After destructive capitalism, can there be a constructive capitalism?

Today, in the better economy we’re building, less carbon emitted does add to national wealth. And that’s exactly why Cash for Clunkers matters. Cash for Clunkers isn’t perfect — but it’s a promising start. It’s the kind of economic reform that’s sparking a revolution in Constructive Capitalism.

I missed a bunch of interesting blog articles by Umair Haque. The quote above is from a little policy case study, explaining why the subsidized exchange of polluting older cars does make perfect economic sense.

This is trademark Umair Haque, in which he contrasts the new ethical economy of constructive capitalism, based on outcome instead of income, against the doomed Ponzi scheme of neoliberal Wall Street capitalism.

In a related article he makes a useful distinction between two forms of value creation: thin value creation vs. thick value creation:

“Profit through economic harm to others results in what I’ve termed “thin value.” Thin value is an economic illusion: profit that is economically meaningless, because it leaves others worse off, or, at best, no one better off. When you have to spend an extra 30 seconds for no reason, mobile operators win — but you lose time, money, and productivity. Mobile networks’ marginal profits are simply counterbalanced by your marginal losses. That marginal profit doesn’t reflect, often, the creation of authentic, meaningful value.

Thin value is what the zombieconomy creates. The healthcare industry profits, but Americans get poor healthcare. Automakers fought tooth and nail against making sustainably powered cars. Manufacturers of all stripes stay mum about environmental costs. Clothing companies can’t break up with sweatshop labour. The clearest example of thin value, is, of course, banks: they invested our national wealth in assets that turned out to be literally worthless.

The fundamental challenge for 21st Century businesses — and economies — is learning to create thick value. We’re seeing the endgame of a global economy built to create thin value: collapse. Why? Simple: thin value is a mirage — and like all mirages, it ultimately evaporates. In the 21st Century, we’ve got to reconceive value creation.

Constructive Capitalists are disrupting their rivals by creating thicker value. Thick value is sustainable, meaningful value — and a new generation of radical innovators is wielding it like a strategic superweapon. “

To illustrate this theoretical point, he offers another case study, asking himself, how much more a ethical iPod would cost, if it would not rely on slave-like Chinese labour.

To the question: Is a 23% price difference between a “Good” and “Evil iPod” worth it — to Apple, society, communities, and our economy?” he responds:

I think the real question is: how long can we afford not to? The less we invest in one another, the worse off we all are eventually. The higher standards we set for ourselves, the more potential value we can create. … If goods cost what they should, we would consume what we could authentically afford, instead of overconsuming what we couldn’t.

All of the above is explained in more detail in the video below.

But before you watch it, we urge you to read one more important article. In “The Ten Rules of 5G Warfare“, he explains how the American paleo-right is attempting to derail the advent of constructive capitalism, through advanced fifth generation warfare (5G, network against network), and so far, they’re winning the battle against better healthcare. Progressive advocates of ‘constructive capitalism’, need to learn these rules as well, he warns.

Umair Haque’s video:

Umair Haque at BRITE ’09 conference from BRITE Conference on Vimeo.

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