The (Situational; Optional; Variable) Values Behind Market Capitalism

This is the World Economic Forum presentation most likely to reveal that fact that genuine, effective change will NOT be coming to any real life situation near you. We'll see, at 10:30 CET tomorrow. I'm hopeful, but not at all enthusiastic, considering this lineup of usual suspect:

Tony Blair, Stephen Green, Indra Nooyi, Shimon Peres, James J. Schiro, Jim Wallis with Maria Ramos

The high hopes are that people are surely not so gullible to swallow this old tired line yet again; the low expectations are based in a cursory understanding of Introduction to Behavioral Economics. Let us consider and reason together:

It's Time To Nationalize Everything

From the lucid keyboard of CNBC's Cliff Mason:

Now some people may object that governments don't do a good job running private companies. In general, I'm sure that's true, but we could hardly do a worse job than private sector's already done. If the state is going to bail out these companies, the state should be the entity that reaps the rewards, not existing shareholders.

We gave free enterprise a shot, now it's time try a different solution.

Book: The Great Financial Crisis

The Great Financial Crisis: Causes and Consequences
by John Bellamy Foster and Fred Magdoff

Meanwhile, the real, pressing needs of most people in the society go unaddressed. The only genuine way out of trap, The Great Financial Crisis argues, is the promotion of those very measures—such as massively expanding socially useful public spending, improving the security of the working class, and democratizing ownership of productive property—that are invariably opposed by the current system of wealth and power.

Thanks to Brad Fidler for the reference.

What is American Market Socialism?

American Market Socialism is not some central mandate from on high in the authoritarian sense of dystopian American fiction.

You won't be getting new marching orders. There won't be some formal announcement -- beyond the series of formal announcements you've received over the past several months, which have fully ushered in the new American Market Socialist economy.

There is nothing to fight or oppose here, Marx was wrong, there was no bloody revolution. Yet, Marx was right, The Machine Destroyed Itself. You and I will be building the Sustainable Global Green Society, moving forward.

This is NOT "shiny happy people holding hands." We have PLENTY to differ about; however, what is no longer debatable is the fact that from here forward, the specific details need to be worked out in each and every of our own individual lives.

Thank you 18th to 20th century American Industrial Era Capitalism for the liberating legacy of American Market Socialism; it is Capitalism evolved. Capitalism++.

Free Will: Predictably Irrational

Industrial Era capitalism is inundated with irrational reliance upon irrational conventions and assumptions in the context of a post-information society.

For instance, it's incontrovertibly obvious that NOBODY possesses anything even remotely resembling "Full Information," yet conventional economic theory is utterly dependent upon hosts of such irrational presumptions.

In real life economic behavior, Ariely explains, "You rely on our own past behavior, to dictate your next behavior, without clearly thinking about it, until it just becomes a habit."

When we do this over and over again with an entire economic system founded upon absurd and irrational assumptions such as Full Information and an achievable equilibrium, we are clearly setting ourselves up to FAIL time and time again.



Dan Ariely quotations:

"There's a level of compensation that actually undermines and replaces the original motivation; and that I think is a very very dangerous place."

"One of the ways [companies capture the heart and soul of employees] is to obfuscate payment, by paying people monthly. Cash eliminates the long term bond between people."

"You simply cannot contract motivation."

"When people talk about markets, it's like voodoo belief: The Markets will fix things."

Ariely says that when he meets entrepreneurs, they generally want to Improve The World and big cash payoffs from some other source to do something that they don't care about generally have little or no effect. My own observations and experience over the past 35 years completely validates this perspective.

"I actually believe that very little of innovation, creativity, entrepreneurial activity is happening because of economic incentives; I think we have these incredible drives for meaning and help and it's not about [cash] incentives."

Shared Fate Capitalism

"We recognize there is a community of interest among all of our stakeholders. There are no entitlements; we share together in our collective fate. To that end we have a salary cap that limits the compensation (wages plus profit incentive bonuses) of any Team Member to nineteen (19) times the average total compensation of all full-time Team Members in the company."

Corporate Policy of Whole Foods Market, Inc. (WFMI).

Recent programs on NPR featured economists citing average existing salary spreads are 20x to 30x throughout Asia, about 50x in Europe, and 300x to 400x in America. Can you say Unsustainable Resource Skews? I thought you could. :-)

Reality Based Business Models

An emerging important approach is the perspective of Reality Based Business Models being developed by Brad Fidler.