Issue #30: Belonging and Economy
"What is growth for if not to help ordinary people thrive?" — Winnie Byanyima
|Oct 1, 2020||2|
With the COVID19 pandemic compounded by climate change, economic theory has entered the chat. The New York Times’ blockbuster story on Trump’s tax returns have given us a crash course in tax policy. Google searches for “K-shaped recovery” spiked after this week’s presidential debates, shining a light on how lower income Americans are struggling to get basics like food and housing even as higher income workers return to normal. By adopting Milton Friedman’s theories that value and prioritize the well-being of shareholders, we have exacerbated our current crisis. In this chaos, we’ve also raised questions about fairness and value.
An economy is more than the stock market index. The Greek roots of the word economy are household and manage. Wikipedia has a more holistic definition:
A given economy is the result of a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure and legal systems, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of human practices and transactions. It does not stand alone.
Our economies are systems that both reflect and create the values that we hold. They are expressions of who and what belongs: buyer and seller, corporation and community, and people and planet. We can choose to redefine these roles, their modes of interaction, as well as the incentives and output prioritized. Transforming our economy can be a pathway to building belonging.
There are a few glimmers of hope on the horizon of a sea change in our economies. The city of Amsterdam announced the adoption of economist Kate Raworth’s “doughnut economics,” an economic system that balances planetary and social well-being with economic growth.
The Business Roundtable made a newsworthy announcement last August that its 200 member companies would prioritize stakeholder capitalism, balancing the pursuit of shareholder value with social needs. However, a recent study found that the member companies have fallen short of making an impact.
The Business Roundtable’s statement of a purpose of a corporation, released last year, was touted by prominent executives as a landmark in the evolution of corporate governance. But its signatories have done no better than other companies in protecting jobs, labor rights and workplace safety during the pandemic, while failing to distinguish themselves in pursuit of racial and gender equality, according to the study.
Our economic crisis is not evenly distributed. Many are calling this the first she-cession. Because women, and particularly women of color, are over-represented in low-wage labor like care workers and service work in businesses like restaurants and hotels, they have been the first to lose their jobs.
Kristin Rowe-Finkbeine, the executive director and co-founder of MomsRising, a group which advocates for women’s and family issues, said: “The cracks in our system that were here before the pandemic have now become catastrophes and we absolutely need every member of Congress to focus on what actually fuels our economy and the health of our nation.”
This systemic vulnerability of economic precarity reveals other root causes of women’s economic exclusion across the income spectrum. Even women in middle and higher income position have been negatively impacted. Without the security of benefits such as vacation time, paid sick leave and child care assistance, women shoulder more than their fair share of labor that pulls them out of the economy as a producer rather than as a consumer only. Of course this labor still contributes to economic growth even as women are excluded from enjoying the protections and full benefits of their contributions.
So much of the reason behind that are policies that have often overlooked the needs of working women, said Heather McCulloch founder and executive director of Closing the Women’s Wealth Gap, an initiative working to advance policies that build women’s wealth.
“We don’t recognize women’s roles and so we never ask, ‘Do women benefit?’ McCulloch said. “We completely ignore or undervalue the role that women are playing, not just in their own families as breadwinners, but also as economic drivers of the economy. If women don’t benefit, the policies need to change because we’re all going to lose.”
More companies are starting to expand the range of benefits in acknowledgement of non-economic labor like civic work with civic time off for elections that contributes to our community and social well-being.
An economy that relies on consumption presents pernicious incentives for those who lack the resources for consumption. Last year, the US Army exceeded its recruitment target, largely due to a strategy that targeted young people from economically disadvantaged communities in debt. Our human practices punish indebtedness and shame indebted people. We allow and enable predatory practices that monetize shame like payday loans and debt collection agencies. We undermine the well-being of these communities by fueling brain drain. And worse, we appear to be doubling down on debt as a cudgel for economic belonging.
Income share agreements (ISAs) act as an alternative to student loan debt. In exchange for educational tuition assistance, students enter into contracts that provide a percentage of future income as repayment. While still uncommon in traditional higher education, alternative education programs like coding bootcamps have offered ISAs as the bright shiny answer to student loan indebtedness even as they shift the risks of educational investment on unknowing students.
