What Happened to America?

Part 1: Looking Around

Where We Are

America ranks below all developed countries in some pretty critical areas, and below many third world countries in too many others. We show exponential increases across sectors that point to problems of epidemic proportions. We show dangerous declines in areas that we have never experienced in our nation's history. We show stagnating trends that represent a very literal flatlining for the American people. And we show a gap that represents the most profound cracks in our social, economic, and political systems. And every one of these trends point back to a single, incriminating date.

Mind the Gap

America wields the largest wealth gap in history. This is not, as some might be tempted to argue, a natural outgrowth of unadulterated capitalism. Because, until a certain and discernable date, the average wages of the American worker grew in direct proportion to the overarching economic growth of the country. These parallel growth trends represent a time when the economic strength of our nation also represented the economic strength of its people. But these tandem trends experience a sharp fracture, where the GDP continues its ascent at a historically healthy rate, while the wages of the average American experience an inexplicable stagnation. The two had been uncoupled from each other. And this creates a gap that forces us to question where the remainder of our collective wealth could be going and why. This infamous split can be traced back to 1971.

The American Flatline

Americans today are struggling to survive. But at the turn of the twentieth century, America's labor force experienced a healthy growth that mirrored the overall growth of our nation. The country had a booming middle class that was the envy of the world, and we had the highest rates of upward mobility that animated the “American Dream." However, with the questionable uncoupling of these two economic trends, the American people slowly ceased to reap the ongoing bounty of their labor. Corporate profits soared as people’s wages stagnated, hours stretched, health declined, and debt grew. And ultimately, the average compensation in America has not budged in five decades. The average salary and minimum wage remain stagnant, and in fact has gone down, adjusted for inflation. The striking contrast between the stagnating wages and accelerating commodity prices makes this trend particularly debilitating. Americans en masse now struggle to survive, a phenomenon that can be appropriately described as the flatlining of the American people. This flatline can be traced back to 1971.

Explosive Trends

America has become a caricature of systemic epidemics. The most notable of these trends is seen in our rapidly growing rates of obesity, diabetes, and metabolic disease. But those exponential increases extended beyond the consequences of our food consumption and is similarly mirrored by our incarceration rates, student loan debt, carbon emissions, opioid addiction, sugar consumption, healthcare costs, credit card debt, commodity pricing, and not coincidentally, lobbying. These accelerated growth patterns are illustrated by a J-curve that highlights their rapid escalation at surprising speed. And needless to say, this substantial increase is ultimately unsustainable as it places unprecedented pressures on our social, economic and environmental systems. Each one of these epidemic trends can be traced back to 1971.

Dangerous Declines

America is experiencing tragic declines in areas we once took great pride in. This generation is the first in our country's history that are expected to have a shorter life expectancy than their parents. This is also the first decade anticipated to do worse socially and economically than the generation before them, marked by a measurement of economic upward mobility. The birth rates continue to decrease as generations are choosing to forgo children due to the weight of social and economic challenges. Our trust in public government plummeted from a healthy 80% to an anemic 20% today. And according to the Economists annual Democracy Index, America was formally demoted to a "flawed democracy", a downgrade that they indicated was approximately five decades in the making. These declines can be traced back to 1971.

Whether it be explosive growth, dangerous declines, or stagnating flatlines, these are all simply symptoms of a broken system: and all of these symptoms can be traced back to a single point of origin: 1971.

Part 2: Looking Back

How We Got Here

Life Before 1971

Before 1971, businesses minded their own business, and capitalism was doing great.  America's labor force experienced a healthy growth that mirrored the overall growth of our nation. The average wages of the American worker grew in direct proportion to the overarching economic growth of the country, and these parallel growth trends represented a time when the economic strength of our nation also represented the economic strength of its people. The country had a booming middle class that was the envy of the world, and we had the highest rates of upward mobility that animated the “American Dream." A family could live comfortably on the income of one wage earner; there was free and affordable access to healthcare; higher education required no student loans. The relative cost of a home was only 2x the average salary. And it was virtually guaranteed that each generation would do even better than the last. Capitalism was being leveraged to generate the resources we needed to advance our democratic ideals. Until it wasn't.

The Powell Memo

On August 23, 1971, a corporate attorney named Lewis Powell wrote a memo at the request of the U.S. Chamber of Commerce, instructing US businesses on how to engage in Washington politics. The document was intended to be a confidential memorandum to the Chamber’s board, but effectively became the blueprint to corporate domination. It grew into a manifesto for new business-oriented think tanks, lobbying groups, trade associations, and professional organizations committed to shaping the government to better shape their needs, a notion that hadn't existed before its penning. (Before this date, businesses minded their own business, and capitalism was doing great.) But Lewis wasn’t just any attorney.

An Insidious Industry's Playbook

Lewis was a corporate attorney for the tobacco industry. And they were reeling from a recent ruling that would result in its impending loss of market share. At the time, Congress frowned upon predatory practices, deceptive messaging, and business models that thrived as people died. (Those were the golden days of democracy.) And just seven months earlier, Congress banned the advertising of cigarettes on television and radio. Lewis used this incident to frame his memo, characterizing such actions as "An Attack on American Free Enterprise." We can deduce, from the contents of the memo, that Lewis felt that preventing companies from killing people for profit was an unreasonable restriction, and that we must take a stand and protect our inalienable rights to make a profit at all costs. And in 34 otherwise unassuming pages, The Powell Memo turned the tobacco industry’s playbook into America’s industry standard - a model that would prioritize profit at all costs, absolve corporations of virtually any responsibility barring the most flagrant, and in effect institutionalize the Gospel of Greed.

