“Ripple Up” Economics, or How LinkedIn (and Facebook) Can Easily Change the World

As of June, 2013, LinkedIn membership is said to have topped 225 million. The vast majority of those are employed people in developed economies where a cup of coffee can easily cost $2.00 or more. Let’s think about how the sheer numbers of that worldwide association could change the world.

The best way to lift the global economy is to create new jobs. The best way to create new jobs is to fund the startup of new small businesses. In numerous countries, a new business can be launched for $2,000 (US) or less. But let us use that benchmark.

If an investment fund were to be created to help all LinkedIn members invest in global small business development, at $1.00 per day per member, at the end of one year the sum in hand would be $82,125,000,000.00. At $2000 each to launch a new enterprise in a developing economy, even allowing for ten percent costs to manage the fund (because money handlers like PayPal take their cut first if the money is contributed online, and other administrative functions – like finding and evaluating the use of funds – do not happen in a vacuum), the net result would be the launch of 36,956,250 small businesses. . . in one year!

If each one of those business only produced one new job:

The CIA World Factbook (www.cia.gov ) states that the global workforce stood at 3,264,000,000 (2011) and unemployment at 9.2% (2012). That means 300,288,000 are unemployed. If each one of the new businesses launched created just one new job, it would reduce the global unemployment rate to 8.1% (263,331,750 workers) IN ONE YEAR!

Over five years, that unemployment rate could be reduced to 3.5% (115,506,750 workers), cut by more than 60% . . . all for $1.00 per day from 225,000,000 million of the most affluent people on earth . . . LinkedIn members.[i]

The concept is what I call “Ripple Up” economics. As people in impoverished economies rise out of abject poverty, their household incomes are stabilized, and new wealth is created by the increased productivity among the poor, they buy products and services to make their lives more convenient. The funds invested in those economies would circulate within them, stimulating further local growth. Those same funds would then be exported to buy locally unavailable products and the ripple effect would start to reach into more developed economies, creating more demand for products from Japan, the United States, Australia, Europe, and so on, and reducing unemployment in those countries as well.

All gross domestic product (GDP), the core measure of economic energy in the world, ultimately is labor. Unemployed workers are rife with latent potential. Helping them become productive, even in a miniscule way, releases the potential of their effort. That potential, once released, builds upon itself to increase the size of the local and global economic pie to the benefit of all. All for $1.00 per day.

Is that an “investment” business people should be interested in as the rising tide will lift all boats? These are your future customers we can lift from poverty!

Is the cost to any of us so high as to keep us from thinking this is a good return-on-investment (ROI) on our smallish donation to such a cause?

This is a simple idea but one that is actually doable in the face of innumerable global hindrances, especially political, to enhancing the common good. Why would we not do this? This is not an issue of any particular faith or political ideology. This is an issue of human flourishing that affects us all, and especially our children and grandchildren. Such a program would create a rising tide of tax revenues to shore up indebted governments, allow for greater global commitments to education and healthcare, and provide a peace-inducing philosophy (trade partners have been proven less likely to fight one another if it is likely to disrupt their economic health) of human unity.

Production and exchange function at the  very foundations of human community and are the source of all prosperity. Business pays for everything in this world, that is, the value created by the division but cooperation and collaboration of our labors and exchanges provides a better quality of life for all who participate.

Please share this essay…let’s get the conversation going. I know there are plenty of professionals on LinkedIn we can gather together to facilitate the creation of a charitable investment fund that can change the world . . . all for $1.00 per day.

Just think if we accomplished the same thing with Facebook . . . at more than 1 billion users! We could gut global unemployment in less than one year! This is an opportunity never before seen in human history, to work together as one people, globally connected. “What hath God wrought?”[ii]