Be the Solution E-Book

Michael Strong

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 625

Veröffentlichungsjahr: 2009

Beschreibung

What if the distinction between business and doing good vanished? What if all those who engaged in business were committed to a deeper purpose, and all those committed to doing good were entrepreneurial and enterprising? What would it take for a world of seven billion such people to solve all the world's problems? More and more people are looking for meaning and purpose in their lives as employees, as consumers, and as investors. More and more people have more than enough material goods and are more interested in the qualities of the goods they buy; in the experiences associated with the services they provide and buy; in the way the companies they buy from act as citizens; and in self-actualization--rising up Maslow's hierarchy. As an increasing percentage of the population reaches the point at which they no longer need more stuff, what will they do, how will they live their lives? If you are one of these people, wondering where to go from here, how to "be the solution" in the twenty-first century, Be the Solution provides an original perspective on how to create a better world. Focused entirely on entrepreneurial and Conscious Capitalist solutions to the challenges and opportunities facing humanity, Be the Solution shows how the entrepreneurial passion to create a better world, in combination with Conscious Capitalist business practices, can solve far more of the world's problems than any other approach. In combination with leading Conscious Capitalists such as John Mackey writing on "Conscious Capitalism," leading social entrepreneurs such as Muhammad Yunus writing on "Social Business," and leading legal reform experts such as Hernando de Soto writing on "Is Economic Freedom for Everyone?," entrepreneurial educator Michael Strong lays out a philosophical, social, and legal framework for a FLOW vision through which all problems may be solved entrepreneurially. FLOW, Inc., is an organization cofounded by John Mackey and Michael Strong to promote Mihaly Csikszentmihalyi's concept of flow as optimal experience--the state in which we are so immersed in challenging, creative activity that we forget that time is passing. To be engaged in flow activities is happiness itself. Whether we are creators of enterprises or entrepreneurially creative within our life as employees, we can embody the entrepreneurial spirit and, in the words of Michelangelo, "criticize by creating." In addition, FLOW refers to the global flow of goods, services, capital, humans, ideas, and culture, in a positive win-win-win world based on love rather than fear. Combining the best of the positive psychology and human potential movements with the best of free market thinking, FLOW offers a unique perspective on how to Be the Solution in the twenty-first century.

Leseprobe

Table of Contents

Praise

Title Page

Copyright Page

Dedication

Foreword

Preface

Acknowledgements

Part One - The Entrepreneurial Spirit and How to Liberate It

Chapter 1 - Context

The Importance of Progress

Peace Is Breaking Out All Over

Poverty Vanishing More Quickly than Ever Before

The End of Environmental Destruction?

Health and Well-being in the Developed World

Goodness and Beauty as the Growth Industries of the Twenty-First Century

Getting a Perspective on Liberating the Entrepreneurial Spirit for Good

Making the World a Better Place through Entrepreneurship and Markets

The FLOW Ideal: A World of Healthy, Happy People Doing Good through Meaningful Fun

A World of Flow

Doing Good through Meaningful Fun

Chapter 2 - The Entrepreneur as Hero

Chapter 3 - The Opportunity

Part Two - Conscious Capitalism

Chapter 4 - Creating a New Paradigm for Business

Voluntary Exchange

The Purpose of Business

Great Companies Have Great Purposes

The Paradox of Profits

Stockholders Maintain Legal Control

Whole Foods Market’s Conscious Capitalism

Conclusion

Chapter 5 - Social Business Entrepreneurs Are the Solution

Social Business Entrepreneurs Can Play a Big Role in the Market

Social Stock Market

How to Make a Start

Chapter 6 - Business as Service

Chapter 7 - Leveraging Entrepreneurship for Social Change

Women Make the Economy Go Round

This Little Piglet Went to . . . Save a Child from Slavery

Part Three - What Do We Need to Do So That Entrepreneurs and Conscious ...

Chapter 8 - Solving All Environmental Problems

How Property Rights Create Sustainable Fisheries

Why Encouraging Changes in Values Won’t Be Enough

How Environmental Righteousness Prevents Progress on Achieving Environmental Solutions

Why We Need to Remove Environmental Assets from Government Control

Environmental Trusts: A Property Rights Solution Beloved by Environmentalists

The Transition from Environmental Righteousness to Transpartisan Coalition Building

Green Tax Shifts as a More Immediate Solution

The Unlimited Resource

Chapter 9 - Eliminate Global Poverty

Mass Wealth Creation, Leading to Mass Poverty Alleviation, by Means of ...

Economic Freedom as the Means of Economic Development

A Friendly Wager to Alleviate Global Poverty

Chapter 10 - Is Economic Freedom for Everyone?

Chapter 11 - Can Entrepreneurs Help Us Improve Our Understanding of the World?

Prediction Markets as Reputation System and Research Tool

Chapter 12 - Improving Health, Happiness, and Well-Being

Public Housing and the Tuition Tax Deduction instead of Public Schools and the ...

A New Vision of Education as Habituation and Cultural Creation

A Practical Approach to an Idealistic New Social Vision

The Challenges We Face

Transformative Cultures as a Solution to Public Health and Environmental Problems

The Power of Culture

A Market in Cultural Innovation in order to Help the Poor

The Idea of Cultural Innovation

A Vision for the Future

Part Four - Living a Life of FLOW

Chapter 13 - The Upward Flow of Human Development— Maps of the Terrain

Abraham Maslow’s Hierarchy of Needs

How Does One Go about Self-Actualizing?

Emergent Deep Value Systems and Spiral Dynamics

Spiral Dynamics Overview

Supporting the Entrepreneurial Shift

The Five Bottom Lines

Moving Forward

Chapter 14 - Areté and the Entrepreneur

The Attitude Principle

The Vision Principle

The Self-Awareness Principle

The Goals Principle

The Action Principle

The Energy Principle

The Wisdom Principle

The Love Principle

The Courage Principle

The Attitude Principle

The Vision Principle

The Self-Awareness Principle

The Goals Principle

The Action Principle

The Energy Principle

The Wisdom Principle

The Love Principle

The Courage Principle

Chapter 15 - The Creation of Conscious Cultures in Support of Human Flourishing

Chapter 16 - Liberating the Entrepreneurial Spirit for Good™

What Do We Mean by “Liberating the Entrepreneurial Spirit for Good”?

