Embracing Humane Capitalism

When I read the article yesterday, on Campaign and 2Degrees, I thought of a former colleague who once asked in a presentation - what is a consultant?

"It's someone who walks into your business, mugs you and leaves behind a report recommending that you're mugged by 3 of his closest friends"

This is perhaps never more true than in the case of sustainabilty consultants who won't be found in the arena . 

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat. " - Theodore Roosevelt

CLINTON'S RE-ELECTION

Yesterday, marked the 20th anniversary of People-Centered Economic Development, when founder Terry Hallman delivered his position paper to the White House.  In the core argument, our manifesto since the 2008 crisis - he concluded:  

"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.

"Each of us who have a choice can choose what we want to do to help or not.  It is free-will, our choice, as human beings."

Putting people over profit maximisation , he reasoned, could be done by any business provided it was with the consent of shareholders and directors and such purpose was stated in the corporate charter. :

"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."

THE RUSSIAN EXPERIMENT

The paper had been his contribution as a volunteer, to the steering group for the committee to re-elect the president and delivered to the White House on 16th September 1996. From there, the next step wasn't building brands or writing books, but putting it into practice with the Tomsk Regional Initiative:

"I sent the proposal to President Clinton, who had been an unswerving ally in prior efforts (accounting for POW/MIAs missing in Southeast Asia.)  I asked him to refer it on to appropriate US agencies if he found it worth considering.  Tomsk was awarded the fourth and final USAID Regional Initiative in Russia three months later in December 1999.  That initiative encompassed the three critical objectives I had outlined, along with 34 other components.  The result was the Russia/US Regional Initiative in Tomsk oblast. "

For the record. Hallman had gained Clinton's attention and invitation to serve, through his efforts to trace the fate of a C130-AC gunship crew, in which his father-in-law Charles Stoddart Rowley had been among the crew.

INTRODUCTION TO THE UK

P-CED was introduced to the UK in 2004, when Hallman was interviewed about his subsequent work in Crimea

"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."

This was followed up with , to tackle poverty in the UK:  

“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.”

UKRAINE'S DEATH CAMPS, FOR CHILDREN

From there P-CED returned to focus on Ukraine and the problem of 'Death Camps, For Children' where he reiterates a point from the 1996 paper:

"There is no room for allowing other human beings to be disposed of, whether actively or passively. Doing so defines anyone, as a person or as a nation, as one who approves and supports that other human beings are disposable and have therefore crossed the line of civilization. It is the passive cooperation in allowing any continuation of Ukraine’s Death Camps, even if by well-intended people who simply don’t know any better, that I must take exception to now."

It was followed up in 2007, with Microeconomic Dewvelopment and Social Enterprise- a 'Marshall Plan' for Ukraine which was described in our article for McKinsey's Long Term Capitalism initiative as 'Re-imagining Capitalism, the new bottom line'  

'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. '

With a cold shoulder from the local USAID foundation, we escalated the issue to USAIDs director and the Senate FRC, where Biden and  Obama were then members.

"Let me talk briefly about one issue in particular that will illustrate this as perhaps nothing else can. This won’t necessarily read politely, as it concerns matters and issues that are not at all suited for polite discussion. That is the matter of tens of thousands of children tossed aside in state child “care” institutions, most particularly psychoneurological (PN) “care” facilities.

Whether by intent or default, rural PN facilities have become money farms and money laundries having almost nothing to do with child care. Kids are thrown in at age 4, often with barbaric and draconian misdiagnoses, and essentially left to die from neglect. They are not there for medical help. They are there to justify government budget expenditures out into the middle of nowhere in places most people haven’t reason to know about and thus no reason to ask or care about. When folks do know about it, they almost without exception do not dare to speak openly about it. These facilities have been extremely difficult to research. University professors, social protection officers, pediatricians, judges, lawyers, doctors and ordinary citizens who have some knowledge of PNs all understand full well that PNs are hands-off and people do NOT ask questions about them. "

Within weeks of delivery, Ukraine's goverment announced plans to implement one of the main recommendations - a program to create more than 400 rehab centres. Another came a year later in the doubling of adoption allowances,  

 Ukraine to see creation of over 400 rehab centers for mentally disabled children. Government of Ukraine, March 5, 2007.

