The Rise of Impact Consumerism

As America enters the third decade of the 20th century, we are presented with a terrifying view.

S*** is not good.

When the average American watches the news or goes on online, we see a social fabric being torn to pieces.

Political gridlock stops the government from achieving anything of practical impact. Social division makes comprise, the foundation of all Democratic systems, impossible.

Wealth continues to concentrate at the top as its influence on the government grows.

Meanwhile, our most pressing social issues are stagnating and deteriorating.

America was designed for us to decide our collective fate. Today, our ability to affect change is being obstructed.

Regardless of the outcome of the next election, there is zero reason to believe the government will address our problems. Face it, if you support a party, in terms of improving your life it sucks as bad as the other one.

Republican obstruction prevented Obama from achieving most of his goals, and Democrats were all too eager to return the favor with Trump. Even with majorities in both chambers of congress, both presidents could only muster one achievement of real impact – Obamacare and the Trump tax changes. And even those we’re full of provisions neither president wanted.

Both parties see any achievement by the other political party, no matter how it impacts the majority of the country, as a triumph for the enemy.

Both parties fight tooth and nail to prevent anything of impact from happening. Elected officials are incentivized to obstruct whoever is in power.

By design, the president only has so much power to affect change. But what was designed as an important quality control mechanism is being abused by the Washington power brokers.

Look at Obama closing Guantanamo or Trump and the wall.

A president can’t really do anything. Unless political leaders get paid, nothing passes through congress.

At all.

Literally zilch.

All the while, our problems grow worse

• Health care costs are devouring a rapidly increasing fraction of our collective wealth.
• Our immigration policy divides, limits economic growth and aids our biggest competitors.
• Massive environmental insults are being sustained to soils, waters and the atmosphere.
• The middle class is being paid less and less while being asked to do more and more.
• There is a sinister asymmetry of accountability for white and blue collar crime.
• Old and new versions of discrimination are emerging, potentially undoing decades of progress and contributing to societal and political division.
• Mass shootings are so commonplace they drop from the news cycle after one or two days.
• The federal debt eats up more and more of the federal budget – our tax dollars.

And there’s so much more. Despite some progress at the edges, the average individual has little hope for progress. We are facing so many issues that despair has grown deep, deep roots. The increasing rates of depression, drug abuse, and suicides are a symptom of a profound malignancy. So is the general breakdown of social and familial integrity.

Yes there’s nuance. We’re facing a multitude of complex, difficult, interrelated issues. But in short, it’s difficult to argue that:

• There is an almost unlimited appetite for change from all corners of society.
• Government is incapable of making those changes.

So What can we do?

Given the situation, the question becomes “Now what?”

Do we reform the Government?

The obvious answer is to reform the political system. That’s a fine goal. We should support any effort that improves the government’s ability to help Americans.

But we’ve been trying to do that for decades, and government has gotten more dysfunctional. Our elections don’t meaningfully change how government functions. It’s like this guy trying to fight the fire with a bucket.

Voting does not fix political gridlock.

Obama’s “Change We Can Believe In” and Trump’s “Drain the Swamp” were responses to our collective anger at the status quo. Or go back to the Clinton campaign, when “change vs. more of the same” was a central message of the campaign.

But when was the last time we tried to improve how government functions?

Meaningfully reforming the government is not a goal we should abandon; rather we need to approach this daunting task in a new way.

“If you always do what you’ve always done, you’ll always get what you’ve always got.”

Henry Ford

Charities, non-profits and religious groups?

Can charities, non-profits and religious groups bring about meaningful social change? Traditionally, we’ve looked to them to affect the social changes governments and businesses can’t or won’t.

These public benefit organizations are hard-wired to the ground floor situation. They have real solutions to affect change. They have an important role.

These charitable groups arguably have more resources than ever in their fight against inertia and the status quo. But when we look at the fundamental problems of society, they’ve been unable to resolve our most pressing social needs. In many places people are hurting more than ever.

