Imagine an AI life coach with the voice of Oprah or Tom Hanks trying to help parents stay together or raise kids. Or a new Legion of Builders and Demolishers that installs millions of solar panels across the country, upgrades our infrastructure, and removes derelict buildings while also employing tens of thousands of workers. Or a digital personalized education subscription that is constantly giving you new material and grouping you with a few other people who are studying the same thing. Or a wearable device that monitors your vital signs and sends data to your doctor while recommending occasional behavior changes. Or voting securely in your local elections via your smartphone without any worry of fraud.
Each of these scenarios is possible right now with current technology. But the resources and market incentives for them do not exist. There is limited or no market reward at present for keeping families together, upgrading infrastructure, lifelong education, preventative care, or improving democracy. While our smartphones get smarter each season, propelled by tens of billions of dollars, our voting machines, bridges, and schools languish in the 1960s.
This is what we must change.
At present, the market systematically tends to undervalue many things, activities, and people, many of which are core to the human experience. Consider:
• Parenting or caring for loved ones
• Teaching or nurturing children
• Arts and creativity
• Serving the poor
• Working in struggling regions or environments
• The environment
• Reading
• Preventative care
• Character
• Infrastructure and public transportation
• Journalism
• Women
• People of color/underrepresented minorities
And now, increasingly,
• Unskilled labor and normal people
• Meaningful community connections
• Small independent businesses
• Effective government
There were periods when the market supported some of these things more than it does today. Today, it needs to be steered to do so. The United States has reached a point where its current form of capitalism is faltering in producing an increasing standard of living for the majority of its citizens. It’s time for an upgrade.
Adam Smith, the Scottish economist who wrote The Wealth of Nations in 1776, is often regarded as the father of modern capitalism. His ideas of an invisible hand that guides the market, division of labor, and that self-interest and competition lead to wealth creation have been so deeply internalized that today we take most of them for granted. Our general thinking today is to contrast capitalism with socialism, which arose in the 1800s and advocated social ownership or democratic control of industries. Karl Marx published Das Kapital in 1867 and argued that capitalism contained internal tensions that would oppress the working class, who would eventually rise up and take control. Our perception is that capitalism—embodied by the West and the United States—won the war of ideas by generating immense growth and wealth and elevating the standard of living of billions of people. Socialism—represented by the Soviet Union, which collapsed in 1991, and China, which moderated its approach in the 1980s—didn’t work in practice and was thoroughly discredited.
This simplistic assessment misses a couple important points. First, there is no such thing as a pure capitalist system. There have been many different forms of Western capitalist economies going back centuries, ever since money was invented around 7,000 years ago. The market feudalism of the Middle Ages evolved into the expansionist mercantilism of European trading companies, which evolved into the industrial capitalism of 20th-century America, and into the welfare capitalism of the 1960s when the United States and many other advanced countries established safety net programs like Medicaid. Our current form of institutional capitalism and corporatism is just the latest of many different versions.
Similarly, many forms of capitalism are in service around the world right now. Singapore is the fourth-richest country in the world in terms of per capita GDP. It has had an unemployment rate of 2.2 percent or lower since 2009 and is regarded as one of the most free, open, pro-business economies in the world. Yet the government in Singapore regularly shapes investment policy, and government-linked firms dominate telecommunications, finance, and media in ways that would be unthinkable in the United States. Singapore’s system of capitalism is very different than Norway’s and Japan’s and Canada’s and ours. Many countries’ form of capitalism is steered not by an unseen hand, but by clear government policy.
Now imagine a new type of capitalist economy that is geared toward maximizing human well-being and fulfillment. These goals and GDP would sometimes go hand-in-hand. But there would be times when they wouldn’t be aligned. For example, an airline removing passengers who had already boarded a plane to maximize its profitability would be good for capital but bad for people. So would a drug company charging extortionate rates for a life-saving drug. Most Americans, I think, would agree that the airline should simply accept the lost revenue and the drug company should accept a moderate profit margin. What if this idea was repeated over and over again throughout the economy?
Call it Human-Centered Capitalism, or Human Capitalism for short.
Human Capitalism would have a few core tenets:
1. Humanity is more important than money.
2. The unit of an economy is each person, not each dollar.
3. Markets exist to serve our common goals and values.
There’s a saying in business that “what gets measured gets managed for.” We need to start measuring different things.
