because it’s a benefit to the capitalist to pay as little wage as possible. If you can get away with that, you gain an advantage over a competitor who is paying their employees more. If enough businesses pay too little, the system collapses.

This brings us back to the topic of humanistic tendencies in business.  Being concerned about the humans who work for you and the humans who consume your goods and services is good business. There is no division between the people who work for you and the people who buy your products. They are the same people.

It is very easy to see your business as an independent entity. You are competing. What you do doesn’t necessarily impact the societal whole. Except that it does. And a humanistic understanding of business acknowledges that are businesses are embedded in society. We serve society and are dependent on society. It’s a two way street.

Paying a living wage to your employees benefits your company (in terms of lower employee turnover), it benefits your customers, which for most of us not building jumbo jets, is our employees, and it benefits society because it helps make your company a positive force in society instead of a societal drain that is leaching tax payer benefits to supplement your less then living wage to ensure your laborers can continue to live.

Humanistic tendencies in business are pro-people, pro-business and pro-society. It’s not one or the other. It’s all three. In collaboration.

Constructive Capitalism

In February - my colleague Elizabeth Castillo from Arizona State University was the guest on the Humanistic Management Lunch and Learn. Her topic was Social Accounting and how to think differently about resources. She brought up an interesting concept - constructive capitalism.

Here are some of my notes:

If we want a more humanistic capitalism, or a more sustainable capitalism, we are defining success as something sustainable.

How it works: by integrated or social accounting it helps you build capital or capacity.

Focusing only on money as capital – tends to be extractive – and not sustainable – because extraction – never is.

If – however, you develop capabilities/capital, you are being constructive. You build more and more capability and then the possibilities grow. It’s not extractive, it’s constructive.

Our problem is we tend to think of capital - as money and that's too narrow. If we think of capital in terms of our capabilities, we think differently about success and we think differently about the values of our various capabilities and the support and investment in those various capabilities.

Money capability is not our only capability. 

Humans represent another capability your organization has. So are the raw materials (which probably come from natural resources).

Social Accounting or integrated reporting helps you capture all your capabilities and therefore – all your possibilities in a way that only accounting for money – does not.

This can also be used for personal purposes.

For instance, my company – lost money last year. Not a lot, but it was my first year net negative. On the other hand, I accomplished so many things. I published a book, got a 5 year contract with the government, and more. I increased human capabilities through relationship building for instance.  I feel like I’m way more capable now. But if you just look at my balance sheet – you would not know that.  This is the benefit of social or integrated accounting. It helps me look at all my capitals/capabilities and how I might leverage them in the future. 

This sort of - accounting can also be used for personal growth as well as organizational growth. What are my personal capabilities and how might I nurture them and ensure their and therefore my growth? This question will probably lead me to value my friendships and time invested in my friendships more highly than if I am only looking at my financial situation. 

If you want to learn more about Elizabeth - here is her professional website: https://asu.pure.elsevier.com/en/persons/elizabeth-ann-castillo

If you want to learn more about the lunch and learn and the international humanistic management association - visit: http://humanisticmanagement.international/ 

Ending Enslavement - who is responsible?

In case you were not aware - slavery is still a problem. In the United States.

I live in a county - that prosecuted someone for slavery - in 2005. It was a tomato farmer.  My county - was "settled" by people who used enslave labor to build the community. They were forcing people to pick crops at gun point well into the 1940s.

Slavery still exists in America. It exists in our food chain (most of the chocolate sold - is farmed using enslaved children), in regular crop production, in the sex trades and in our prisons through convict leasing - which has it's own history - tied directly to racial segregation and racial slavery. There is a reason why the photo above is a black man with black prisoners. It's the modern form of American slavery! 

We also all purchase products that were created using enslaved or severely exploited people.  Companies do this - to reduce costs and so that they can take more money out of the supply chain and put it into their pockets.

For instance - if you eat peeled shrimp - an enslaved person - probably peeled it for you. https://www.ap.org/explore/seafood-from-slaves/global-supermarkets-selling-shrimp-peeled-by-slaves.html  

I want you to read the above article. It is horrifying.

Exploitative capitalism - must be rejected. The onus is on the business owners - to NOT tolerate this in their supply chain. I live in FL. We have a problem with this in the tomato picking industry.  The businesses that buy tomatoes, don't want to get involved. But THIS - doesn't stop unless the companies purchasing goods - get involved to insure their supply chains don't included ENSLAVED LABOR! 

It is all of our problems - but mostly - the responsibility of business owners since they are the people - who benefit the most and enable this.

If you participate in prostitution - it's your responsibility to ensure that the person you are having sex with - is a willing participant and not an enslaved person!

Finally - convict leasing - is a form of slavery and the practice must stop. One of the reasons we have a privatized prison system is because - prisons - are not just big money - they are a form of modern day slavery. Companies - leasing prison labor - is a sanctioned for of involuntary servitude!  And it's not ok.

