Saving the World

Last Friday I attended a luncheon hosted by Social Venture Partners, a San Diego based “Strategic Philanthropy.”  It was very exciting.  That’s because there is a positive invisible movement sweeping the world.  It’s called Socially-Strategic Enterprise.  Those are fancy words for harnessing the positive innovations and focused efficiency of free market business to do good.  To solve the world’s problems.  It’s big and it’s everywhere.  Chrysalis Staffing, a temporary labor agency in L.A., hires homeless people to provide workers for their customers throughout the city.  Delancey Street Foundation in San Francisco operates many businesses including restaurants, a moving company, and a car repair shop paying and training pre-parole felon convicts as their workforce.  They have changed the lives of 14,000 former criminal employees over the past 30 years.  These are just two examples of a world-wide explosion of charities using business discipline to become self-sustaining. It’s not brand new.  Remember the reason the Girl Scouts went into the cookie business was to train self-reliance, presentation skills, accountability, and build self-esteem.  But today this model of creating a reliable income stream by developing a “mission centered” business is growing faster than the Arctic snow melt.  The reasons are profound.  We’ve got large scale, civilization ending problems rocking our entire world.

Modern life has become the 31 flavors of catastrophe.  We’ve got terrorism, poverty, epidemics, corruption, environmental destruction, resource depletion, illiteracy, and continuous large-scale natural disasters (earthquakes, fires, floods, hurricanes…), so we’ve got to do something.  Governments are principally self-sustaining bureaucracies that move slowly and often ineffectively at solving emerging problems.  They have a hard time keeping bridges from collapsing.  With few exceptions, businesses that operate on the old industrial model of capitalism are too focused on turning “things” into shareholders’ wealth to be effective at solving acute social problems.

So our times have called forth a new brand of citizen enterprise.  They come in many forms.  Non-profit and not-just-for-profit businesses are using social-entrepreneurship to take on just about every problem imaginable.  One World Health is a San Francisco based non-profit pharmaceutical company working with universities to scale up low cost cures for the diseases of the poor.  It’s run by executives with all the discipline of Johnson and Johnson.  And the world’s youth are flocking to these enterprises.  Socially-strategic non-profits are the fastest growing job market in the world growing at two and a half times the rate of private sector companies.

The biggest problem, however, is that most young citizens don’t know how to become social-entrepreneurs, so my friends and I at the American Dream Project are developing a fully accredited on-line academic course on the subject.  We will be offering this course to high school and college students throughout the world.  It’s going to be a multi-media banquet of documentary film clips, animation and student generated video.  Each student will also join a local group to do a community-based project.  Imagine millions of students doing innovative projects to improve their own communities each year.  Well, that’s what we imagine!  Right now we are working with GlobalGiving.org to raise the funds to get it launched.  If you’re interested in seeing what we’re up to with Global Giving, click here.

Bottom Line, don’t think the only stuff going on in the world is what’s on the cable news.  There are millions of people who wake up everyone morning to go to a job to make their difference.  You don’t have to take a vow of poverty.  Only a vow of meaning.

3 comments.

World Peace Requires Virtuous Commerce

World Peace Requires Virtuous Commerce

There is a new game going on called Totalitarian Capitalism. Huge economies such as China and Russia are proving that consumer capitalism can drive economic growth without political freedom. They’re also proving that technology can easily be used to control information rather than broadcast it. This should be more than a little concerning. Remember, we thought we won the Cold War because the weak Russian economy, but Russia has become the oil and energy supplier to Europe. Now Russia is getting richer by the day, and they’re dusting off the buttons on their nukes. China is one of the most repressive police states in the world, yet it’s an economic miracle. A miracle with a 100,000,000-man army, inter continental ballistic missiles, and an appetite for Taiwan.

In a world where critical economic resources such as oil, water, and minerals are increasingly scarce, the imagined benefits of competition are simply too tempting to pursue the opportunities of collaboration.

Peace will come when leaders recognize the benefits of peace outweigh the potential benefits of war. Those benefits must cover the whole spectrum of human motivations, spiritual as well as material. This requires visionary world leaders and an international business community who see the ultimate threat not as bad financial quarter, but rather human extinction or world wide dark age of unprecedented suffering.