What Are the Conditions that Foster Liberation of the Entrepreneurial Spirit ...

What Are the Factors that Constrain the Entrepreneurial Spirit for Good?

What Can We Do to Overcome These Challenges and Constraints?

Chapter 17 - The FLOW Vision for the Twenty-First Century

Act I: A Tale of Two Activists (A Vision for the Here and Now)

Act II: The Global Consequences of FLOW Activism from Today through 2040

Act III: A Concrete Vision of a School in 2060 as a Result of the FLOW Activism ...

About the Contributors

Index

Additional Praise for Be the Solution

“Michael Strong and his coauthors sketch out a provocative and appealing vision of what you might call ‘bleeding heart libertarianism.’ Regardless of where you fit on the ideological map, they will challenge the way you think about social progress. So if you’re interested in how to make the world around you a better place, take the challenge and read this book.”

—Brink Lindsey,VP for Research, Cato Institute; Author of The Age of Abundance

“If you want to contribute to making a better world and you have an indomitable entrepreneurial spirit, this is the book for you. Ours is the age of doing good by doing well. The notion that market competition is all about greed is just a monumental error that you can help a new generation to avoid.”

—Herbert Gintis, Santa Fe Institute and Central European University

“In Be the Solution Michael Strong, John Mackey, and other visionary authors organically develop a new framework for capitalism so that the beneficent and transformational potentials of entrepreneurship and free market can be powerfully unleashed for societal good. Be the Solution cogently argues that the essential feature and primary virtue of capitalism is not profit-motivated exchange of commodities but voluntary exchange of abilities. Be the Solution demonstrates that when capitalism is rightly framed and entrepreneurship is properly nurtured in a culture of freedom, the entrepreneurial spirit of humanity will bring forth new innovative solutions to many of the persistent and pervasive problems of the world. At once informative and inspirational, Be the Solution will provoke you not only to think outside the existing paradigms but also to act for the realization of your vision by invoking in you the highest value and the innermost virtue of humanity—freedom and creativity.”

—Yasuhiko Genku Kimura, Founder and Chairman, Vision-In-Action, Author of Think Kosmically Act Globally

“Be the Solution is out on a frontier of thought where no one has travelled before. It redefines the word ‘prescient.’ A breathtaking integration of futuristic thinking about economics, politics, social justice, and human happiness, it is nothing less than a blueprint for a transcendent tomorrow for humanity. Once or twice in a lifetime you come across a vein of thinking like this—one that that makes you feel as if life and the world are suddenly new again. The inspiring future Be the Solution paints for us will be the very motivation we have needed to pursue it.”

—Dan Palotta, Author of Uncharitable: How Restraints on Nonprofits Undermine Their Potential

“Be the Solution will undoubtedly be added to my ‘must read’ book list for those who inquire about the causes of world poverty and what can be done to solve these problems.”

—Philip Sansone, President and Executive Director, Whole Planet Foundation

“This is a desperately needed synthesis of the work of the world’s most insightful thinkers on how to solve the problems of poverty. It lays bare fallacies in policies that annually misdirect billions of dollars into development of initiatives that don’t work. And it offers situation-contingent guidelines for programs that will. A must read.”

—Clayton M. Christensen, Professor, Harvard Business School; Author, The Innovator’s Dilemma

Copyright © 2009 by Freedom Lights Our World (FLOW), Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Strong, Michael, 1960-

Be the solution : how entrepreneurs and conscious capitalists can solve all the world’s problems / Michael Strong ; foreword by John Mackey. p. cm.

Includes index.

eISBN : 978-0-470-48814-0

1. Entrepreneurship. 2. Problem solving. 3. Capitalists and financiers. I. Title.

HB615.S773 2009

658.4’08—dc22

2008052152

To the Entrepreneurial Spirit in Each of Us

Foreword

I grew up in Houston, Texas, during the 1950s and 1960s. My family and friends were fairly typical of the middle class in the southern United States during that era. I spent my late teens and early 20s trying to discover the meaning and purpose of my own life. Before I started my business career, I serially attended two different universities, the University of Texas at Austin and Trinity in San Antonio, where I accumulated about 120 hours of various electives, majoring in philosophy and religion.After dropping out of school for the sixth and final time in 1977, I had earned no degree. During my tour of duty in higher education, I never took a single business class. I am convinced now that this gap in my formal education actually worked to my advantage in the business world. When I started out as an entrepreneur, I had no way of knowing how many accepted business practices I was ignoring and that gap gave me the opportunity to innovate freely without the burden of too many legacies to overcome.

My search for meaning and purpose led me into the counterculture movement of the late 1960s and 1970s. I studied eastern philosophy and religion in college and on my own, and still practice both yoga and meditation. I studied ecology and developed a strong commitment to living lightly on the planet. I was drawn to the concepts of organic farming and natural foods early on. I chose a vegetarian lifestyle (I am currently a near vegan—only deviating by eating eggs from my own chickens), lived in communal housing, and grew my hair and beard long. I was, and still am, one of those crunchy-granola types. Politically, I drifted to the left and embraced the ideology of my peer group that business and corporations were essentially evil because they selfishly sought profits. Along the lines of this reasoning, I viewed government as good because its employees altruistically worked for the public’s interests. I worked part-time when I was low on cash, played a lot of pickup basketball with my friends, and continuously read books on dozens of diverse topics.

With that background, I felt well prepared to launch my business in 1978, with a grand total of six months of actual experience working in a small natural food store in Austin. My initial business, a small natural foods market called Safer Way, was located in a charming, rickety Victorian house in central Austin. I started Safer Way with my girlfriend, Renee Lawson, using $45,000 in initial capital that we raised from friends and family for the venture. Renee and I were very idealistic and we started the business because we thought it would be both fun and a way for us both to engage in a right livelihood—supporting ourselves while having fun and helping other people. We were right—we had a blast, and although Renee went on to do other things with her life, I continued to have a great time running Whole Foods Market, the business that Safer Way evolved into, over the last 28 years.

