A progressive and comprehensive look at a future capitalist system.
Umair Haque’s book makes an argument for what 21st capitalism should look like in the face of the economic, social, environmental and technical challenges we all face. Haque points out that the open-ended consumption model we have today is not sustainable and certainly crazy to be the preferred path for how emerging markets grow and develop.
Note: this s a long review as The New Capitalist Manifesto is a complex and unique book. It’s not just a call for reform couched in populist terms, but a rather serious look at alternative ways of conducting capitalism in the future. It sits in the gaps between economics, business, environmentalism, social science and probably a few other disciplines than that. The combination makes for a complex, but accessible book that makes you think.
Haque’s book is a studied look at the issue and strong advocacy for something he calls “constructive capitalism” that is based on creating close looped value cycles rather than unsustainable open-ended value chains. The book is a provocative and progressive look at a potential future for the capitalist economic system.
Recommended for anyone wondering what will come next, how companies will compete on a broader level and price and economic scale. I found the book helpful in thinking about what the future and future strategies might look like. Highly recommended for strategists and those looking to understand an implementable argument
Haque’s central argument revolves around the observation that current capitalistic practices lead to what is called ‘thin’ value. Thin from the perspective that the value created relies on exploitation — not in the Marxist sense — but in the environmental sense. Resources depleted without an incentive to return them or replace them with something better.
In contrast, Haque encourages companies to create ‘thick’ value, which is described as generating profits by activities that create value for sustainability, authentically to people and build up rather than tear down people, communities and resources.
The books chapters
Chapter 1: A Blueprint for a better business sets the stage and makes the argument that the current type of capitalism is not sustainable. Rather than call for simply ripping it up and replacing capitalism with another system, Haque lays the groundwork for how capitalism can go through a revolution to meet the challenges we all face.
Chapter 2: Step One: The Loss Advantage / Changing value chains into value cycles discusses the notion of socio-efficiency and the value potential of limiting business loss and exploitation. This chapter goes into detail about the elements of a value cycle that Haque suggests needs to replace the value chain.
Chapter 3: Step Two: Responsiveness / From Value Propositions to Value Conversations is all about gaining agility and the ability to engage customers, suppliers and the public. Rather than a discussion about marketing 2.0, this chapter offers a look at how increased participation drives requirements for greater participation.
Chapter 4: Step Three: Resilience / From Strategy to Philosophy points out that the ability to survive is based more on your ability to constantly challenge your current business model, products and markets. Those that constantly look to disrupt themselves learn more and are more resilient than firms that seek to defend the same turf and terms of competitive advantage year after year. This chapter also makes the point that value extraction is significantly different than value creation.
Chapter 5: Step Four: Creativity / From Protecting a Marketplace to Completing a Marketplace discusses how creativity plays in this new system in identifying ‘impossible’ markets that can be found in the gaps in any market structure. The chapter discusses the different levels of creativity and how they apply to new ways of looking at market opportunities.
Chapter 6: Step Five: Difference / From Goods to Betters looks at the basis for creating meaningful differences in your customers, products and services. This chapter is particularly provoking in advocating a focus on creating products that support positive outcomes rather than just delivering features and functions.
Chapter 7: Step Six: Constructive Strategy / From Dumb Growth to Smart Growth covers how to create strategy and business models based on ideas such as Generosity, Creativity, Resilience, etc. This is perhaps the most challenging chapter as it seeks to offer a broader strategic model, one that has the potential to identify previously hidden sources of value and performance.
Chapter 8: Constructive Capitalism provides a summary of how the steps and concepts fit together. Its a good summary, however the topics and terms are specialized meaning that this is a place to refresh your understanding rather than a place to go for a quick summary.
Balance, not in the FOX News fair and balanced sense, but in the recognition that the system that created these issues is perhaps the best system to fix them. I would have been easy for Haque to simply join the bandwagon and call for a return to government driven, controlled and managed economies in the name of the public good. This is not to say that Haque’s recommendations are a validation of the current system, rather they represent a radical redefinition of the way economies work. Any book that would upset conservatives, progressives and environmentalists considers a broad range of opinions and needs definitely is worth reading as the truth is in the cracks between them.
Comprehensive in its outlook and consideration of the ideas of what type of capitalism should come next. Haque discusses what he sees as the logical next steps for capitalism, replacing value chains with value cycles. This gives the book and its recommendations greater credibility, as it’s apparent that Haque has thought many of these things through.
Use of named companies like Wal-Mart, Google, Star-Kist, among others. This helps illustrate different points, but I am not sure that Haque has studied these companies in detail or just went off of available information.
The book has an aggressive and progressive style, which sometimes gets in the way of the arguments as the author’s passion shows through. Normally this would be good, but in places and in some chapters the book tries to cover too much ground and winds up dealing with issues at a more superficial level than intended.
The examples and descriptions used to illustrate Haque’s points are rather general and lack specificity. It is more like he is looking for some examples to fit his description than capture the conscious decisions by companies to change how they compete.
The book is light in the area of the new kinds of management and management tools required to make this work. This is a significant gap as achieving these ideas requires adjusting management’s approach which is largely based on cost and resource control. This is an area for future research and insight as the tools you used in the 20th century value chain cannot be expected to deliver different results in the 21st world.
The book is also light on technology. Its assumed that information and technology are parts of the future, its just that their role in constructive capitalism is not as prevalent as one would expect given technologies role in both empowering and exploiting people, economies and the environment.
Overall, this is a unique book, one that has few to compare it to as it deals with broad issues and trends in a directive and focused manner. Recommended reading for people who like to disrupt their own thinking and learn more by being challenged than having their beliefs confirmed.
PS: I find myself referring ot the ideas in this book from time to time making purchase of a hard copy perhaps a better choice as my electronic copy is getting heavily annotated and less helpful.