Newconomics: A Future for Capitalism

Why it Matters:

The faulty societal model we call Capitalism has been corrupted to the point of collapse; Steve Newcomb, capitalist extraordinaire, reconstructs economics through the lens of sustainability and community.

Recap:

At this year’s West Coast Green conference in San Francisco, Steve Newcomb spoke on a panel with the other most well-known and prolific leader in the green movement, Adam Werbach of Saatchi & Saatchi S (previously of Act Now and the Sierra Club). They spoke poignantly about the absolute necessity of global transformation, a reinventing of modern society.

Werbach was absolutely moving in his statement that these are really dark times for our species and that if you are feeling frightened and sad about the lack of progress, you are not alone. He went on to say that the core of the problem is that corporations have been allowed to get far too large: “corporations cannot continue to exist at the size they are; when systems get too big, they break down.

Newcomb agreed with Werbach’s sentiments, yet had a different approach to a solution. While Werbach is the green movement’s most shining example of helping big ugly corporations transform themselves into more sustainable organizations (yet still big and often ugly), Newcomb believes that big business is the root of the problems that our society and planet are facing.

Commentary:

Coming from a man whose businesses have had combined valuations of over $3 Billion and have raised over $140 Million on Sand Hill, this is a bold statement. He goes on to say: “I’m in the business of changing all the rules (for VCs, big business, governments, people) because we must change the whole societal paradigm, not just certain parts of the current broken model.”

In a one on one interview with Newcomb, I came to realize that he may be our planet’s best hope for global transformation. Of course, I don’t say something like that flippantly, so allow me to explain.

First, Newcomb is the poster child for success in the current model of capitalism. He’s started and sold any number of companies for serious bucks, yet is only 38 years old. He knows how the Venture Capital world works, he knows how big business thinks, he has mastered how to reap the rewards of a currently broken capitalistic economic system. As a result, he’s deeply in-tuned with its fatal flaws.

Second, unlike most naysayers about capitalism or Wall Street, he proposes real solutions for a path forward. But he doesn’t stop there; he is actively manifesting these solutions within the broken model as a way to transition us to a new economy. I call it “corporate alchemy.”

After Newcomb confides, “monolithic capitalism keeps me up at night,” he goes to the crux of what is wrong with the system: no company should be larger than regional in size. Instead of 3 or 4 quasi-monopolistic companies, colluding at the top, there should be a thousand companies disaggregated throughout the nation working together only in order to share best practices and quality services.

Because the system is controlled by very few people at the top of very few corporations, this leaves the country very vulnerable to the whims of executives and the results of their folly, a la our current economic meltdown. This by no means is democracy. “Why aren’t executives that manage 100,000 employees elected rather than hired?” he asks incredulously.

Newconomics would first engage in the greatest Anti-Trust movement of all time, where trust-busting becomes the new “black.” By taking, say, a McDonald’s, and demanding from a federal level that they deconstruct their monolith into many small units, we re-localize economies and reinvigorate communities.

Concurrently, the “too big to fail” problem truly becomes “too big to exist” and the country essentially diversifies its portfolio. We have all seen the results of putting all the proverbial eggs in one basket.

With Newcomb’s new umbrella company, Virgance, he is walking his talk. CarrotMob, 1BOG and Lend Me Some Sugar focus on creating community around collective buying power, enticing capitalism to incentivize responsible behavior.

CarrotMobs are being spawned all over the planet by local communities working together to leverage their power as…consumers. One Block Off the Grid pools a neighborhood to get the best group rates on solar. Lend convinces Fortune 500’s that in exchange for massive and priceless PR they put up their own advertising dollars to create contests around environmental innovation, all on Facebook.

Newcomb is moving the needle further than most as a result of his deep understanding of Capitalism’s biggest assets (buying power, community and innovation) and its deepest deficiency (anti-societal monopolies with unsustainable models). Newconomics is alive; cartels beware.