An excerpt from The War On Normal People

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 install millions of solar panels across the country, upgrade our infrastructure and remove 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 or upgrading infrastructure or lifelong education or 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 U.S. 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.

The Next Stage of Capitalism

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 the 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 seven thousand 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 U.S. and many other advanced countries established safety net programs like Social Security and Medicaid. Our current form of institutional capitalism and corporatism is just the latest of many different versions.

Similarly, there are many forms of capitalism in service around the world right now. Singapore is the 4th richest country in the world in terms of per capita GDP. It has had an unemployment rate of 2.2% or lower since 2009 and is regarded as one of the most free and 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 U.S. 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 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 has a few core tenets:

Humanity is More Important Than Money The Unit of an Economy is each Person, not each Dollar 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. Economist Simon Kuznets, upon introducing 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 like:

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

Re-acclimation 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. Everyone could then see how we’re doing and be galvanized around improvement.

Human Capitalism will reshape the way that we measure value and progress, and help us redefine why we do what we do. It’s time to build an economy that makes people’s lives better. The market must serve us, not the other way around.