For the Many – An economy that puts people over shareholder returns

In the Long Term Capitalism challenge I described how people-centered business evolved from a question about the purpose of business to create a ‘Marshall Plan’ strategy for Ukraine.

‘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. ‘

Re-imagining capitalism — The New Bottom Line

An economy that benefits all is on the lips of political leaders as we approach a General Election, It cannot happen without support, particularly from those identified as follows:

Support from government and the social enterprise community as suggested in our 2004 business plan:

“Traditional capitalism is an insufficient economic model allowing monetary outcomes as the bottom line with little regard to social needs. Bottom line must be taken one step further by at least some companies, past profit, to people. How profits are used is equally as important as creation of profits. Where profits can be brought to bear by willing individuals and companies to social benefit, so much the better. Moreover, this activity must be recognized and supported at government policy level as a badly needed, essential, and entirely legitimate enterprise activity.”

From the Vatican who have argued for an ethics which is people-centred and an economy for ther common good.

“This is not merely a matter of a “third sector”, but of a broad new composite reality embracing the private and public spheres, one which does not exclude profit, but instead considers it a means for achieving human and social ends. Whether such companies distribute dividends or not, whether their juridical structure corresponds to one or other of the established forms, becomes secondary in relation to their willingness to view profit as a means of achieving the goal of a more humane market and society. “

From the UN General Assembly who also advocate a people-centred economy

“The anti-values of greed, individualism and exclusion should be replaced by solidarity, common good and inclusion. The objective of our economic and social activity should not be the limitless, endless, mindless accumulation of wealth in a profit-centred economy but rather a people-centred economy that guarantees human needs, human rights, and human security, as well as conserves life on earth. These should be universal values that underpin our ethical and moral responsibility.” (Miguel D’Escoto Brockmann, the President of the United Nations General Assembly speaking in 2009)

From the Blueprint for Better Business who also advocate that the future of business lies in people not profit.

“Over the past couple of years a group from business and society have been working on a distinctive approach to this. Called a Blueprint for Better Business, it offers a way for businesses to renew and regain a sense of social purpose. The key question is why a business exists. The point this group focused on is that the true purpose of business is to solve problems and meet social needs. Profit is the result. Profit is not the purpose. “

From Coops and Fair Trade who have joined forces to promote people-centred business in supply chains.

“Both Cooperatives Europe and Fair Trade have been actively engaged in promoting enterprises that place people and not profit at the heart of business. “

From Oxfam who advocate a human economy that benefits all

“People should replace profit as the bottom line” wrote Oxfam CEO Mark Goldring for Huffington Post.

Tackling inequality requires that people, not profit constitute the bottom line. We need everyone who is in a position of influence — business leaders, financiers, politicians, civil servants — to put the interests of ordinary citizens back at the heart of every decision he or she makes. To borrow from Steve Hilton, David Cameron’s former adviser, we need an economy that is “more human”.

He’s not borrowing from David Cameron’s adviser, but the man who argued 20 years ago that:

“Modifying the output of capitalism is the only method available to resolving the problem of capitalism where numbers trumped people — at the hands of people trained toward profit represented only by numbers and currencies rather than human beings. Profit rules, people are expendable commodities represented by numbers. The solution, and only solution, is to modify that output, measuring profit in terms of real human beings instead of numbers.”

Neoliberalism is broken

Pierre Omidyar co-funded Ukraine revolution groups with US government, documents show

USAID/Omidyar funding support for Ukraine activists

Ukraine: a ‘Marshall Plan’ or an oligarch bail out?

It was no surprise that the crisis in Ukraine came up at the Davos Philanthropic Roundtable. Tony Blair followed with a panel discussion about business for social benefit. This is what our work there was about, as one such business. Blair is indebted to host Viktor Pinchuk for a $500,000 donation to his faith foundation:

Calling on the Blair government for support in 2004, we’d said:

“While the vast majority of people in poverty suffer quietly and with little protest, it is not safe to assume that everyone will react the same way. When in defence of family and friends, it is completely predictable that it should be only a matter of time until uprisings become sufficient to imperil an entire nation or region of the world. People with nothing have nothing to lose. Poverty was therefore deemed not only a moral catastrophe but also a time bomb waiting to explode”

“Traditional capitalism is an insufficient economic model allowing monetary outcomes as the bottom line with little regard to social needs. Bottom line must be taken one step further by at least some companies, past profit, to people. How profits are used is equally as important as creation of profits. Where profits can be brought to bear by willing individuals and companies to social benefit, so much the better. Moreover, this activity must be recognized and supported at government policy level as a badly needed, essential, and entirely legitimate enterprise activity.”

