First Sea-Tac and now Seattle have instituted $15 minimum wages. Seattle's biggest philanthropic muscle, The Bill and Melinda Gates Foundation, was born out of the riches of one of the most competitive companies in tech and, from Starbucks to REI to Costco, our city is peppered with corporations committed to community engagement, worker benefits and member ownership. On the smaller scale, socially conscious companies and start-ups, like code.org, are popping up more and more frequently. Even President Barack Obama centered his last campaign around middle-out economics, an antidote to trickle-down economics that has significant roots in Seattle.
It's no surprise there’s talk of a distinct form of capitalism taking root here in Seattle – Cascadian capitalism, people are calling it.
Its definition is still very much in the making, but one of the most useful definitions floating around comes from Chris DeVore, a Seattle native and founder of venture capital firm Founders’ Co-op, who wrote in a post on his blog in December that “Seattle is emerging as a global leader in fusing the growth-oriented culture of techno-capitalism with a deep and broad commitment to social justice and social mobility.”
A central voice in the conversation, DeVore is the first to admit that his homegrown status might skew his perspective about the city. After years in Silicon Valley, DeVore made a “value decision” to come back to Seattle: “For me, that is the counterpoint that informs all of this.”
“Every day I meet more people in Seattle who add weight to my belief that there is some seriously divergent economic thinking going on up here,” DeVore wrote, “And that we should actually be leaning into it.”
Optimistic, but rational
DeVore is no Pollyanna. The head of one of the Northwest's most successful venture capital outfits, DeVore is skeptical of the idea that private companies should be civic actors.
“Entrepreneurs more generally – they see where the world is going and they want to get there first…" he said. "They’ll work on social justice issues when it aligns with their interests.”
Which is precisely where DeVore and one of Seattle’s most infamous capitalists, Nick Hanauer, would agree. After making a name (and a whole lot of money) for himself as one of Amazon’s first investors, Hanauer went on to become an outspoken advocate of middle-out economics, the idea that prosperity in capitalist economies does not trickle down from the top, but is always built from the middle out
Like DeVore, Hanauer is very much of the “capitalists will be capitalists” school of thought. He is concerned what’s best for business — not fairness. And in his view, an inclusive economy, with a burgeoning middle class, will make for the best businesses, which will give way to the most competitive capitalist economy possible.
The regional success of middle-out economics (think $15 minimum wage) then is interesting because it provides a more concrete example of Cascadian capitalism — something other than a list of companies who give their money to good causes. Something like a movement.
Hanauer and Liu drew the link directly when they raved about Seattle’s Cascadian capitalist identity in a March Stranger article: “No city can match our combination of economic dynamism and civic engagement. While we have plenty of successful capitalists in Seattle, this isn’t a town…that worships the super-wealthy and believes in trickle-down economics. People here recognize…that we’re connected in an ecosystem…This ‘Cascadian’ form of capitalism works – for everyone, not just for capitalists.”
Economic pipe dreams?
Which sure sounds nice, but it remains hard to say whether Cascadian capitalism is a movement that is in fact happening. Is it just a conversation between a few powerful Seattle leaders? A rhetorical ploy that conveniently plays off the Progressive-Northwest identity to mobilize support for the middle-out cause? Just a nice idea?
When I asked Paul Guppy, Vice President for Research of the Washington Policy Center, about Cascadian capitalism, he hadn’t heard the term before – but he liked the idea.
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