Skip to content
Search

Latest Stories

Follow Us:
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

Capitol Building of USA

Senate votes increasingly pass with support from senators representing a minority of Americans, raising questions about representation, rules, and democracy.

Getty Images, ANDREY DENISYUK

Record Number of Bills and Nominations Passed With Senators Representing a Population Minority

From taxes to the environment to public broadcasting like PBS and NPR, the Senate has recently passed record levels of legislation and confirmed record numbers of nominations with senators representing less than half the people.

Using historical data, GovTrack found 56 examples of Senate votes on legislation that passed with senators representing a “population minority.” 26 of those 56 examples, nearly half, have occurred since President Donald Trump’s current term began.

Keep ReadingShow less
The Fahey Q&A with Elizabeth Rasmussen

An in-depth interview with Elizabeth Rasmussen of Better Boundaries on Utah’s redistricting battle, Proposition 4, and the fight to protect ballot initiatives, fair maps, and democratic accountability.

The Fahey Q&A with Elizabeth Rasmussen

Since organizing the Voters Not Politicians 2018 ballot initiative that put citizens in charge of drawing Michigan's legislative maps, Fahey has been the founding executive director of The People, which is forming statewide networks to promote government accountability. She regularly interviews colleagues in the world of democracy reform for The Fulcrum.

Elizabeth Rasmussen is the Executive Director for Better Boundaries, a Utah-based organization fighting for fair maps, defending the citizen initiative process, preserving checks and balances, and building a better future. Currently making headlines in the state, Better Boundaries is working to protect Proposition 4, and with it, the rights of Utah voters.

Keep ReadingShow less
Trump's Delusion of Grandeur Knows No Bounds

U.S. President Donald Trump walks off Air Force One at Miami International Airport on April 11, 2026 in Miami, Florida. President Trump came to town to attend a UFC Fight.

Getty Images, Tasos Katopodis

Trump's Delusion of Grandeur Knows No Bounds

There has been no shortage of evidence of Trump's grandiosity. See my article, "Trump, The Poster Child of a Megalogamiac." But now comes new evidence of his delusion of grandeur that is even worse.

Recently, on his Truth Social media account, he posted an AI generated image of himself as Jesus healing the sick, apparently in part response to Pope Leo's rebuking of the U.S. (Hegseth) for invoking the name of Jesus for support in battle, saying Jesus “does not listen to the prayers of those who wage war, but rejects them,” together with a diatribe against Pope Leo in another post saying he was very liberal, liked crime, and was only elected because Trump had been elected..

Keep ReadingShow less