Monday, February 22, 2010

The state of things.

Thomas Friedman whines on in the Times

It is very hard to spend intellectual capital. It is a form of equipment rather than a feedstock. People with ideas just keep on finding applications for them. People who are educated as opposed to those who are trained improvise solutions. They can even recognise new problems. This is not popular with those who want to sell old understood solutions to problems that no longer exist.

At this moment the business model is broken. A business must benefit all those who are involved with it. It has no reason to exist aside from those benefits. Involuntary servitude, fraud and theft are some of the descriptors for nonbeneficial operations. The model is broken because the goal is to maximize stockholder value. This set is far too small. The goal should be to maximize participant value. Suppliers, workers and customers must all benefit along with the stockholders. There can be no externalized costs. In the language of mathmatics, a business can not be zero sum.

Understand that I have no idea how to bring this about. It is antithetical to the received wisdom.

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