The ‘Marshall Plan’ for Ukraine is an iimpact investment proposal to address some of Ukraine’s most intractable social problems. The investment was calculated at $1.5 billion over 5 years . |It was delivered to Ukraine’s goverment in October 2006, setting out a strategy for microeconomic development and social enterprise, with a particular emphasis on transitioning children from orphanages and on the streets into loving family homes, while helping to stimulate business and job creation such that fewer live in poverty:

“An inherent assumption about capitalism is that profit is defined only in terms of monetary gain. This assumption is virtually unquestioned in most of the world. However, it is not a valid assumption. Business enterprise, capitalism, must be measured in terms of monetary profit. That rule is not arguable. A business enterprise must make monetary profit, or it will merely cease to exist. That is an absolute requirement. But it does not follow that this must necessarily be the final bottom line and the sole aim of the enterprise. How this profit is used is another question. It is commonly assumed that profit will enrich enterprise owners and investors, which in turn gives them incentive to participate financially in the enterprise to start with.

That, however, is not the only possible outcome for use of profits. Profits can be directly applied to help resolve a broad range of social problems: poverty relief, improving childcare, seeding scientific research for nationwide economic advancement, improving communications infrastructure and accessibility, for examples – the target objectives of this particular project plan. The same financial discipline required of any conventional for-profit business can be applied to projects with the primary aim of improving socioeconomic conditions. Profitability provides money needed to be self-sustaining for the purpose of achieving social and economic objectives such as benefit of a nation’s poorest, neediest people. In which case, the enterprise is a social enterprise.”

“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 ple 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. “

A ‘Marshall Plan’ strategy has more recently been called for by Ukraine’s interim Prime Minister and the leaders of civil rights organisation Maidan. It has also been called for by a group of international academics and most recently George Soros.
Earlier this week, the British Foreign and Commonwealth Office met one of the oligarchs closest to the deposed regime to discuss financial support to save Ukraine’s economy, estimated at $35 billion over 2 years.

As of yesterday it was discovered that $70 billion is missing from public funds with another £43 billion of aid gone without  trace.

If it comes to supporting one or the other through public funding , which would be your strategy of preference?

MMIC to the World: Why You Need Peace in Ukraine?

Сайт Майдан - дзеркало WP

This FAQ has been compiled from the QAs of several interviews to foreign media we had in last two months. Please read it before asking us for interview. Thanks!

Who is fighting on the streets in Kyiv? Radicals? Nationalists?

No, this is the war of middle class and civil society, freelancers. journalists, NGOs, IT workers, artists, students and old people, who have nothing to lose. Kyiv Euromaidan is a sort of internal domestic exile from a totally fraudulent political and economic system.

MMIC Board Member Boris Zakharov with one of freedom fighters in Kyiv. Mask to protect her from tear gas.

What do people want and what they could actually get?

People want freedom – political freedoms (freedom of assembly, freedom of speech, freedom of conscience, right to non discrimination etc.), freedom from Russia and freedom from nepotism which is the current regime. The number of people ready to die…

View original post 1,098 more words

Michael Porter: Business can be good at solving social problems

The profit motive can make business good at solving social problems says Harvard professor Michael Porter – So how about #terrorism?

From a 2003 proposal for economic development for the Tatars of Crimea.

