Dear Ed Miliband,
As I’ve read in the FT, you say that purpose-driven businesses will be needed to rebuild after Covid. I’ve said the same thing, but before I get to that I’d like share the story of how we introduced purpose-driven business to the UK.
It begins with a question: Isn’t the purpose of business and economic , people?
In 1996, our founder Terry Hallman had the opportunity to pitch the concept to US President Bill Clinton:
“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.”
He went on to describe how it required the mandate of shareholders and directors with minor modification to the governing documents to state that redirection of profit was the entire point.
Introduced to the UK in 2004 we appealed for support from the New Labour government:
“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. “
As the Purpose Summit you attended recently , you participated in a panel discussion about ‘How government can promote purposeful business through law, regulation and standards’.
With you on that Panel was former Chief Justice Leo Strine. In 2015, Chief Justice Strine made the following point about any corporation that determines to operate for other than shareholder interests:
“It may well be the case that a certificate of incorporation that said that a for-profit corporation would put other constituencies’ interests on par with stockholders would, in view of § 101(b), be respected and supersede the corporate common law. But, in the case of silence, the idea that directors can subordinate stockholder interests to other interests of the directors’ choosing is strained and at odds with the structure of our overall statute.”
Another session at the Purpose Summit raised the question – ‘What can we learn from crises, past and present, in solving the problems of people and planet?‘
In 1999 it was an economic crisis in Russia that gave us the opportunity to source an experimental poverty alleviation program knowns as the Tomsk |Regional Initiative.
“Small businesses were beginning to flourish despite severe financial constraints following the financial collapse of August 1998.There were also critical food shortages in the region, children living on the streets because they considered orphanages intolerable, women having to resort to prostitution to feed their children, and a near-total lack of new economic opportunities. Economic opportunities for women were routinely negotiated in bed, if at all.”
In response to a growing social crisis in Ukraine, we published a ‘Marshall Plan’ proposal in 2007.
‘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. ‘
The following year brought us another economic crisis. A 2009 conference on Ecological Economics gave us the opportunity to describe the background to this crisis and the growing climate crisis:
” 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.”
In 2011 founder Terry Hallman was found dead. Although he’d taken a stand against orgainsed crime, he wasn’t murdered, he’d been terminally ill for some time. He’d been brushed aside by those we shared our proposal with.
‘The author of breakthru report “Death camps for children” Terry Hallman suddenly died of grave disease on Aug 18 2011. On his death bed he was speaking only of his mission – rescuing of these unlucky kids. His dream was to get them new homes filled with care and love. His quest would be continued as he wished.’
The crisis in Ukraine today was a preventable tragedy which to date has taken soe 13,000 lives.
Returning to the issue of Covid-19 recovery. When I wrote about this last I included a reference to Community Weath Building and “a new people-centered approach to economic development “. which matches the description in our 1996 paper.
“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.”
What I didn’t know at the time of writing was that the Labour Party had established a Community Wealth Building Unit. I was horrified to realise that this is the Party I’ve supported for 50 years. My father and grandfather before me.
What kind of new economy can we hope to build on the basis of pushing each other our of the way? How can we talk about inclusion when those who take a stand for social justice and lose their lives doing so are simply airbrushed out of the picture by predators.
We have to understand that taking someone elses livelyhood could mean taking their lives and the lives of those they take a stand for.
We’re well aware that these aren’t the kind of people who’ll join us in the trenches and they can’t bring anyone back to life, but they could have the grace to attribute Terry Hallman’s contribution.