Written by Matt Ward and Gerd Leonhard
Adam Smith, with his landmark book The Wealth of Nations, published in 1776, is recognized by most as the father of capitalism. In 1970, Milton Friedman built upon Smith’s legacy with the Friedman doctrine, outlining the basics of what we recognize today as shareholder capitalism — which argues that a business’s primary (if not only) responsibility is to its shareholders, ie, making more money.
This has been the dominant operating framework for modern business that has driven the boards of big companies around the world. But today — as we are nearing the limits of expansion and increasingly suffering from our own anthropogenic aberrations, it is becoming clear that capitalism as we know it is unfit for the future.
The over-optimization of GDP and growth at all costs combined with the exponential economics of modern tech businesses has led to a world on the brink of climate catastrophe and likely civil unrest due to extreme inequality. None of what we are doing is sustainable going forward, and, as such, it is time we tried to define new target metrics for society, before it is too late.
A focus on People
There is no such thing as a Good Future if we do not focus on people. What is the purpose of creating a profitable, progress-driven future and world if not to further the aims and lives of people?
Said another way: if a tree falls in the forest and nobody is around to hear it, does it make a sound? Who cares? The inherent value of something is never in the thing itself, it is in the feelings and emotions it makes us feel. Beauty, as they say, is in the eyes of the beholder.
And yet, today, we are creating a beautiful future for the few, built upon the struggling backs of the many. We have allowed the focus of our labors to shift from bettering the lives of very people producing our iPhones, Starbucks lattes, and skinny fit jeans to blackening the bottomline — even as businesses attempt to outsource or automate (layoff) as much of their workforce as possible.
We’ve created a world where the average CEO in the US earns 278 times more than their average worker and the richest 1% own as much as the bottom 50% of the world combined.
Is that really a better world? Is that really one focused on people?
The truth is, the measure of a society’s goodness was never its GDP, its number of billionaires or tech giants, or the size of its population. No, the true measure of any society is how willing you are to being randomly born within its pecking order. Said another way by Mahatma Gandhi,
‘The true measure of any society can be found in how it treats its most vulnerable members.’
At a very basic human level, there are certain rights that every individual SHOULD have, things like access to food, water, shelter, education, and healthcare. Yet, despite economic progress and the abundance of few, many lack for even the basic necessities.
In order to not only ensure, but fuel a better future for mankind, we MUST place a higher premium man him(or her)self and work to level the playing field. How many Einsteins, da Vincis, or Shakespeares have been lost to history, merely because they were born and died with nothing in the streets of Mumbai, or Rio, or gang-ridden LA, never once having a real shot or education?
This means not only investing more in things like public education (K-12, higher ed, and lifelong learning), healthcare, and social safety nets, but also creating regulations to protect workers, individual rights, and democracy as a whole.
A focus on Planet
Imagine if you will, a smoking a pack of cigarettes during your yearly checkup. If the doctor didn’t ask you how why you were huffing after climbing a flight of stairs or do a chest X-ray to examine your lungs, you might think everything was fine. Other than the bad breath, there would be no evidence of the damage or growing cancer building up within your lungs.
It is a microcosm of pollution — a bit like measuring GDP or gross profits without taking into account negative externalities such as CO2 emissions. While every little cigarette break is like a breath of fresh air and markets are thriving, cancer is lurking around the corner in the form of rising sea levels, reduced crop yields, weather extremization, and the die off of much of the natural world we rely on.
If we are to not only survive, but thrive in the future, we MUST start taking the Planet scorecard more seriously, because the planet, like the body, keeps score. And we can’t survive without either, regardless of what Elon Musk may hope.
The best (and also the worst) thing about climate change is that we know what to do. We have to reduce emissions, we have to keep warming below 1.5°C. The truth is, we have the tools. But do we have the will?
Are we ready to impose sweeping carbon taxes, end fossil fuel subsidies, cutback on meat, and in many ways, reduce our luxurious way of life to something the planet can sustain?
There are many ways to solve the climate crisis: technological, economic, societal… The most important thing is that we act, that we start measuring the true environmental impact of what we consume and that we hold companies and organizations accountable as we make a collective effort to save our world.
A focus on Prosperity
Traditional economics would argue that prosperity is merely a function of profit and consumption. The more we consume, the happier/more prosperous we are, right? Unfortunately, study after study have shown that this is not the case. In fact, a 2018 study from Purdue University found that earning more than $75,000 per year didn’t contribute significantly more to overall well-being (with the ideal income for life satisfaction topping out at $95,000).
So where did we get the false idea that consumption was tied to happiness/contentment? Marketing. If advertisements were not constantly trying to tell us we were too fat, too ugly, or too unhappy, how else would they sell us their “magical cure” products?
The truth is, we need a better metric than consumption, ie, GDP, to optimize for, if we are to have a happier, better future. Which begs the question, what that metric should be?
We believe prosperity, and not profit or GDP should be the economic variable of choice. Profit too often accrues to too few and consumption/GDP leads to constantly striving for more — more houses, more streaming services, more BigMacs. In a world of limited resources, perpetual growth (ie, consumption) is not sustainable.
