While the discussion about income inequality becomes mainstream I find those arguments by Nick Hanauer quite refreshing, like for example in his TED talk ‘the dirty secret of capitalism – and a new way forward‘ or also the excellent ‘Beware fellow plutocrats – the pitchforks are coming‘.
His perspective as a ‘plutocrat’ belonging to the 0.1% is that social stability depends on a strong middle class, therefore it is essential to maintain and develop the conditions for this middle class to emerge and strive. One of his initiatives has been to support an increase in minimum salary in Seattle (US federal minimum salary is very low), which did have a positive impact on consumption and social stability.
He promotes new economics, based on market economy but along 5 main rules:
- Successful economies should be like gardens (and not jungles), tended, and properly regulated
- Inclusion creates economic growth. Neoliberal approaches have shown their limits. Economy is people
- the purpose of the corporation should be reviewed. It is far more than enriching shareholders: it is to promote the welfare of all stakeholders
- Greed is not good. “Being rapacious doesn’t make you a capitalist, it makes you a sociopath“. Economy depends on cooperation
- Laws of economy are a choice (unlike laws of physics), it is a social construct. Therefore if we want so we can choose to apply a new economical approach.
Nick Hanauer is only a representative of an interesting new trend in economic thinking, calling for a change to the current neoliberal theories. Recently a number of CEOs of large companies have publicly adhered to a similar approach. It will be interesting to see how far those ideas will gain traction.
