Brief Review: “Winners Take All”
“Winners Take All: The Elite Charade of Changing the World” by Anand Giridharadas is a thought-provoking indictment against philanthrocapitalism and the concept that unbridled free-market, capitalist-driven solutions are the answers to all the world’s social problems.
Challenging the Free Market as THE Solution
Like many in the West, I’ve grown up with the notion that the free-market and business driven solutions are not only the most efficient, but often the most effective ways to solve many problems. Giridharadas systematically works through the myths behind this notion, explaining the history, the counter-evidence, and the self-serving nature with which the market works.
The author puts forward a concept he calls MarketWorld:
MarketWorld is an ascendant power elite that is defined by the concurrent drives to do well and do good, to change the world while also profiting from the status quo. It consists of enlightened businesspeople and their collaborators in the worlds of charity, academia, media, government, and think tanks.
The belief structure is stated clearly here:
These elites believe and promote the idea that social change should be pursued principally through the free market and voluntary action, not public life and the law and the reform of the systems that people share in common; that it should be supervised by the winners of capitalism and their allies, and not be antagonistic to their needs; and that the biggest beneficiaries of the status quo should play a leading role in the status quo’s reform.
Key Points
The book has numerous interviews, anecdotes, and great ways to reframe some of our existing biases and beliefs. Here are a few of the particularly interesting insights:
The Systems That Caused The Problems, Will Not Fix Those Same Problems
Over the last 40 years, the American worker’s productivity grew by more than 70% while the median worker’s pay increased less than 10%. The problem of stagnant wage growth and inequality is not so much a productivity problem, but rather that the majority of those gains are captured by the top. The author refers to private equity investors, for example, as extractive — as in they extract the value of the business and from others. You can think how mining companies extract natural resources — and these modern corporations extract all other value from a business at the cost of workers and perhaps communities, environment, and society.
What is the incentive for those free market capitalists to change the very system that led to their wealth?
Challenging the Concept of the Win-Win
More often than not its easier and more palatable to think that the problems can be solved elsewhere and through other mechanisms. Business tells us that if we can grow the pie — we all can win — that there can be a win-win. It’s an easy and non-threatening approach to solving the problems of poverty or, more pointedly, inequality.
But what if that’s not the case? What if in order for one group to win, one group must give up something? For the last several years the unprecedented growth of the wealth of the top 1% has often come through the efficiencies gains in business and at the expense of that working class. Think offshoring of previously well paid manufacturing jobs or Uber not providing benefits or predictability of wages. Wealth has grown for some and not for others — indeed a win-lose. What if to change that, business needs to be a little less efficient? Extract a little less out of those workers? What if we need not hollow out our government and civic institutions at the cost of unbridled business growth?
The author does a nice job of challenging this seemingly obvious dogma that there can always be a win-win. Its a powerful re-framing and important one. If we broaden our horizon to include the possibility that some solutions are not win-win — it can enable us to be more creative and possibly consider a more fundamental truth or reality and arrive at a broader range of potentially more effective solutions.
Inadequacy of Business Tools to Solve Large, Social Problems
The “business protocols” as Giridharadas calls them are not the best tools to solve social problems. Here the author is referring to the modern MBA/McKinsey driven approach to break down problems, use best judgments, 80/20 rules to quickly find and optimize business problems working to achieve efficiency. And while useful in certain business problems — they are not the only mechanism — and often they are woefully inadequate for solving complex, social problems.
The Author describes the infatuation with the McKinsey-esque business protocols as “Trying-to-Solve-the-Problem-with-the-Tools-That-Caused-It issue.”
Social enterprises gravitate to those tools themselves, often blinded by the success of big business, and the impressiveness of the strong, refined analytical toolset — stated as such:
The nuance and inherent humility of the social sciences — the realization that development has to do with people, with human and social complexity, with cultural and traditional realities, and their willingness to struggle with the messy and multifaceted aspects of a problem — have no cachet in this metrics-driven, efficiency-seeking, technology-focused approach to social change.
However, the belief that these narrow business tools are enough, that you need not delve deep, that you need not talk to a broad group of people, that the solutions are clean and not messy — is indeed arrogant and lacks the humility of the scope of the problems, the relevance of the solutions, and the intelligence of the actual individuals working in those domains.