"Flagler built his tourist empire — and modern Florida — by exploiting two brutal labor systems that blanketed the South for 50 years after the Civil War: convict leasing and debt peonage. Created to preserve the white supremacist racial order and to address the South’s labor shortages, these systems targeted African Americans, stealing their labor and entrapping them in state-sanctioned forms of involuntary servitude." https://www.washingtonpost.com/news/made-by-history/wp/2018/05/17/how-slave-labor-built-the-state-of-florida-decades-after-the-civil-war/?utm_term=.6eb05594f0dc

If Humanistic Management is to mean anything - it must mean an end to the use of enslaved people. The greed motive that feeds this - is unacceptable.

I realize that I write about humanistic management practices and most of the HR folks who read my blog are probably thinking - this has nothing to do with me. But it does. It has to do with all of us.  Exploitative capitalism - that views employees as resources - is exploitative. We need to transition to an understanding that our employees help us create wealth and are valuable collaborators. Not nameless individuals to be exploited for capital gain.   Humanistic Management - is a mindset shift. One that is sorely needed given the amount of exploitation of labor that is present at all levels of our society and in almost every business.  Even if your company is not exploiting your labor - you need to ensure that your suppliers don't either. 

Humanistic Management Training – As a First Step

There is no doubt we need to change how we run our businesses. The greed ethic is counter-productive and harmful to society. But what can we do to change it?

There are a variety of reasons why people create businesses. Some want money and don’t care what the business is. Others care deeply about solving problems using their business. Most businesses are a mixture of good will and desire for money and a living for your family. So are just – you have to do something.

Business as Community

Unless you are a solo-entrepreneur, your business includes people.

Your company is built by people for people and people matter. Those people who intersect with your business are your community. Whether they are employees, bosses, or customers.

This understanding of business as community is the foundation on which humanistic business management is built. Smart leaders recognize and accept the responsibilities and opportunities that comes with being part of a community.

Business should be both about opportunity and about responsibility. Exploitative capitalism exploits the opportunities, but doesn’t take responsibility for the outcomes of their behavior. It’s irresponsible.

Humanistic capitalism grasps opportunities in a way that is responsible to the communities in which they work and operate.

Isn’t it time we start rejecting exploitative business models and promote more humanistic ones?

To learn more check out:

• Why Humanistic Management
• Principles of Humanistic Management

What is evil – business edition

To be evil is to be profoundly immoral. It’s not just about lapses in judgement, it’s about intent. Not caring who you hurt or that you hurt others.

In business, as in life, there are people who are profoundly immoral. They use their businesses to enrich themselves and hurt others.  These are not good businessmen. They are “evil” immoral businessmen.  They are the people who give capitalism a bad name so that we now associate capitalism with exploitation.

It doesn’t have to be that way. Most people are basically moral. Some people are super moral. Most people go along with the flow. Many people are opportunistically immoral but only a small number are profoundly immoral.

We need to be aware of how we, as humans, respond to the leadership around us. It is well known that most employees mimic the behavior of their bosses. The boss sets the cultural expectation and employees set out to meet it.

If a boss bullies, the staff bullies. If a boss steals, the staff steal. This doesn’t make the copy cats profoundly immoral, they are just adjusting themselves to the cultural expectations of the organization they find themselves in.  They themselves may be moral, but their sense of right and wrong is adjusted based on the group they are in. Some research to understand how group think works.  http://www.psysr.org/about/pubs_resources/groupthink%20overview.htm

Before you think – couldn’t happen to me – it could and it probably has. After all, if you were brainwashed would you even know it? Most of the time, brain washing and group think is only obvious to an outside observer. It is the rare individual who doesn’t succumb to peer pressure and group think maintaining a sense of self to the point they can stand against the group and the pressure the group exerts to maintain the faulty views they have.

Bad bosses and bad morals lead to bad decisions. It benefits us all to make good decisions and to do that, we need to get rid of people who are profoundly immoral who are steering us off course.

Good leaders take care to make sure that they don’t fall into group think traps. Not just because it’s the right thing to do but because they know how easy it is to get manipulated into doing bad while thinking you are doing good.

The main thing we all can do to defend ourselves from becoming victims of group think in favor of a profoundly immoral individual is to be skeptical.  Play devil’s advocate with yourself and others.

There is a difference between making money helping people solve problems - and selling people solutions they don't need and that don't work

I meet a lot of people. Many - are focused on making money. They don't care how they make it - only that they make it. And I get it. I've been there. I've struggled to make ends meet. We qualified for medicaid at one point when both my husband and I were unemployed. I don't EVER want to go there again.

The problem with focusing on how YOU make money - is that it is very hard to run a business that is based on YOU making money. And the reason for that is because - if you focus on you - you aren't focused on your customers.

I have nothing against the profit motive. I am motivated by profit. It's just that - I also understand that asking people to purchase any of my fine courses - because I need money - isn't going to make them purchase my courses.