At the time I started my business, the political left had taught me that both business and capitalism were based on exploitation: exploitation of consumers, workers, society, and the environment. I believed that “profit” was a necessary evil at best, and certainly not a desirable goal for society as a whole. However, going into business as an entrepreneur completely changed my life. Everything I believed about business turned out to be wrong! The most important thing I learned about business in my first year was that business was not based on exploitation or coercion at all. Instead I realized that business is based on voluntary exchange. At least in the United States, and certainly in most of the developed world, no one is forced to trade with a business; customers have competitive alternatives in the marketplace for their purchases; employees have competitive alternatives for their labor; investors have thousands of alternatives and places to invest their capital. Investors, labor, management, suppliers—they all need to cooperate to create value for their customers. If they do, then the value created by the business will be divided amongst the creators of the value approximately equal to the contribution each market participant made in creating that value through the competitive dynamics of the market process. In other words, business is not a zero sum game with a winner and loser. It is a win, win, win, win game—and I really like that.

However, I discovered that despite my idealism and my newfound certainty of the voluntary nature of marketplace exchanges, our customers thought our prices were too high, our employees thought they were underpaid, the vendors would not give us large discounts, the community was forever clamoring for donations, and the government was slapping us with endless fees, licenses, fines, and taxes.

Were we profitable? Not at first. Safer Way managed to lose half of its capital in the first year—$23,000. Despite the loss, we were still accused of exploiting our customers with high prices and our employees with low wages. The investors weren’t making a profit and we had little money to donate. Plus, with our losses, we paid no income taxes. I had somehow joined the “dark side”—I was now one of the bad guys. According to the perspective of the political left, I had become a greedy and selfish businessman.

At that point, I rationally chose to abandon the leftist philosophy of my youth since, in my experience, it failed to explain how the world really worked. With my previous interpretation of the world now shattered, I looked around for alternative economic and political explanations for making sense of the world.

I somehow stumbled into reading Milton Friedman, Friedrich Hayek, Ludwig von Mises, and Ayn Rand—I read them all and said to myself, “Wow, this all makes sense. This is how the world really works. This is incredible.” I quickly came to identify myself as a Libertarian. I am one of those people who actually votes Libertarian and have voted almost strictly Libertarian since 1980. What I love most about the freedom movement, another name for the Libertarian platform, are the ideas of voluntary cooperation and spontaneous order that when channeled through free markets lead to the continuous evolution and progress of humanity. I believe that individual freedom in free markets when combined with property rights and the rule of law and ethical democratic government results in societies that maximize prosperity and establish conditions that promote human happiness and well being.

But, unlike many people in the freedom movement who view the responsibility of business solely as returning a profit to investors, I have long been a strong proponent of the social and environmental responsibility of business. Businesses have multiple stakeholders. When all stakeholders are cared for and flourish together, the business has a much higher probability of being profitable over the long term. And with higher profits, giving back to our communities and protecting the environment are simply the right things to do. Indeed, I strongly believe that once more businesses are managed on behalf of all of their stakeholders that many of the challenges we collectively face throughout the world will be effectively and efficiently addressed and reversed.

Along with my youthful explorations in political and economic theory, over the years I maintained my quest for personal growth and expanded consciousness, continuing my study of the great philosophers from all over the world, as well as pursuing a 20-plus-year dedicated study and practice of A Course in Miracles. I also practice a variety of consciousness-altering disciplines such as meditation, yoga, and holotropic breathwork. I introduced my own philosophy of personal empowerment and accountability into Whole Foods Market and structured the business to foster an atmosphere of stakeholder accountability through having a strong business mission, team member empowerment, and continual creative experimentation. Guess what? This philosophy has been incredibly successful and the business has flourished tremendously.

I first met Michael Strong through a mutual friend back in 2002. I liked him immediately. Michael was the first Libertarian I had met who was also idealistic and who shared my commitments to both economic and political freedom as well as personal growth, social responsibility, and environmental stewardship. Like me, Michael wants to use these philosophies and practices to help make the world a better place. Most Libertarians I know are committed to economic and political freedom but not to the other three. Most of my friends who were committed to personal growth and social and environmental responsibility don’t believe in economic freedom, and continued to view business and capitalism as inherently exploitative, and the source of the problems instead of the solutions.

Although Michael lived in New Mexico at the time working as the headmaster of a charter school, we began a long dialogue via e-mail in which we shared our ideas about how to make the world a better place and discovered increasingly that we had remarkably similar views on a myriad of issues. In the fall of 2003, Michael invited me to join him at a meeting in Angel Fire, New Mexico, to explore whether we wanted to foster a community of people who shared our vision and ideals. After a great deal of brainstorming and discussion we decided to try to create an organization that would serve as a beacon to liberty, human potential, and making the world a better place. We decided to call it FLOW1 in honor of Mihaly Csikszentmihalyi’s wonderful book by that title. Since that seminal meeting in the mountains east of Taos, we have been slowly but steadily evolving our ideas about what FLOW is, why it exists, and what we hope to accomplish with this organization. This book is our most complete statement to date about what FLOW offers to the world.

What is FLOW? To sum it up in one simple phrase: FLOW is about liberating the entrepreneurial spirit for good. Our world faces many tremendous challenges, from AIDS to global warming to large population growth to malaria to war and nuclear proliferation to many, many other challenges. FLOW is dedicated to the proposition that creative entrepreneurs can help solve all the challenges in the world. When we talk about entrepreneurs, however, we are not restricting the meaning of the word to business entrepreneurs. Business entrepreneurs will, of course, continue to play a very important role in creating solutions to our challenges, but so will various other types of entrepreneurs including social entrepreneurs, educational entrepreneurs, health entrepreneurs, political entrepreneurs, and spiritual entrepreneurs. At FLOW, we believe that the human capacity for creativity is limitless and that entrepreneurship effectively channels that creativity into real-world solutions for our challenges. Every person alive has the potential to learn and grow and to contribute their unique creativity toward making the world a better place. FLOW is dedicated to liberating each person’s entrepreneurial spirit and helping that entrepreneurial spirit creatively flow toward the collective good of all humankind.

