[Capitalism assumed] that from the beginning all men are equal. If that were so everyone would be equipped with the same working power, the same education and, above all, the same economic assets … each person would [then] have only himself to blame if he did not succeed — Knut Wicksell
There are various versions of idiots. An idiot is a person who keeps doing the same thing hoping for a different outcome. If history is any indicator, we are all idiots at different points in time. We keep innovating only to realize that we leave a lot of people left behind each time we innovate.
Raghuram Rajan, the man who predicted the financial crisis of 2008, recently published a new book titled ‘The Third Pillar: How Markets and The State Leave The Community Behind’. In it, Rajan writes: ‘Half a million more middle-aged non-hispanic white American males died between 1999 and 2013 than if their death rates had followed the trend of other ethnic groups. The additional deaths were concentrated among those with a high school degree or less, and largely due to drugs, alcohol and suicide’.
Compare these statistics to farmers suicides in India. The suicide rates have been falling in recent years. However, there are a variety of reasons for such suicides such as indebtedness, family problems and illness. Farmers are also unable to find the right price for their produce on many occasions.
My point, which is just plain common sense, is that we need to have a more widespread and fair distribution of gains from our capitalist societies. Capitalism has succeeded in lifting millions out of poverty but it has also exacerbated wealth and income inequality. In many countries, the agrarian and manufacturing sector are bearing the brunt of technological advancement.
This article outlines solutions to help improve a broken system. We need to build a well before a fire begins and not while it rages on. In other words, we have to find ways to include more people in the abundance story before we implement drastic technological change. Capitalism can be made more inclusive if we work together.
The Infinite Monkey Theorem
The infinite monkey theorem states that a monkey hitting keys at random on a typewriter keyboard for an infinite amount of time will almost surely type any given text, such as the complete works of William Shakespeare. In fact, the monkey would almost surely type every possible finite text an infinite number of times. However, the probability that monkeys filling the observable universe would type a complete work such as Shakespeare’s Hamlet is so tiny that the chance of it occurring during a period of time hundreds of thousands of orders of magnitude longer than the age of the universe is extremely low (but technically not zero).
For simplicity sake, let us assume the world can be divided into three layers. First, the extremely wealthy — some of whom have made their money riding on the waves of technological innovation or through various other types of businesses. Second, the middle class which is sandwiched between the aspirations of making a difference in the world it lives in and the constant daily battle of putting food on the table for their families. Third, the bottom of the pyramid — the poor and the destitute.
The bottom of the pyramid need an ecosystem to survive. Food, water and housing to begin with. These should be considered primary infrastructure as much as roads and highways. Of course, the government (through taxpayer money) has a significant role in providing this ecosystem. However, the private sector that educates students of public policy should work with governments to incentivize talent to start modernizing villages.
The middle class bears a very heavy burden. That burden is called ‘re-education’ i.e. unlearning and re-learning skills relevant to a new technology driven world. As economies grow, the service sector becomes a dominant part of the GDP growth. This will require the middle class to learn while working. Corporates can incentivize employees to learn new skills just as the example of JP Morgan (discussed below) shows.
We are very similar to an infinite monkey. We unleash technologies without a plan to address the hardships of the ones that are left out. Eventually, our hope is that the world moves on and the luddites will transform. However, the period of transition becomes very painful.Also, not everybody needs to take up a job in the world of technology. After all, the idea behind AI is to free up mankind for more creative pursuits. Therefore, the idea is to preempt disruption and create safety nets.
A Financial and Emotional Safety Net
Insurance is what helps you when things go wrong. Think of financial and emotional safety nets as great stress relievers. A community is a set of people to turn to during times of crisis.
In Malcolm Gladwell’s book ‘Outliers’, he speaks about a village named Roseto in Pennsylvania (named after its namesake in Italy) where virtually no one under the age of 55 died of a heart attack. Even for people over 65, the rate of heart attack was much lower despite consumption of fatty foods laden with cheese. The reason — a strong social safety net. A community that will band together to help ones in need.
More importantly, people don’t know want loneliness is when they are surrounded by a community. The trade off could be less time to spend on their own. However, the balance between individuality and community can be managed. It is a better problem to have than relying on pills to put your brain at ease. Also, pills only attack the symptoms not the root cause.
In India, a widespread joint family system where at least three generations of the same family lived together is slowly giving way to a nuclear family — a family of young parents and their children. As a result of urbanization ie increased migration of people from the villages to big cities where the real estate is extremely expensive, the joint family system suddenly starts looking impractical. However, the biggest benefit of a joint family system was the continuous compounding of social capital. Grandparents would take care of their grandchildren while both the parents are working. Not only that, they ensured the survival and passing on of ancient traditions, festivals and spirituality.