But what is prosperity? If it isn’t a bigger house, a better car, or a trip to the Maldives (before they are lost forever), what exactly do we mean with prosperity? The way we define prosperity is the ability to do what you want, when you want — within reason of course. If I could stay in some guy’s flat in Australia, dive the Great Barrier Reef for a weekend, and have a plant-based or lab-grown burger for dinner, all before accessing a free MIT lecture on quantum computing before bed, that sounds pretty prosperous to me.
But where in that equation did I need to own the apartment, the scuba gear, or attend (and pay for) in-person university?
Getting to prosperity isn’t easy. It takes flipping the entire economic logic that has thus far defined modernity on its head and focusing on the big picture, not the individual, easy to measure parts that make up GDP and profit. It involves trying things like New Zealand’s Happiness Index and Well-Being Budget ($5.6B in 2020 alone), focusing on Quality of Life surveys, and increasing access to the modern “luxuries” of 1st-world living that many of us take for granted — things like education, healthcare, healthy food, shelter, meaningful work.
But as we enter an age of automation, can we not go beyond that? Henry Ford invented the Mobile T, the modern assembly line, and the 40-hour work week in 1926. Since then, worker productivity has risen hundreds of percent thanks to technological advances. For some reason however, worker compensation and quality of life have struggled to keep pace, especially since the 80s when average wages began to flatline (especially in the US).
The question is: if it took forty hours of work in 1926 to assure a certain standard of living, why is it still taking forty-plus hours in 2021? In a world where AI and robotics will increasingly replace manual human labor, should it not be possible for the people to benefit from the boom of automation making many of their jobs irrelevant?
Said another way, if we are able to sustainably produce X number of solar-powered Teslas a year without human labor, and at any given time, Y number of them are not being used, is it really a problem if the people who used to produce them (or anyone, really), can have a free carpool ride around the city, assuming there is a car available.
Here’s a shocking statistic for you: There are 59 empty houses/properties for each homeless person in the US — that’s an increase of 43% since 2010 (Source: Self.inc).
If we each didn’t have to own our own car, our own lawnmower, etc… we could come together as a community, buy much higher quality products than any of us to afford on our own, and then be able to mow the law, go for a spin, etc… pretty much whenever we wanted. That is a lot less stuff we would have to have in our lives (and landfills) with almost no change in our habits/options.
Don’t know about you, but that sounds a lot like prosperity.
A focus on Purpose
Many a dystopian film feature the “worthless” humans of the future being replaced by machines and relegated to either: unemployed starvation, escape-from-reality VR, or equally despondent drug addictions as technocrats or robots rule the world. Either way, the future looks grim — whether you are plugged in 20+ hours a day to Netflix or selling your body as a “real-human” sex slave.
But the future doesn’t have to be so. In fact, the future holds the potential to become a new human Renaissance of flourishing, life, and creativity. Imagine the possibility of being freed from hours of mindless repetition to focus on your true passion, to find your purpose. For many, this can be an incredibly scary experience. Who am I when I am not working?
If you are like most people, you may have forgotten (or never discovered to begin with). The education system and working world mold us from an early age to the factory-efficient robo-workers Henry Ford once needed in his factory. But humans are quickly being outpaced by AI/automation in all aspects of efficiency, productivity, and logic.
For us to not only stay relevant, but thrive and live in a future worth inhabiting, we must learn to shift from productivity to purpose. Because each of us has our own internal purpose, our own set of uniquely human (us) things to bring to the world. But we don’t get the Harry Potter, the Beatles, or even Henry Ford’s Model-T without the creative, driven individuals who made it their life’s mission to follow their calling wherever it may lead them.
Purpose is both the easiest and the hardest of the 4Ps to tackle. On paper, it couldn’t be easier — give people free time and they will find their purpose. Unfortunately, TV viewership stats tell another story, as Reid Hastings, CEO of Netflix, predicted when he said Netflix’s biggest competition was sleep.
Even before today’s modern age of on-demand entertainment, purpose was challenging. But also critically important. In fact, the Buddha once said,
“Your purpose in life is to find your purpose and give your whole heart and soul to it.”
Although we cannot claim to have the formula for finding one’s purpose or happiness in life, there are a few universal truths that seem to come up again and again. For instance, play. We firmly believe that unstructured, unmitigated play, and joy, are critical for the next generation of work. There is nothing more creative or more fulfilling than that moment when one enters the all-encompassing flow — be that acting, building, coding, teaching… certain experiences allow us to become children once more, to be lost in the flow of time, space, and imagination. This is where we find our purpose, our passion, and our place in the future of work.
The Good Future: Bringing it all together
There is an old Māori proverb “Kia whakatōmuri te haere whakamua” that I think perfectly describes our relationship with the future. It means, “I walk backwards into the future with my eyes fixed on my past.” As futurists, we can see just how true this is. We based our norms and ideals, our predictions and our possibilities on that which we have experienced before.
We live in an “if it ain’t broke, don’t fix it world.” Unfortunately, things are broken and fracturing worse than ever. But the good news is that we still have time, we can still change the underlying cause of so many of the crises facing our world, if we can but muster the courage to make the necessary changes.
Like this? Help create a better future by building better impact-driven startups and businesses.
Subscribe via Substack To Get My Free Growth Hacking & Pitch Deck Guides
Join 16k+ other founders and CEOs interested in growing their businesses bigger and faster.