Social benefit organizations might know what to do, but they lack the means.

Individual actions?

What about individuals? Is taking action as individuals enough to create meaningful change?

“There are times in life when, instead of complaining, you do something about your complaints.”

Rita Dove

After all, we as individuals can donate to groups, recycle, organize fundraisers, write our representatives, run for office, support local farmers and on and on.

Yes those are all important, and they do matter.

But just like with government and public benefit organizations, given what individuals are up against, these disparate efforts are simply not enough.

Recycling is important; one aluminum can being re-used is one less in a landfill. But realistically it’s a drop in the ocean compared to the waste produced every day.

Writing your elected representatives can give a voice to some of your concerns. But how does that letter compare to a giant check from a special interest group?

When we try to take on issues alone, we are massively outgunned. We don’t have the power.

At least, not if we keep doing what we’ve been doing.

“We need to kick it up a notch.”
Emeril

Fortunately, as concerned individuals we have at our disposal the greatest organizing force humanity has ever seen.

The Free Market

Nothing has changed humanity more than the free market.

The ability to freely buy goods and services ushered in the modern Capitalist system.

Corporations developed to help harness, and profit from, demand for goods and services.

Since The Dutch East India Company first listed publicly, an acceleration of change unrivaled in history took place. One example of that change: It took more than 200,000 years for the human population to reach 1 billion, and only 200 years more to reach 7 billion. The population explosion coinciding with the modern capitalistic system is not a coincidence.

Forces like agriculture, the belief in a higher power and the written word all affected human history. But in terms of speed and scale, their impact pales in comparison to the free market.

There’s no question the free market has unrivaled power to affect life on the planet, for good or ill.

But as much impact as it’s had on history and our lives, we’re not using it to its full potential.

Not even close.

The Purpose of Business

“The purpose of a business is to make money” states Eliyahu M. Goldratt in his seminal novel “The Goal,” required reading in any MBA program.

Social problems are not the concern of business argued Milton Friedman in his famous 1970 essay. The Friedman Doctrine states that the one and only purpose of a company is to return value to shareholders. By providing goods and services people want to buy, businesses are by definition helping society. Therefore, they needn’t concern themselves with anything but growing the wealth of shareholders.

The Friedman Doctrine is gospel to the indoctrinated MBA graduates that are our corporate and political leaders. Debating its merits is like arguing that the the sky isn’t blue or that water isn’t wet. To those in charge of our largest companies, the idea that a corporation has a duty beyond shareholders doesn’t compute. That’s what they learned in business school, and that’s what everyone in their social circle believes. How could it not be true?

Of course in many areas business innovations have changed our lives for the better. Nobody is disputing that. But how many of those innovations have served our collective wants and needs? Has business really done anything to improve any of our social ills?

“It is questionable if all the mechanical inventions yet made have lightened the day’s toil of any human being.”
John Stuart Mill

Making money is the one and only purpose of business. If a business can have a positive impact on society, that’s fine. But the point is to make money. That is the world in which we live in.

But if we accept that fact and examine it closely, we find an opening to speed up positive social change and revolutionize our country for the better.

If we harness the power of consumer choice we can change the dynamic of how and where money is invested.

The trick is to align our collective wants and needs with those of business. We need to make it so that our wants and needs are the same as businesses’.

Impact Consumerism

“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.”
Archimedes

As consumers, we have an incredible ability to conduct progress. The lever is our spending power, the fulcrum is the free market. By selectively buying from companies that align with our values, we have the power to change business priorities. And by extension society at large.

It’s like Democracy on steroids. Instead of voting at the ballot box every four years, we’re voting at the cash register every single day.

For those tired of more of the same, who want to see real solutions to the problems we are facing, we need to do more.

Make your feelings heard through the power in your wallet. Demand companies answer difficult questions. Questions they have managed to sweep under the rug. Or address through marketing and press releases with lots of pretty words but few concrete details.

“When men are easy in their circumstances, they are naturally enemies to innovations.”

