Umair HaqueEudaimonicsRedesigning Global Prosperity.: Redesigning Prosperity: A Six-Step Extreme Makeover

Umair HaqueEudaimonicsRedesigning Global Prosperity.: Redesigning Prosperity: A Six-Step Extreme Makeover

SUNDAY, 31 JULY 2011

Redesigning Prosperity: A Six-Step Extreme Makeover

If the challenge is raising societies up to higher levels of eudaimonic prosperity--meaningfully well lived lives--then what are the levers that are powerful enough to begin doing do so? What are some real world choices that societies can make to begin making a eudaimonic transition? In geek-speak, what's what you might call the beginnings of a eudaimonic "strategy (or policy) space"?

Here's a quick take: six areas in policy space I believe advanced economies will have to enter--and master--to make the quantum leap to 21st century prosperity. Here's the little analogy behind it: if America were a person, it'd probably be something like a morbidly overweight, thoroughly broke, highly superficial, junk-food loving, MTV-addicted couch potato with little ambition: a giant waste of human potential. Hence, a six step program to turn sluggardly decline a tiny bit more eudaimonic.

1. Detox. While most advanced economies claim to be "post-industrial", the plain fact is that belching, capital-intensive, rapidly depreciating, high-maintenance, often downright self-destructive industrial age stuff still receives the lion's share of subsidies: agriculture, oil, water, "banking". A eudaimonic transition can't happen if you're too busy propping the industrial age--hence a vital step is likely to be gracefully (or fractiously, whatever it takes) letting yesterday's structure of subsidies subside and wane.
2. Makeunder. Do you know what a makeunder is? When a person wearing way too much bad makeup takes it off--and looks a lot better for it. That's pretty much the state our economy's in: industrial age concepts like GDP are giant slabs lipstick, massive swathes of eyeliner, and gigantic dollops of foundation on the proverbial pig--they perpetually let us overstate real prosperity, as it matters in authentic human terms. When it comes to numbers, we (seriously) need an institutional makeunder: loads less desperately artificial less-than-attractive prettification, and more natural beauty shining through.
3. Credit card. In most advanced economies, debt's heavily subsidized (through tax shield effects, and the like). Result? A structurally tilted playing field, that incentivizes debt--and accelerates bubbles and crises. A more eudaimonic approach is to limit debt subsidies, and, where markets fail, subsidize equity instead--because equity rewards joint effort, active engagement, and fuels participation, and punishes disengagement. America's stock markets aren't broken because there's too much equity--but because there's far too little (fewer than 15% of Americans own "shares", etc). Our economy's built on thin financial bedrock that limits and stifles productive economic interaction--in favor of a revolving door of once-cheap (and now suffocating) credit.
4. Gym. It's one thing to limit subsidies for centuries-old stuff. It's another to reward groundbreaking breakthroughs--and most societies have few ways to do so except relying on "venture capital" (which is in real economic terms, I'd suggest, as grossly inefficient as allocating capital as Wall St is). Advanced economies will need to provide a range of 21st century public goods--Which they currently suck at providing. Hence, I'd suggest a new workout regimen for the atrophying muscles of great achievement: not just subsidies for public "school", but for public contests, tournaments, debates and intellectual battles, in cities and towns, large and small--all aimed at igniting, sparking, and rewarding breakthrough thinking in every discipline. Let's create social incentives to make sitting on the couch all day, banging down "food-like products", and obsessing over Jersey Shore look like the excremental waste of human potential it actually is.
5. Charm School. Let's face it: our institutions need far sharper checks and balances, if we're going to prosper--for civil society's been rendered as toothless as a kitten. Corporations should face real liability when they err--not just today's wrist-slaps: hence, less regulation, but better enforcement of tougher regulation. Politicians should face sharper sanctions when they act like tantrum-prone infants: hence, structural reform of lobbying, replaced by more information, faster. And as "consumers" and "citizens", too, people's self-destructive disengagement and apathy should be punished: simple value added taxes for hyperconsumption, and, conversely, incentives for basic civic engagement.
6. Diet. Let's simplify the onerous, socially pointless complex tax code--we all know it is the way it is to prop up pure rent-seeking, written by tax lobbyists for tax lawyers. Here's a simpler, better approach: if it's harmful to people, or useless to society, tax it. If it's beneficial to people, useful to society--don't. We can debate the precise calculus, but the principle's straightforward: the former half would include stuff like carbon, banking, congestion, massive inheritance, dumbification, and obesity (as in food, not people) taxes. The point, of course, is to create socially productive incentives--not just zombifying malincentives. Now, there are those who might argue that yesterday's tax code was, once upon a very long time ago, written to do so--but I doubt there are many who believe it hasn't become a cynically grotesque caricature of itself.

Now, the above isn't "the list" of eudaimonic policy choices. It's not even the beginnings of "the list". It's just a very incomplete scratchpad of ideas that might help us discern the direction of 21st century prosperity that's built to last, instead built to crash.

Pioneering that trail will, if you ask me, take a decade of tough choices--or more. Here's the catch.

Some nations are setting out on the journey now. Some, making preparations for a hard journey. And some are still on the couch, downing junk-food, howling at the screen--and maybe just frittering their future away.