I know this sounds like idealist mush, but, as the McKinsey survey reflects, it’s not. We are on the verge of a whole new level of technological breakthroughs that will enable us to create everything we need from atoms and molecules instead of iron, ore, precious metals, and oil. We are on the verge of solving the problem of sustainable clean energy. We are on the verge of solving the riddles of disease. We are on the verge of creating sustainable abundance based on the economics of ideas rather than the economics of things. But being on the verge doesn’t mean now. But in real time these advances will take 50 years to come into widespread use. In the mean time we must find the will not to destroy each other and reduce the world to barbarism before we can save it.

So what is required? We must demand that our political and business leaders have a worthy vision of a new future and have practical plans to get us there. So far all I see are little ideas, politically inspired mush, and too little bold investments in world saving technologies.

But we, you and I, can do a lot. We must take stock of whom we work for. Is your employer or are you adding unique value to the world? Would anything of tangible value be lost if your employer went out of business or you quit doing your job? Human energy, brains, and talent are terrible things to waste. We’ve all been given an advantaged life. Why not use it to create the most value you can?

Don’t be reckless. Be wise. Spend enough time in daily self-reflection to get a sense of inner direction. Then take the common sense, one step at a time approach to changing your impact and elevating your influence. You will attract allies. You will see opportunities. As the door unlocks, open it wide. Speak up. Act. In your next business meeting, ask the big questions others aren’t. We can’t do everything, but what can we do? Our children are depending on our courage.

Will Marre
Founder, American Dream Project

4 comments.

Is This the Best We Can Do Mr. Greenspan?

Economists are more arrogant than weather reporters. They not only try to predict the future, they attempt to control it. But like all things humans try to control, the real world is far more complicated than our limited understanding of it. When their plans don’t work, they stand back, smoke a cigar and write a book.

Thank you, Alan Greenspan. After 18 years of expanding the money supply that recently financed the turn of the century tech bubble and the greatest housing inflation in history, you’re saying that we are all in for a prolonged recession with double-digit interest rates and no growth (USA Today). The main reason Greenspan gives is that Chinese labor is growing more expensive so (dangerous) stuff from China is going to cost more at Wal-Mart. Unfortunately, I am not making this up. He said this is to Lesley Stahl in the interview for 60 Minutes (cbsnews.com).

It is time to break this economic myth that labor costs are the primary cause of rising prices. It’s become patriotic to restrain wages by any means. But it’s not. In fact, it makes us all weaker. This faulty thinking has led to a world of unrelenting economic insecurity for the typical American. Males between 25 and 34 earn 17% less than their fathers did. The average American household sees $2000 less in real income than they did in 1975 and that’s with more people per household working longer hours! (economy.com).

Meanwhile, low real inflation is a tragic myth. In the 1990’s budget pinheads in Washington decided to change the way we calculate inflation to avoid cost of living hikes in social security. This is a serious deception. They overweigh any price that declines and don’t count prices that rise on the most important things (financialsense.com). Just open your eyes. The inflationary price of assets has exploded on all the things that matter. The house I bought for $40,000 in 1975 sold recently for over $500,000. This is a three bedroom, two bath 1960’s tract house bomb with tar covered compressed cardboard sewer pipes. That’s a 350% increase in real dollars. College tuition is up 300% in 25 years. We spent $1.79 per gallon for gas 5 years ago. Is today’s $3.00/gallon gas any better? Or does it just cost more? Yes, inflation is really low for hamburgers and CD players because we use Illegals to make our food and Chinese peasants to make our electronics that keep our wages right where they need to be. Meanwhile real inflation is raging on all the things that matter, and we may be headed for a big fat recession. And we’re supposed to think this is the best we can do?