The paper argues for a targetted financial strategy for a peaceful community, the equivalent in finance to a smart bomb deployed after violence has broken out:

“There is no requirement in capitalism for the direction in which profits will go. They can accumulate in the hands of a few people, and they can be made available to meet social needs. Using profit to meet social needs does not necessarily remove the profit motive because everyone involved in such an enterprise is likely to want it to be profitable so that they will continue to have a job and income. This has been the case many times in US companies, for example. A company may have an economic downturn and lose money instead of making profit. Employees often accept lower pay to keep their jobs and to keep the company going. Employees know very well that the company must once again make a profit – end up with more money than it requires to operate it each year – if they are to keep their jobs. Otherwise, it will consume more money than is needed to operate and finally cease to exist when all of its money is gone. Employees accepting lower pay is a way to help return the company to profitability. The employees all share the profit motive. The profit motive is not the exclusive domain of the few people who start a company. It is shared by everyone involved because each has his or her own self-interest in keeping the company going. “

“In efforts to deal with communities in or near poverty, it will be useful to target progressive, peace-oriented communities just as aggressively as has been done in targeting terrorist cells. Both types of communities are quite similar, but, one has attempted a peaceful path whereas the other has not. Toward this end, the most promising and deserving communities must be “hit” with equal force as is brought to terrorist cells – the difference being delivery of resources rather than ordinance. The point is to grow the best, most promising communities with the same focus and passion brought to destroying terrorists.”

“Just as the US now heavily uses smart bombs in warfare, it is becoming increasingly apparent that the equivalent is needed in aid efforts. It is not enough to spend, say, US$ 7 million dollars for five Tomahawk cruise missiles and then spend a fraction of that amount in building a peaceful community which does not merit targeting by missiles. Yet, that is what we have in this case.”

http://www.p-ced.com/1/node/32

Living wages and the US Presidentwho challenged global poverty

This story really begins ten years ago with a homeless man’s fast for a living wage. The story of how a UK based social enterprise ‘nudged’ US politicians over economic and social rights.

Regrettably it’s one of those ‘how it could have been’ stories. The man who might now be US President was John Edwards, senator for North Carolina. In July 2007, a year before the economic crisis, the Center for Global Development wrote:

“John Edwards believes that the United States must be a global leader in the fight against poverty. Solving global poverty is a moral imperative, but it is also a security issue. Global poverty increases the risk to America by providing a safe harbor for instability, extremism, and terrorism. Edwards’ strategy against global poverty will require every weapon in our national security arsenal. For the last six years, too many burdens have been placed on the Department of Defense–not because it has asked for this mission or is the best suited to handle these challenges, but because it has been the most capable and well-funded national security institution.

As president, John Edwards will fundamentally transform America’s approach to the world. He will bring high-level attention to help people in three priority areas: primary education, preventive health, and greater economic and political opportunity.”

As most know, John Edwards fell from grace following revelations of his extra marital relationship and efforts to conceal it.

There is however another story in the background. A story known only to Edwards and myself , an Englishman.

He’d also stood for the Vice Presidency in 2004, when I fowarded a letter from colleague and friend Terry Hallman who by then was operating out of Ukraine, on our own efforts to tackle poverty. Terry Hallman’s letter drew attention to tax avoidance, spending on the war in Iraq and a new economic paradigm which depended on American people.

A year earlier Terry had been in Chapel Hill North Carolina where he had been on hunger strike for several weeks in a campaign for US government to ratify the International Covenant on Economic Social and Cultural Rights. After returning from work in Russia to tackle poverty, he was jobless homeless and partially disabled.He asked me to forward progress reports to John Edwards, who he informed me, he had been nudging about international policy for several years.

Observing the deteriation in his thinking and writing I offered Terry an exit strategy which would lead us to working together. The relevance of John Edwards stand against global poverty may be found in a proposal we distributed in 2004 and this extract:

“The opportunity for poverty relief was identified not only as a moral imperative, but also as an increasingly pressing strategic imperative. People left to suffer and languish in poverty get one message very clearly: they are not important and do not matter. They are in effect told that they are disposable, expendable. Being left to suffer and die is, for the victim, little different than being done away with by more direct means. Poverty, especially where its harsher forms exist, puts people in self-defence mode, at which point the boundaries of civilization are crossed and we are back to the law of the jungle: kill or be killed. While the vast majority of people in poverty suffer quietly and with little protest, it is not safe to assume that everyone will react the same way. When in defence of family and friends, it is completely predictable that it should be only a matter of time until uprisings become sufficient to imperil an entire nation or region of the world. People with nothing have nothing to lose. Poverty was therefore deemed not only a moral catastrophe but also a time bomb waiting to explode.”

