WeWorked

WeWorked

By now, most people in the literate world have heard of WeWork.  It is the shared workspace company that caters to and further encourages the entrepreneurial culture that is blossoming across the globe. WeWork has become globally ubiquitous in the less than ten years of its existence.  What Uber/Lyft are to car culture and what Airbnb is to hospitality, WeWork is to Dilbert and office cubicle culture. Adam Neumann, the Israeli kibbutz-raised kid and Miguel McKelvey, the guy who grew up in an Oregon commune, came up with this one.  Think about that, you can’t write more fanciful fiction than that without being accused of being too contrived. Henry David Thoreau would be proud and probably trying to work Walden Pond into the design of the next Massachusetts WeWorks. WeWork is on the verge of its IPO at a valuation that will likely exceed $50 billion, a moderately sized unicorn by the standard set by Facebook when it went public.  I see that Neumann (In Seinfeld-speak that would be Neuuuuuumann!) has engaged in some serious tax finagling to both give founders and early investors big tax breaks (somebody better alert Elizabeth Warren), but also gives him continued governance control over the public company (again, probably requiring an alert to Liz).  Such is the overheated demand for the WeWork brand (how does Regus feel about this as they started the trend but ignored the value of a cool name) that investors seem willing to ignore this disadvantageous tax/governance structure just to get a piece of the WeWork rocket ship.

          Meanwhile, back at the ranch, the rest of the world continues to worry about how they are going to have enough wealth accumulated to retire.  In China, a place with a booming property appetite that rightly should have invented something like WeWork (UCommune, run by a guy called Mao, is the big pretender to that competitive throne), they are still struggling with wei-fu-xian-lao, which roughly translates to “getting old before getting rich”.  This is the growing concern in China and lots of other places that there has been a failure to have appreciated earlier the demographic challenge of an aging population combined with slowing economic growth and the likely downward economic and demographic spiral that results. This is not news to Chinese policymakers, they have been worrying about it for years. They understood long ago that there was no achievable economic growth rate that would prevent China from “getting old before getting rich.”

My friend Meatloaf once said “A wasted youth is better by far than a wise and productive old age”, but that was not the Chinese way.  China preferred to extract what can be called the demographic dividend of the service economy, by hiring out its low-wage newly-urbanized workers to drive massive export growth and cheap construction growth (I say cheap because there were plenty of buildings that simply fell down for lack of understanding the fundamentals of proper foundations).  The other thing government policymakers did was be sure that their pension commitments were both modest and not policed well..  That may sound harsh, but at least the mob is less likely to revolt the way German and French pensioners are doing with the prospect of their teetering payouts on the line.  This was backstopped by improved education such that younger workers could move up the global workers’ food-chain.  And, of course, there are all those Yuan spent by China on the Silk Road Economic Belt, building infrastructure in all its neighboring countries (remember my comments on Iran?).  This connection between Asia and Europe is a direct play from the Marco Polo School of world domination (Genghis Kahn himself would have been proud). Watch out for the Xanadu Express wrapped in a UCommune wrapper.

Compare this program with the aging Japanese Xenophobia, where the old age dependency ratio is on the verge of permanently killing any growth prospects for the dwindling culture of Japan.  While they and other aged Westerners spend their money on the cruise and travel market, the Chinese are hard at work setting the stage for the next chapter of global growth. 

To make a play on words, I am sure that Western and Japanese pensioners are saying out-loud, “Hey, we worked, so why can’t we play now?” Well, they can, but is that serving the greater good other than the freedom of self-realization?  I guess it depends on your perspective.  We are short-term thinkers and greedy individualists.  The Chinese are long-term thinkers and greedy collectivists.

When I wrote my Global Pension Crisis book a few years ago I spoke to the reality that one of the good things that had changed in the forty years since my college classes on development economics, was that food security had improved tremendously due to technology.  The world could actually produce enough food to feed the added billions of people that we had worried about in the zero-population growth craze.  I have come to learn that this is largely a function of increased production of ammonia, which comes as a great cost to our environment thanks to Steam Methane Reforming (something my company is trying to change).  All that food has come from all that ammonia which has created all that CO₂ that has gone into the depleting ozone layer.

Now we are facing another barrier.  The U.N. (the folks who brought you the dire warnings about Climate Change) are saying that we are over-taxing the land and water resources and endangering our ability to keep pace with the food needs.  Naturally this is all exacerbated by Climate Change as well so don’t forget that little problem.  They conclude that these shortages are displacing people (let’s face it, modern agriculture has not really yet come to places like Africa and war-torn regions that cannot afford irrigation, much less $400/tonne ammonia).  Those migrations are certainly being felt all over the world (5X where it was just a few years ago) from Europe to the United States and are now front and center of a world gone scarce. And you know where I am going next with this.  Sure enough, the best minds at the Food and Agriculture Organization of the UN say that we can help address this food and water shortage by increasing land and water productivity by eating less meat.  In other words, we must go beyond meat (where have I heard that recently?)

So I have come up with answers for all of this by coming up with a new merger plan for the new age with one multi-part motto for humankind:  WeWork therefore WeEat. WeMeet before WeEat.  WeWork and WeEat Beyond Meat. Take that you kibbutzim commune billionaires!