The spread of these protocols was, he said, a “continuation of the colonial, imperial arrogance of the enlightened white man with money and science, and noble and benevolent intentions, who will solve these problems.”
The Vacuousness of Thought-Leadership
The marketplace of “ideas” is a business itself. That academic/intellectual discourse and true critical thinking is hard and messy and not always win-win. Sometimes we have to make tough decisions that require sacrifice — which we don’t like. Thought leaders aim to package ideas in bite-size ways that are palatable, and most importantly enjoyable, in a way that re-affirms what we know, and don’t challenge us to go beyond or sacrifice much of what we have — perhaps just add to it.
Paternalistic View of Solving Other People’s Problems
This was one of the most interesting insights: the wealthy — having benefitted from an unfair system and often responsible for driving that unfairness (e.g. reduction in regulations and taxes favoring themselves) are then in the position with extraordinary wealth and decide to give back. Smug in their capabilities and the capabilities of their businesses and business tools, they feel uniquely suited to solve the social problems of inequity. The irony that the author explains here is remarkable:
- business leaders state that governmental institutions aren’t working
- these are the same governmental institution that businesses have waged war against and “gutted” to achieve their unfair wealth
- those same business owners now say “we are the only ones in a position to fix those problems”
- AND we will do it our way, in a way that is convenient to us, that doesn’t threaten our way of life, or the way we make our money
- AND we will do it without oversight, or buy-in — setting the agenda of how we see that society should be fixes as a benevolent dictator
- We used (and perhaps abused) the system to make our money, and now we will use it to try to make the world better — as we see fit.
Indictment of the Globalist
The observation is about the well-meaning globalist. I think this sums it up well:
Globalists were utopians. They believed in change and in the future. They were “anti-nationalist and anti-religious” and “anti-parochial,” believing that “anything that divides people into separate groups or identities is bad; removing borders and divisions is good.”
Globalism, [ however ] chasing a dream of everyone, risks belonging to no one.
The clear statement is that globalization, the ability to get what you need anywhere in the world, is a luxury available to the elite — who increasingly don’t need their local community. The global elite — belong to “the world”. Can travel anywhere, and do anything, everywhere. The danger in this thinking is certainly one-level of group-think — but also disconnectedness from the problems they are aiming to solve.
With regards to problems at home and poverty in America, for example, the author stingingly states that the globalist ignore “the unexotic underclass” — people neither rich enough to be global elites themselves nor poor enough to get the global elites’ attention.
Summary
While acknowledging the good intentions, the book makes a number of reasoned and powerful challenges against philanthrocapitalism. The book makes a clear statement about the challenging reality as its observed from big businesses that want less government, less regulation, and more free market:
This is the compromise, the truce, distilled: Leave us alone in the competitive marketplace, and we will tend to you after the winnings are won. The money will be spent more wisely on you than it would be by you. You will have your chance to enjoy our wealth, in the way we think you should enjoy it.
The challenge of only valuing the dollar — and not employees, living wage, the community or society.
The challenge of ultra efficiency in business — where efficiency is shareholder value and the wealth of the owners, not a broader set of stakeholders.
The paternalism that comes with saying that “we” know how best to deploy that capital and those winnings for your own good.
And for sure it won’t be in a way that threatens the way we make money.
Ouch.
What Do We Value?
I think one of the interesting observations is about how we / society value money:
“When we talk about economic inequality we might acknowledge an underlying, unspoken hierarchy, in which we relate everything back to capital. In most areas of life, we have raised market-based, monetized thinking over all other disciplines and conceptions of value.”
Is money all that matters? Do we not value our non-monetizable relationships — family and community? I think this is a searing indictment on our society as a whole. I’d like to believe that money is not all that drives us and that that should be demonstrated by the values we espouse and the picture of the world that we say we’d like to live in. However our society’s actions and adoration of business, capitalism, and the unbridled free-market appear to belie that belief.
What Kind of Society Do We Want?
One of the most succinct and clear articulations of this very interesting challenge and struggle was made by Chiara Cordelli, political philosopher at University of Chicago who states:
The winners of the [market economy] bear responsibility for the state of those [common] institutions, and for the effects they have on others’ lives, for two reasons: “[1] because you’re worth nothing without society, and also [2] because we would all be dominated by others without political institutions that protect our rights.”