Much of this is unnecessary. Real inflation is mostly caused by bad economic policy, special interest tax and trade policy, and a host of other myopic leadership blunders. The biggest thinking error of all is to think the labor costs is the primary cause of inflation therefore it is a national goal to keep labor costs low. The real cost of goods and services is mostly driven by waste. It’s everywhere. All the non-added-value materials and effort that go into building, manufacturing, unnecessary shipping, inventorying, packaging, and handling only add cost. Eighty percent of the raw materials and energy consumed to make a car are not in the final product. A typical 3000 square foot home can easily be constructed in 30 days if the work and materials are organized. How many homes are built in 30 days? The music industry makes more profit per song (about 60 cents) from an itunes download than a CD that they manufacture, package, ship, unload, and stock, while another layer of retailers handle, sell and put it in a plastic bag so you can spend time and gas driving back and forth to the store. So why do music companies, and builders, and car manufacturers do what they do? Because they’ve built their business models on assumptions that are no longer sustainable. Every industry has its bad habits. But please don‘t blame inflation on labor. Inflation is the product of leadership. With new leadership and new thinking we can invent ways of making and consuming that lower costs and raise living standards everywhere.

In the meantime, we are not powerless. All of us have suffered from creeping inflation in our own lives. Our old habits may cause us to spend time and money on activities and stuff that no longer add value. We all know the greatest compensation in life is not money or stuff. It’s loving friends, enriching experiences and satisfying service. So the real question for each of us is, “What thinking habits are enticing me to waste time or money on things that don’t enrich me? What new priorities, activities and experiences would bring lasting satisfaction?” As we look to a bumpy future, these personal choices will have a lot more impact on our well-being than some arrogant economist who actually stimulated inflation and blames us for wanting a piece of our own productivity. Get even. Live well.

7 comments.

Strong, Wise, and Good

This week super-smart General Patraeus has told Congress we need to keep up our efforts in Iraq. But over 60% of Americans say we need a timetable for a pullout (USA Today). Everyone seems confused. We seemed to have lost our “mojo”. We’ve degenerated from confidence to uncertainty. It’s time to find our way. It’s time to form a real foreign policy that will help create a future world we want our children to live in.

It’s a tragedy that our nation has wasted its leadership capital since we became the world’s only super power in 1989. Before the fall of the Berlin Wall, we had defined our role in the world as the good warrior who opposed demon communism. Once we won that war, we lost our strategic compass and often behaved as a confused giant. Well, the world’s changed a lot in the past six years, mostly for the worse. Civil strife, genocides, pestilence, and poverty pummel Africa. The Middle East is violent and chaotic. Nuclear Pakistan is a staying area for Islamic fundamentalists. China has the largest army in the world and nuclear missiles capable of targeting any Starbuck’s in Western North America. Meanwhile, our armies are weary and our defense budget overdrawn. Our greatest enemies are not nations but quasi-religious groups and international gangsters who want to destroy both our peace and way of life. Other than that, everything’s dandy.

It’s time for more than a new set of tactics. It’s time for a major change in foreign policy strategy that is both grounded in values and anchored by common sense that can be our overarching theme for future decades.

In an effort to kick-start new thinking, I wonder if we might adopt a foreign policy that is strong, wise, and good.

This is a foreign policy that first focuses on self-defense with a clear definition of what “self” means. Our foreign policy should seek our well-being and safety, while making us invulnerable to the unilateral actions of untrustworthy tyrants. Our oil based economy and addiction to cheap labor have tied our national interest to unpredictable behavior of both the Middle and the Far East. This is not wise. It weakens us daily.

Second, we ought to be leaders of international legal legitimacy. We must have the moral authority to spread a civilized international rule of law we love to tout but appear to treat superficially whenever we just want to act tough. We’ve spent decades establishing broad agreement about what’s legally acceptable behavior for world leaders and their armies and now is not the time to abandon that effort into a geo-political every-man-for-himself free-for-all.

Third, we must put great effort in minimizing violence. Unfortunately there are times when force is necessary. Those times are far fewer than most of us rationalize. But without the strength of arms and a wise willingness to use them, the world will be run by despots and tyrants. That said, open democracies will not sustain wars that have ambiguous aims or are incompetently waged. This is not due to lack of patriotism but rather because of it. War is a blunt instrument with unimaginable unintended consequences. And often the threat of violence is more powerful than its exercise. Increasingly, violence is non-strategic except in the most obvious and extreme circumstances. Perhaps most importantly we need to focus on stopping the spread of war weapons, everything from weapons of mass destruction to AK47s. The terror achieved with automatic weapons and shouldered missiles are enough to bring a society to its knees. There will always be sociopathic villains. Hitler, Stalin, Mao, Atilla will always be with us. We must, for our children’s sake, do more than we have to limit the weapons at their disposal.

