THE BLOG
05/14/2011 02:43 pm ET | Updated Jul 14, 2011

Good Idea: Reward Losers That Produce Winners, Like in College Sports

In college sports the winner takes the trophy, the glory, and the inherent rewards of being the best. Financially, though, it's a different ballgame.

When any college team wins the national championship, a large portion of the winnings are distributed among all league members. The winner gets a good chunk, but doesn't take all.

This financial setup acknowledges that every team in the league that lost to the champions made them that much better. It also achieves the real end game: a strong and fair league in which great individual achievements are possible within a financially sustainable meritocracy.

Imagine applying these principles to our larger economy.

How many times have we seen this story: Company X lays off 5,000 people. Company X stock goes way up. None of the 5,000 people whose losses made that gain possible are rewarded in any way.

In sports, we're outraged at the slightest hint of unfairness. We remember bad calls for generations. Meanwhile, we tolerate all manner of unfairness in our economy, allow the Aristocrats to win every game, and look the other way at bad calls that devastate the lives of millions.

As we take another devastating loss and walk away with nothing, unable to pay for our injuries, our officials deny the unfairness of the league. They tell us "Don't worry, once you're on the Aristocrats, you'll be a winner, too. Keep working!"

If only our society were as fair to its necessary winners and losers as any Rose Bowl. If people have to lose their jobs to "make our economy more efficient" and that creates billions in new value, they should be rewarded for taking one for the team. But how can we reward both the winners and losers for our collective success?

Some have advocated for a dividend for all citizens based on America's GDP (similar to how every Alaskan resident gets a dividend based on oil production). In a sense, this would give every citizen some skin in the national economic game. Rather than divest the vast majority of Americans from our collective success, such a policy would instantly invest all of us in a collective enterprise.

Our aim should be a society that is fair to both our economy's winners and its necessary losers. To reach that goal, we must change the rules of our economy, and how it's officiated, in order to create the fair, financially sustainable meritocracy we all deserve.

Do you have ideas for creating a stronger, fairer, financially sustainable economic system? Post your ideas in the comments below.