In this podcast, Seth discusses the standard measurement used by capitalism and how it impacts our culture.
Capitalism is the simple idea of finding a market with a need, selling something for less than it is worth to the person in that market, and repeating the process. Throughout the last couple of hundreds of years, capitalism has been the primary force that changes the world in many ways.
Capitalism also works like a ratchet. It is a ratchet because people in the market will always try to seek solutions with a better value. A key metric in capitalism is the return on investment. The desire for seeking a better return usually goes in one direction, so it is like a ratchet that can only turn one direction.
Capitalism can also be said to be lazy. It is easy to be lazy when the participants in the market think about winning at capitalism with just one measurement. It is the return against the investment. If we put money into this venture, how much can we get back from the investment?
When we have just one measurement to track when practicing capitalism, it can lead to some problems. It is human nature where if there is just one number to pay attention to, people will develop ways to make that number go up. In many situations, just making one number go up can push people to do things that diminish other factors that also matter in our lives.
Because we do not live in such a simple world anymore, everything we do have side effects somewhere. The ratchet of constantly improving the return can pressure us to ignore everything that does not directly contribute to the return.
Unfortunately, no single solution can solve all problems, and there is no one perfect model. There are only a messy series of choices we have to make if we will be in the business of changing the market, changing the culture, or changing people’s lives.
The alternative is to figure out what is the smallest viable audience that we can serve or influence. What do they care about so I can adapt it to come up with the metrics for that audience? Knowing what the metrics are, how will we scale our creation to make the change we want to make and in a way that we are proud of?
As we can see, whatever practical solution we develop will involve a series of messy and complicated decisions with no one having the right answer. However, this is a beautiful opportunity to make the change we seek to make in the world and do it in a way that makes a difference.
We are not lazy capitalists – we are humans. That means one thing we can do is thinking hard about how we can become agents of change. We can become an agent of change by building something and figuring out how to make something better.