FLOW: Markets in happiness and well-being
I’ve been greatly enjoying my monthly newsletters from FLOW, because these guys are genuinely committed to exploring the reconciliation between liberal values (of personal development, generosity, community, and peace) and free markets.
Below is their latest, from CEO Michael Strong. Other than perhaps his analysis of Mac vs. PC 
I find this to be a very stimulating and incisive discussion of the relevant topics.
Dear FLOW Members,
One of our most powerful instincts is that those who contribute the most to a community should be rewarded the most. From this perspective, it has always been a source of great consternation that educators and healers are often poorly paid, while other individuals whose contribution to the public good are more dubious may be highly paid. For many of us, our sense of justice is constantly violated by this obvious inequity. For much of the last century, “capitalism” was blamed for this state of affairs.
I know a dedicated, hard-working Montessori teacher approaching fifty with no pension, barely able to pay her bills, whose school may be going bankrupt, leaving her unemployed. I once calculated that Montessori teachers sacrifice about a million dollars in lifetime earnings, relative to public school teachers, in order to pursue their vocation.
In another direction, I know the CEO of a large yoga business, a highly professional businessman who once led his family’s multi-million dollar jewelry business, who struggles with the challenge of paying his yoga teachers well.
What to do? There are those who would legislate more government funding for educators and medical professionals, in various ways. But precisely because the vast majority of Montessori educators and yoga teachers practice their arts outside government-legitimized channels, such legislation would not help them at all. Indeed, sometimes government-mandated education and health care reduces the opportunities for alternative practitioners. Montessori educators, for instance, often campaign against government-mandated pre-school, because by supplying free government pre-school such programs would probably put the vast majority of Montessori schools, most of which are private, out of business.
One could, of course, declare that all alternative education and healing are appropriately marginalized, and with issues as urgent as education and health care the last thing that we need to worry about are alternatives outside the mainstream (though both Montessori education and yoga are creeping towards the mainstream).
For those of us who do find value in alternative education and health care, and for those of us who are simply committed to innovation and to individuality, this perspective is profoundly unsatisfying. I don’t want my options for myself and my family to be limited to those legitimatized by the custodial state.
Moreover, a strong case can be made that there are severe weaknesses in the “establishment” education and health care systems. This does not mean that there are not some things that they do well, but it seems premature, to say the least, to reduce the amount of innovation that is possible in the most important realms of human life.
One of the statistics that has long interested me is the fact that about three-quarters of health care costs in the U.S. are attributable to chronic diseases: heart disease, stroke, cancer, and diabetes leading the way. The single most powerful way to reduce the incidence of all of these diseases, and their associated costs, are lifestyle changes (The most lethal cancer by a large margin continues to be lung cancer, largely due to smoking). In addition, most accidents, the largest source of death among young people, are due to lifestyle choices, among them drinking and driving. Separate from both the costs of chronic diseases and the costs of accidents are the costs associated with addiction per se. The epidemic of obesity results in all health care problems become more frequent, more deadly, and costlier to treat. Added together, the overall health costs of bad habits may well exceed 80-90% of our health care costs, somewhere between $1.2 - $1.4 trillion per year, more than double what we spend on all K-12 education in the U.S., more than the GDP of sub-Saharan Africa.
As an educator, I was always more concerned with the school’s culture than I was with academics per se; it is a profound mistake to force schools to focus directly on test scores and ignore all other aspects of life. My explicit goal was to develop positive habits and attitudes among the students in my care. The best “alternative” or “holistic” educators and health care practitioners are often profoundly focused on habits and lifestyle choices, as are many of the best traditional educators and health care practitioners. But we have created institutions that penalize such a focus rather than reward such a focus.
I have often looked at the $1.2 trillion or so in health care costs due to our bad habits and wondered how that massive amount of wealth could be redirected towards those educators and health care providers that support the development of good habits. It is a well-documented fact that cultural variables are more important determinants of health than are education, income, or access to health care. At a given level of income, Asian-Americans and Hispanic-Americans tend to have better health than Euro-Americans, who in turn tend to have better health than African-Americans and Native Americans. Hispanic Americans from Mexico are healthiest when they first immigrate to the U.S., and gradually regress closer towards the national average the longer they live here. Mormons are significantly healthier than the rest of us. If we could all be Asian, Hispanic-fresh from Mexico, or Mormon, health care costs might instantly drop by nearly a trillion dollars.
