REVIEW: Umair Haque – “The New Capitalist Manifesto” (Harvard Business Review Press)

This review was originally posted on Bold As Love Magazine.

You’re probably wondering what a book on capitalism has to do with a music and culture blog. Perhaps nothing. Maybe everything.

The world of progressive black culture is exciting precisely because of the unexplored possibilities it represents. But it doesn’t exist in some Utopian vacuum. Pull back and you see that, like everything else, it is impacted and shaped by the larger system of capitalism.

Paraphrasing Dr. Cornell West: I don’t expect there to be a major critique of capitalism in my lifetime. That said, the question is how do we turn capitalism to serve progressive agenda, especially as relates to culture? The answer isn’t fully clear. However, what is clear is that it’s time to take that first step and figure out what capitalism looks and acts like in the 21st century. Fortunately, economist and business advisor Umair Haque (pronounced hock) provides plenty of food for thought.

In his new book, The New Capitalist Manifesto, Haque convincingly puts forth the idea that 20th century capitalism is no longer sustainable in our 21st century world. And it’s not that capitalism is dead, it’s that the way it’s done has to change. While reading the book, my mind was racing with ways that his theories could be applied to influence the direction and tenor of 21st century black cultural production. But before I make that leap, let’s look at some of the concepts in the book.

Essentially, Haque proposes a framework for what he calls constructive capitalism and, no, it’s not some oxymoron like “compassionate conservatism.”

He starts off by illustrating the difference between where we are today and the world we lived in during the 20th century. 20th century capitalism ran on the idea that the world was one big game reserve, a place of seemingly stable and limitless resources. So, as he notes, if you ran out of fish in one pond, that was okay because you could simply go to another one nearby. Or you could take food and supplies from that other tribe because, hey, you don’t trade with them anyway.

But this new century’s world is more like an ark (or for the New Yorkers, a subway train): “tiny, crowded and fragile”. So if a fight breaks out or there’s a food shortage or disease, it affects everyone. Sound familiar?

The problem lies, he suggests, with 20th century capitalism’s cornerstones or underlying ideas: production efficiencies; positioning based on product differences; strategy framed as a zero-sum, “I win, you lose” mode of competition; the idea that the only way to really gain advantage is to keep competitors out of your market; and mass producing goods or products to drive consumption.

Especially important: 20th century capitalism doesn’t take into consideration the full economic cost to people, communities and society of producing those goods and services. He writes:

Twentieth-century capitalism’s cornerstones shift costs to and borrow benefits from people, communities, society, the natural world or future generations. Both cost shifting and benefit borrowing are forms of economic harm that are unfair, nonconsensual, and often irreversible.

For example, take the fast food hamburger:

How much does a burger really cost? You pay perhaps $3, but. . .the authentic economic cost may be closer to $30. Environmental and health-care costs are shifted to society and future generations. And benefits are borrowed from people, communities and society: the beef, water, land, and even jobs that go into burgers are subsidized by as much as $20. If, for example, water were no longer subsidized in the Great Plains states, a pound of ground beef would cost $35, estimates James E. McWilliams, a fellow in Agrarian Studies at Yale University. . .the $27 gap between the $3 or less the average American pays and the $30 or so a burger actually costs is economic harm that is done by industrial era food producers to people, communities, the natural world and future generations.

In their stead, he proposes five new cornerstones of 21st century businesses. Consider these:

What he offers throughout the remainder of the book are examples of companies that are moving aggressively on this path. It’s not that they are operating in all five areas, but they’ve taken meaningful steps in at least one, and that is enabling them to leave similar companies in the dust. He cites companies such as Walmart (vs. Target), Nike (vs. Adidas and Puma), Google (vs. Yahoo), Indian carmaker Tata (vs. General Motors), Threadless (vs. The Gap), Apple (vs. Sony) and many others. Simply put, these companies are able to prosper—do well—by doing good.

For example, Walmart and Nike have made sustainability a key piece of their business going forward. Summed up thus, their philosophy is “waste nothing, replenish everything”. Nike, for example, recycles the rubber from its shoes to make playground, tracks and basketball courts. Apple has simplified the complex, i.e., the single button on the iPod. The Nintendo Wii’s motion control system opened up video games to consumers beyond teenage boys and men. Threadless thrives because it is responsive (via community-sourced designs) to it constituents in a way that The Gap can’t be.

Caveat: Still hard to be all ra-ra about big corporations. Walmart has ongoing issues around its labor practices, including the controversial recent dismissal by the Supreme Court of class action sex discrimination suit. As well, their superstores tend to put small, mom-and-pop operations out of business. When small businesses leave an area, the tax base erodes, which means you end up with less public services. And there are still concerns about the extent to which Nike uses sweatshops to produce its shoes and clothing. And, while I write this on a Mac, Apple has mastered the pricing game so that we feel like we’re getting deals when, in fact, we’re not. I wouldn’t call it dishonest, but is a sleight of hand.

However, to be fair to Haque, his book is dealing with business at a macro level, i.e., overall approaches and philosophies that guide the way 21st century companies engage people, communities and society. I also believe that one of our mandates as Americans and global citizens is to take the best ideas and put them towards improving the lives of not only black people, but the world as a whole. The task before us all is sustainability across the board: art, culture, business, etc. It’s about value that not only makes people feel like they paid a fair price, but in some significant way makes their lives better. This book provides important guidelines: A means and a language through which to change capitalism’s current frame. In doing so, we are opened up to a new set of possibilities. If capitalism itself can be changed, then perhaps there’s hope for the kind of culture that flourish within it, too.

In subsequent posts, I’ll look at the pillars of Haque’s new capitalism and explore their implications for progressive black culture.

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