Everyone seems to feel like the economy is broken.
No hiring. Job losses. Everything costs more. Tough times all around.
I have a name for what’s broken.
The Extraction Economy.
This is the system where insiders design the rules to capture value created by outsiders. Opacity, asymmetry, short-term optimization…all in service of building moats around the castle.
Live Nation is the poster child of the moment.
Employees joke about “robbing them blind.” The CEO gets paid to “solve the DOJ problem.” Fans are called “so stupid” in Slack messages.
It isn’t just tickets and entertainment.
Private credit sells itself as safe, then halts redemptions when cracks appear. Law firms chase partner profits while client trust erodes. Sports teams hold back inventory and sell to brokers, then complain about the secondary market they aided.
Extraction is late-stage capitalism’s playbook. Build a moat. Keep outsiders out. Capture the upside. Let someone else hold the bag.
This system is breaking down.
There is another way. There has to be.
I call it the value-creating organization.
These organizations don’t build moats. They build flywheels. They start with the people who create the value. Then let success flow outward.
It’s not theory. These organizations exist. They thrive…across industries. And, they share six principles.
Value Starts at the Base:
No customers, no fans…no business.
The Green Bay Packers are publicly owned. Show your stock to your friends.
The team exists for the community. Shareholders are fans.
My favorite stationer is Smythson. That beautiful blue paper.
Smythson has lasted for generations because the prestige comes from loyal clientele, not advertising campaigns.
Customers drive the brand’s equity.
The “12th man” is a Seattle Seahawks tradition.
It isn’t a marketing gimmick…ok, maybe it is, in the best way possible. Tradition. Expectation. Connection.
Whatever it is, the team puts the fans at the center of everything.
Transparency, Not Opacity:
Extraction hides…duh. Value creating reveals.
Chicago is one of the longest-running shows on Broadway.
No hidden fees.
No distribution games.
Fun is one of the first things most people think of when they think of Virgin Atlantic. The brand is built on openness. Customer-friendly policies. Straightforward communication.
Fun sticks.
America’s most popular retailer might be Costco.
Besides the $1.50 hot dog and soda combo, Costco is known for transparent pricing, high employee wages, and no extraction disguised as convenience.
Shared Incentives. Not Asymmetric Capture:
When the organization wins…everyone who contributed wins.
The Australian Football League (AFL) shares revenue, best practices, and competitive balance across clubs.
This keeps the league healthy.
Go Dees!
“Become a partner” is the road to success in most professional services firms. Aon is employee-owned. Equity participation is broad…not locked to the C-Suite.
Shared prosperity.
In the same vein, Wachtell, Lipton, Rosen & Katz is an elite law firm. True equal partnership.
Profits are shared. Not hoarded.
Flywheels. Not Moats.
Moats are defensive, reactive. Flywheels are dynamic, proactive. Growth focused. Each turn powers the next.
“Ladies and gentlemen serving ladies and gentlemen.” That’s a famous Ritz-Carlton motto.
The Ritz-Carlton flywheel: service excellence -> loyalty -> referrals -> brand strength -> reinvestment in service.
What about Smythson?
The flywheel works naturally: Heritage products -> loyal customers -> word-of-mouth -> new customers -> reinvestment in craftsmanship.
Netflix…a classic flywheel example: content -> subscribers -> revenue -> more content -> more subscribers.
Winning!
Long-Term Alignment Beats Short-Term Extraction:
Quarterly capitalism rewards extraction. Value creating organizations build for decades.
Hermes doesn’t do fast growth. Family controlled, it maintains quality and scarcity. Refusing to sacrifice long-term value for short-term revenue.
Brunello Cucinelli calls it “humanistic capitalism.”
Workers, community, and sustainability come before margins.
Mont Blanc is built on craftsmanship and heritage. Enduring value beats fleeting trends.
Accountability Built In:
Patagonia is purpose driven. The Earth is a stakeholder. Accountable to everyone…not just shareholders.
The Co-operative Group (UK) is member owned.
Democratic accountability is the decision model. Accountability ensures decisions serve the people who own it.
Navy Federal Credit Union is member-owned. You have to have served the United States.
The board is elected by members. Profits return to them.
Your Choice:
The extraction economy is stable…until it doesn’t.
Cracks are showing. Live Nation is on trial. Private credit is wobbling. People are tired of being treated as ATMs, marks, resources to be used up…not as people to be served.
Leaders have a choice.
Keep building moats. Keep extracting. Wait for the next crack to become a chasm.
It happens.
Or build something sustainable.
Start with the people who create value…customers. Design for transparency, shared incentives, long-term alignment, accountability, and trust.
Turn the flywheel.
The frameworks already exists. The case studies exist. The question isn’t can you do this. The question is will you do it?