Government doubles assistance to orphan children  Government of Ukraine, April 4, 2008.

USAID AND THE BRITISH COUNCIL

The reluctance of USAID to support our social enterprise in Ukraine was explained in 2010, when they partnered with The  British Council and some of Ukraine's most notorious oligarchs to launch their own "top down" interpretation of social enterprise development. Ukraine's neglected children as one of the most intractable problems, wasn't on their agenda.  The Brithish Council, one of our customers, made it very clear we weren't welcome "on board".

CREATING SHARED VALUE

The arrival of Creating Shared Value in 2011 brought with it the assertion that corporaions can profit by solving social problems, It sparked a debate between Johm Elkington and Mark Kramer on the pages of the Guardian.  I commented, sharing the argument from the 'Marshall Plan' that "Profits can be directly applied to help resolve a broad range of social problems".  I was censored and blocked from further comment on all Guardian articles.  As one advocating Love in Business, editor Jo Confini would seemingly blow out other's candles to make his own shine brighter.  

CARITAS IN VERITATE

There was one very prominent voice who supported our view.  When Pope Benedict published his 2009 encyclical, , going on to say:  

"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. "

THE UN GENERAL ASSEMBLY

In a 2009 speech, Miguel D’Escoto Brockmann, the President of the United Nations General Assembly said this of the need for a new 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.”

DOING THE RIGHT THING

Getting back to the Campaign article, our  3 consultants are represented by , Good Business , Beautiful Corporations and 2Degress.

Unilever is mentioned several times. Interestingly several months after I published 'The New Bottom Line' on McKinsey, Paul Polman wrote for Huffington Post on 'Where our Moral Compass Meets the Bottom LIne' It sounded very familiar:

"When people talk about new forms of capitalism, this is what I have in mind: companies that show, in all transparency, that they are contributing to society, now and for many generations to come. Not taking from it.

It is nothing less than a new business model. One that focuses on the long term. One that sees business as part of society, not separate from it. One where companies seek to address the big social and environmental issues that threaten social stability. One where the needs of citizens and communities carry the same weight as the demands of shareholders."

There are few greater threats to social stability than war. At the beginning of 2014, I was trying to gain the support of MEPs to deploy such a business model in Ukraine  Politicians and local activists were calling for a 'Marshall Plan'

Ask yourself why Polman joined Richard Branson in offering to help Ukraine after violence erupted and not before.

Can capitalism deliver both economicl and social returns? A key point from the 'Marshall Plan' in 2007. Why was this being brought up at Davos in the context of Ukraine?.  

Of those present. Muhammad Yunus should have known, since Grameen partners, Grameen Creative Labs and Erste Bank had been introduced to it 4 years earlier in the Social Business Ideas competition.     

In his philanthropy Viktor Pinchuk has placed funds in both The Clinton Foundation and Tony Blair's Faith Foundation but he's known as one of Ukraine's Scrooges by Kyiv Post. 

Terry Hallman put it more bluntly in 'Death Camps, For Children':

"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.."

BAYER AND MONSANTO

With his Maidan article 'Really Betraying a Revolution' in 2005, Hallman warned of the potention for a peaceful revolution to turn violent, pointing to neolberal US interests as a threat:

"What economic hit men will surely try to do is persuade Ukraine to give up lucrative state assets to private buyers – and thus lose most of that revenue base – in exchange for the “privilege” of borrowing billions of dollars and going into debt to Western governments, particularly the US. That’s the deal, and that is what and all is going on with most of this noise against Ukrainian Prime Minister Yulia Tymoshenko at this point in time. God forbid that she have the courage to do the right things for Ukraine. It is simply not done in many countries, including the US, which will likely be one of the main sources of vitriol against her in coming weeks and months unless her government relents on strong, progressive social policy and gives in to demands to give up lucrative state enterprises."

It came in 2013 when loans of 17 billion dollars were made in exchange for a Monsanto land grab now

Part of Ukraine's tragic modern history is the forced collectivisation or agriculture, known locally as the Holodomor in which upwards of 7 million people starved to death when food was used as a weapon. Under the cloak of sustainability, neolberalism now threatens to do the same thing