Nick Hanauer, who inherited money and then made an even bigger fortune by investing early in Amazon, is on a mission to redefine capitalism to benefit the middle class.
Everything you learned in school about economics is wrong.
The belief that when wages rise, jobs fall?
“A lie,” Nick Hanauer said the other day. “As ridiculous as claiming that when plants grow, animals shrink. It’s not the way the system works.
“Our policy and politics are imprisoned by these bankrupt and neoclassical ideas.”
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You listen to Hanauer because he doesn’t have any economic worries; he is part of the one percent who — one would surmise — knows something about how money works.
A member of the Seattle family that made a fortune in bedding with the Pacific Coast Feather Company, Hanauer was the first non-Bezos investor in Amazon. He has started 37 companies, including aQuantive, a digital-advertising company that was purchased by Microsoft in 2007 for $6.4 billion.
That comfortable perch has allowed him a clear view of the American economy. And he’s worried.
So Hanauer, 59, has set his sights on helping the middle class see its own opportunities — starting with relearning how the economy works.
The result: “Pitchfork Economics,” a podcast Hanauer started last month out of Civic Ventures, a Seattle-based think tank he founded that describes itself as “a small group of political troublemakers devoted to ideas, policies, and actions that catalyze significant social change. We are serial innovators in the civic space who favor the kind of big, disruptive ideas that upturn conventional thinking.”
(The name came from Hanauer’s belief that “if we don’t do something about rising inequality, the pitchforks are coming”).
Civic Ventures’ “disruptive” ideas have contributed to successful campaigns to increase Washington state’s minimum wage and expand background-check requirements for gun buyers. In 2017, Hanauer bankrolled a levy campaign to raise $275 million in property taxes over five years, all aimed at combating homelessness. (The levy was pulled in favor of a King County sales-tax measure.)
“I have had an unusual business career,” Hanauer said of his inherited wealth and the businesses — and billions — he built with it. “And that experience with capitalism has given me a different perspective on capitalism.”
With “Pitchfork Economics,” Hanauer is seeking to teach citizens how the economy truly works, and what they can do to have a bigger role in it.
“The point is to show people, definitively, that what they have been told is not true,” he said, “and that these old ideas have imprisoned them and changed our choices and possibilities.”
Challenging these ideas, he said, gives people “permission and the courage and the confidence” to advocate policy changes that will benefit them in material ways.
Take the long-held belief that raising wages means jobs will be lost.
In reality, a $15 minimum wage is good for everyone, he said — both workers and corporations.
“If you see it as an ecology, well, that’s what it is,” he said. “If nobody has the money, who will buy the stuff?”
Hanauer shares the mic with members of the Civic Ventures staff, as well as economic scholars such as Eric Beinhocker of The Institute for New Economic Thinking at Oxford University and former U.S. Secretary of Labor (under President Bill Clinton) Robert Reich, who is also an author, professor and political commentator.
On one recent podcast, Civic Ventures president Zach Silk explained “how Republicans sold their trickle-down tax cuts as a great deal for the middle class — and how angry suburban voters punished them for their lies.”
“It’s indescribably fun,” Hanauer said. “I really do feel strongly that our nation is going to hell in a handbasket, mostly because the rich are getting richer and everyone else is getting screwed. And the only way to get the nation back on track is to build an economy that will make every citizen feel like they are benefiting from it and included in it.
“We want to redefine capitalism and make it a thing that benefits everyone, and not just a few people.”
After Hanauer made his fortune, he made a decision: “I did not want to spend the rest of my life being dedicated to making a huge pile of money even bigger.”
The people he admired — Gandhi, Martin Luther King — had made a difference in the world. So Hanauer decided to dedicate no more than one-third of his time increasing his net worth, and the other two-thirds to “the life of the mind” and public service.
“I have stayed true to that commitment,” he said. “The life of the mind and public service has merged” with Civic Ventures.
When he’s not working at Civic Ventures or tending to his businesses, he finds the time to fly-fish at his Montana ranch. He has a weakness for fishing gears and seemingly mind-numbing, nonfiction books like “Out of the Wreckage: A New Politics for an Age of Crisis” by George Monbiot.
Hanauer’s passions are wide and deep. And now, with the podcast, they have a new outlet.
“In this work, the better I do, the more money I lose,” Hanauer said. “So it’s definitely the opposite of my commercial experiences.
“But it’s for the greater good. I have enough money.”