—JOHN MACKEYCEO,Whole Foods MarketCo-Founder, FLOW®

Preface

Michael Strong

An increasing number of people, of all ages, want to dedicate their lives to making the world a better place. So many people in the developed world now have more than enough stuff, and they now crave meaning and experience more than they crave more goods. At the same time, those who have a comfortable life want to maintain their comfortable lives, and those who do not yet have a comfortable life want to obtain a comfortable life while also working towards making the world a better place.Who doesn’t want to “be the solution”?

And, indeed, there are many calamities, present and future, that we should rightly wish to avoid. And both out of a sense of compassion and self-preservation we should work together to create a world that works for all.

In the past those who have felt the most urgency regarding making the world a better place have often expressed themselves through anger and outrage, attempting to motivate others through fear and shame.While there will no doubt be contexts in which such approaches continue to be useful, there is also a tremendous amount of good work to be done by means of creating and supporting new enterprises, for profit, for benefit, non-profit, and everything in between, that transform society for the better in profound ways.This book is for those who believe, with us, that the most important work for the future is to be done by means of creating enterprises or, in the words of Michelangelo, by “Criticizing by Creating.”

John and I created FLOW because both of us were frustrated at the fact that the vast majority of those who care about personal growth, compassion, and mindfulness were largely ignorant of economics, and those who were more knowledgeable about economics often ridiculed those writers and practices that were working to reduce our propensities towards egotism and selfishness.

For me, doing good is the most natural thing in the world; I have no appetite for material goods, and am happy living quite simply—at the age of 48, I recently moved across the country and all of my possessions (with the exception of books) fit into my salvaged 1999 Saturn, which I subsequently gave to my daughter and finished my move with only those possessions that I could carry onto an airplane. I simply don’t understand why people want things, nor why they enjoy most forms of entertainment. I would rather spend all day, every day, educating young people than “having fun” or being entertained in any other way.

Consistent with my joyful passion to educate the young, I spent 15 years working to create better schools, starting as a public school reformer and then creating several private and charter schools. The last school I created, a charter school in Angel Fire, New Mexico, was located in a region without any serious academic ambitions; the first year the school was operating a representative of the nearby University of New Mexico—Taos stopped by to talk about college options, and the topic of Advanced Placement (AP) courses came up. She said point blank, “Students in northern New Mexico are not capable of passing AP courses.”

Despite her informed opinion (she had more than a decade of experience with students in northern New Mexico, and I had none), I nonetheless implemented an AP program at Moreno Valley High School (MVHS). There is a ranking system of U.S. high schools nationally, created by Jay Mathews, an education journalist for Newsweek and the Washington Post. Mathews’ list ranks schools based on the number of AP tests taken at each school divided by the number of graduating seniors. Mathews argues that this is an important ranking system because it turns out that simply taking AP courses, which are more difficult than many freshman college courses, is an excellent predictor of college success—students know what to expect and how to study for a real course.

The second year that MVHS was open, it was ranked in the top 150 schools in the U.S. on Mathews’ list. The third year MVHS ranked number 36, with a passing rate for AP exams that was more than double the national average. Most of the schools ranked more highly on Mathews’ list than MVHS were either very wealthy suburban schools in places like Palo Alto or Westchester County, or magnet schools that drew the best and the brightest from an entire urban region. Although MVHS was in a higher income region than the surrounding region, the student population was not from high income families, and for the most part the school served as a neighborhood school rather than a magnet (more than 80 percent of the students were local). I had created one of the most rapid turn arounds, in terms of creating a subculture of learning in a region that had previously lacked any such subculture, of any school in the United States. Our students had taken more AP exams and done better on them than possibly any comparable school in the United States, starting from scratch in just three years.

But in the meantime I had been forced out of the school because I did not have an administrator’s license. Throughout my 15 years’ career in education, I had never become a credentialed teacher nor had I become a licensed administrator. In private schools it had not been necessary and, when I started the school, it had not been required either. I was a victim of a change in New Mexico charter school law, and despite our school’s performance, the State Department of Education would not relent on the certification issue.

I describe this anecdote in some detail because there are several ways in which the perspective that John and I have created in FLOW differs from that of more mainstream movements promoting social entrepreneurship and socially responsible business. Most of those who promote social entrepreneurship and socially responsible business identify with the political left, and belong to a social tribe that bonds together by means of hatred and ridicule of the political right. Most of academia shares this social bonding process. The Stanford Social Innovation Review, for instance, a generally excellent publication documenting the contemporary social entrepreneurship movement, rarely publishes anything that would be outside the accepted boundaries of Democratic Party political positions.

As a consequence, there are certain ideas which are simply not stated in polite company because they are identified with the enemy tribe; support for charter schools, or school choice, is one of them.That fact is gradually changing with respect to charter schools—Presidential candidate Barack Obama, to his credit, came out in favor of charter schools in the midst of the heated primary battle with Clinton, who toed an establishment teachers’ union party line, but it is still considered poor taste to say anything positive about other forms of school choice in polite (read: liberal) company.

The former 1970’s Marxist Herbert Gintis, now turned complexity theorist at the Santa Fe Institute for Complexity, has written that “the left-right dichotomy is a sick joke.” Gintis, who was formerly very much a man of the left but who has learned to respect the arguments of classical liberals such as Hayek, realizes that opportunities for doing good are undermined by means of the two-hundred year old attachment to the left-right dichotomy.

I give John great credit for “coming out of the closet” as a libertarian, given his prominence, because the vast majority of Whole Foods Market employees and consumers identify as “left” and bond by means of hating the right and everything with an allegedly conservative hue. John and I are creating a new tribe that might better be described as “upwing” rather than “left” or “right.” We are doing so because in order to create a world in which entrepreneurs and Conscious Capitalists can solve all the world’s problems, we need to escape the “sick joke” of partisan political categories.

There are three specific ways in which escaping partisan categories can empower us to solve all the world’s problems:

1. Entrepreneurs in health, education, and community formation need the same level playing field and freedom that have allowed entrepreneurs in technology to transform the world.

2. In order to escape poverty, the world’s poor need access to the same Entrepreneur’s Toolkit—secure property rights, rule of law, and economic freedom—that are enjoyed by virtually all residents of developed nations.