And fourth, we need to emphasize on our humanitarianism. The Tsunami relief effort created more good will in Muslim Indonesia than diplomatic maneuvers ever could. The world agreed long ago what true humanitarianism is. It’s found in the United Nations Declaration of Human Rights. A declaration we had a major hand in authoring. These are the rights human civilization must foster for the whole world to thrive. They are necessary to create hope and tolerance among the hopeless and hateful.

This fourth dimension of foreign policy is vital to our future because right now middle eastern oil money funded by our insatiable need for gasoline is being spent by the tens of millions to relieve poverty and insecurity of the world’s Muslim children. Islamic fundamentalist schools teach their growing generation that the U.S. version of civilization is corrupt and must be overthrown. The values of our Bill of Rights and individual self-determination are skewered on a sword of violence. And we are letting it happen.

Our battle is the oldest in the world. It is the battle for people’s minds. The battle to spread the point of view through which all decisions, personal and political, are made. We cannot win that war with guns or sanctions. We must win it because our ideas are more noble, more just, more meaningful. Of course we can establish schools, social programs and T.V. stations in troubled countries. But most of all we must lead by doing. We must be the first to exhibit the values we espouse to relieve suffering and provide opportunity. This is tough sledding. We cannot be naive. We cannot expect that our money or resources filtered through corrupt governments will achieve any good. Nevertheless, we must persist and invent new ways to systematically spread the collective wisdom of civilization so that some day, maybe a century from now, everyone in the world will have more to gain by peace than to lose by violence.

Strong, wise, and good: self-defense, legal legitimacy, minimize violence, emphasize humanitarianism. What do you think?

6 comments.

Fake Wealth

Yesterday President Bush declared that our economy was “sound” and all this concern about home foreclosures is overblown. He said, “I’m a glass-half-full person” (USA Today). Well, what if you’re a what’s-really-going-on-here kind of person?

What’s your house worth? How much home equity do you have? Will your mortgage readjust in the next two years? Welcome to the wealthiest country in history. But is it the wisest? Recent news is full of a declining housing market with the biggest price declines in the shortest time in history (“Economy.com Forecasts Historic Home Price Decline”). What we’ve just experienced is called asset inflation. It’s when the price of things goes up but their underlying value doesn’t. It’s all due to easy credit. It drove up the stock market before the 1929 crash. It drove the Internet bubble of 1998-2000 (which eventually cost 17 trillion dollars in stock losses), and now it’s hitting nearly all homeowners who live paycheck to paycheck. Whether the ripple effect of 3 million mortgages adjusting to higher payments in the next two years is going to choke our economy is yet to be seen. But if it does, it will hurt those who have the least resources. And the worst is it could have been avoided. It didn’t happen by chance.

About 30 years ago our leaders decided that turning America into a consumer economy was a good thing. So today instead of borrowing to invest in factories, technology and ideas, we spend 70% of our 12 trillion dollar economy on buying stuff. We can’t afford to repair our bridges, our levees, or fix education, but anyone can get a credit card. You see, there is lots of money to be made loaning us the money. But since we quit investing in productive assets and now mostly spend it on consumption, look what we’ve produced. Today, two-thirds of Americans believe their children will be economically worse off than they are. This might be why:

• We live in a country of 300 million people in which the richest 3 million own more than the bottom 256 million. 1% owns more than 90% of us put together!

• Profits are at a 40 year high for Fortune 500 companies ($705 billion) nearly 2X previous high, and worker productivity is up 48% between 2000-2006, but average wages are only up 1% (inflation adjusted) (Bureau of Labor Statistics (BLS)).

• Median personal income is actually down, below 2000 levels (BLS), and also below 1977 levels in real dollars! (The real median income in 1977 was $51,223 (inflation adjusted). In 2006 it was $50,700.) (National Center for Education Statistics (NCES)).

• Prices in real terms of housing, college education, and health care have risen nearly 300% more in the past 30 years, while individual incomes are stagnant. (College Board and U.S. Census Bureau).

• The amount of monthly income it takes to buy a house today is nearly 23% vs. 17% in 1970. People who pay 50% of their income for rent or mortgage payments are at an all time high.

