The Great Debate

‘Inclusive Capitalism’: Bridging business-labor divide

Economic policy debates often focus on areas of division and discord. On the minimum wage, you’ll see some businesses fighting labor. On regulation, you have government versus the free market.

There are plenty of areas where American workers and companies agree, however, such as the need for public investments in infrastructure and education.

There is another worker-business alignment, explored in a new Center for American Progress report, that has us — a corporate chief executive and a labor leader — excited about its potential to boost innovation and workers’ wages when we desperately need both.

“Inclusive capitalism” is based on the simple idea that when a company does well, its workers should also do well. Mechanisms to promote inclusive capitalism include everything from broad-based profit-sharing and stock options to worker cooperatives and employee stock ownership plans.

This can lead to innovations that help U.S. companies compete in the global economy. Ideas for new products and efficiency improvements don’t just come from the top; often, they come from less senior workers. Yet we are largely ignoring a proven strategy for uncovering innovation: rewarding workers for the gains they help create by paying them a share of the profits.

What CEOs can learn from Sherlock Holmes

This essay is excerpted from Mastermind: How to Think Like Sherlock Holmes, published this week by Viking.

How do we make sure we don’t fall victim to overly confident thinking, thinking that forgets to challenge itself on a regular basis? No method is foolproof. In fact, thinking it foolproof is the very thing that might trip us up.

Because our habits have become invisible to us, because we are no longer learning actively and it doesn’t seem nearly as hard to think well as it once did, we tend to forget how difficult the process once was. We take for granted the very thing we should value. We think we’ve got it all under control, that our habits are still mindful, our brains still active, our minds still constantly learning and challenged—especially since we’ve worked so hard to get there—but we have instead replaced one, albeit far better, set of habits with another. In doing so we run the risk of falling prey to those two great slayers of success: complacency and overconfidence.

These days, we’re all disgruntled workers

The average Goldman Sachs employee earns in excess of $350,000 per year, and we’re assured Greg Smith, who most visibly quit his job there last week, was paid substantially more.

And, in leaving his long-time employer, Smith didn’t abandon just a fat salary. To regain his career freedom, he knowingly forfeited a considerable sum in deferred compensation as well.

Most people in the world, of course, can only dream of being so highly paid for their work, so it’s a good assumption that a very large percentage of the working population has summarily judged Smith’s resignation as an act of complete insanity.