3. Creating property rights solutions to environmental problems, in many cases using the environmental trusts advocated by Peter Barnes in Capitalism 3.0, will allow entrepreneurs to create a more environmentally sustainable world.

All three of these approaches are often ignored by tribalists on the left, including many such tribalists in academia. And yet none of these proposals are new; free market economists have been advocating these structural solutions in some manner for decades and, in some ways, for centuries.

Insofar as those on the right advocate selfishness or religious or ethnic tribalism, we are adamantly opposed to them. Our ideals are very much those of universal compassion, inclusiveness, and peace. From my perspective, the simple awareness of the scale of suffering in the world should incline us all to devote all of our time to helping others. But, as it turns out, in order to help billions of others most effectively, we need to incorporate some knowledge of classical liberalism into our desire to help.

Thus if you are looking for an inspirational book on Conscious Capitalism that repudiates all economics and business as bad, you may be frustrated by those sections of the book that explain basic economic concepts. If you are looking for hard, concrete, detailed economic and regulatory (or anti-regulatory) policy suggestions you may be frustrated by those sections of the book that may seem to be so much inspirational fluff. Political tribalists on the left may be frustrated by our support for markets, and political tribalists on the right may be frustrated by our constant emphasis on doing good. And all of these frustrations are exactly what we believe that the world needs today.

Enjoy what you will and, where you are annoyed, join us in Criticizing by Creating. A world of six, going on seven, billion optimistic, empowered creators will provide billions of new solutions to problems that will allow us to overcome obstacles.We don’t claim to have a perfect solution to getting from here to there, but we believe that we are pointing in an important direction that has not yet been adequately recognized.

We can’t prove this, of course, because that which has not yet been created can never be shown to exist. Prior to the creation of Whole Foods Market, one could not have proven that a health food store could become a Fortune 500 corporation. Prior to the creation of MVHS, one could not have proven that it was possible for a school in northern New Mexico to become a top-ranked school in the U.S. Indeed in these, and in almost all cases of creation, all of the “evidence,” all of the “proof,” is that every act of creation is impossible. This is one of the reasons why academic social science will always be blind to the creative possibilities of a free civilization. And yet almost all of us alive in the world today, and almost every moment of health and well-being that we experience, would not exist were it not for two thousand years of “impossible” creation—borne by individuals—that has come before us.

There are many different voices in this book, not all of whom agree with each other. Some of them, such as Candace Smith, Muhammad Yunus, Donna Callejon, Hernando de Soto, Don Beck, and myself might best be described as social entrepreneurs—individuals who have contributed to change primarily through organizations that were not originally organized as profitable corporations. Others, such as John Mackey, Kartar Singh Khalsa, Brian Johnson, and Jeff Klein, have been leaders of for profit corporations—but always with a strong social mission. But in the end, as John likes to say, the difference between for-profit and nonprofit is arbitrary—good for profit corporations and good nonprofit organizations share 98 percent of the same DNA. All of us are united by a desire to do good, and the organizational form through which we do good is less important than is our ability to carry out our mission.

Many of the people who might normally be inclined to read some of the voices, such as those focusing on inspirational personal development, might not usually be inclined to read some of the more economic voices, such as the arguments on economic freedom. But it is our belief that this fragmentation of perspectives is itself one of the obstacles to creating sustainable peace, prosperity, happiness, and well-being for all. We take the view that everything—from personal well-being to physical health to societal strength and peace is all connected.Think of our world, your world, as we are increasingly coming to see personal health: It’s not just your diet or just your exercise or just your mental state of being—but all that interconnect and influence each other.

We invite those of you who are weary of partisan hatred, who are poised to release yourself from the desire to force others to conform to your will, and who are willing to live and let live, to work with us in creating a better world.

FLOW offers three public programs, which provide a point of entry and opportunities for action:

1. Peace through Commerce®

2. Accelerating Women Entrepreneurs™

3. Conscious Capitalism®

Though these program you can learn about the movements they represent and meet like-minded individuals who share passion and commitment to making the world a better place through entrepreneurship and markets. More generally, FLOW offers FLOW Activation Circles, where FLOW-oriented individuals can learn, network, and support each other in various cities—write [email protected] for information on how to join of start a FLOW Activation Circle in your community.

We also invite you to join our on-line community, at www.flowidealism.org—and receive our newsletters, participate in conversations, meet others, and develop your wiki page to position yourself as a socially minded entrepreneurial individual.

Finally, we invite you to donate to FLOW, which is a 501(c)(3) nonprofit educational organization. You may donate at our web site, www.flowidealism.org, or by contacting us a [email protected].

Peace,

Michael

Acknowledgments

Thanks to the FLOW board, Jim Von Ehr, Vidar Jorgensen, Susan Niederhoffer, and Randy Eisenman, as well as to all who have donated to FLOW, including Dick Cornuelle, Ken and Frayda Levy, Gerry Ohrstrom, Harvey Cody, Kartar Singh Khalsa, Mark Finser, Christiana Wyly, Sam Wyly, and hundreds of others. I would also like to thank Philip Sansone, Jim and Maureen Tusty, Mark Skousen, Tim Fort, and Barbara Barrett. Thanks to Candace Smith, Bert Loan, Marsha Enright, and Malcolm Roberts as early fellow travelers on the path that later became FLOW. Thanks to Gary Becker and the late Paul Heyne for being honorable individuals with deep integrity who also understand entrepreneurs and markets. Thanks to Paul Edwards, Giancarlo Ibárgüen, and Jeff Sandefer as institutional leaders sympathetic to our vision.Thanks to Gary Hoover, the godfather of FLOW, who introduced me to John, and thanks to Milton Friedman, whose early sympathy helped broaden our circle of support in a crucial early stage, and Bob Chitester who introduced John and me to many key contacts.Thanks to MuhammadYunus and Hernando de Soto for their inspirational, path-breaking work, and support. Thanks to all the FLOW supporters and activists who have taken initiative in various ways.Thanks to my hard-working colleagues who are devoted to this work whether or not they are getting paid, especially Philomena Blees and Jeff Klein.And most of all, thanks to John.

