Smart, mainstream people get it

Experts are saying technology is one of two major factors leading to prosperity. What do you think is the other?

Tim O’Reilly is no dummy. Neither is James Manyika.

You may recognize O’Reilly’s name. Manyika, probably not. O’Reilly coined the terms “open Source” and “Web 2.0” among other notable accomplishments. He’s world famous, mostly for being really smart.

Manyika is Senior Partner at McKinsey, a top private think tank and consulting firm operating worldwide.  He directs the McKinsey Global Institute (MGI), McKinsey’s business and economics research arm, and one of its three global co-leaders. You gotta be smart to have that title.

McKinsey featured Manyika and O’Reilly talking about how work will change in the “next economy”. I don’t remember either participant defining what “next economy” meant. But I do remember the common ground they found: They both agreed the next economy, whatever it is, will have to address pressing social problems:

Tim O’Reilly: Economic growth is good because of two things. One, if you have population growth, you need the economy to grow at least as fast as the population to keep living standards even. Economic growth is good because, presumably, it increases the wealth of a population if economic growth exceeds the population’s rate of increase—but only if that wealth is distributed properly.

James Manyika: Absolutely.

Tim O’Reilly: One of the big changes in our economy, over the past few decades, is that it has become much more of an extractive economy in which corporate profits are going up. We have sort of abandoned the idea that growth is only good if it leads to prosperity for all. It’s not good if it leads to prosperity for a very small number of people, who then don’t spend the money, and instead it just sits on the sidelines.

James Manyika: Oh, absolutely. In fact, that’s one of the challenges that, if we’re creating a list, we’re going to add to the list—this idea of how do we grow and develop and innovate and, at the same time, include everybody and have the benefits of all that go to everybody? I think it’s quite striking, for example, that even through periods in the past decade when productivity has been good, the share of the national income that’s gone to wages has actually declined.

One other thing. Both O’Reilly and Manyika agree: technology and globalization are key to rising prosperity. I agree too.

That’s why any fundamental change not supporting a globalized economy with global trade is not going to get public support. The elites know what is driving prosperity no matter how unequal that prosperity is. The solution isn’t killing productivity drivers, it’s fixing the problems they cause.

Watch the whole video, or just read the transcript.

In Capitalism Everybody Is Underpaid

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Photo: Pepi Stojanovski

If you’re working for someone else, it’s likely sometimes you think about what else you could be doing with your time. Maybe you think about how much money you’re making.

And sometimes you wonder if you should be making more.

The answer is always yes.

And by yes, I don’t mean a fifty-cent raise, or a salary increase that gets gobbled by inflation.

My wife says “rich people are not underpaid.”

Well, yes they are. Because even rich people want more than they have.

And that means they feel they don’t have enough.

Average Joes and Janes are no different. Everybody wants more. But in our current structured society it’s difficult to satisfy that “more” longing. Especially when working for someone else.

When you work for someone else, you’re at the whim of that person’s willingness to pay you more. Most employers don’t want to do that, even when it is justified. It costs money to do that.

How can I claim no one is paid what they’re worth in capitalism?

Isn’t it obvious?

No matter how much you’re paid, the person or organization paying you is making more money off your time and energy contribution than they’re paying you. That should be obvious.

Your pay also is hardly ever –– if ever –– based on how much you’re actually worth. It’s nearly always based on market rates for the kind of labor your efforts represent.

That has nothing to do with your worth.

It has far more to do with what you and your employer, as a microcosm of the larger market of employers and labor, are willing to settle on.

So every salary, every wage is a compromise.

There is no need to compromise in life.

Unless you live in a society dominated by markets, money and government. But the future doesn’t include those things.

I know, it’s really hard to envision a future not inclusive of those things.

But in the future all things become possible. For it is only markets, money and government which at the very least slows progress down. Sometimes way down.

It’s time for a better future. More and more people are asking for it. Particularly younger people.

What does that future look like? For starters, it’s one which pays you what you’re worth. Because the facts are, no amount of money can equal your worth. That’s why, in the future your potential earnings are exactly equal to your worth.

Which is unlimited.

Now we just need more and more people of all kinds letting that future happen. That’s just a matter of time.

The future is boundless. And it’s coming.


Immigration Is More About Where People Come From

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Are the United States an aspirational destination? Do millions of people aspire to become US citizens?

Yes and yes.

But the reason is usually because they’re more dissatisfied with where they are, than they are interested in coming to the US.

According to this research, a tiny minority of people world-wide actually want to move here. How many is a “tiny minority?” One hundred, forty-seven million.

A lot of those people are coming from really dreadful places.

Considering there are over seven billion people worldwide, 147 million people is decidedly not a lot of people. Compared to the US population (roughly 350 million), that number is a lot.

In other words, the number of people wanting to come to America is relative.

Researchers found that roughly 15 percent of the global population said they would move to another country if given the chance. That’s roughly 710 million people. The 147 million figure is a subset of that population. Meanwhile, 85 percent of the global population is fine right where they’re at.

Those who do want to move to the US, overwhelmingly want to come here as opposed to some other country. No arguing that. This blogger makes a great point about people wanting to move here, but we think he goes a bit far claiming that the fact that they do indicates an objectively valid measure of an American exceptionalism.

People’s desire to move here is based on their own desires and perspectives as well as their current situation at home. As such, these desires are always subjective and more about where they’re coming from than where they want to go.

Most people are happy right where they’re at. And for good reason. Family, friends, comfort of home, familiarity, identification with the land….These are good reasons for staying put.

And that’s why we’re eager to make people around the world aware of our innovation. For it can create prosperity exceeding that of the US in every part of the world (including the US), without taking any wealth from any person anywhere or requiring anyone to leave their homelands.

There are a lot of things the United States offers, making it a popular destination for those unsatisfied with where they are. Perhaps the solution to immigration is not building a wall, but creating opportunities where people are that rival or exceed what’s possible somewhere else.

Hard to do with our current system. Easy to do with ours.


While you’re waiting…don’t get screwed

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As capitalism continues to evolve into something we’re all eager for, you might be thinking about building wealth.

I know, a lot of people who don’t like the capitalist system also don’t like money. But money is not the only kind of wealth there is. In fact, it’s the least valuable.

I came across a tweet recently that explains this:


I’ve been thinking a lot about this lately while running my latest venture designed specifically to reward me with number three. My other companies cover all the other ones, as does my current one.

So you could say my portfolio of “wealth building assets” covers the spectrum. The downside is, they don’t provide immediate cash income. The upside is, the long-term wealth viability of them all is HUGE.

I’m so glad I don’t work a job anymore.

If you’re working a job, now is a great time to think about how to build something that will generate wealth in the five areas above. It’s going to take a while to shift capitalism into something better.

It’s a HUGE tanker.

In the meantime, don’t spend your nows doing something you hate. Even if you have to do something you love on the side, it’s better to do that with the hope it will become something significant enough to displace your nine-to-five than to suffer in the now.

By far the most valuable is number 5 Spiritual wealth. I know, there are some who guffaw at this. But really, it is the source of everything. I wouldn’t give a rip about number 2, and number 1 can certainly numbers three and four.

I’ll clue you in on something though. If you get number 5 right, all the others will fall in place.

Build your wealth. Whether capitalism changes or not, it’s worth having.