“Along the way, all employees of P-CED are to be paid at minimum a wage sufficient to guarantee a decent standard of living in accordance with the International Covenant of Economic, Social and Cultural Rights.

The fundamental policy guide for P-CED is the International Bill of Human Rights. IBHR is comprised of Universal Declaration of Human Rights; International Covenant of Civil and Politial Rights, and International Covenant of Economic, Social and Cultural Rights. P-CED’s main focus falls within sphere the economic, social and cultural rights, ICESCR.”

The proposal referred back to a paper written in 1996, drawing attention to the same risks, for the steering group of the Commiitee to Re-elect President Clinton

In 2003, drawing attentiion to the relationship between poverty and terrorism, in a proposal for Crimea’s Tatar community , US government were advised.

“Once a nation or government puts people in the position of defending their own lives, or that of family and friends, and they all will die if they do nothing about it, at that point all laws, social contracts and covenants end. Laws, social contracts and covenants define civilization. Without them, there is no civilization at all, there is only the law of the jungle: kill, or be killed. This is where we started, tens of thousands of years ago.

By leaving people in poverty, at risk of their lives due to lack of basic living essentials, we have stepped across the boundary of civilization. We have conceded that these people do not matter, are not important. Allowing them to starve to death, freeze to death, die from deprivation, or simply shooting them, is in the end exactly the same thing. Inflicting or allowing poverty on a group of people or an entire country is a formula for disaster.

These points were made to the President of the United States near the end of 1996. They were heard, appreciated and acted upon, but unfortunately, were not able to be addressed fully and quickly due primarily to political inertia. By way of September 11, 2001 attacks on the US out of Afghanistan – on which the US and the former Soviet Union both inflicted havoc, destruction, and certainly poverty – I rest my case. The tragedy was proof of all I warned about, but, was no more tragedy than that left behind to a people in an far corner of the world whom we thought did not matter and whom we thought were less important than ourselves.

We were wrong.”

it concluded:

“Just as the US now heavily uses smart bombs in warfare, it is becoming increasingly apparent that the equivalent is needed in aid efforts. It is not enough to spend, say, US$ 7 million dollars for five Tomahawk cruise missiles and then spend a fraction of that amount in building a peaceful community which does not merit targeting by missiles. Yet, that is what we have in this case.”

Though John Edwards was to admit he’d been dishonest with the American people, I’ve often wondered just how much of a threat he might have been to vested economic interests and competitors.

In 2005, Edwards launched the Center on Poverty Work and Opportunity on the UNC campus in Chapel Hill and last year the same campus would launch a social business centre endorsed by Muhammad Yunus.

The theme of spending in Iraq carries foward to efforts in Ukraine where in a ‘Marshall Plan’ proposal, we weigh the weekly cost against that of a social investment fund to tackle poverty.

“It is proposed that the United States of America be actively engaged in supporting this project, financially and any other way possible. Ukraine has clearly demonstrated common will for democracy. Ukraine has also unilaterally taken the first critical step to fulfill this program, thus clearly demonstrating initiative and commitment to participation required in the original Marshall Plan sixty years ago. The US side is presumably attempting to foster democracy in another country, which never expressed much interest and shows little real interest now. That of course is Iraq, where recent estimates indicate a cost of $1.5 billion per week.

That same amount of money, spread over five years instead of one week, would more than cover the investment cost of the initial components of this project, and allow a reserve fund for creating new projects as Ukraine’s intelligentsia invents them in the Center for Social Enterprise. It is proposed that Ukraine and the US provide equal portions of this amount. Ukraine is certainly able to provide that level of funding, given that projects are designed with the same fiscal discipline employed in the traditional business sector. That means they pay for themselves, one way or another.