Part One

The Entrepreneurial Spirit and How to Liberate It

The entrepreneur in us sees opportunities everywhere we look, but many people see only problems everywhere they look.The entrepreneur in us is more concerned with discriminating between opportunities than he or she is with failing to see the opportunities.

—MICHAEL GERBER

Chapter 1

Context

Michael StrongCEO and Chief Visionary Officer, FLOW

Among the first teachings of the Buddha is the understanding that “mind is the forerunner of all things.” If we believe it is impossible to make the world a better place, we will create a self-fulfilling prophecy. If we believe we can make a difference and set about doing so with a clear-eyed vision, passionate focus, persistence, and courage, then we can achieve extraordinary things.

In the language of business, each human being who is dispirited is a loss to the balance sheet of global goodness, whereas each human being who is an inspired, energetic, and thoughtful change agent is an enormous asset to global goodness. Optimistic creators such as Apple’s Steve Jobs and Google founders Sergey Brin and Larry Page have produced billions of dollars of wealth and immeasurable happiness and well-being that would not have existed had they not founded the businesses they and their teams created. By championing the practice of microlending, Muhammad Yunus empowered tens of millions of poor women to become entrepreneurs and create value for their families and communities. Maria Montessori created a whole new way of understanding children, and in addition to the tens of thousands of schools that follow her method she influenced child-raising in numerous ways, including the creation of the idea of child-sized furniture. We believe that every human being is capable of creating something of great value, and that at present the vast majority of us only create a tiny fraction of the value that we could create for ourselves and others.

So how do we create a world in which happiness and well-being are ubiquitous and endlessly abundant?

The Importance of Progress

To begin, we highlight the importance of progress, and illuminate the existence of far more progress than is usually acknowledged. People in general like to do things they are good at and in which they are making progress. If we play a sport or a game, we are more likely to keep playing it if we find ourselves getting better and better at it. If we focus on and believe all the doom and gloom we hear from the media and the negative doomsday predictions from both ends of the political spectrum, it is no surprise that many of us are ready to throw in the towel. But if we see the profound progress humanity is making on many levels, we can become ever more engaged in the game of making the world a better place.

What if, instead of (or in addition to) getting excited about playing a game, we got excited about our ever-increasing ability to make the world a better place?

The work of psychologist Martin Seligman clearly demonstrates that we are more effective for a longer period of time when we believe that we are successful and that such a belief will help ensure we will continue to be successful in the future.2

Stop and breathe. Have you ever been in a room with too many people yelling, too many televisions and radios blaring, perhaps horns honking outside, and so much stress and anger that you can barely hear yourself think?

While it is wonderful that news is now widely available, being immersed in news and its principally negative orientation, confuses us and prevents us from seeing the world clearly.

The problem is not that what happens on the news is false (though occasionally some is), nor even that the news fails to tell us many important things (which it often does), but more deeply the problem is that the news doesn’t encourage us to see the big picture. The news, by its nature, is focused on problems and bad things that happen. And its ubiquitous presence and compelling and penetrating effects distort our perception of reality.

If we want to liberate our potential to do good work in the world and to have a positive effect on the world, we need to believe that what we do matters. And to believe what we do matters, it helps to see that what others are doing and have done for thousands of years makes a difference. The doing of good work may take time, and it may not be obvious how you will achieve your goals. Two hundred years ago almost everyone on earth was poor and famines, in which people literally starved to death, were a regular feature of life around the world. The people who created the steam engine and constitutional government had a general attitude that practical problems could be solved, and they worked hard and long to solve problems, but they did not fully realize that they were creating the beginning of the end of starvation as a routine family experience.

We have good news:What people do matters a tremendous amount.3

Peace Is Breaking Out All Over

Thus, the first fact that we ought to stop and consider is that, despite the steady barrage of news concerning wars that are happening and that might break out in the future, from a deeper perspective the fact is, shockingly enough, that peace is breaking out around the world:

By 2003, there were 40 percent fewer conflicts than in 1992.The deadliest conflicts—those with 1,000 or more battle deaths—fell by some 80 percent. The number of genocides and other mass slaughters of civilians also dropped by 80 percent, while core human rights abuses have declined in five out of six regions of the developing world since the mid-1990s. International terrorism is the only type of political violence that has increased. Although the death toll has jumped sharply over the past three years, terrorists kill only a fraction of the number who die in wars.4

Prior to 1992, war was far more common around the world than it is today. Wars with more than 1,000 battle deaths are down by 80 percent! The Cold War, in which the planet was divided between Communist countries and capitalist countries, resulted in endless wars throughout the developing world, many of which we barely heard about.While the end of the Cold War has not brought complete peace, it is significant to notice that despite the fact that ongoing televised casualties in Iraq bring the horrors of war into our living rooms, nonetheless from a global perspective we haven’t lived in such a peaceful world since the nineteenth century.

Poverty Vanishing More Quickly than Ever Before

Well, so war is on the decline; what about the horrors of poverty? It turns out that poverty is also decreasing on a global scale the likes of which the world has never seen before. Although poverty in Africa remains a very serious problem, the good news is that economic growth in India and China is raising the standard of living of more people more quickly than has ever taken place in history.

The first thing to realize about India and China is that they are each home to more than a billion people. Together they account for about 40 percent of the global population. In the past 20 years, about half a billion people in these two nations have been raised out of poverty. Now, a negative person might point out that three quarters of them are still poor; but half a billion no longer in poverty is more than the entire population of the United States. For countries that have been symbols of mass poverty for hundreds of years to have a quarter of their populations lifted out of poverty in merely 20 years is mind-boggling. More important, at current rates of economic growth, China will reach the current U.S. standard of living around 2030, and India will reach the current U.S. standard of living a few decades later.5 See Figure 1.1.

Figure 1.1 The Expanding World Middle Class

SOURCE: Used with permission from Goldman Sachs Global Economics Paper No. 170,“The Expanding Middle Class:The Exploding Middle Class and Falling Global Inequality.”

