‘Betterness‘ is an essay by Umair Haque – an economist who’s played a big part in shaping my own ideas and beliefs about capitalism and its future. It’s actually been out for a while now but because I follow his blog I didn’t think there’d be much new in there for me. Wrong! It really is an incredibly important piece of work, bringing together and clearly laying out Umair’s radical but completely sensible ideas. I urge anyone in business or thinking of starting up their own venture to read this – it might challenge some very fundamental beliefs about what business and capitalism are actually for.

Here are four of the ideas that stood out for me:

Business and capitalism have ultimately failed in delivering true wealth (not just money, but across the board improvements in health, well-being, societies, the environment and happiness.) Umair offers some stark insights and statistics to back up this point. For example the plateauing (or in some cases falling) of happiness as GDP increases in developed countries and how America has seen increases in obesity and mental illness as it has become ‘richer.’

Personally I see a parallel with personal income and GDP. When you’re very poor (either an individual or a country,) more income does have a real positive impact because you can look after your base human needs (safety, food, water, medicine, shelter) but once these needs are met, increasing money don’t make that much difference and it’s higher things (relationships, well-being, enjoying the environment and having purpose and meaning in our lives) that make us truly happy. But money is like a drug and there is a tendency to believe that what made us happier before will continue as we earn more.

GDP as the primary measure of economic success is flawed and dangerous. GDP is like a corporation focussing solely on its income and not its balance sheet. It leads to a growth of sorts, but does not grow real, long-term value which should be the goal of any organisation or country. Instead Umair suggests that countries need to focus on a ‘national balance sheet’ to measure improvements or declines in human, social, emotional, environmental as well as financial capital. Then we would see much of current ‘business’ for what it really is – an extraction of value from humans, society or the environment to make money, but actually leaving us all worse off in the areas that really matter. It would then divert attention to creating value in all of the areas that matter.

The idea that even successful, ‘good’ businesses today perform at just a fraction of their potential to generate real wealth. Using the analogy of the change in the field of psychology from how can we cure people with psychological problems and get them to a ‘normal’ state to the positive psychology movement which looks at how we can continually better ourselves and build on what’s right to reach ever higher levels of happiness and achievement. The same is true for business which is often defensive and happy to return 5-10% net profit and focus on not screwing up rather than being creative and ambitious in how it can actually deliver true enduring value.

The need for deeper meaning and purpose in business. Umair gives ‘vision’ and ‘mission’ statements a thorough working over to show how most businesses are incredibly thin when it comes to their reason for existence. He suggests that all businesses need to have a much higher purpose – something that transcends their own organisation – and delivers diverse wealth back to people and the planet.

This essay is an inspiring call to arms for how we can radically change business into ‘betterness’ for the benefit of all of humanity. Umair doesn’t believe that there is any organisation in the world that is truly living up to this potential right now. Who will be the first? I personally will give it a damn good try.