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·4 mins

According to data from the US Bureau of Economic Analysis (BEA) and the Bureau of Labor Statistics (BLS), corporate profits continue to set new records in comparison to pre-pandemic. Many people complain about inflation but fail to realize that high inflation is often being caused by private companies raising consumer prices to boost their profits. The average S&P 500 CEO made $15.5 million in 2020, 299 times the pay of the median worker and this winner-take-all philosophy continues to increase inequality and makes careers a zero sum game in which everyone else must lose, so that corporations can continue to grow exponentially.

There is a thought experiment proposed by Brad Stollery:

Suppose you’re one of five people who have been selected by a mysterious philanthropist to participate in a contest. The five of you all have comparable debt-levels and costs-of-living, as well as similar, middle-class financial situations. You’re all roughly the same age, equally healthy, have the same number of children, and you all live moderately low-risk lifestyles. Privately, and one by one, a representative of the donor approaches each of you with a blank check and a pen, and poses the following question: How much money would you have to be paid, right here and now, to retire today and never receive another dollar of income (from any source) for the rest of your life? The catch this time is that whoever among the five players writes the lowest amount on the check will be paid that sum. The other four players will get nothing.

This leads us to the critical question: How much is enough? The answer is complicated, especially since in reality we all have different financial situations, privilege, future earning potential and many other factors which mean that people will have widely different answers. However, I believe it is possible to set upper limits which everyone can agree upon. For example, someone with 10 years of experience who bills at $100 an hour could be fairly paid twice as much as a junior team member who bills at $50 hourly rate. However, it is pretty hard to make a coherent argument why certain members of leadership deserve a 10x, 100x, or greater compensation.

This thought line dovetails with a minimalist mindset and really challenges the consumer culture which Americans live in. Here I think it is important to acknowledge that discussions around minimalism quickly highlight that it is a problem as a result of the immense privilege and wealth which people in developed countries have. Extreme minimalism is not for everyone and it is debatable how healthy some of the techniques taken are but basic ideas regarding setting limits on consumption are important to developing a sustainable society.

In parallel, working in the public sector shouldn’t be motivated by the pursuit of maximizing personal wealth because every dollar spent is taxpayer revenue. Just as civil servants are told they are stewards of these funds and must be fiscally responsible, those who seek government contracts as a primary revenue stream should seek to develop sustainable models which minimize unnecessary costs.

Here are some concrete steps which should help the organization shift from ideals into action:

  1. Salary Transparency - Sharing all salaries and setting a hard 3x total compensation limit for all positions.
  2. Carbon Neutrality - offsetting the organization’s carbon emissions but also each employee’s personal carbon footprint with prizes people’s choices resulting in reductions.
  3. Charity - Ranked choice voting to select a manageable number of charities to donate to each year.
  4. Collective Bargaining by default

Instead of promising wild growth and amazing returns to shareholders, we want to establish a collective of amazing people who do great work and will also be our primary investors. From the investment perspective, we aim to pay modest quarterly dividends on our stock so that it is a reliable source of retirement income for those no longer working. Understanding that we may need to adjust over time based on inflation but our goal isn’t to have a share price which continues to go up exponentially or is traded for short term gains.

For our customers, this means that we aren’t always trying to raise rates or sell more products. Our prices might increase with inflation but our goal is to provide fair rates with transparency regarding costs and pricing. Such as using a Cost Plus approach to pricing work further in the future.

These ideas are a work in-progress, the goal is to build it in the open, welcoming feedback and ideas to improve it. Hopefully this will result in pioneering a sustainable business model which challenges assumptions and others can be inspired to iterate on.