Forgone Fiduciary Duties

The Powell Memo threw open the doors for corporate dollars to infiltrate American politics, and turn our government into the mutant institution we see today. Big corporations, Wall Street, and wealthy individuals began to use their money to quite literally purchase policies that tipped the game ever in their favor. And as politicians received big checks through lobbying and campaign dollars, they felt compelled to cater to their corporate constituents, forgetting or forgoing their fiduciary duty to the American people.

Replacing Ideals with Idols

And that process was almost invisible, for decades. It happened inside administrative agencies, within legislatures, and behind the brick walls and solemn columns that none of us could be bothered to pay attention to. But the net effect was to very subtly, and dramatically, change the rules of the game, and the reality of our daily lives. These policies prioritized profit over people; placed the bottom line over the greater good; shifted our culture from American ideals to American idols; and slowly distorted the definition of the American Dream from a call to morality to the pursuit of materialism. We were groomed to consume, and fattened for slaughter. The American people simply became a means to an end. And the end was profit.

The Birth of Bad Capitalism

Over the last five decades, the Profit Motive, a concept central to more traditional notions of capitalism, had mutated into “profit at all cost”. And this has inevitably come at a very high cost. Predatory practices designed to maximize profit without consequence have led to some of America’s most damaging (and iconic) features today. Because the Profit Motive, unhindered by any moral compass or legislative oversight, incentivizes bad behavior, and turns its profit-seeking artillery against people and planet. And by turning profit against people and planet, it has in effect turned Capitalism against Democracy. This is what I call Bad Capitalism. The Powell Memo gave birth to Bad Capitalism; and Bad Capitalism is cannibalizing democracy.

Part 3: Looking Forward

Where We Go From Here...

History Has Its Eyes on You

People like you are seeing the problems that are being ignored, mishandled, or blatantly exploited by traditional institutions, and they are creating their own solutions. Because if obvious solutions could have come from obvious sources, they would have happened already. But often times, those obvious sources have a vested interest in the status quo. People seeking solutions are no longer willing to wait for governments, corporations, or traditional institutions to lead. People like you are finding ways to respond with creativity, energy, and even optimism, tackling local, national, and global problems with powerful ideas and new tools.

Redeeming Capitalism

Capitalism is broken; but it hasn't always been, and it doesn't have to be. Over the last five decades, we have come to conflate corruption with capitalism. Bad Capitalism turned Profit into an idol, and we have sacrificed life and liberty at its altar. But ‘money’ is ever enough; profit is insufficient. And the quest for success (or excess) will never satisfy our deeper call to significance. And while Bad Capitalism anchors its ethos in The Profit Motive, Good Capitalism anchors its ethos in "The Purpose Motive." Because purpose is the point. Humans are wired for it; businesses neglect it; customers demand it; and the world needs it. The Purpose Motive does not dismiss the role of profit, but it views profit as a tool, not the goal; a means to an end, but my no means the end in itself. And a capitalism that works in the public interest, and is used as a tool to advance the good of people and planet is what I call Good Capitalism.

Social Entrepreneurship

Social entrepreneurship puts Good Capitalism into action. Previously, people motivated by social or ethical concerns did not view business as a means to their dreams. "Purpose-driven" individuals tended to pursue humanitarian fields, while "profit-driven" individuals tended to enter the business landscape. But this binary way of thinking has blinded us to alternative uses for business, and can cause us to miss out on opportunities for profound change and transformation. Social entrepreneurship blends the brains of a business with the heart of a humanitarian to create innovative solutions to address the world's biggest challenges. This invites humanitarians to step into the economic landscape, create solutions they wish existed, and generate economic agency as they drive positive social change.

The Future of Democracy

Democracies flourish to the extent that the largest number of citizens can shape and participate in civic life. Social entrepreneurship allows citizens to do exactly that. In the United States, we have settled into the complacency of "minimalist citizenship." We are content to believe that a good citizen votes, pays taxes, abides by the law, and serves in the military when called. Anything beyond that is considered optional, although admirable. But our core duties are fairly passive: voting is a process of giving power away; and paying taxes is done bedrudgingly. We have failed to recognize that citizenship comes with a responsibility to better society. Because this fundamental democratic ideal has been drowned out by self-indulgent calls to action by masterfully-crafted Profit Motive marketing. America's founding fathers looked beyond their economic interests to create new institutions that would realize their vision for a greater good and a better future. Social entrepreneurship is today's response driven by the failure of old institutions to meet the needs of our time.

The Time is Now

We are living at an unbelievable time in history, when individuals and small groups can influence entire nations. And with modern technology, the spread of information, and our organizing capacity, we have more constructive capacity than ever before. But with the rate of change, and the urgency of today's social, economic, and environmental crises, the need for more changemakers is urgent. The future belongs to a different kind of person with a different kind of mind: to people who want to create, innovate, and solve interesting (and important) problems; to people who want to make things better by making better things. You have a unique set of strengths that will set you apart in this strange new world. You challenge old assumptions, and move the rest of us beyond our stale and stuck ways of thinking in order to face our biggest problems with bold ideas and new solutions. And as you create solutions you wish existed, you'll embolden others to create solutions too. And the time is now.

"This will strike some as a burdensome responsibility; but it will summon others to greatness." -John Gardner