Joseph Addison

Companies won’t change unless we make them.

We need to ask businesses questions they’d rather not answer. They need to be as uncomfortable as we are.

Collectively, we need to decide what issues are important. And it starts with individuals asking companies tough questions about things like the environment, political spending, pay structure and so much more.

It’s time to ask business questions like:

• What are your political contributions? Who are you donating to? What policies are you pursuing?
• What is your impact on the environment? How are you measuring it? What are you doing to decrease your impact?
• What do you pay in taxes? What loopholes are you using to lower what you pay?
• How do you treat your employees? How are your average employees paid compared to executives and shareholders? How many of your employees aren’t paid a living wage?
• How many women and minorities do you employ? How are they paid? What percent of leadership do they comprise?
• Where do you spend your marketing dollars? Are your marketing dollars rewarding programming that exacerbate social and political division?
• How do you source your materials? How much of the materials you use come from conflict areas?

And hundreds of other questions that impact the lives of everyday citizens.

CSR is not good enough

To some observers, it might seem like Corporate Social Responsibility (CSR) has gained momentum recently. Companies are increasingly touting their green credentials and civic engagement. But this concept has been around or decades. In fact The Friedman Doctrine developed in response to calls for more civic-minded corporations. Yet we still don’t really have much to show for it. Is there any reason to believe that this time corporations really mean it?

One of the problems with Corporate Social Responsibility (CSR), or “ethical investing”, is that it is being driven by corporate leaders. The very leaders that benefit from the status quo. They get to pick and choose what issues they want to highlight. But what they want to bring attention to isn’t the same as what impacts the lives of everyday Americans.

It’s also clear that while CSR is a nice to have, when it affects profitability money always wins.

We need to be in charge

We consumers need to take the reins and demand accountability from any company that wants a single cent from us.

We don’t need an advertising blitz promoting one brand with an element of social responsibility while the rest of the company hides behind an impregnable, trans-national veil, doing what it’s always done.

We need to put the onus on businesses to explain their social impact in a clear and transparent manner. Not hidden in the fine print of an SEC filling. Not glossed over with pretty advertising. And we don’t need the government to mandate what companies disclose. Our combined spending power wields more influence than the government can ever hope to.

The point isn’t to punish “bad” companies. The point is to leverage business to advance our collective goals by putting average Americans and corporations on the same side. And the first step is getting some answers.

We Need Some Answers

These will be challenging questions for most business. They are used to answering questions from investors, not from consumers.

In many cases companies will need to invest significantly to even understand the answers.

Many companies will resist.

Some will lie. The issue of Greenwashing is already a concern for environment activists.

But as more and more pressure for answers builds, some companies will see transparency as a marketing edge.

From there, the free market’s power will be unleashed, as increasing numbers of consumers demand more and more accountability.

And it starts with you.

“You have to act as if it were possible to radically transform the world. And you have to do it all the time.”
Angela Davis

It’s time to #DemandMoreforYourDollar.

The Future

Companies that first embrace Impact Consumerism will be in the best position to attract new customers.

As pressure builds on companies to provide more convincing answers, we’ll see a surge in the desire to be seen as socially conscious.

And at that point the free market will show its true strength. Companies that embrace the future will flourish. And those that impede progress will wither.

Close your eyes an imagine a day when companies bend-over backwards to have the smallest impact on the environment.

To be the most transparent about their pay structure.

A day when companies communicate what political causes they contribute to and the policies they are pursuing.

For many, this future is difficult to imagine. “People just don’t care” is a recurring lamentation. The specter of apathy looms large over this endeavor.

But given the opportunity it presents, don’t we owe it to ourselves to take a chance?

We might not get there tomorrow, or the day after. But the point is to start. With sustained pressure our mission will grow a little stronger each day.

If you care enough to take a stand, like I do, how many more will join us?

It’s a brave new world out there.

It’s time we started acting like it.

“Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”
Margaret Mead