Rather than a focus on output and consumption, “Making in Public” calls for a economic system that centers on the creator and production as the meaningful units of the system. In other words, we derive value from transacting relationally with the person(s) creating the product. In some sense, the final consumable that emerges is a bonus. We pay for patronage much like in the Renaissance. Products like Patreon already enable this creator economy that is projected to keep growing.
One economic model that might reflect this turn from output and consumption is group economics, now entering pop culture thanks to the NBA.
Broadly speaking, the term refers to groups of people who pool their resources to accomplish something they otherwise might not be able to as individuals—in the context of the Black community, it has often been used to talk about the importance of creating and supporting Black-owned businesses that in turn support the larger Black population. West defines the idea as follows: “I think it’s something Black people used to practice and don’t practice anymore. And our communities haven’t shown a positive result from us not practicing it. It’s creating a mechanism where their resources are tied together and they’re being moved in a position to positively help the communities we come from.”
As the world becomes more socially connected, economic solidarity becomes easier to practice and sustain. Ethel’s Club, a private social club for people of color, recently announced the launch of Something Good, a Black-owned social platform centered on the needs and aspirations of people of color. Fintech startups like Breaux Capital leverage community to pool resources, build financial literacy and generate wealth for Black Millennials.
Our current economy values extraction, competition, power over others, and aggression that treat workers as mechanistic parts within economic machinery. Jennifer Armbrust outlined a set of 12 feminist business principles that imagines a more embodied, holistic economy.
The social change collaborative The Point People explored the implications of these principles and reimagined the economy that could emerge with them mainstreaming. These new values highlighted the dynamism of exchange, reinforcing the optimization of reciprocity and balance rather than the maximization of competition and aggression.
These new economic models share a common thread of redefining value in a way that builds and reinforces connectedness, empathy and belonging. By shifting our gaze away from the output on only dollars and cents, these alternative economies allow us to make meaning from our human activities and resources. We work because it makes our community and natural world better. Our labor becomes an exercise in building legacy rather than just generating revenue.
While communities generate tangible value for businesses — such as content, events, online advocacy and marketing, technology production, customer support, and education — it is the intangible value that members derive from the experience that makes these environments truly “sticky.” Human beings are fundamentally social animals. Behavioral economics and psychological research have taught us that we fundamentally crave a sense of connectedness, belonging, mission, and meaning, particularly when performing our work. Theresa Amabile’s The Progress Principle and Daniel Pink’s Drive both demonstrated that making progress towards a shared mission is the most motivating force a professional can feel. Communities deliver these benefits, creating a sense of shared accountability and a set of values while preserving individual autonomy.
As we move from a mindset and reality of zero-sum scarcity to shared abundance, we can move beyond valuing only material gain toward greater fulfillment of deep human needs. Economic design is complex; given the human impact, we should search for approaches to de-risk the iterations needed to design economies of belonging. We can turn to simulation to understand how to approach economic design and play-test these new models. Research has shown that video games like the Sims and Animal Crossing are sufficiently real to model economic activity, making simulations participatory and even fun. Salesforce’s AI Economist is one simulation capable of managing the complexity and assessing the consequences of new measures and incentives and better balance tensions between economic productivity and social well-being.
I’m excited to speak at CHROMA, the upcoming conference hosted by Black and Brown Founders. I’ll be talking about leveraging tech for the future of belonging on October 2. There’s over 250 people registered to watch! If you’d like to attend, grab a ticket here.
I took September off for meetups both because it was my birth month as well as the month for the Institute for the Future’s Ten Year Forecast Summit. If you’d like to see some of the highlights, check out IFTF’s YouTube channel. If you want to join this collective journey of imagining the future of belonging, RSVP to the next Future of Belonging meetup on October 13 at 5:30 pm PT/8:30 pm ET at http://bit.ly/belongingOct2020.
PS. I’d love it if you’d share this post with folks you care about. Let’s build the future of belonging together!