Defining the middle class worldwide as having an annual per capita income between $6,000 and $30,000, Goldman Sachs estimates that before 2040, 4 billion people will qualify. After that the number of people in the middle class by this definition declines primarily because the Chinese will have become wealthier than that.6

Thus, although there are relatively poor people in the United States, from the perspective of Chinese or Indian poverty even the U.S. poor are well fed and mostly well housed. Within our lifetimes, mass poverty in China and India will no longer exist.

Figure 1.2 Income per Capita in 2007 and 2050

SOURCE: Used with permission from Goldman Sachs Global Economics Paper No. 170, “The Expanding Middle Class:The Exploding Middle Class and Failing Global Inequality.”

Note the difference in scale between the two graphs in Figure 1.2; by 2050, Goldman Sachs estimates that income per capita in Turkey, Mexico, China, and Brazil will all be higher than it is in the United States today.7

Moreover, it is not only in China and India that economic growth is rapidly eliminating poverty: Ireland, for instance, moved from being one of the poorest nations in Europe 15 years ago to being the wealthiest. Many (but not all) nations from the former Soviet Union are growing well. Chile, Costa Rica, and Mexico are doing well in Latin America. The outlook throughout Asia is generally positive: Forty years ago Japan was a poor nation, thirty years ago Singapore, Hong Kong, Taiwan, and South Korea were all poor, now Thailand and Vietnam have joined India and China in successful economic growth and are on their way to joining the no-longer-poor portion of the world.

Clearly, there is much to do and we should not rest on our laurels. But we also should not despair over global poverty. It is decreasing more rapidly than it has ever decreased in history, with more people attaining higher standards of living than the world has ever known. While very serious problems remain in much of the world, the fact that we are making so much progress so quickly ought to inspire us to more effective action rather than despair.

Paradoxically, the alleviation of poverty around the world concerns many people. A headline on economic growth in China expressed environmental concerns with the question, “Too Many Toyotas?” The downside, of course, of nine billion human beings (the expected peak global population later this century), each with a U.S. standard of living, is the demand for natural resources on a colossal scale. Most people assume that such an enormous use of natural resources necessarily implies extraordinary environmental damage. Does it?

The End of Environmental Destruction?

Yes, serious environmental concerns do exist and the possibility of catastrophic climate change is among them. That said, in order to solve the problems facing us it is important to acknowledge the significant progress that has been made in the past and to consider the strategies and techniques that succeeded in driving this progress.

The decline of acid rain is a good place to begin to understand the nature of progress on environmental issues. In the 1970s there were widespread concerns that acid rain would destroy ecosystems throughout the United States. Sulfur dioxide, a pollutant that was emitted largely by power plants, combined with various gases in the atmosphere to create rain that was more acidic than is natural. As a consequence, numerous plants and fish began to die.

Subsequently, a law was passed in the United States that set up a sulfur dioxide trading system: power plants that produced sulfur dioxide had to buy rights to continue to do so. Some companies then began to add antipollution equipment to reduce their sulfur dioxide emissions. As a consequence, they were able to sell their pollution rights to companies that had not yet installed the anti-pollution equipment. Although many environmentalists were originally against this system because they did not like the idea of companies owning a “right to pollute,” what happened was that companies suddenly had an incentive to invest in the very best antipollution equipment.The faster they could install better equipment, the sooner they could sell their pollution rights to other companies. Soon it became cheaper, in many cases, to install the innovative antipollution equipment than to buy more pollution rights. As a result, sulfur dioxide emissions in the United States have been cut in half in the last 20 years and most ecosystems that had been damaged by acid rain are now well on the way to recovery.

As important, the cost of adding these scrubbers was less than a tenth of what had been expected. The innovation dynamic catalyzed by the market in pollution rights created a circumstance in which pollution decreased both more quickly and more cheaply than anyone had imagined possible.8

The growth of forests in the United States is a good place to begin to understand how our environment may be restored. Deforestation in the United States took place at the highest rate during the nineteenth century as pioneers cleared forests in order to create farms. From 1920 to 1990, the percentage of the country covered in forest was stable. Since 1990, the percentage of the country being re-covered in forest has steadily increased, so that now we are returning about two million acres of land to forest each year.9 Indeed, the rate of reforestation in the United States is now so high that some scientists believe that the country is absorbing as much in new carbon emissions as it is emitting. U.S. forests now contain 40 percent more wood than they did 50 years ago and, by some measures, despite the fact that the United States is the largest producer of greenhouse gases, due to our heavy levels of reforestation, the U.S. may actually be carbon neutral with respect to net annual emissions.10

Patrick Moore, a founder of Greenpeace, believes that “trees are the answer.”11 He points out that the more wood and paper we use, the more trees are planted, and the more trees that are planted, the more carbon is absorbed into the atmosphere.

Without going into more details here, the primary points are:

1. We have solved environmental problems in the past (decreased sulfur dioxide emissions, increased forest cover).

2. We can continue to solve environmental problems in the future.

Although there are some people who believe that fear of catastrophe is necessary to get people to take action, it is also important to be aware that real progress has been made and continues to be achieved.

As countries develop and poor nations become richer, environmental conditions generally improve. Economists have noticed what they call the “environmental Kuznets curve,” whereby economic growth can be detrimental to the environment in countries where average annual per capita incomes range between $2,000 and $8,000, but thereafter, environmental improvements take place. Economist Benjamin Friedman summarizes the evidence:

In cross-country comparisons, sulfur dioxide, nitrous oxide, carbon monoxide, smoke, and lead from automotive emissions all show increasing atmospheric concentrations up to some income level but a decreasing concentration thereafter. A similar pattern obtains for fecal contamination in rivers, as well as contamination by heavy metals such as lead, arsenic, cadmium, mercury, and nickel, all of which carry well-established health risks. Conversely, the level of dissolved oxygen in rivers (a key sign of biological vitality) appears to decrease at first with economic development and then increase.

Benjamin Friedman, The Moral Consequences of Economic Growth, Knopf, 2005, 383

As incomes increase in each country, individuals and governments do what it takes to improve the environment. Although we would like to reduce the extent to which these harms take place, the long-term prognosis for the effects of economic growth on the environment is positive.12 Although problems do exist and will need to be solved, our track record for solving environmental problems is far more positive than is often acknowledged.