Project funding should be placed as a social-benefit fund under oversight of an independent board of directors, particularly including representatives from grassroots level Ukraine citizens action groups, networks, and human rights leaders. ”

When John Edwards addressed the Council on Foreign Relations in his May 2007 speech, he said:

“The core of this presidency has been a political doctrine that George Bush calls the “Global War on Terror.” He has used this doctrine like a sledgehammer to justify the worst abuses and biggest mistakes of his administration, from Guantanamo and Abu Ghraib, to the war in Iraq. The worst thing about the Global War on Terror approach is that it has backfired — our military has been strained to the breaking point and the threat from terrorism has grown.

We need a post-Bush, post-9/11, post-Iraq American military that is mission-focused on protecting Americans from 21st century threats, not misused for discredited ideological pursuits. We need to recognize that we have far more powerful weapons available to us than just bombs, and we need to bring them to bear. We need to reengage the world with the full weight of our moral leadership.

What we need is not more slogans but a comprehensive strategy to deal with the complex challenge of both delivering justice and being just. Not hard power. Not soft power. Smart power.”

The following month Richard Armitage and Joseph Nye launched the Smart Power Initiative at The Center for Stategic and International Studies,

In a follow up communcation to USAID and the Council on Foreign Relations, Terry draws attention to the proposal and the R.I.C.O activities we and others have been exposing, including the trade in aborted foetuses. Notably Barack Obama and Joe Biden are serving on the Council at the time.

“We are grossly underfunded in favor of missiles, bombs, and ordnance, which is about 100% backwards. Now, with even the US Pentagon stating that they’ve learned their lesson in Iraq and realize (so says top US general in Iraq ten days or so ago) that winning hearts and minds is the best option, I and others shall continue to think positive and look for aid budgets and funding spigots to be opened much more for people and NGOs in silos, foxholes and trenches, insisting on better than ordnance, and who understand things and how to fix them. We can do that. We can even do it cost-effectively and with far better efficiency than the ordnance route. Welcome to our brave new world. Except it’s not so new: learn to love and respect each other first, especially the weakest, most defenseless, most voiceless among us, then figure out the rest. There aren’t other more important things to do first. This message has been around for at least two thousand years. How difficult is it for us to understand?”

Before he died, Terry informed me that his efforts to assist in a proposal for fundamental science education in 2007 had entered the US circuit via Obama.

By October 2008, the economic crisis had arrived in the United States and this time Barack Obama was standing for the presidency. I noted this announcement for his campaign:

“The second thing I’ll do is invest in ideas that can help us meet our common challenges, because more often than not the next great social innovation won’t be generated by the government.”

An article in Skoll Social Edge noted

“With these words, candidate Obama promised to create a Social Entrepreneurship Agency within the Corporation for National and Community Service. He proposed $3.5 billion a year for social investment, paid for by ending the war in Iraq and eliminating corporate tax loopholes.”

it didn’t happen that way. Instead a Social Innovation Fund of $100 million was made available to “experienced grantmaking intermediaries” and two years later Occupy Wall Street and the Arab Spring were a clear demonstration that the policy wasn’t adequate.

The UK followed this top down rather than bottom up social investment approach through intermediaries with Big Society Capital whereas in Northern Ireland there was apparently greater insight into the needs of grassroots investment, with their Social Investment Fund

Barack Obama now campaigns for a living wage,

Economics in Transition: Beyond capitalism and communism

The prevailing economics systems in the twentieth century were capitalism and communism.  Both systems were hypothetically aimed at creating a means of providing people with comfortable, safe and secure life.

Along the way, in the process of attempting different forms of economics from capitalism to communism, we have managed to pollute and contaminate our own environment to the extent of causing environmental change to the point of quite possible catastrophe for people around the world.  Neither the capitalist system nor the communist system – nor the various fascist systems attempted in such as Germany, Spain and Italy – lived up to their promises.  Communist and fascist systems became infamous for mass murder.  The Western capitalist was less murderous. Overall, capitalism was able to produce a much larger middle class of people between rich and poor, and has gained precedence due to making safe and secure life possible for more people.   But, it’s various methods over the past 100 years left millions of people to suffer and die more indirectly than outright murder.  Those people were dismissed as relatively unimportant, mostly left to die from deprivation rather than outright execution.  In all systems, some rationale was created to either dismiss people and leave them to die, or, kill people outright.  In the end, for the victims, the result was identical.

