One of the most valuable things I learned in business school (over 30 years ago) was the "Smart Man" theory. The theory says that when you cannot figure out something, assume the other person is very smart. An application of the theory follows.
There are two trends that are increasingly shaping the future:
- Non-government agencies are increasingly addressing the major social problems; NGOs, non-profits and social entrepreneurship ventures are all examples
- Entrepreneurship and its little brother self-employment are increasingly being used as the means to develop and manage economic well being; entrepreneurship is now being taught in high schools and is one of the most popular subjects at many universities
What do these two trends have in common? Smart Man Answer: In each case the traditional role of the government is being supplanted by a more viable alternative.
In the case of social problems, private capital is being mobilized to address issues that can no longer be ignored. Porter's "shared value" is one example of this thinking. Another example is a foundation in Nicaragua that has undertaken the role of modernizing primary school education.
In the case of the popularity of entrepreneurship, what is recognized at the most fundamental level is that entrepreneurship allows one to control their life to the maximum allowed. One is no longer dependent on a government (or corporations) for their well being.
What do these thoughts suggest about the future? The role of government can be reduced because the people have recognized and started organizing for a world in which big governments do not solve every problem. On an international level this idea would suggest, as some have said, that cities will replace federal governments as the major political and social force. Every trip overseas, I see state and city governments taking on the role historically filled by a federal government.
The irony is that such a world closely approximates a Jeffersonian democracy of limited government. We are going back to an idea that was crafted and communicated over 200 years ago. Why do I insert the idea of democracy? Mobilizing private capital for social issues and entrepreneurship both rely on individual empowerment and the unencumbered freedom to act, which eventually will produce a democracy.
