Economic Growth Through Opportunity: Constructive Cooperation Versus Degenerative Interdependence
The economy must become the top priority of public policy. Reducing regulation, slashing taxes, and ending tariff-free trade will not, however, be enough to accelerate and sustain economic growth. Ultimately, an economy must provide for the needs of the population it serves or it cannot be sustained. Today, it does not. Thanks to a widening income gap and a growing number of poor, an increasing amount of wealth is being concentrated into the hands of a shrinking minority. In turn, this income inequality inhibits the flow of wealth and overall economic growth.
In geographical terms, this translates into pockets of extreme wealth surrounded by a growing number of impoverished communities where the scarcity of opportunity inhibits economic development and growth. Not only does the lack of economic development within impoverished communities undermine the growth of the overall economy, the growth of the overall economy does nothing to actually help those living in this growing number of impoverished communities. Only by fostering constructive cooperation, instead of degenerative interdependence, can the scarcity of opportunity in stagnant communities be addressed and economic growth offer prosperity for all.
The world is lush with need, yet the human resources and intellectual capital needed to address the need exists. Opportunities turn into prosperity when there are needs to be fulfilled and when enterprising individuals, with ideas, skills, and ambition, have access to the proper resources. Communities, including businesses, foster a scarcity of opportunities, instead of cultivating the potential to achieve prosperity, due to the way in which socioeconomic factors keep the right people from coming together and working to ensure prosperity for all. Unfortunately, countless opportunities to solve problems and foster prosperity are lost, because those with the insights to solve these issues are blocked from seizing opportunities and harnessing their talents.
In other words, the right people are not in the right position to solve problems due to a lack of influence, mentorship, career choices, financial capital, and other material resources needed to cultivate their potential. It is the relationships and the ability to network that helps bring talented people to capitalize on their potential. Although poor hiring and payroll practices alone can starve businesses and industries of high-valued labor and intellectual capital, i.e. well-trained, innovative professionals, in the long-term, relationships play a major role in all successes and failures. This is particularly apparent when contrasting the constructive cooperation of more affluent families with the degenerative interdependency of poor families.
No man is an island: successful businesses and other endeavors are built on the cooperation of many individuals over years. Middle Class and wealthy families push their children to succeed. When more affluent parents help their kids study to ensure they do well in school and use their personal assets to help pay for their children’s college, parents are engaging in constructive cooperation. When more affluent parents help their children start a new business, place them in a management role at their own company, or help them find a good job, they are giving them access to opportunities others their age cannot access alone. In order words, middle class and wealthy parents are leveraging their success to help their children succeed, i.e. they are engaging in constructive cooperation.
Where middle class and wealthy families pool, or invest, their assets to help the next generation prosper, the poor tend to cannibalize off the extremely limited assets of each other. The poor face degenerative interdependency. Instead of utilizing familial and community assets to develop new assets, poor families and communities simply consume their assets. This is largely due to the reality that their available assets are generally insufficient to cover even their basic needs and they lack high quality jobs themselves. It is also due to a lack of access to viable opportunities due to the restriction of their socioeconomic environment, i.e. they do not live it and cannot move to areas where high quality jobs exist or they simply lack the references need to be hired. For those who do not enjoy the benefits of a family willing and/or able to engage in constructive cooperation, the burden of success is solely on their own shoulders.
Throughout life, the constructive cooperation within middle class and wealth social circles helps children from more affluent families access far more, far better opportunities. Children from poor families, who have access to those social circles, can also benefit from such constructive cooperation. Those children from poor families, who are reliant on social circles consisting of the poor, will have very few, very low quality opportunities available to them. Ultimately, those who lack resources and connections can succeed, but they are less likely to succeed, especially when competing against those who have such an advantage. It will also take them much longer to succeed, which means they are unlikely to reach their full potential.
A child from a poor family with middle class friends will have access to more opportunities than two children from two poor families, but two children from two middle class families will have access to an even greater number of opportunities. Poor families tend to engage in fewer structured social activities due to the constraints of their budgets; whereas, middle class and wealthy families expect their children to engage in a variety of activates that will bolster their social standing and hone their talents. Not only do middle class and affluent parents provide access to such opportunities, their grandparents, relatives, and the parents of their friends do so as well. The poor lack these alternative sources of opportunity, especially when they live in poor communities where they cannot network with more affluent individuals.
In terms of their impact on society, the innovative poor will not be positioned to solve problems. Few full-time college students, for example, have jobs that allow them to solely focus on their studies, thus they must take on the full burden of financing college and a minimal standard of living, which is distracting. Where those who come from Middle Class families can count on their parents to pay for things like clothing, supplies, car insurance, and other necessities, those who come from poor families face a near total lack of financial support. In fact, poor children may need to use their limited income to pay the past due utility bills of their parents or buy their siblings clothing in order to avoid a total collapse of their “support” network. The consequence is a lower probability of innovative poor acquiring the intellectual skills and qualifications needed to succeed personally and help the economy grow.
Furthermore, crony capitalism, as well as crony socialism, is the negative extreme of constructive cooperation where the usage of familial and other relationships to secure one’s position by enriching and empowering associates becomes detrimental. It is harmful, because it blocks talented, enterprising individuals from achieving the success they can, and have, earned while starving the economy of much-needed talent. There is, however, a positive role family ties and business connections can play in the economy. This self-evident when it comes to affluent families where a legacy of prosperity has been a top priority for generations. This writer lives in an area where several small communities are dominated by businesses owned by the same families, because the family members have helped the others succeed, i.e. they have engaged in constructive cooperation.
That said, constructive cooperation helps drives the success of wealthy communities; whereas, the degenerative interdependence of helps drive the decline of the increasing number of poor communities. To break the degenerative cycle of poverty and economic decline, it is necessary to foster constructive cooperation. Unfortunately, this is neither easy nor quick. Social welfare spending helps alleviate the harm of poverty, but most poverty policies only help sustain the impoverished, along with degenerative interdependence, and do nothing to foster opportunity. Ultimately, declining communities need the private, and public, sector to provide anchor businesses capable of providing a critical mass of jobs offering viable incomes. In turn, employers need to recognize and capitalize on the human resources of these communities.
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