What if some educators or health care practitioners were actually effective at helping us cultivate better habits? In principal, our insurance costs should decrease. There are already insurance discounts for non-smokers in health insurance and for good students in auto insurance. If an insurance company knew that students from a particular educational program, or practitioners of a particular kind of yoga or martial art or whatever had reliably better health statistics, they could provide significant discounts to the individuals who were associated with such healthy practices. If the discounts were significant enough, those organizations and individuals who were consistently able to improve health habits could increase their rates, and pay their professionals more highly. Ultimately high-quality preventative care, with highly paid professionals providing such care, would become a reality.
Most of the alternative educators and health care professionals I know believe that, in fact, they are more effective at imparting good habits and lifestyle changes than are most mainstream sources of education and health care. The mainstream would counter that there is inadequate research evidence of this fact. And so the Montessorians and yoga teachers and others patiently work to try to obtain funding for research to prove that what they are doing has some measurable value. Most of them hope to become legitimate in the eyes of the establishment so that they can receive some of the establishment funding.
In the world of personal computing, for nearly thirty years now there has been a virulent argument between supporters of Macintoshes and supporters of Microsoft PCs. On the basis of cost and measurable performance, Microsoft PCs are almost always a better buy than are Macs. On the basis of quantifiable evidence, Macs lost long ago. And yet Macs have retained their position on the leading edge, inspiring millions of enthusiasts even while Microsoft continues to imitate elements of cutting-edge Mac design.
Insofar as improvements in our quality of life are not easily measured, it is a mistake to await double-blind research evidence and government approval before allowing such innovations to receive support. Insofar as the worlds of education and health care are heavily regulated and have been for the past hundred years, the vast majority of potential innovations in our quality of life have remained stillborn during this period.
Entrepreneurs bet their lives on unproven visions. If it were legal to do so, more entrepreneurs would bet their lives on delivering education and health care that changed habits and improved quality of life and, most importantly, health insurance that monetized the value of those improved habits. Some of those, using unproven technologies, would become wealthy and provide new and better ways of living to millions of people. We should have education and health care chains that are far more powerful than Apple and Whole Foods Market, bringing new and better ways of living to millions. Ultimately, once these markets in happiness and well-being have been legalized, we will see all of the capital and talent that we now see flowing into technology and finance flowing into education and health care. And great educators and holistic health care practitioners will become highly paid, highly respected members of our society. In this sense we need more capitalism, not less, in order to create an ever-improving quality of life for everyone in our society.
Newsweek Magazine recently named Moreno Valley High School (MVHS), of Angel Fire, New Mexico, the 51st best public high school in the U.S. based on the number of students who take Advanced Placement (AP) exams. The first year I founded the school none of the students had taken an AP test and a local college professor told me point blank that northern New Mexican students were not capable of passing AP tests. The second year of the school we were ranked the 147th best in the nation, the third year 36th best, and now 51st best, with AP passing rates more than double the national average. Most of the schools ranked more highly than MVHS are either wealthy suburban schools in elite enclaves or they are magnet schools that gather the best and the brightest from an entire city. Given the demographic profile of the school, it has consistently been one of the highest performing schools three years in a row.
I know exactly how to replicate this performance and had wanted to create a chain of these schools across the country. But I was forced out of the school due to the fact that I had never had an administrator’s license. There is no research evidence showing that the “methods” that I used produce these results – because the devil is in the details. I got into the business of starting schools because I realized I had to design every aspect of the school in order to ensure these results. It is not a matter of a “method” resulting in “replicable results.” It is the matter of individual vision manifest in a unique organization leading to outstanding results. Government-controlled institutions can never support the cultivation of thousands of individual visions resulting in unique organizations leading to outstanding results.
Through economic freedom based on rule of law and secure property rights, war and poverty can become a thing of the past around the world. Through property rights solutions to tragedy of the commons problems, we can create an environmentally sustainable world. And by legalizing markets in happiness and well-being, we can create a lively, innovative industry in health and learning, happiness and well-being, that will result in a continuously improving quality of life for all nine billion human beings in the 21st century.
Towards life, liberty, and the pursuit of happiness,
Michael Strong
CEO & Chief Visionary Officer
FLOW, Inc.
If you find this kind of analysis interesting, I encourage you check out their web site and sign up to receive their newsletter yourself.
