Umair Haque bangs the drum:
Socially useless business is what has created a global economy on life support. Socially useless business is what has created a jobless “recovery” and mass unemployment amongst the young. Socially useless business is why we don’t have a better education, healthcare, finance, energy, transportation, or media industry. Socially useless business is a culture in shock, reeling from assault after assault on the fabric of community and comity. Socially useless business is the status quo — and the status quo says: “You don’t matter. Our bottom line is the only thing that matters.”
Until now. Today, socially useless businesses are living on borrowed time — and the clock’s about to reach zero hour. Somewhere out there is a Constructive Capitalist who’s going to use the power of meaningful economics to relegate you to the dustbin of economic history — just like Google and Apple are doing to big media, Wal-Mart’s doing to big food, FMCG, and retail, and Nike’s doing to shoes.
So far, so good; smart, critical, visionary. Probably even true.
But then, Haque pulls out a lighting bolt of an analogy to remind us that he’s a young guy who’s writing a blog, not a stuffy magazine writer proffering an op-ed:
Here are four different paths to becoming a socially useless supervillain:
Skeletor. Skeletor’s goal was to learn Eternia’s time-honored secrets, and use them against Eternia itself. Sound familiar? It should. It’s what telcos, pharma players, health insurers, and automakers do when they lobby against the common good — and for a license to be socially useless. The secrets of Eternia were the key to its prosperity, just like laws that protect the common good are the key to ours. Yet GM was lobbying against higher mileage standards until this year, right up until their bankruptcy. That’s about as brain-dead as Skeletor trying to take on He-Man, over and over again — and never winning.
Gargamel. Gargamel isn’t really a supervillain — just an evil old dude with the ability to create magic potions. He wants to destroy the Smurfs because he thinks he knows how to run a better Smurf society. Sound familiar? It’s the economic equivalent of financial engineering. Private equity funds are textbook examples: their magic potions never seem to work very well. Though the companies they run may benefit in the near-term, eventually, they run iconic companies into the ground. Think of the sad story of Simmons — the focus of seven deals in 18 years. Today its debt load is ten times what it was two decades ago. Yet from the merry-go-round of private equity owners, no authentic value has been created.
Also mentioned: Wile E Coyote and Cobra Commander. Awesome.
One thing I want to add: “constructive capitalists” (not a bad term) find ways not only to generate qualitative value, but to realize it. This is why smaller businesses have so much to offer, to their owners, their workers, and their customers: they’re less concerned with extracting value to pass up the chain (to shareholders, parent companies, etc.) then with realizing it by creating great products, treating people with respect, offering humane policies, job flexibility, mentorship, etc.
You can forego maximizing profit if you can realize some of these qualitative benefits. It’s impossible for someone trading your stock to realize those qualitative benefits. It’s not that a shareholder is economically rational while a self-employed business owner isn’t — it’s that in each position, only certain kinds of economic decision-making are even possible.
Instead of buying and cooking and eating a meal — where at every step you’re balancing qualitative and quantitative value — it’s like buying a gallon of gasoline: who cares, really, how good it is? I just need a full tank at the best price. I don’t know about you, but cooking a great meal isn’t just more socially valuable — it’s more personally valuable too, because all of that qualitative goodness ends up on our tongues and in our bellies.