The How and What of the Empowerment Conundrum
Common Nonsense
Vinay Ganti
Issue date: 3/10/09 Section: Voices
"One ____ to rule them all, One ____ to find them, One ____ to bring them all and in the darkness bind them"
For those of you that have seen or read the Lord of the Rings trilogy, you will be familiar with this quote and will no doubt recognize what should go in the blanks -- financial system. If you are a little rusty, basically this is when Gandolf is speaking to Frodo on the deep interconnectivity of Middle Earth's markets and the fact that decoupling does not actually exist.
Now, I am sure none of this is new to anyone reading this column and I will not waste your time discussing the linkages of capital flows around the world. No, my interest today is to discuss a deeper effect, empowerment. Empowerment is when someone is given the means, either through new responsibilities, economic independence or other ways, to take a greater ownership in the actions of their everyday lives. Interconnected financial markets arguably disenfranchised as many people as they empowered, but it is the lasting effects that empowerment has that I feel are acutely important.
The positive effects of empowerment cannot be overstated. Many, including myself, would argue that empowerment of individuals who were previously marginalized is one of the fundamental tenets of the social entrepreneurship movement. Less revolutionary, but equally profound is the effect of empowering individuals that conventionally would be seen as opponents or adversaries.
One example that Professor Guthrie articulated last week in my Leadership class was Lee Iacocca's decision to place Douglas Fraser, the President of the United Auto Workers, on the Board of Chrysler during his successful turnaround of the company. In a move that shocked traditional capitalists, Iacocca effectively engaged and empowered one of the very entities that was considered a culprit to the fall of American automotive supremacy. However, by including Fraser, Iacocca also sent them a message that a failure to cooperate and develop a solution would be partly their responsibility as well. Likewise, in his inaugural address President Obama speaks to the importance of empowerment by focusing not on just how much a country produces but also the breadth to which this prosperity reaches in our society.
But once one is empowered, he or she will be unwilling to let it go. Empowerment can be a very powerful force in changing the way a society and economy operates. From within single firms all the way up to the way a citizenry forms expectations of its government, it is a concept of ownership that has cascading effects across all levels of society. Thus when things turn sour, the financial empowerment and independence that before fueled a consumption driven economy can now be the driving force behind massive unrest. Once people taste the fruits of a middle class life they are unlikely to be willing to go back to their lives of material destitution, even as the global economy further recedes.
While the incredible growth experienced across the world may go both forwards and backwards, the expectations of the human beings that have experienced the promise land often do not. According to The Economist, if American and European middle-class behaviors are any indicator, people the world over will continue to demand their quality of lives throughout an economic slump. In turn, such material desires will evolve into perceived needs and will pressure economies to enter into deficit spending in order to provide the cash necessary to continue to fuel its constituency's consumption patterns.
In this way, empowerment has influenced the developed world as well, as we have grown accustomed to freely available foods from all over the world, cheaply made goods from China, and the ability to access services instantly from anywhere. We too have been bitten by the empowerment bug, one that we are equally as unwilling to concede even in tougher times. Surprise, surprise our trade surplus is now a deficit and our country is drowning in debt.
It comes as no surprise then as to why it is so easy to view this idea of empowerment in a zero-sum paradigm, constantly pointing fingers at one another demanding that the 'opposing' party make a sacrifice so that we do not have to. But this approach is fraught with moral and pragmatic faults, and is not a solution. But what to do then? We cannot just innovate out of this problem; nor can we spend our way out.
Unfortunately I do not have a satisfying answer to this conundrum. I do believe that the first step is the simple recognition that in the minds of everyone their recent empowerment is justified no matter how conspicuous the consumption may seem to an outsider. And I also believe that in order to pierce that perception one must be willing to elevate the conversation beyond that of economics and instead reintroduce concepts such as values and fraternity into the ways in which we describe how we allocate our resources.
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