Do we need ethics in social investment?

(A story of one man’s challenge to organised crime, discovering government were not in his corner)

It might at first seem redundant to ask whether investment with  social and environmental objectives needs to be ethical, since this would appear to be what many consider to be ethical business.

Consider this conversation from 2009, where social business pioneers are being asked who will build a more efficient social marketplace.

Note in particular, the words of Terry Hallman, who died two years later,  in August 2011. He refers to the theft of intellectual property. saying:

“So, if we’re inventing projects that we know will be stolen, there are at least two problem areas.

First, if stolen, it’s stolen. It’s not unlike an architect having a building design stolen. The architect/designer is in best position to understand exactly how it works and how to assemble what they’ve designed.

If someone wants to use a project design, it’s the same as any other project design. The design comes after an in-depth research phase, which in my experience tends to be extremely difficult not least from danger involved in shining light under rocks where the core problems are to begin with. That is, corrupt bureaucrats and officials. When I finish the research part — which I always do so far (Russia/Crimea/Ukraine) — I know exactly what the problems are, what solutions are needed, and how to navigate. Possibly someone else could take over and manage things from there on — implementation. I have no problem with someone else implementing a project, and usually prefer that. Even if they do, it’s still a matter of stolen property in which we’ve invested unilaterally to produce. Almost always, however, there may remain critical components that the implementer just doesn’t want to bother with. Maybe it’s too dangerous. Maybe there are political considerations and conflicts. In that case, the designer is likely the only person(s) to know how to get those done. That’s when it’s time to consult with the architect.

Second, even if the project outcome, after theft, is what was envisioned by the designer(s), how does the venture qualify as a social enterprise? Sure, we can slowly design projects one by one as income from our funding side permits. We can do it a lot faster if we get paid for our R&D output, just like any designers.

Finally, is it acceptable to build projects with stolen property? What sort of results would that lead to? Can be build an ethical system based upon unethical behavior (such as violations of Intellectual Property Rights)?

If we invent such a system, is it anything new? Or is it just a twist on the old system?

One thing that can be collaborated openly is this: a Code of Ethics. But, whose ethics? What org(s) will enforce them, and how? Who decides who gets in, how, and why?”

There would seem to be something of Ayn Rand in this argument. except that it takes a stand against the laissez faire ideology she advocated. In the Fountainhead,  Roark defends his actions by arguing for the right to see something built as he wished.  That reasoning can also be applied if the wish is for others to benefit, in support of  the moral case for ending poverty.   As  a social business, rather than distributing dividends to shareholders,  choosing to invest profit in a social purpose.

In that same year, it was Pope Benedict XVI who’d written in Caritas in Veritate, supporting the approach of business  using profit for a more just and human society, saying:

Striving to meet the deepest moral needs of the person also has important and beneficial repercussions at the level of economics. The economy needs ethics in order to function correctly — not any ethics whatsoever, but an ethics which is people-centred. .

Though neither he nor I are Catholic, what Terry Hallman,  founder of People-Centered Economic Development, was describing in his work was entirely congruent with the Vatican view:

“This is a long-term permanently sustainable program, the basis for “people-centered” economic development. Core focus is always on people and their needs, with neediest people having first priority – as contrasted with the eternal chase for financial profit and numbers where people, social benefit, and human well-being are often and routinely overlooked or ignored altogether. This is in keeping with the fundamental objectives of Marshall Plan: policy aimed at hunger, poverty, desperation and chaos. This is a bottom-up approach, starting with Ukraine’s poorest and most desperate citizens, rather than a “top-down” approach that might not ever benefit them. They cannot wait, particularly children. Impedance by anyone or any group of people constitutes precisely what the original Marshall Plan was dedicated to opposing. Those who suffer most, and those in greatest need, must be helped first — not secondarily, along the way or by the way. “     

In 2009, when that discussion took place, Terry’s concerns had been focussed on Ukraine’s moguls. it would be “friendly fire” however that left him without compensation and the means to fund his own medical needs, when we introduced our work to something described ironically as ‘Business Based on Trust“, a business that’s “all about others”

A Conversation with Grameen patner Erste Bank

Muhammad Yunus is deservingly described as a model social enterprise leader, but can trust be transitive,  when it comes to partnerships?   The article on Yunus comes from the British Council sponsored international hub  of the Guardian Social Enterprise Network   As Erste Bank are a Grameen partner, so are the British  Council with Erste in Ukraine.  The author of the article, Liam Black, is co-founder of Wavelength, another Grameen partner who connect visionary companies.

Our visionary company saw business as a means to tackle poverty and in the case above,  placing trust in those declaring the same intent. We wanted to ensure that every child could have a loving family home.   That meant challenging both mafia and US government.  When Kate Blewett arrived to film Ukraine’s Forgotten Children, she was shocked that nobody was speaking out about conditions in Ukraine’s institutions for the disabled.  Many die of malnutrition. Grameen Danone has a ‘bottom line’ in the number of children  removed from malnutrition, our bottom line was to remove children from these “Death Camps“.

At the risk of offending all in the largely grant funded  social enterprise support sector,  support has been derisory, with one representative even going to the length of drawing our attention to the anonymous defamation used against our efforts.

Now think about it.  Can we really build a better world by pushing each other out of the way? Is there any social return in keeping what others have to say out of media and censoring us from online dialogue?  A death in social enterprise may be an uncomfortable truth, but perhaps not as uncomfortable as the truth that children are denied a humane existence through absence of solidarity.

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2 thoughts on “Do we need ethics in social investment?

  1. I really love your website.. Excellent colors & theme.

    Did you make this website yourself? Please reply back as I’m attempting to create my own personal blog and want to find out where you got this from or exactly what the theme is named. Appreciate it!

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