In that context of disposing of people, by all economic systems, and with capitalism having become predominant, financial profit came to rule the day.  Profit, the bottom line, was master of all else.  People and the environment we live in were secondary considerations.  The vehicle of Western capitalism was, and is, corporations.

Corporations are legal structures created as legal entities to carry out the business – financial – objectives.  Under US law, corporations are a legal person.  What sort of person?  According the psychological assessment measures in the Diagnostics and Statistical Manual, Fourth Edition (DSM-IV) used for personality assessment, corporations meet the strict clinical definition of a psychopath.  “Psychopath” is another word for lunatic, or, someone who is legally, criminally insane.

–  From the presentation on Economics in Transiiton at the 2009 Economics for Ecology Conference in Sumy, Ukraine  P-CED’s contribution in 2009 and 2010 included a study guide of the conditions leading to the economic crisis of 2008 and the 2010 paper on people-centered economics.    

In Reimagining capitalism: The new bottom line, I describe how a people-centered system of economics reasoned for an economy which serves people rather than the other way around.  

Reimagining capitalism: The new bottom line

How business can better serve humanity

From the paper ‘Microeconomic Development and Social Enterprise – a ‘Marshall Plan’ for Ukraine 2006

‘ In order to understand the overwhelming critical need for social enterprise and a formal national center to facilitate social enterprise, an operational definition for social enterprise is essential.

‘Enterprise is any organizational activity aimed at a specific output or outcome. Once the output or outcome – the primary objective – is clear, an organization operating to fulfill the objective is by definition an enterprise. Business is the most prominent example of enterprise. A business plan, or organizational map, provides a reference regarding how an organizational scheme will operate to produce a specific outcome: provision of products or services in a way to create profit. Profit in turn is measured numerically in terms of monetary gains, the “bottom line.”

This is the function of classic capitalism, which has proven to be the most powerful economic engine ever devised.

An inherent assumption about capitalism is that profit is defined only in terms of monetary gain. This assumption is virtually unquestioned in most of the world. However, it is not a valid assumption. Business enterprise, capitalism, must be measured in terms of monetary profit. That rule is not arguable. A business enterprise must make monetary profit, or it will merely cease to exist. That is an absolute requirement. But it does not follow that this must necessarily be the final bottom line and the sole aim of the enterprise. How this profit is used is another question. It is commonly assumed that profit will enrich enterprise owners and investors, which in turn gives them incentive to participate financially in the enterprise to start with.

That, however, is not the only possible outcome for use of profits. Profits can be directly applied to help resolve a broad range of social problems: poverty relief, improving childcare, seeding scientific research for nationwide economic advancement, improving communications infrastructure and accessibility, for examples – the target objectives of this particular project plan. The same financial discipline required of any conventional for-profit business can be applied to projects with the primary aim of improving socioeconomic conditions. Profitability provides money needed to be self-sustaining for the purpose of achieving social and economic objectives such as benefit of a nation’s poorest, neediest people. In which case, the enterprise is a social enterprise.’

In the conclusion, the paper says:

‘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. ‘

It was the major and final work of founder Terry Hallman whose efforts began with a seminal paper for the President of the United States and led to the creation of a business for social purpose which leveraged a community micro finance bank in Russia. P-CED established in the UK in 2004.as a business serving both private and public sector supply chains with it’s software products and services.        ,

In You, Me, We, Ethics and People-Centered Economics, I relate how the concept evolved from an argument for the primacy of human beings over profit and numbers.

In 2004, it had been introduced to British Government and the social enterprise community, saying:

Dealing with poverty is nothing new. The question became ‘how does poverty still exist in a world with sufficient resources for a decent quality of life for everyone?’ The answer was that we have yet to develop any economic system capable redistributing finite resources in a way that everyone has at minimum enough for a decent life: food, decent housing, transportation, clothing, health care, and education. The problem has not been lack of resources, but adequate distribution of resources. Capitalism is the most powerful economic engine ever devised, yet it came up short with its classical, inherent profit-motive as being presumed to be the driving force. Under that presumption, all is good in the name of profit became the prevailing winds of international economies — thereby giving carte blanche to the notion that greed is good because it is what has driven capitalism. The 1996 paper merely took exception with the assumption that personal profit, greed, and the desire to amass as much money and property on a personal level as possible are inherent and therefore necessary aspects of any capitalist endeavour. While it is in fact very normal for that to be the case, it simply does not follow that it must be the case.

