Building People-Centered Economies
In 2004, the introduction of People-Centered Economic Development to the UK was marked by an interview with founder Terry Hallman who described how he’d pitched his concept of business for social purpose to US President Bill Clinton who gave him the opportunity to source a proof of concept project in Russia:
He was asked how his model differed from conventional approaches:
“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.”
Having delivered his treatise to Clinton in September 1996, he published his model online free-to-use. It argued that any business could operate for social benefit, if it was agreed by directors and shareholders and this redirection of profit declared in the corporate charter or articles.
“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.”
I’d met Terry on the ground in Crimea in 2002 and in 2003 I discovered he was back in North Carolina fasting from a tent. He wanted US government to ratify the International Covenant on Economic Social and Cultural Rights and asked me to relate progress to his Senator , John Edwards who’d later stand with John Kerry for the US presidency:
With his health fading I invited him to London where he spent many weeks creating a business plan to tackle poverty in the UK. He reiterated what the 1996 paper had argued about ignoring the disenfranchised;
“The opportunity for poverty relief was identified not only as a moral imperative, but also as an increasingly pressing strategic imperative. People left to suffer and languish in poverty get one message very clearly: they are not important and do not matter. They are in effect told that they are disposable, expendable. Being left to suffer and die is, for the victim, little different than being done away with by more direct means. Poverty, especially where its harsher forms exist, puts people in self-defence mode, at which point the boundaries of civilization are crossed and we are back to the law of the jungle: kill or be killed. While the vast majority of people in poverty suffer quietly and with little protest, it is not safe to assume that everyone will react the same way. When in defence of family and friends, it is completely predictable that it should be only a matter of time until uprisings become sufficient to imperil an entire nation or region of the world. People with nothing have nothing to lose. Poverty was therefore deemed not only a moral catastrophe but also a time bomb waiting to explode.
“Dealing with poverty is nothing new. The question became ‘how does poverty still exist in a world with sufficient resources for a decent quality of life for everyone?’ The answer was that we have yet to develop any economic system capable redistributing finite resources in a way that everyone has at minimum enough for a decent life: food, decent housing, transportation, clothing, health care, and education. The problem has not been lack of resources, but adequate distribution of resources. Capitalism is the most powerful economic engine ever devised, yet it came up short with its classical, inherent profit-motive as being presumed to be the driving force. Under that presumption, all is good in the name of profit became the prevailing winds of international economies — thereby giving carte blanche to the notion that greed is good because it is what has driven capitalism. The 1996 paper merely took exception with the assumption that personal profit, greed, and the desire to amass as much money and property on a personal level as possible are inherent and therefore necessary aspects of any capitalist endeavour. While it is in fact very normal for that to be the case, it simply does not follow that it must be the case.
Profits can be set aside in part to address social needs, and often have been by way of small percentages of annual profits set aside for charitable and philanthropic causes by corporations. This need not necessarily be a small percentage. In fact, there is no reason why an enterprise cannot exist for the primary purpose of generating profit for social needs — i.e., a P-CED, or social, enterprise. This was seen to be the potential solution toward correcting the traditional model of capitalism, even if only in small-scale enterprises on an experimental basis.”
Tony Blair’s New Labour government were in power at the time and had already embraced “social entrepreneurship”, a foundation and grant funded approach which had been conceived by Ashoka.
The proposal called on them to support our autonomous business approach:
“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.”
In 2005 John Edwards launched the Center for Poverty Work and Opportunity and from there, the Moral Mondays marches were organised:
Terry returned to Ukraine later in 2004 and was on the ground as the Orange Revolution began and connected with local Maidan activists. Aware of interference from the Carnegie endowment for peace, he warned of the risk of violence:
“Elimination of graft and corruption, and raising the overall standard of living for ALL Ukrainians rather than a few insanely greedy oligarch clans, was the main underlying and implied reason for the Orange Revolution — at least from hundreds of people, activists and otherwise, I talked with on the ground during and after the Revolution. Further, as director for any sort of peace institute, Mr. Aslund is obliged to review the connection between poverty and peace. Peace does not and cannot exist for people in poverty, unless they are harshly suppressed by government or other forces. Poverty is a horrible existence and lifestyle, and is bound to breed violence, not peace.”
Then he turned his focus toward Ukraine’s orphanage system, describing “Death Camps for Children” and what he saw as the root cause:
“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..”
The following month, Terry was interviewed about his work and was followed by the Minister of Youth and Sport, who acknowledged that orphanages were far from ideal.
In 2007 we published a ‘Marshall Plan’ for Ukraine arguing that profit could be applied to resolve a broad range of social problems:
“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. “
Barack Obama and Joe Biden were brought into the loop in 2008 with an appeal to USAID
In 2009 Miguel D’Escoto Brockmann, the President of the United Nations General Assembly offered spoke of the need for people-centered economics
“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.”
Terry died in Ukraine in 2011, unable to leverage support and in 2014 following an attempt to introduce an EU access agreement Ukraine erupted ino violence.
At Davos, one of Ukraine’s “insanely greedy oligarchs” hosted the Philanthropic roundtable and chairing it was none other than Tony Blair , reading back what the ‘Marshall Plan’ had argued about capitalism creating both economic and social returns. He may well have felt indebted to the oligarch, who’d funded his Faith Foundation to the tune of more than a million dollars.
Right behind them was George Soros , calling for an EU ‘Marshall Plan’
In 2008 the ‘Marshall Plan’ for Ukraine was shared with the EU citizens consultation. In 2012 it was introduced to commissioner Michel Barnier with the help of MEP Sir Graham |Watson.
The people-centered approach to local economic development was finally adopted in the UK in 2013 by the Centre for Local Economic Strategies whose funders include George Soros: