Opportunity Cost

Lincoln on U.S. one cent

Image via Wikipedia

The progressive community is paying a huge opportunity cost for its lack of imagination and its ignorance of progressive history.

There are many examples I could give but now I want to discuss just one: services to members.

There are quite a few progressive organizations such as unions, the Democratic Party, MoveOn.org, and the Sierra Club that have millions of members. I could not find a total combined membership count, but browsing the list of “Leading U.S. Progressive Organizations” will give you a hint of how staggering the number of members must be. The organizations all have specialized missions they are heroically pursuing. But what many of them are failing to do is to help themselves and their members by recognizing that their members have other needs that are actually synergistic with those missions but which are not being addressed.

All progressive organizations need to take a lesson from groups like the AARP.

Wikipedia (AARP): AARP operates as a non-profit advocate for its members and as one of the most powerful lobbying groups in the United States, and it also sells insurance, investment funds and other financial products. AARP claims over 40 million members,[2] making it one of the largest membership organizations in the United States.

So how about it MoveOn (5 million), or Sierra Club (1.4 million) –how would you like to have 40 million members? You are missing the synergy between lobbying, insurance, and financial services (among others)!

Wikipedia (Opportunity Cost):

Opportunity cost is the cost related to the next-best choice available to someone who has picked among several mutually exclusive choices.[1] It is a key concept in economics. It has been described as expressing “the basic relationship between scarcity and choice.”[2] The notion of opportunity cost plays a crucial part in ensuring that scarce resources are used efficiently.[3] Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure or any other benefit that provides utility should also be considered opportunity costs.

The concept of an opportunity cost was first developed by John Stuart Mill.[4]

The mutually exclusive choices that I’m talking about here are choosing to offer financial services (and others), or not. This is a no-brainer.

If a particular organization is too small by itself to offer extra services in-house, it can collaborate with other organizations to meet whatever the threshold may be to make those services practical.

Another example of synergistic services: lobbying for economic reform, a credit union, and a worker-owned business incubator.

This is not rocket science.

Membership organizations can use the extra services as perks to recruit members; but in many cases the extra services can actually generate additional revenue streams and, lo and behold, actually reinforce and serve the primary mission of the organization.

Let me spell it out even more plainly. Meet me at camera three…

If your organization is progressive, anything you do to help struggling members is synergistic with your mission. Lets say you lobby for something progressive. OK. Delivering some extra services to your progressive members can give them a leg up (hooray for progressives in general) and generate revenues for your usual lobbying activities at the same time.

But if your mission is something like fighting poverty,  no matter how you have been approaching this in the past, helping members fight their own poverty might fit in quite nicely, don’t you think?

Its a pretty, pretty, pretty, pretty, pretty good idea.

Here is a partial list of services that progressive organizations should be offering if they want more members and more money and if they want more power to pursue whatever their core mission may be:

  • Green Insurance. AARP contracts this out, but if some or all the progressive organizations worked in concert they could start a non-profit insurance company or HMO and turn it into a huge, private, progressive single payer system right under the corporate capitalist’s noses.
  • Green Credit Union. You can start a credit union and do a micro-finance program. But again, if progressive organizations joined forces they could create credit unions to rival the big banks.
  • Green Retirement Fund. Guess what progressive organizations could do with the money in the fund–invest it in progressive organizations and green enterprises.
  • Green Venture Capital Fund.
  • Worker-owned green business incubator. This might be operated under the auspices of the green credit union(s) and/or venture capital fund(s).  A business incubator helps people create business plans, get financing, learn management skills, etc. It might also include things like office space and a pool of shared office equipment and labor. It could also offer payroll processing, tax preparation, accounts receivable, credit card processing, and other bookkeeping and  financial management assistance.

If you are a staffer at a progressive organization please hand carry this proposal to your people. If you are a lowly member, please copy and email it to your organization. Feel free to edit or embellish it any way you like and put your own name on it. If you take the time to bring this to the attention of your organization you deserve all the credit.  That’s the hard part. Contact info for many organizations can be found at the link to the list of progressive organizations above or by “googling”.

Demand that your organization get with it!

Good luck!

Poor Richard


Insurance Firm Is Set Up for Land Trusts, Which See Legal Costs Soaring (NYTimes)

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