The concept of GDP and economic progress didn’t even exist until the Great Depression. It was invented so that the government could figure out how bad the economy was getting and how to make it better. The economist Simon Kuznets, upon introducing the concept of GDP to Congress in 1934, remarked that “economic welfare cannot be adequately measured unless the personal distribution of income is known. And no income measurement undertakes to estimate the reverse side of income, that is, the intensity and unpleasantness of effort going into the earning of income. The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined above.” It’s almost like he saw income inequality and bad jobs coming.
Our economic system must shift to focus on bettering the lot of the average person. Capitalism has to be made to serve human ends and goals, rather than have our humanity subverted to serve the marketplace. We shape the system. We own it, not the other way around.
In addition to GDP and job statistics, the government should adopt measurements such as:
• Median income and standard of living
• Levels of engagement with work and labor participation rate
• Health-adjusted life expectancy
• Childhood success rates
• Infant mortality
• Surveys of national well-being
• Average physical fitness and mental health
• Quality of infrastructure
• Proportion of elderly in quality care
• Human capital development and access to education
• Marriage rates and success
• Deaths of despair/despair index/substance abuse
• National optimism/mindset of abundance
• Community integrity and social capital
• Environmental quality
• Global temperature variance and sea levels
• Reacclimation of incarcerated individuals and rates of criminality
• Artistic and cultural vibrancy
• Design and aesthetics
• Information integrity/journalism
• Dynamism and mobility
• Social and economic equity
• Public safety
• Civic engagement
• Cybersecurity
• Economic competitiveness and growth
• Responsiveness and evolution of government
• Efficient use of resources
It would be straightforward to establish measurements for each of these and have them updated periodically, similar to what Steve Ballmer set up at USAFacts.org—a treasure trove of social metrics that pulls from many public and private sources. Everyone could then see how we’re doing and be galvanized around improvement.
This could be tied in to the Digital Social Credit system, where people who help move society in a particular direction are rewarded. For example, a journalist who uncovered a particular source of waste, an artist who beautified a city, or a hacker who strengthened our power grid could be rewarded with Social Credits. So could someone who helped another person recover from addiction or helped acclimate an ex-convict into the workforce. Even someone who maintained a high level of physical fitness and helped others do so could be rewarded and recognized.
The power of this new marketplace and currency cannot be overstated. Most of the technologists and young people I know would be beyond pumped to work on these problems. They’ve been chomping at the bit to do so. We can harness the country’s ingenuity and energy to improve millions of lives if we just create a way to monetize and measure these goals.
I’m no fan of big government. The larger an organization is, the more cumbersome and ridiculous it often gets. I have sat in Washington, DC, conference rooms and filled out forms and realize the limitations on what even well-intended public officials can do. I am, by nature, an entrepreneur who likes to operate close to the ground on the human level.
I’ve also spent time with people at the highest levels of government, and it’s striking how stuck most of them feel. One congressman said to me, “I’m just trying to get one big thing done here so I can go home.” He’d been in Congress for seven years at that point. Another joked that being in DC was like being in Rome, with the marble there to remind you that nothing will change. Government isn’t magic. Quite the opposite. The system has become bigger than the people.
That said, I’ve concluded that there is no other way to make these changes and manage through the loss of jobs than to have the federal government reformat and reorganize the economy, particularly using technology to serve human needs.
I’ve been around some of the richest individuals, philanthropies, and companies in the world. Even the richest and most ambitious of them either operates at the wrong scale or has multiple stakeholders that make big, long-term commitments difficult to sustain. Most all of them are kind of waiting for government to reinvent itself and get its act together. Even billionaires operate on a scale of $100,000 to $10 million most of the time. We’re staring at trillion-dollar problems, and we need commensurate solutions.
Grassroots efforts are admirable and inspiring. But the market to support most of them does not exist, and things are getting worse around them. No level of activism can compensate for the displacement of workers.
What is required is a new, invigorated government willing to build for the long term. We are in a slow-moving crisis that is about to speed up. It requires drastic intervention. Human Capitalism will reshape the way that we measure value and progress, and help us redefine why we do what we do.