Future of Capitalism: Branson, Blair, Gates and Yunus

"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."

'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.'

(From the business plan for People-Centered Economic Development, 2004).

The author was a homeless American visitor, soon to be banished from UK shores as a potential economic migrant.

At the Davos Philanthropic Roundtable 2014 the subject of the panel discussion was - The Future of Capitalism: Maximising Economic and Social Returns.  It opened with an update about the outbreak of violence in Ukraine weeks earlier.      

Ten years earlier, just 6 months after the warning above, the founder of P-CED had arrived in Kharkiv as the then peaceful Orange Revolution began. Researching the problems of insititutional childcare would lead to the story of 'Death Camps, For Children' in 2006  

In 2007, a 'Marshall Plan' for Ukraine was delivered to Ukraine's government saying this about the use of profit for social benefit. It was published in a magazine and distributed widely online

'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.'

'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. '

At the 2009 Economics for Ecology conference in Sumy,  this question was raised "How can we create an economy based on people, to achieve financial profit, social benefit, and a safer, cleaner environment?".

With the same question, the 7th Phlianthropic Roundtable begins with 60 seconds silence for those who have suffered so far..  

So why didn't they help?

It would be interesting to re-discover the dialogue from the discussion online about Bill Gates Creative Capitalism where I tried to share this work.

Later in 2008, it would be submitted to the EU citizens consultation and the FCO of the British Government would inform us that they were fully aware of our work.  

In 2009 it was introduced to Branson's Virgin Unite network which had been soliciting project ideas.

Last but not least to Yunus social business partners Grameen Creative Labs and Erste Bank. Their response was to say that they could potentially help us.

They didn't , but the following year, Erste became partners in a joint USAID/ British Council project for social enterprise development centrre in Ukraine which would not accept us as partners

Yunus above all should have understood the argument. Of his 2007 book Creating a World Without Poverty he had said:

"Social Business introduces a totally revolutionary dimension to the free market economy. It does not interfere with the mechanism through which the normal Profit Making Business (PMB) works and prospers capitalization, expert business management, competitiveness etc. but investors here do not receive any dividend, though they can recover their investment if they want to, to reinvest in other Social Business or PMB. The satisfaction gained in achieving the social goals are the only motive behind the investment, and the business will be evaluated according to that standard. Essentially it is a non-loss, non-dividend business aimed at social objectives education, health, environment, whatever is needed to address the problems faced by society. The profits here remain with the business and help it to grow further. The whole thing is based on the premise that entrepreneurs need not be motivated only by the profits they personally receive, but can also be motivated by social goals and may enjoy success there with equal satisfaction. The important thing is not to mix up a Social Business with a PMB. In fact the inclusion of Social Businesses alongside PMBs in the business world will give the free market capitalism a larger, nobler and a more fulfilling purpose. Its advantages over straightforward charity are many efficiencies, continuous use with each turnover, competition with PMBs following the same rules, utilization of business innovations being some of the most important ones."

As we'd said when our work in Ukraine began.

"The P-CED model is not a charity sort of operation. It is business. What we choose to do with profits is entirely up to us, and we choose before anything else happens to set most of our profits aside to assist poor people. In fact, our corporate charter requires us by law - UK law, where rule of law is very well established - to use our profits only for social benefit. We cannot do anything else with it."

Could it be that we were stepping on toes and that a man feted with a Nobel Prize found it difficult to accept that others were thinking along similar lines and more importantly, taking action? It would seem so.  .

Today with US boots on the ground in Ukraine and thousands dead, I reflect on the letter that called on USAID and Senate Committee of Foreign Relations for support. Two members of that committee now serve at the White House.

I am writing to you to request your support in advancing critical relief for Ukrainian citizens – with first focus on children in state care, the worst result of Ukraine’s political machinations. This is mentioned in some detail in “A Marshall Plan for Ukraine” referenced at the end of this document."

It concluded:

"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?"

 

A new 'Marshall Plan'?

Imagine the collective morality of the following people. An oligarch fighting extradtion on bribery charges. A part of the British government renowned for protecting its paedophiles and the Marxist philosophy of a man who strangled his wife. 

No it's not the plot of a distopian movie. it involves 3 members of the House of Lords and a plan to deliver a 'Marshall Plan' sometime in the next 200 days. All of us will get to pay 300 billion dollars for it, one way ot another.

They include a man whose idea of an EU access agreement to Ukraine triggered the currrent uprising. When the 'Marshall Plan'  was put forward he was both the EU Trade Commissioner and UK Business Secretary. Together with current Chancellor George Osborne, he was also being entertained on the yacht of oligarch Oleg Deripaska,  

His relationship with Ukrainian oligarch Rinat Akmetov had also been revealed   

 

 

Call it a hunch but I think they'll be passing off anything they can as their own thinking, Don't you?