A New Form of Capitalism
It was an event hosted almost 10 years ago at Said Business School in Oxford, where we were to hear from the top names shaping the new economy.
To illustrate where I’m going with this, Wafic Said is a billionaire arms deal fixer and Conservative party donor.
Just a few days earlier, at Sumy State University in Ukraine, a lesser mortal delivered his first presentation to an international conference on Economics for Ecology. He concluded:
“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.”
A year earlier, the same man wrote to USAID appealing for their support for a ‘Marshall Plan” for Ukraine
“What Ms. Fore is describing has been central to P-CED’s main message, advocacy and activity for a decade. That, and helping establish an alternative form of capitalism, where profits and/or aid money are put to use in investment vehicles with the singular purpose of helping the world’s poorest and most vulnerable people. The paper on which that is based is in Clinton’s library, dated September 16, 1996, author yours’ truly. “
The paper he described had argued that the purpose of business was beyond maximising returns for shareholders. It could use profit to create benefit for society.
With his 2007 ‘Marshall Plan’ for Ukraine Terry Hallman has described how profit could be applied to resolve a broad range of social problems. Publishing it in full, was a defensive strategy, he knew his IP was at risk of being hijacked, by one of Ukraine’s leading oligarchs.
This oligarch had been the man who hired Paul Manafort to organise the election campaign for the Russian leaning Party of Regions. He had also hired McKinsey as ‘Western experts’ to create another ‘Marshall Plan’ for Ukraine.
Before his death in 2011, Hallman wrote: “As the 60th anniversary of the Marshall Plan came around in June 2007, noise was emerging within Ukraine of a certain political boss preparing a Marshall Plan for Ukraine. This person was a reputed mob boss — exactly the sort of entity that the original Marshall Plan meant to oppose. It seemed most likely that whatever he came up with would be self-serving, hijacking the label ‘Marshall Plan’ and turning the whole notion on its head.”
In his 2010 presentation Hallman had warned that we could choose to reform capitalism or not, leaving those disenfranchised to fight back any way they can. Occupy Wall Street and the Arab Spring were a year away.
In 2011, Dominic Barton of McKinsey warned that we must reform capitalism or have capitaims reformed for us by political measures and an angry public. Publishing our story in the Long Term Capitalism initiative, was again a defensive move to protect our IP.
An article from Paul Polman of Unilever soon followed:
“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.”
The article appeared in Huffington Post, who were soon promoting another ‘Marshall Plan for Ukraine, sponsored by another Ukrainian oligarch. He also sponsors Cambridge University’s Ukrainian society.
Notably Arianna Huffington and Paul Polman are members of Richard Bransons B Team. Speaking at Davos in 2009 at an event hosted by yet another Ukrainian oligarch who has sponsored Tony Blair, to discuss creating more effective social programs in Ukraine, Branson said:
“A modern company should focus not only on making money, but also on solving social problems and investing in protection of environment.”
Branson would subsequently make the call for a ‘Marshall Plan’ for the Caribbean.
Today we’ve come full circle. A professor at Said Business School is saying that “we must rethink the purpose of the corporation”.
What this is leading up to is a British Academy initiative to ‘Rethink the Purpose of The Corporation’.
“The Future of the Corporation is a major new initiative by the British Academy that is addressing the purpose of business and asking what its role in society should be. It is led by Professor Colin Mayer FBA, Professor of Management at the Said Business School.”
What he says about profit and purpose is an echo from the 2007 ‘Marshall Plan:
“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.’
I guess my colleague was wrong. We don’t all get te invent the new economic system. it will be driven by billionaires and the academics they sponsor.
Meet plagiarism, the new sharing economy.
