Capitalism beyond the B Corporation

In March 2009, in the wake of an economic crisis, our paper for the opening plenary of the Economics for Ecology conference said this of our economic system:  

"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."

Since 2004 we'd been operating alongside civic activist as a business for social benefit in Ukraine where  two years earlier our collaboration with Kharkiv National University delivered a 'Marshall Plan' proposal to Ukraine's government. it had argued the case that business could be applied for social benefit and called on forward thinking business to participate.

In pursuit of this collaboration I discovered and approached a group called B Labs as I'd also approached Grameen Creative Labs a little later.

From: Jeff Mowatt <>
Date: Fri, 10 Jul 2009 18:00:48 +0000 (GMT)
To: <>
Subject: B Corps membership

I was interested enough to register on your site a while ago, but there’s little more that I can do now, it seems.

In 2004, I created a business with a profit for social purpose business model which has a mission in Eastern Europe.

It’s named after the model proposed in a 1996 white paper for President Clinton re-election committee. Terry Hallman the author deployed it in Russia in 1999 to source the Tomsk initiative and microfinance bank.

https://p-ced.com/about/history/

https://p-ced.com/projects/russia/

http://www.iccrimea.org/scholarly/economicdev.html

We set focus on Ukraine since launching in the UK and in 2006 published a microeconomic ‘Marshall Plan’ which has since influenced several areas of government policy

There are many items in your survey which I really can’t respond to although I believe we are working toward the same ends. I don’t know if it’s a question of our limited visibility, but in the field of social enterprise I’ve often felt there’s competion where there should be collaboration, such that one organisation fails to endorse the efforts and achievement of others.

We’re a very small organisation, not in any way a corporation but I believe we’re creating impact that as yet hasn’t come up on radar.

Regards,
Jeff.               

The response at the time from Hardik Savalai was to say::

“Unfortunately we are not at a point yet where we are able to certify companies outside the US.  But many foreign companies are still using the B Ratings System to benchmark their own performance and help start similar conversations in their countries. “

he seem to miss, or avoid the point that I was looking for collaboration rather than approval.

This was no abstract reasoning. Our primary focus had been the issue of children who die inside the intitutional childcare system. When we called on USAID for collabaration in 2008 we drew their attention to this and the trafficking of fetal stem cells as profit maximising enterprises.

I say beyond B Corporations because it started with an argument for business which makes a social purpose its primary objective, investing at least 50% of surplus revenue in the target objective which would clearly go beyond delivering both shareholder and social returns. It had argued that this primary purpose should be stated in the corporate charters. It asked -  

There's noting wrong with delivering both social and financial return, but there are circumstances where more is required. A crisis in Ukraine for example:

'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 and is about far more than shareholder benefit an exconomics which puts people first:

"Economics, and indeed human civilization, can only be measured and calibrated in terms of human beings.  Everything in economics has to be adjusted for people, first, and abandoning the illusory numerical analyses that inevitably put numbers ahead of people, capitalism ahead of democracy, and degradation ahead of compassion."