The ego of the Conscious Capitalist

In all the time I've been engaged in business for social benefit, it was only this week that I'd found John Mackey's  from 10 years ago on Rethinking the Social Responsibility of Business. .      

I was struck by the similarity with the argument from our 1996 paper, which has been readable online since 1997. I share a key paragraph    

"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. In effect, the business would operate in much the same manner as a charitable, non-profit organization whose proceeds go to local, national, and international charities. Non-profits, however, are typically very restricted in the type of business they can conduct. In the United States, all non-profits must constantly pay heed that they are not violating those restrictions, lest they suffer the wrath of the Internal Revenue Service. For-profits, on the other hand, have a relatively free hand when it comes to doing business. The only restrictions are the normal terms and conditions of free-enterprise. 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.”

As one may read however, it was not just about the benefit of employees, but the benefit of the community at large. 

What about those who had no employment, or were being paid wages insufficient to meet their most basic needs? In 2003, it was which led to embedding a living wage policy in the business model. 

” Fifty percent of annual surplus will remain in each local community where income is derived, by way of deposit into a local community development bank serving that location. In that locales are part of EU and therefore subject to well-developed rule of law, corruption issues should not present insurmountable barriers such as in Crimea.

Fifty percent of surplus will be retained by P-CED for growth and expansion. 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."

It was an intrerview later that year, with a Crimean Diaspora leader which gave founder Terry Hallman an opportunity to describe the approach:

"Essentially, P-CED challenges conventional capitalism as an insufficient economic paradigm, as evidenced by billions of people in the world living in poverty in capitalist countries and otherwise. Under the conventional scheme, capitalism - enterprise for profit - has certainly transformed much of the world and created a new breed of people in capitalist societies, the middle class. That is a good thing. But, capitalism seems to have developed as far as it can to produce this new class of fairly comfortable people between rich and poor, at least in the West where it has flourished for quite some time.

The problem is that profit and money still tend to accumulate in the hands of comparatively few people. Money, symbolically representing wealth and ownership of material assets, is not an infinite resource. When it accumulates in enormous quantities in the hands of a few people, that means other people are going to be denied. If everyone in the world has enough to live a decent life and not in poverty, then there is no great problem with some people having far more than they need. But, that's not the case, and there are no rules in the previous capitalist system to fix that. Profit and numbers have no conscience, and anything done in their name has been accepted as an unavoidable aspect of capitalism."

A truer picture of John Mackey was revealed by the Rahodeb debacle in which Mackey had posted some 1200 comments online about competitor Wild Oats.

"Rahodeb cheered Whole Foods' financial results, trumpeted his gains on the stock and bashed Wild Oats. Rahodeb even defended Mr. Mackey's haircut when another user poked fun at a photo in the annual report. "I like Mackey's haircut," Rahodeb said. "I think he looks cute!""

A further insight came more recenty when Mackey denounced Obamacare as Fascism.  What I do know about Fascism is that the men and women of the Uniited Kingdom, who conscripted to take up arms and fight it, would vote overwhelmingly for a Labour goverment, who in 1948 introduced a Natiional Health Service which today operates at less than half the cost of US healthcare.    

“The government’s race to sell off of the NHS to private business will destroy this incredible British achievement and put profits before people. The glow from the report will be very short-lived if we do not stop the sale of our NHS and value the people who do extraordinary things every day.”

The UK had the second-cheapest health expenditure on of the list, spending $3,405 per capita, compared with £4,495 in Germany or $8,508 in the US.

Putting people ahead of profit maximisation was where we began and where we ended in Ukraine with our primary focus on childcare:

"The most urgent component of the project below is relief and modern medical treatment for tens of thousands of Ukraine's children diagnosed as psychoneurologically handicapped. Many have died in state care, in primitive and inhumane conditions. Many are misdiagnosed, and end up in atrocious conditions. Following intense publicity and public discussion of the issue during final preparation of this project, Ukraine's government agreed on 5 March, 2007 to open more than 400 new treatment facilities for these children all over Ukraine. That commitment from Ukraine’s government was a major step forward, clearly demonstrating Ukraine’s willingness and ability to take initiative in childcare reform first and foremost."

"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. "

Coming back to the NHS, one of the most prominent figures in privatisation has been Sir Richard Branson who seemed to be singing from our hymn book when speaking at the 2009 Davos Ukrainian Lunch  Business should focus more on solving social problems, he said:  

"Capitalism is the only economic system that really works", he underlined, saying that the downside of the capitalist system is accumulation of great wealth in hands of relatively small number of people. "Not all of these people use their assets to create new jobs and new opportunities."

Big Egos and Inaction said the Guardian of Branson's B Team 

In 2009 Branson's Virgin Unite were solicting projects and I introduced them to the 'Marshall Plan' for Ulraine suggesting we could lead the way in what Branson was arguing. They didn't want to be involved   That's not surprising in hindsight Branson is well connected with the host of the Davos philanthropic roundtable, who has also cultivated friendships with Sir Elton John and Tony Blair.  Our founder had identifief him as one of those at the root of the social problems, in his Death Camp for Children report:    

"Excuses won’t work, particularly in light of a handful of oligarchs in Ukraine having been allowed to loot Ukraine’s economy for tens of billions of dollars. I point specifically to Akhmetov, Pinchuk, Poroshenko, and Kuchma, and this is certainly not an exhaustive list. These people can single-handedly finance 100% of all that will ever be needed to save Ukraine’s orphans. None of them evidently bother to think past their bank accounts, and seem to have at least tacit blessings at this point from the new regime to keep their loot while no one wants to consider Ukraine’s death camps, and the widespread poverty that produced them.."

It all began with , 

"At first glance, it might seem redundant to emphasize people as the central focus of economics. After all, isn't the purpose of economics, as well as business, people? Aren't people automatically the central focus of business and economic activities? Yes and no.

People certainly gain and benefit, but the rub is: which people? More than a billion children, women, and men on this planet suffer from hunger. It is a travesty that this is the case, a blight upon us all as a global social group. Perhaps an even greater travesty is that it does not have to be this way; the problems of human suffering on such a massive scale are not unsolvable. If a few businesses were conducted only slightly differently, much of the misery and suffering as we now know it could be eliminated. This is where the concept of a "people-centered" economics system comes in."

Concscious Capitalism has now come to a similar conclusion, but won't joining us in the foxholes and trenches