Impact Economics: Turning Problems into Solutions
Updated: Jul 19
As the world’s incumbent superpower, America is not unique in experiencing the kind of systemic socioeconomic problems that throughout history have accompanied the rapid growth of the majority of her predecessors. However, given the last superpower, Great Britain, ceded her moniker to The United States almost 100 years ago, America has had the time and opportunity to learn from history and to manage the kind of growing pains that eventually became the downfall of most of the superpowers that preceded her. Unfortunately, it would appear that we are yet to take full advantage of this opportunity and hence we might be arrogantly ignoring the fact that there has never been a single superpower that has maintained that moniker.
In his brilliant essay titled “The Pitchforks Are Coming”, Nick Hanauer discusses the likely outcome if we fail to address the growing divide between the haves and the have-nots, a warning that many past superpowers probably wished they could have heeded. However, as we begin to realize that solving social, environmental and economic (People, Planet, Profit) problems in isolation does not work, it is becoming incumbent upon us to look at the future of America through the lens of system-thinking, i.e., in a manner that relates to using a Whole Systems Approach.
America is facing many critical and systemic problems, however it is probably fair to assume that welfare, immigration, minimum wage, healthcare, education and its decaying infrastructure are worthy of inclusion in the top ten. Critical problems often require solutions that numerous people are critical of and the following scenario will certainly fall into that category. However, given we must never forget that history has a habit of repeating itself, it might just be time for critical solutions unless we one day wish to join the list of those that once held the moniker of superpower.
Although America’s infrastructure is crumbling before our eyes, the scale of capital and human resources required to not only fix the problems but to replace the currently outdated infrastructure with sustainable alternatives appear to be unavailable. Additionally, it is sad to observe that the drive for the American Dream has resulted in the unintended consequence of many service oriented jobs being aligned with failure and/or embarrassment, and numerous able bodied American citizens refusing to accept certain unskilled positions when welfare can provide an alternative. The latter is often driven by the current level of the minimum wage, and by the fact that employers hire illegal immigrants because they will accept lower pay for doing the jobs that are hard to fill. We should be mindful that in many instances wages are not depressed by those who accept them, they are depressed by those who pay them.
Illegal immigrants make up +/- 5% of the American population and we are being led to believe that there are +/- 5,000,000 that have been in the country long enough to be given immunity. We believe the US should mandate that all able bodied illegal immigrants in this situation be required to give a minimum of 4 years of service to this country if they wish to receive immunity, and have any potential of becoming citizens. They should be given the option to work on sustainable infrastructure projects, receive a living wage (above the current minimum), pay taxes, receive on the job training (education), and access to healthcare. Individuals could add an additional year of service for each immediate (non-able bodied or not of appropriate age to work) family member they wish to remain with them in the US. Individuals opting to decline this offer would be escorted back home.
The above can only work if we also focus on reducing the future flow of illegal immigrants in a way that creates a positive economic and social impact for the border towns that are straining to fund the costs associated with the defense of these borders. Investments in the infrastructure, technology and the labor force required to secure our borders will increase the velocity of capital in those regions, helping regenerate economies and communities.
The above will of course require capital, so the borders should be secured in a manner that would stem the flow of corporate tax dollars out of America (in essence bringing more of them back), while stemming the flow of illegal immigrants into America.
America should always welcome immigrants for the right reasons, but it should be on a legal basis.
There are too many able bodied people on welfare and it’s time that the tax dollars being spent on this be put to work somewhere else. In addition to the offer to immigrants, the US should mandate that all able bodied people on welfare also join in providing service to their country, and in doing so, receive a living wage (above the current minimum), pay taxes, receive on the job training (education), and have access to healthcare. The minimum term of service would be two years, and failure to accept this mandate would make those eligible to work, ineligible for welfare. In essence this takes current welfare dollars and directs them to building sustainable infrastructure projects.
The extra capital required to bridge the gap between the redirected welfare dollars and what it would cost to pay a living wage would be funded by the private sector companies given the contracts to build America’s sustainable infrastructure.
The US should bring back the draft under a structure that allows flexibility while rewarding service. The choice of how to serve would go way beyond which branch of the military to enter, as draftees could choose between initiatives such as sustainable infrastructure, sustainable agriculture, renewable energy, clean tech, education, healthcare, etc.
The program could look something like the following:
High school students already accepted too college serve for a minimum of 1 year. However, college bound draftees could select to volunteer for up to 4 years of service, with the government paying for one year of college for each year served. Students selecting this option would receive basic room, board, and a small stipend, and healthcare while in service.
Students opting not to attend college would enter the draft as apprentices, thereby receiving enhanced training in a specific vocational or technical skill. Draft tenure would be dependent upon the time required to learn their trade. Students selecting this option would receive a living wage (above the current minimum but paying taxes) and a full benefit package.
Dare we even begin to think that by bringing together people from different socioeconomic backgrounds, races, religions etc., to work under a common cause, we might just heal some of the divides we are currently witnessing in our country.
Finally, the program would be made available to any American wanting to enter it based upon a needs test, i.e., open to those citizens currently employed in jobs paying less than the draft so that they would have the option of receiving the same opportunity as everyone else.
Note: We would have zero issue with ourselves and/or our children serving our country so we would certainly ensure that our my families walked the walk.
Public Private Partnerships
The government should outsource much of the necessary work to appropriate (accredited as sustainable) private sector companies that agree to provide full transparency on:
All revenues and expenses
Adherence to all required sustainability initiatives/mandates, i.e., providing equal returns to all stakeholders (employees, communities, the environment, financial and supply chains)
Companies wishing to accept government contracts would be given an option to receive their payments based upon either:
A capped ROE, i.e., a fixed return over and above the total agreed upon expense required to complete a project; or
Payments net of tax, i.e., the tax is taken out at source.
Of course the above will be derided by many people based upon their political allegiance and personal perspectives on the thesis of People, Planet and Profit. Accordingly, our Foundation is half way through researching and producing a full financial analysis of each scenario and how they could provide positive effect to People, Planet and Profit and both sides of the aisle.
In the meantime, I hope some of these scenarios will at least be the cause for a discussion on the possibilities of something similar, as no matter what we think or say about America, anytime more people want in than out, the future must be worth fighting for.