Profits can be set aside in part to address social needs, and often have been by way of small percentages of annual profits set aside for charitable and philanthropic causes by corporations. This need not necessarily be a small percentage. In fact, there is no reason why an enterprise cannot exist for the primary purpose of generating profit for social needs — i.e., a P-CED, or social, enterprise. This was seen to be the potential solution toward correcting the traditional model of capitalism, even if only in small-scale enterprises on an experimental basis.

Enterprise for the primary objective of poverty relief, localized community economic development, and social support became the business model which guided P-CED’s efforts and development at a time in the US when terms such as ‘social enterprise’ and ‘social capitalism’ had not yet been coined.

Traditional capitalism is an insufficient economic model allowing monetary outcomes as the bottom line with little regard to social needs. Bottom line must be taken one step further by at least some companies, past profit, to people. How profits are used is equally as important as creation of profits. Where profits can be brought to bear by willing individuals and companies to social benefit, so much the better. Moreover, this activity must be recognized and supported at government policy level as a badly needed, essential, and entirely legitimate enterprise activity.”

Though some aspects of this recomendation were addressed by the introduction of the Community Interest Company in 2005 and the Social Value Act in 2013, two major components, localisation and human rights, were overlooked.

The cencept of a business operating for the benefit of the community was first described in the 1996 white paperm which said:

“The P-CED concept is to create new businesses that do things differently from their inception, and perhaps modify existing businesses that want to do it. This business model entails doing exactly the same things by which any business is set up and conducted in the free-market system of economics. The only difference is this: that at least fifty percent of profits go to stimulate a given local economy, instead of going to private hands.”

“If a corporation wants to donate to its local community, it can do so, be it one percent, five percent, fifty or even seventy percent. There is no one to protest or dictate otherwise, except a board of directors and stockholders. This is not a small consideration, since most boards and stockholders would object.  But, if an a priori arrangement has been made with said stockholders and directors such that this direction of profits is entirely the point, then no objection can emerge. Indeed, the corporate charter can require that these monies be directed into community development funds, such as a permanent, irrevocable trust fund. The trust fund, in turn, would be under the oversight of a board of directors made up of corporate employees and community leaders. “

“It is only when wealth begins to concentrate in the hands of a relative few at the expense of billions of others who are denied even a small share of finite wealth that trouble starts and physical, human suffering begins. It does not have to be this way. Massive greed and consequent massive human misery and suffering do not have to be accepted as a givens, unavoidable, intractable, irresolvable. Just changing the way business is done, if only by a few companies, can change the flow of wealth, ease and eliminate poverty, and leave us all with something better to worry about. Basic human needs such as food and shelter are fundamental human rights; there are more than enough resources available to go around–if we can just figure out how to share. It cannot be “Me first, mine first”; rather, “Me, too” is more the order of the day.”

The first action was to share this concept with the committee to re-elect the US President in 1996 and then publish online free to use. In 2009, at the international Economics for Ecology conference in Sumy, this point was made:

“Thus the issue of ecology economics is not only ‘the third bottom line’, it might be more aptly renamed the economics of survival of the human species.  That includes everyone, regardless of one or another economic hypothesis or theory they might prefer.  We can endlessly debate and discuss von Mises/von Hayek free market economics/capitalism which proved successful except for the times it failed, and then study why it failed – repeatedly, the most recent failure in September 2008.  We can endlessly debate and discuss opposing Keynesian government interventionist economics/capitalism,  which proved successful except for the times it failed.  That has been an alternating pattern for the past eighty years in Western capitalism.  We can discuss the successes and failures of various flavors of communism and fascism.  At this point, the simple fact is that regarding economic theory, no one knows what to do next.  Possibly this has escaped immediate attention in Ukraine, but, economists in the US as of the end of 2008 openly confessed that they do not know what to do.  So, we invented three trillion dollars, lent it to ourselves, and are trying to salvage a broken system so far by reestablishing the broken system with imaginary money.

