I’ve been reading more and more of Umair Haque’s writings on HBR recently – he has some great insights into the state of our economy, and how taking on a more humanistic approach (rather than a quantitative one) is key to reviving our country. His post today, titled, “The Best Investment You Can Make”, discusses the how investing in one’s relationships can lead to greater drive, talent development, creativity, and ultimately a regeneration of our economy. A brief excerpt is here:
But if you were to have the impertinence to invest in what (really) moved you… and if a few other people also invested in their dreams, and then several more followed their lead — well, eventually the economy’s gears might begin to move with a different rhythm. And multiplied, your pattern of investments in your dreams — acting classes, music lessons, lectures, books, seminars, travel, and so on — would begin to set incentives for people doing useful stuff, who were able to help you meaningfully accomplish those dreams. And we’d probably begin to devalue the microbubbles in socially useless stuff (like gold) and dilute oversized managerial rewards.
The same’s doubly true for investing in the people you love: spending your resources to spark their talents or to create meaningful life experiences with them — instead of just buying stuff for them. And the same’s triply true for living a life that matters: if you were to invest in, for example, social businesses, instead of the equity of orthodox corporations, or to choose where to work not just based on the immediate paycheck, but on whether or not the boardroom valued making a difference a tiny bit more than which hedge-fund bots it was enriching this nanosecond, well, the economy’s gears wouldn’t just find a new rhythm — you’d be rebuilding the engine.
In fact, if enough of us made these smarter investments, we might just take a leap past opulence — the furious, desperate, never-ending hyperconsumption of more, bigger, faster, cheaper, nastier — and towards eudaimonia: living meaningfully well, by investing in endlessly powerful, infinitely delicate human potential, instead of mass-made junk, whether paper chits or designer diapers.
I tend to agree with Umair’s assessment – if we invest in building our own capacity and talents, and do the same for those in our community, then that’s ultimately a better path to prosperity than spending one’s time deciding what asset class to invest in.
But I want to point out that although his suggestions are certainly necessary for revitalization, I don’t think they are enough – especially for much poorer parts of the world. In the U.S., we have an economic engine – a struggling one, granted – but an engine that can provide a return on our efforts. But much of the world lacks an engine at all, and they face a far more difficult path. Let me explain.
I don’t have the exact words, but I remember hearing a quote from Bill Clinton that went something like this (I’m paraphrasing): “In America, those that put the effort into education can generally expect a positive outcome from their results. That is, if someone finds a way to graduate from college, a young person can be pretty sure that the achievement will produce a better economic situation for herself. In much of the world, though, there are no assurances of positive outcomes for those that obtain new skills and knowledge. Securing education in Haiti, for example, is much less likely to provide a positive economic return. It is simply unlikely that taking risks to learn new things will be worth it. Since the outcome is so uncertain, people have much less of an incentive to make the sacrifice in the first place.”
What I’m getting is that Americans (and much of the Western world) are in a unique situation, because we are confident that the efforts we put into bettering ourselves and our community will yield an improvement for our well-being. Even though our economic engine is idling, it’s still running. And for as long as that holds true, we’ll always be in a position to improve things if we ever find ourselves struggling again. However, much of the world’s nations don’t have an engine at all, let alone one that’s functioning well. Places like Haiti and Somolia don’t even have the framework to build an engine in the first place. Those countries need to invest in making sure that rewards for education and development are available at all before people there are willing to put forth the effort.
We need to recognize how fortunate we are to live in a part of the world that encourages education and risk-taking – and we need to take advantage of what we have available to us before it is too late. We also need to understand that while Umair’s ideas may work well for the revitalizing the developed world, they aren’t nearly sufficient for unstructured nations that don’t even have a framework for rewarding learning and hard work in the first place.
The full article, which I highly recommend, is available here.