Health and Well-being in the Developed World

Some of the positive developments in this area are almost unbelievable: The average American lived to 54 only 50 years ago. Now, our average life span is 76 years and climbing.The number of Americans living past 100 is exploding ; currently there are 71,000, three times that many are predicted to reach the milestone in the next 20 years, and who knows how many living up to what age beyond that. Cancer is on the decline, AIDS is on the decline, suicide is on the decline, fatal accidents are on the decline. By almost all measures our health is improving.13 The major exception is obesity. If we could only exercise more and eat more healthily we would defeat the single greatest obstacle to dramatically improved health.

Meanwhile, we live in larger and better houses than ever before. It takes fewer hours of labor to buy food, clothes, and most consumer goods than it did 50 years ago. In the 1960s long-distance telephone calls were a luxury; now most teenagers have cell phones and Skype Internet long-distance service is free. Almost every poor American has a refrigerator and a color television, items that were considered luxuries only affordable by the rich not long ago. Indeed, almost every item that was once available only to the very wealthy has become common even among the poor in the developed world.

Health care and education are two of the very few items that have become more expensive and, even there, in many ways they have become cheaper. For instance, although university tuitions have increased rapidly, MIT now has a project through which it offers all of its courses online for free. Although it requires considerable discipline to study the material on one’s own, the Internet has made access to vast educational resources essentially free to anyone with access to the Internet.The very best encyclopedias on earth even 20 years ago could provide only a tiny, tiny fraction of the information that is instantly available through Google.

Health care is more expensive primarily because there are such sophisticated options available. One hundred years ago, doctors could do very little to improve health; every local pharmacy today provides far higher quality health care, at a lower cost, than was available from the best doctors that money could buy in 1910. And, although access to cutting-edge contemporary health care remains a problem, 75 percent of the $1.4 trillion dollars in health care costs spent annually in the United States go to the treatment of chronic diseases, most of which are preventable through lifestyle choices. Eat well and exercise and, in essence, you have solved the single greatest health care problem in the United States in your own small way. Encourage your friends and family to do likewise, and the amount of resources devoted to health care will decrease dramatically.

Goodness and Beauty as the Growth Industries of the Twenty-First Century

Moreover, a significant and growing portion of our population is actively engaged in doing good. Many of the fastest growing companies, and the most desirable corporations to work for, are explicitly committed to doing good: Google, Whole Foods Market, eBay, Southwest Airlines, and Toyota are all socially responsible corporations, and they are just the tip of the iceberg. If corporations want to succeed in the twenty-first century marketplace, they will have to satisfy demanding customers, employees, and investors that they are, in fact, honorable companies. There are numerous indicators that this movement is growing, as documented in Patricia Aburdene’s book Megatrends 2010: The Rise of Conscious Capitalism.

Meanwhile, from another direction, it is noteworthy that in 2006, for the first time, the Nobel Peace Prize was awarded to Muhammad Yunus and the for-profit organization, Grameen Bank, he founded. Grameen Bank has been the leader in the global microfinance movement, through which tens of millions of impoverished women have received micro-loans that allow them to engage in entrepreneurial activity. In 1968, John Kenneth Galbraith expected that the age of the entrepreneur was over. Shortly thereafter, Yunus began giving tiny loans to women to purchase chickens, bicycles, scales, and other capital goods to empower them to launch their own businesses. The age of micro-entrepreneurship was launched even as expert observers had come to believe that the entrepreneurial role was obsolete.

Anyone can be an entrepreneur now. In the 1970s, as Marxist theorists were discussing the final days of “late capitalism,” Steve Jobs and Steve Wozniak were creating Apple Computer, Bill Gates and Paul Allen were creating Microsoft, and thousands of other high school and college dropouts were creating thousands of other companies that resulted in the technology revolution of the last 30 years. Because of their efforts, I can now develop entrepreneurial projects with individuals in Sri Lanka, Uganda, Romania, and Nepal in 24 hours. Using the Internet, we can all work together immediately. Andrew Hyde’s Startup Weekend gathers small groups of software developers to start a new project or company over the course of an intensive 54-hour weekend.

Sugata Mitra’s Hole-in-the-Wall project has shown that illiterate, uneducated ghetto children in Delhi can learn to use the Internet on their own in the course of days, with no outside guidance or instruction whatsoever and immediately engage with the enormous world of the Web. Those of us who want to help others develop their own projects already face an endless sea of opportunity for helping the world’s poor improve their lives.

Meanwhile, the astounding success of Wikipedia reveals an unlimited appetite for openly and freely producing and sharing information. The Open Source software movement demonstrates that even very high-quality software can be produced collaboratively, for free. As mentioned earlier, MIT is in the process of putting its entire curriculum online and allowing free access. And with the $100 laptop developed for the One Laptop per Child program and broadband costs collapsing around the world, millions of new people are getting plugged into the global economy and the universe of global knowledge faster than ever before. Ori Brafman and Rod Beckstrom document the “unstoppable power of leaderless organizations” in The Starfish and the Spider; as eBay becomes one of the largest economies on earth.

Daniel Pink, in A Whole New Mind, makes a compelling case that the growth industries in the twenty-first-century economy in the developed world will be based around the production of goods and services into which meaning, beauty, empathy, and other soft values are integrated. In the developed world, there is a thriving “green” consumer sector. But Pink also points to the ubiquity of design: from the elegant Apple iPod to the fact that Wal-Mart carries “designer” toilet bowl brushes. Much of the value added to products in the future will come from improved aesthetics and richer, more rewarding experiences rather than bigger and more. BMW has engineers who specialize in the acoustic experience of driving a BMW. There are professionals with business cards that read “Cultural Strategist” and “Organizational Storyteller.” The world of meaning, design, and aesthetics will generate enormous new industries in the twenty-first century, as all of the old mechanical and commodity-based industries, which operated strictly on price criteria, fall prey to competitors that are ahead of the curve in the meaning dimension of their products and services. Many of the great entrepreneurs of the twenty-first century will be entrepreneurs who create exceptional enterprises that are preeminent producers of beauty and grace, culture and experience, happiness and well-being.

The poet Frederick Turner describes the twenty-first-century growth industries as the “Charm Industries:”