Now there are, honestly, no answers.  It is all just guesswork, and not more than that.  What is not guesswork is that the broken – again – capitalist system, be it traditional economics theories in the West or hybrid communism/capitalism in China, is sitting in a world where the existence of human beings is at grave risk, and it’s no longer alarmist to say so.

The question at hand is what to do next, and how to do it.  We all get to invent whatever new economics system that comes next, because we must.”

P-CED began as a challenge to traditional capitalism and would lead on to challenge organised crime over human rights. It would finally challenge the governments and politicians who put personal benefit above that of “those in greatest need”.

The primary focus of P-CED became the removal of children from neglect in state institutions, for Muhammad Yunus and Grameen Danone it is the number of children removed from malnutrition.

Social business is “All about others, nothing about me”

In his speech Yunus also refers to the 47 million Americans without health insurance. P-CED founder Terry Hallman was one of them

Though we may have re-imagined capitalism, as Martin Luther King Jr once said ‘our lives begin to end when we become silent about things that matter’  and when we are silenced by others, many lives are ended.

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It’s the economic paradigm, stupid!

Re-imagining capitalism for people and planet

What Ethical Trading Initiative?

That was my immediate thought on reading a Guardian article assessing the impact of business on child rights following a live discussion session.

Developed by Unicef, the UN Global Compact and Save the Children, the children’s rights and business principles (the Principles) were designed to help companies incorporate child rights into their practices. With an increasing focus on the social and environmental impacts of business, we gathered a group of experts to discuss how businesses can make the shift from reactive to pro-active when supporting child rights.

As a social business with childcare reform as a primary objective, I might have commented were it possible.

Regrettably I’m blocked from commenting on the Guardian after commenting on an earlier article about ‘Creating Shared Value’ where ironically, I’d given the issue of childcare reform as an illustration of profit for a social purpose rather than what the article advocated, profit from a social purpose. Was it the author or the Guardian who didn’t want to engage?

When I first wrote, Changing Capitalism For People and Planet in 2011,  our founder Terry Hallman was still alive. I offered it first to the Guardian editors for social enterprise and sustainable business.  It ended up as an article for a McKinsey initiative the following year.

After his death, in Every Child Deserves a Loving Family, I’d described how his efforts had influenced goverment policy and led to a 40% increase in domestic adoptions. It had begun buy speaking out about neglect, in ‘Death Camps , For Children’

Just days ago, I was in conversation with a DTI representative on a social networking forum. I referred her to my report on ‘Social Enterprise in Ukraine‘ which revealed our interaction with both US and UK government agencies on our work.  It would reveal how Unicef had turned a wilful blind eye, USAID had no budget for “retarted children” and the British Council, working with USAID and corporate partners had been approached with our proposals and determined to set up a social enterprise project of their own.

I’ve also described how both Ukraine’s constitution and the International Covenanant on Economic Social and Cultural Rights compel us to act where there is harm being done to children and how business membership organisations like the British Ukrainian Society and Business in the Community, locked us out and aligned themselves with Ukraine’s moguls, in the vested interest of trade.

At the top of the festering pile the UK business and EU trade minister of the time, would be found.

So where in all of this does an Ethical Trading Initiative come in?  It is a club who’d have us as members?

Apparently yes, if I pay 900 quid.  And then what, read articles on how to suck eggs, or actually do something?

You’ll forgive me for seeing this as the puffery of a rostrum clinging elite, after a colleague and many children lost their lives,  when they couldn’t be found.

Replicate or Scale?

It might well be a strategy for planetary iinvasion.  Do I replicate the agreeable human form or just show up as my scaly self and hope to be loved for what’s inside.

But no, we’re talking about social enterprise.

I guess when we told them our mission was to “replicate localised people-centered economics on a global basis”  it must have sounded a bit on the scaly side, but we really meant no acquisition. Quite the converse in fact.

It was in fact about a business which invests its profit in stimulating a local economy and in our earlier work we’d referred to it as a Community Funding Enterprise.  The directors and shareholders just needed to amend the business articles to agree the core objective as a social purpose.