Skip to content
Search

Latest Stories

Top Stories

The overleveraged and underleveraged society

The overleveraged and underleveraged society
Getty Images

Anderson edited "Leveraging: A Political, Economic and Societal Framework" (Springer, 2014), has taught at five universities and ran for the Democratic nomination for a Maryland congressional seat in 2016.

Many critiques of capitalist society show that there is either too much of something or too little of something, and each kind of critique can be written in a way to show that the value that we have too much of is equivalent to too little of the opposite of that value. A book that shows that there is too much economic inequality (like Thomas Piketty's Capital in the Twenty-First Century) can also be read as saying that there is too little economic equality. A book that shows that women suffer too much injustice (like Betty Friedan's The Feminine Mystique) can be read to say that women experience too little justice in our society. A book that shows African-Americans suffer too much injustice (like Cornel West's Race Matters) can be read as saying that there is too little justice in our society toward African-Americans.


Leverage is very different. For American society -- in fact all societies -- suffer from both the problem of excessive leverage and deficient leverage though not about the same subject matter. Rather, on some matters we have too much leverage, and on other matters we have too little leverage. Moreover, leverage, unlike equality and justice, is not a moral concept. Leverage is an empirical concept like weight. A person can weigh too much or too little, but the weight itself does not establish the judgment that there is too much or too little weight. That judgment must come from the medical profession, who must defend their own standards and values.

With leverage -- and there are different kinds, bargaining leverage, resource leverage, and financial leverage -- there can be too much or too little. And the judgment that there is too much or too little must come from a normative standpoint-- for example, a moral philosopher, a political philosopher, or a Congressional oversight committee.

Leveraging involves using a minimum force to create a maximum force with the help of some tool and a fulcrum. In traditional physical leverage, you can move a large concrete block with a pen if the pen is placed under the block and lifted in the appropriate way. Archimedes, the ancient Greek scientist who is credited with discovering physical leverage, said he could move the entire earth if he had a pole that was long enough and a fulcrum.

The financial crisis of 2008-09 was, according to many economists, a "leverage crisis," because both banks and homeowners were involved in excessive leveraging practices. In financial leverage, there is borrowing that takes place which is used for an investment that is intended to generate an outsized return. In the home mortgage leveraging crisis, homeowners bought homes which were interest free for a few years and then the interest rates ballooned, leading many homeowners to become incapable of paying their mortgages. They were "overleveraged." The banks, which could not collect the monthly mortgages, were also overleveraged and many of them crashed. Thus, excessive financial leveraging led to a financial disaster. Another example of overleveraging in our society is working mothers who are overwhelmed with their work and family responsibilities.

On the other hand we have under-leveraging. For example, the poor minorities in many American big cities who do not have laptops or broadband (although they may have smartphones), are part of an economy and political system which under-leverages information technology. An economically strong society is going to leverage information technology -- this is resource leverage and not financial or bargaining leverage -- effectively so that citizens can benefit in their work, health care, and family relations. A society can also under-leverage the diversity of its very population if the talents, background and cultural knowledge of different groups of people are not effectively harnessed in business, education, and government. Resource leverage typically goes beyond efficient use of resources. Gary Hamel and C.K. Prahalad in their book Competing for the Future explained how resource leveraging is inherently creative, especially by uniting resources from diverse sources.

A just and prosperous society will minimize the cases of overleveraging and under-leveraging striving to reach what I have called a "Leverage Mean." Aristotle said that virtue was the Golden Mean between excess and deficiency. Leverage analysis sends up red flags when it reveals either excessive or deficient leveraging. Indeed, if there is excessive or deficient leveraging, there is probably some moral value that is being violated.

There we have it then. Leveraging should be used more responsibly, avoiding extremes and hitting the Mean. If we analyze different parts of society via a leverage framework, then we will be better positioned to promote moral values like justice, equality, freedom and stability.


Read More

Business meeting, blurred background and people in office for teamwork, collaboration and planning

Another recruitment drive won’t fix a nonprofit board. A practical guide to sharing real decision-making power with diverse members: acknowledge, affirm, act.

Jacob Wackerhausen/Getty Images

Before Recruiting Diverse Board Members, Examine Who Holds Power

Nonprofit leaders keep asking me where they will find the next generation of diverse board talent. My question is what those leaders will be allowed to change once they arrive. In this piece, I outline concrete steps boards can take to ensure diverse members have real opportunities to shape organizational decision-making and to translate good intentions into meaningful progress.

In my board service and consulting work, I hear the concern from executives and grassroots activists alike. They worry about recruiting successors, sustaining funding, and governing organizations whose work increasingly depends on partnerships beyond their own walls. I share those concerns. I also wonder whether another recruitment initiative will solve what troubles them.

Keep ReadingShow less
The Pennsylvania state capitol building.

The Pennsylvania state capitol building.

jimfeng/Getty Images

Pennsylvania’s Bipartisan Exchange Is Rebuilding Trust in Governance

The University of Pittsburgh Institute of Politics has nearly 40 years of experience working with legislators from different political parties, and it is building on this history by drawing on lessons from the successful American Congressional Exchange model, begun in 2018 at the Bipartisan Policy Center, and from state exchanges now underway in Minnesota and Michigan. The University of Pittsburgh Institute of Politics, in collaboration with the Bridge Alliance, has launched the Pennsylvania Legislative Exchange.

This state-based, systematic approach is designed to foster better relationships and build trust across the political aisle with the following guiding principles:

Keep ReadingShow less
Shadow on a wall of Judge hitting gavel in court, concept of justice, law, and legal protection

DOJ lawsuits in Alaska and California preview post-Election Day fights over certification and seating winners. Here’s how officials and voters can prepare.

Aitor Diago / Getty Images

The Lawsuits Will Lose. The Delays Will Still Win.

Less than two weeks before Election Day, President Trump’s Justice Department asked a federal court to stop Alaska from certifying its U.S. Senate race if Republican Sen. Dan Sullivan loses to Democrat Mary Peltola. The lawsuit claims that a second candidate on the ballot, Daniel J. Sullivan, will confuse voters. That argument went nowhere in June, when the Alaska Supreme Court ruled that the state had no legal way to remove him from the ballot. Asked about the suit, the president took credit. “I’m the one that said do it,” he told reporters.

Alongside the Alaska suit, the Trump administration sued California to keep the state from counting mail ballots from 20,000 people it calls “likely” noncitizens. Over the summer, the Department of Homeland Security put that number at 190,000. Legal experts expect both suits to fail, as so many suits like them have. Still, Alaska and California give us an early look at what the weeks after November 3rd could bring: recount demands, calls to review or throw out ballots, and pressure to delay seating winners.

Keep ReadingShow less