When it comes right down to it — what kind of society do we want to live in? Do we want to be ruled by the law of the jungle? Law-less, right-less, protection-less society where might wins? Everything is fair game and everything can be taken from you?
The foundation of this country and even today’s political banter go back and forth between socialist tendencies and capitalist free-market tendencies. Both advocate for the important parts of our modern democracy namely 1) an equitable and fair society on the one hand and 2) freedom of the individual on the other hand. Is is indeed the foundation of the US.
Like many of our dogmas and beliefs, these are opposing beliefs and it can appear that by advancing one we constrict the other. The message being: yes you can have the freedom to create your own business, own property, accumulate wealth — but no, you don’t have the freedom to produce knowingly toxic chemicals or dangerous pharmaceuticals, for example.
The notion that a growing economy is a rising tide that raises all boats — does not seem to be working for the last 40 years. We are all, rightfully, impressed by the modern capitalist engine of growth. The efficiencies of companies to produce goods and services, generate wealth and make change. Indeed this engine has created massive societal economic wealth. However those changes seem to be of one type and unfairly benefitting one group of individuals. And if so, if this is the case, we need to seriously question if the push we’ve been making on the freedom/capitalism side is working for our collective goals — or if we need to find ways to drive more equity and fairness…not just because its good long-term business, but primarily because that’s the society we want to live in.
I recently enjoyed a TED Radiohour podcast that provided a few snippets of talks that address this topic of what do we value and what type of society do we want? How do we want to treat in-home care-givers for example and others that are vulnerable in our society? Are we willing to provide predictable wages, medical care, paid time off — like many in the top half of the economic ladder enjoy? What values do we want to live by in the companies we run? Are we driven singularly by shareholder ROI — the oversimplified construct of the 1970’s and 80’s — or do we understand and drive by a broader stakeholder value — where employees, customers, and community are an integral part of those stakeholders? What metrics do we want to use to govern our societies? It cannot and should not be singularly about growth and GDP, but include equity, health, security, and societal happiness. Its a quick listen and I recommend it.
My Personal Take-Away’s:
- Not every problem has a win-win solution. Embrace discomfort and tough unpopular decisions.
- Business solutions are not a sufficient instrument to solve complex social problems.
- Meet people where they are — truly engage beneficiaries in the process and solutioning.
- Strongly question the free-market and unbridled growth. The free market is powerful, but not a complete solution. A purely free market success, while efficient, clearly does not embody or achieve all our values.
The one challenge I’m left with is my own soul-searching. While the book makes a very compelling case that free-market, capitalist solutions are NOT the solution to all problems AND that we should invest in government and civic societies — its hard not to wonder what this specifically means. Also my own bias shows in my belief that government solutions and organizations have not been a panacea of productivity and improvement. It’s not that government can’t do good things — but what does it mean for government to improve? What are the scorecards we are using? Capitalist free market solutions have clear report cards — typically the bottom-line dollar. We are beginning to recognize that having that singular report card and focus can drive bad behaviors — but we can acknowledge that it is efficient, does focus the energy, and can achieve its goals (even if the goals are not always desirable). Are we able to take any similar conceptualizations and apply them more broadly to other institutions and social enterprises?
While we can acknowledge that unbridled greed is not good, we can agree that ambition and the drive to achieve are powerful forces for change. The very human notion of power and greed are as old as humanity itself. However, the attractive idea behind the social enterprise, for example, is that we can potentially unleash that same force, that same creative mind, that same ambition as free-market enterprise to enjoy similar scale benefits.
I recognize this is the challenge the author makes in the book altogether — that business and the solutions of the past cannot be used to solve these problems. However I’m not convinced that running back to just investing in community and government as we had 50 or 100 years ago will magically fix everything.
I’m left wondering about how do we reframe success? How do we as a community tackle ambitious problems — what’s the next social construct and invention — beyond old-school government, and beyond unbridled free-market capitalism? I enjoyed Marc Andressen’s essay on “It’s Time to Build” but recognize that venture capital rarely (if ever) invests in the big ambitious building that is necessary to solve these complex social problems.
As a tech entrepreneur who is also very concerned about these problems, I hope to take some of the lessons in this book to heart. I hope I can be part of the next generation of solutions that attempt to solve a broader, more holistic, and ambitious class of problem — that purely that of efficiency and the basest level of the free market. And at the least, if only in the smallest contribution, I hope to attempt to build business in a better way.