• The average home price adjusted for inflation in 1970 was $115,000. Today it’s 2X as much in real dollars ($219,000). (Fetterman, Mindy. (2006, Nov. 19). Young people struggle to deal with kiss of debt. USA Today.) In many markets it’s 4X more (475,000+).

• The average debt of a college graduate is nearly $20,000+ (College Board).

• 47 million are medically uninsured. Most are in families with at least one full time worker.

• In many communities, teachers, policemen, and firefighters cannot afford housing.

• Medical Insurance Premiums of an average American family exceed $1000 per month.

• Loan defaults and foreclosures are doubling monthly in many parts of the country.

• In Cleveland, Ohio nearly 10% of the homes are vacant and abandoned due to foreclosure caused by job loss.

• Retail sales are declining due to increase costs of gasoline, insurance, and housing.

• The savings rate for the average American 30 years ago was 9%. Today it is at zero.

• America has fewer manufacturing jobs (14.3 million) than it did in 1950 with 2 times the population. SOURCE

• Since 1977, inflation-adjusted medium income for U.S. males has declined 7.5%.

• U.S. productivity in terms of output ranks 8th behind Norway, Belgium, France, Ireland, Italy, Austria, and Germany (OCED).

• U.S household debt exceeds $12 trillion.

• U.S. Federal Deficit is $8.8 trillion!

So what’s our plan? Can this continue? Is this the best society we can produce?

Maybe we need new leadership with a vision for a new future. A future in which we get our identity and our joy from who we are and what we create rather than from how we appear and what we consume. We need a new economic agenda for our future and individually we need to make sure our personal economic agenda is serving our real dreams rather than the dreams of someone trying to sell us something. The lessons are simple. We need new leaders with a new agenda. And most of all…we need to invest in ourselves, not in our stuff.

Let us know what you think. We want to hear your voice.

23 comments.

Ruining Mexico

The heated Mexican/U.S. border debate rages on. We read about it in the papers; we hear about on the news. But the debate doesn’t even seem to be dealing with the real issues.

First of all, claiming that it’s all right to exploit Mexican workers in the U.S. because they do jobs we won’t do is twisted logic. If we have jobs only a desperate immigrant would do for exploitive wages, why do these jobs even exist?

There is zero evidence that Americans won’t do hard jobs that are safe and pay fair wages. So if we need Mexicans to do dangerous, toxic, dirty work for unfair wages there is something wrong with the morals of the exploiters. Slave owners also thought they were giving Africans a better life.

More importantly, illegal immigration is killing Mexico. Over half of Mexico’s 100 million citizens say they want to move to the U.S. Is that a good thing? The tens of thousands of young men and women leaving Mexico are Mexico’s most entrepreneurial, most resourceful of their vast underclass. There are entire towns and villages peopled only by the women and children left behind. The whole nation is dependent on the billions of dollars illegally employed family members send home creating a false economy. This creates price inflation in Mexico while robbing our economy of the purchasing power of the wages we are paying. Most of all Mexico remains unable to move behind a corrupt banana republic system of the rich and privileged making a mockery of democracy. The corruption of rich using laws and regulations preventing real capitalism from nurturing a middle class has created a country rich in resources sinking in greed and bribery.

Since it is unlikely we will annex Mexico, we must use our political, economic and investment policy to promote real reform. Access to quality education and capital must improve. The legal system must be made reliable. Misery as a way of life must end, and much more. All this may take decades. But is the alternative to have most of Mexico’s future sneak across our border?

As for us, never in our history has this number of immigrants come to America so fast. Where are schools, roads, hospitals, housing, water, sewers coming from? Is having 400,000 million Americans in the next 35 years really a good idea for anyone but big box retailers and fast food outlets? Is this really the best idea for our future?

What do you think? The article “Ambassador: Mexico to lobby hard for immigration reform” found in USA Today on Feb. 20, 2007 states that Mexico favors creating a guest worker program. The article also states that a Republican-led Congress prior to November’s Congressional elections feels the solution is to increase security and building border walls to prevent illegal immigration. But does this solve anything?

Where do you stand? What are your ideas to solve this problem? Let us know. We want to hear your voice.

7 comments.