By: James Matlock 

Contemporary American politics is marked by deep polarization, widespread distrust of institutions, economic anxiety that cuts across class and party lines, and a sense that the system no longer works for ordinary people. These symptoms are often treated as purely political or cultural problems. A more foundational cause lies upstream, in a quiet but consequential shift in how we educate people about business and economics. For much of the twentieth century, the American economic model rested on a simple, durable idea known as the three-legged stool. When that idea faded from classrooms and boardrooms in the early 2000s, the consequences reached far beyond quarterly earnings. They helped produce the conditions that now dominate political life.

The Three-Legged Stool: Balance as Stability

A three-legged stool is inherently stable. Remove or weaken any leg and the structure topples. In traditional American business thinking, the three legs represented the primary constituencies whose interests had to be kept in rough equilibrium for a company—and by extension the broader economy—to remain healthy over time:

• Customers, who needed quality goods and services at fair prices and reliable performance.
• Employees, who needed decent wages, reasonable working conditions, skill development, and a measure of security so they could raise families and participate in the economy as consumers.
• Owners and shareholders, who needed a fair return on capital so the enterprise could attract investment, innovate, and endure.

The model did not claim that interests were identical or that conflict never arose. It insisted that long-term success required treating the three groups as interdependent rather than zero-sum. A business that maximized short-term profit by squeezing workers or shortchanging customers eventually undermined its own foundation. One that neglected returns to capital starved itself of the resources needed to grow or adapt. Responsible growth meant expanding in ways that strengthened all three legs rather than extracting from one to inflate another.

This was not romanticism. It reflected hard experience from the postwar decades, when many of the country’s most successful companies—large manufacturers, retailers, and service firms—operated with an implicit social contract. Productivity gains were shared more broadly. Loyalty ran in both directions more often than it does today. Communities benefited from stable local employers. The result was not perfect equality, but a broadly rising middle class and a political system that, whatever its flaws, rested on a foundation of shared material progress.

The Early-2000s Turn: From Stewardship to Scale-and-Sell

Sometime around the turn of the millennium, the operating assumption began to change. The new priority became rapid scale followed by monetization through sale, IPO, or private-equity exit. Growth metrics—user numbers, revenue run rate, market share—took precedence over durable profitability, employee development, or customer loyalty measured in decades rather than quarters. Venture capital and private-equity models rewarded companies that could demonstrate explosive expansion even if that expansion rested on thin or negative unit economics, deferred costs, or aggressive cost-cutting later.

Several forces accelerated the shift. The dot-com boom and its aftermath normalized the idea that valuation could outrun fundamentals. Financialization increased the pressure for short-term returns. Globalization made it easier to separate production from consumption and ownership from local community. Technology lowered the cost of rapid scaling while also making it easier to treat labor as more disposable. Business education reflected and reinforced the change. Shareholder-primacy doctrines that had gained ground earlier found fertile soil. Courses and case studies increasingly emphasized disruption, growth hacking, and exit strategies. The older language of balance and stewardship sounded quaint.

A conversation with an economics professor a few years ago captured the educational dimension starkly. When asked about the three-legged stool, the professor laughed and said he had not taught the concept in years. He then added that it was probably time to reintroduce it to young people. That single exchange is more revealing than many formal curriculum reviews. Concepts that once formed part of the basic vocabulary of responsible enterprise had become unfamiliar enough to provoke amusement—and then a rueful recognition that their absence might matter.

From Classroom to Boardroom to Ballot Box

When successive cohorts of managers, investors, and policymakers are trained to treat the stool as optional, the results compound. Companies optimized for scale-and-sell often deliver impressive paper wealth for founders and early investors while leaving employees with precarious jobs, customers with degraded service or privacy trade-offs, and communities with hollowed-out local economies. The gains concentrate; the costs diffuse. Over time this produces the economic conditions that feed political anger: stagnant real wages for large parts of the workforce, declining trust in corporate institutions, resentment of “elites” who appear to extract rather than create durable value, and a sense that the game is rigged.

These material realities do not map cleanly onto traditional left-right categories. They help explain the simultaneous rise of populist movements that criticize corporate power from the left and from the right. They contribute to the erosion of the middle ground that once made compromise possible. When large numbers of citizens experience the economy as extractive rather than reciprocal, politics becomes more zero-sum. Institutions that once mediated conflict lose legitimacy. Polarization is not only cultural; it is downstream of economic arrangements that no longer feel reciprocal.

Education is not the sole cause. Technology, trade policy, monetary conditions, and cultural changes all play roles. Yet education shapes the mental models of the people who design business strategies, write regulations, allocate capital, and advise political leaders. When those models systematically undervalue balance among stakeholders, the resulting economy generates the grievances that politics then struggles to manage.

Rebalancing the Legs

The three-legged stool was never a guarantee of fairness or a substitute for competition and innovation. It was a practical recognition that businesses operate inside a social system and that neglecting any major constituency eventually weakens the whole. Restoring it in education does not require nostalgia or rejecting growth. It requires teaching that sustainable scale is different from extractive scale, that long-term value creation includes the health of the workforce and the trust of customers, and that the purpose of a firm is not solely to maximize the next exit valuation.

Reintroducing these ideas will not instantly solve political dysfunction. It would, however, address one of the deeper sources of the economic discontent that makes healthy politics harder. Young people entering business, finance, and public policy deserve to understand the older model not as a relic, but as a tested framework for building enterprises that can stand. An economy whose firms are deliberately unbalanced will continue to produce the instability that then shows up at the ballot box. Strengthening all three legs again is not a partisan project. It is a prerequisite for a politics that can once more rest on something more solid than grievance.