If I want them to take one of my courses or to hire me - I need to help them solve a problem THEY have.   Bonus - if I actually help them solve their problem well and ethically and at a fair price.

I don't sell people things they don't need or that don't work. That's what charlatans do. They disdain their clients as rubes and exploit them. THAT is not the Humanist way.

A Humanist approaches capitalism and the market - with fairness in mind. The exchange between customer and supplier - is fundamentally - fair.  As Maya MacGuineas, the president of the Committee for a Responsible Federal Budget wrote in a recent Atlantic article, "In a well-functioning market, consumers have the freedom to act in their own self-interest and to maximize their own well-being. Prices are transparent, and people have a basic level of trust that exchanges of goods, services, and money benefit all parties." - https://www.theatlantic.com/magazine/archive/2020/04/capitalisms-addiction-problem/606769/

A sense of transparency and fairness for both the consumer and the seller - is crucial. Yes - there are lots of sellers that violate that trust and do - on demand pricing to maximize that profit.  If you go to my website -you will see - I post all my prices. I do offer group discounts - but that is also transparent. I give individual discounts to existing customers as a thank you for supporting my work. https://humanistlearning.com/programsoffered/

If you are honest with yourself - you want to work with sellers who are honest, compassionate and will treat you fairly and who will give you a good service that will really solve your problem.

So be that business for others. It is possible to both make money AND run an ethical business. That is what we should all be striving for.   Don't exploit your customers and don't exploit your employees.  Make your money by helping people solve their problems, honestly and fairly.

And if you are in the market for professional and personal development training or harassment/bullying training that is based in science and compassion and that will actually work - check out the programs I offer. Thanks.

https://humanistlearning.com/programsoffered/

Christopher Robin and Humanistic Management concepts

If you haven't seen the movie - Christopher Robin - you should.  It provides an important lesson for humanistic management and more importantly - humanistic capitalism.

The story line is that Christopher has grown up. He works in RandD for a luggage manufacturer and he is being tasked with reducing costs to increase profits and if he can't do that - they are going to shut down the company because not enough people are buying luggage to make the company profitable. In short - they have a demand problem.

The solution - comes from Christopher helping his old friends in the 100 acre woods. And it's a solution similar to the one Henry Ford came up with.  Which is that employees - need to be able to afford your products AND have a reason to need them.

Christopher's solution is  - instead of just selling to the uber rich- which is not a big enough market to survive on – create customers by increasing pay and giving people time off – so they can afford – leisure pursuits – which in turn – create jobs and sales for the luggage company.

The added benefit is that it is also good for work life balance which is where Pooh bear comes in.

On Oct 26th 2018 - I will be interviewing Benito Teehankee about ethical wages and good jobs.  http://humanisticmanagement.international/humanistic-management-professionals-lunch-and-learn-ethical-wages-and-good-jobs-with-dr-benito-l-teehankee/ 

Wage suppression is one of the ways - business owners try to maximize profits. And that is understandable. The problem is that this wage suppression - negatively impacts everyone's customer base. Greed as a business motive - often leads to REALLY bad solutions. Instead of thinking about how to maximize profits - they should have been thinking about how to increase their customer base.

Our businesses - need to be about more than just making money. They need to be about solving problems. And one of those problems is about how we view employees. Are they resources? Or actual human beings who are partners in wealth creation?  I know  I would prefer to be thought of as a partner in wealth creation. But that means - thinking about the weath create not just in a greedy way - but in a collaborative way. Where - everyone benefits - and not just the owners. 

The Problem of Unearned Income

Humanistic Business Management as it applies to tax policy.

I subscribe to the Evonomics Blog. And if you don’t, you should.  Joseph E. Stiglitz, winner of the Nobel Memorial Prize in economics, has a great essay on how unearned incomes are killing the economy - http://evonomics.com/joseph-stiglitz-inequality-unearned-income/

The gist of it is this. Income inequality is bad for the economy. Capitalism is driven by demand. Demand comes from consumers and consumers are by and large workers otherwise known as people who make things.

The problem is that our tax policy rewards unearned income, meaning income that isn’t derived from making things, but income that is made just by pushing money around or receiving rents on things that other people have made. This rewarding of unearned income distorts the economy and takes money away from projects that actually make things and gives it to people who provide no real value.

Now I realize that people in banking will argue that they do create value. But they really don’t. All they are doing is facilitating the creation of things and sometimes, they aren’t even doing that.

There is an assumption that the people who are the most rewarded contribute the most. But that’s an assumption and it isn’t always true. This is the lie behind trickle down economics. And it is a lie. If you give more money to the people at the top, it does not create more jobs or better paying jobs. What creates more jobs is demand.

If you are interested in this as a policy issue area, read the article. It is dense but totally worth reading.

Inequality causes instability. 

The bottom of this essay contains a lot of policy proposals that are about how to reduce inequality and they range from investments in education, to changing the tax code by redefining what economic performance means.  If you are concerned about the health of the economy – this is an essay worth reading.