Things are changing in India too. One cannot say for better or for worse. The level of inflation coupled with a desire to maintain and improve lifestyle forces both the husband and wife to work. In urban centers, there is a marked shift from a joint family system to a nuclear system. Grandparents typically live on their own. The trade-off is giving up the emotional safety net that elders in a family provide. It is time to rethink what we consider more important — the warmth of grandparents or the practicality of a nuclear family. I am not a strong advocate of either. To each his own. The only question i am asking is : is it possible to both have a joint family live together and to also work together to improve lifestyle. Perhaps, economics and mental health can co-exist.
Self help is the best kind of help. As with most problems, it is very hard to expect people from outside to empathize and solve local problems. From industrial towns to rural villages, mobilizing the local community to provide basic infrastructure and education is key.
Villages, rural areas and backward communities have to become their own remedy. It is very hard, nearly impossible to do so. If development is concentrated in a few mega cities and the rest of the country is backward, those mega cities will die under the weight of a crumbling infrastructure.
There is a need to create a model of public private partnership where a team of highly educated and motivated people is compensated handsomely to work with the local community to turn it around. Again, a topic very easily written about but impossible to execute.
India has a three tier local self government ie Zilla panchayat, Taluka panchayat and Gram panchayat. Despite two decades of implementation, local self governments have shown mixed results. In a democracy, there is a constant tussle between the local candidates, major political parties and politics at the state and district level. In other words, it will take a longer time than two decades to get it right.
An executive team that works on clear targets within a specified time frame and directs the local community members to negotiate with the higher forms of government i.e. the state governments to make their problems heard and to follow up consistently on solutions.
The world works on incentives. Monetary compensation is a powerful motivation to work. Therefore, there is a need to compensate well educated individuals to help with modernizing a village.
Second, every school in a village should introduce students to two concepts very early in life i.e. the concepts of ‘risk’ and ‘ethics’. The school system ends up creating a lot employment for traditional jobs but doesn’t do much to create entrepreneurs. Setting up a business should be part of a high school curriculum. That is because making money in the face of insurmountable odds will create a unique kind of entrepreneur — an entrepreneur forged in a fire. Such entrepreneurs are likely to be successful under any condition.
The next step is to use government funds to pay such entrepreneurs well enough to run a small village or a community like a business. The other option is to provide students pursuing a traditional education in public policy a salary equivalent to a private sector CEO to focus on the development of villages-a practical application of their education.
Teaching Just Enough
A training focused on skills is slowly gaining ground as an option to traditional degrees. While it has not even come close to replacing universities, many experts and companies are waking up to this new way of recruiting skill based expertise. On March 18, 2019, JP Morgan announced it is investing $350 million in training its workforce to survive in a world that requires a completely different skill set. As per US News, this skill development training will be focused on high demand technical and digital skills.
The idea behind teaching just enough is to spark curiosity. If training on any topic i.e. AI, Blockchain, cloud computing etc. are designed to appeal to more people by making it simple and easy to understand, it will unlock people’s hidden desire to learn. Every student needs a good teacher. A well designed training program is a program that empathizes with the lowest common denominator. It should appeal to everyone. Once you unlock a passion to learn, education is just a byproduct.
Sugata Mitra, pioneered a unique ‘School in the Cloud’. It is a virtual classroom in the heartland of remote areas of India. An example of using technology to ignite curiosity. However, this is just one idea. We need to think of many more such ideas to let education flow like a river.
A Few Kind Words
The cure to loneliness lies in the word itself. Belonging to something bigger than yourself (ie friends, community or a group of like minded friends) is the antidote to loneliness. Often, that antidote requires diminishing our ego, searching for collective happiness ie sacrificing short term goals for a larger good. In essence, living for others. Only then, others will band together to live for you. No amount of meditation apps, games etc. can replace humans.
I love to write about finance, technology, business and economics only in so far as they hold a promise to create a more beautiful and human world. I want to write about solution even when I know problems are more popular than positivity.
The goodness of our heart should help us control the words that come out of our mouths. There is no medicine in this world as powerful as a few kind words spoken out of empathy and genuine concern. At the same time, there is no weapon as devastating as unkind words spoken out of spite and hate.
It is not very hard to wield that one instrument of change. You can only change yourself to be more kind. If you can’t speak good about people, try not to speak ill’. Don’t be too quick to judge without learning more about a person. You don’t know the hell they have been through. That does not mean there is no place for constructive criticism. Constructive criticism is borne out of genuine love and concern for the happiness of others. Make it genuine and you remove the negativity out of feedback.
We live in an overpopulated world. Yet, there is no dearth of lonely people. There are many universal truths in this world. All you have to do is just remember one : love heals all. Love can get help us get rid of all the crutches of addiction we lean on.