From Profit to Purpose, to Practice
It’s now more than 20 years since the question was raised. Isn’t the real purpose of business to benefit people?
Putting forward the concept of business which operates for social benefit rather than maximising shareholder returns , P-CED’s founder concluded that it doesn’t have to be this way:
‘It is only when wealth begins to concentrate in the hands of a relative few at the expense of billions of others who are denied even a small share of finite wealth that trouble starts and physical, human suffering begins. It does not have to be this way. Massive greed and consequent massive human misery and suffering do not have to be accepted as a givens, unavoidable, intractable, irresolvable. Just changing the way business is done, if only by a few companies, can change the flow of wealth, ease and eliminate poverty, and leave us all with something better to worry about. Basic human needs such as food and shelter are fundamental human rights; there are more than enough resources available to go around — if we can just figure out how to share. It cannot be “Me first, mine first”; rather, “Me, too” is more the order of the day.’
By and large, it was still this way 15 years later when Harvard introduced the concept of ‘Creating Shared Value’ was put forward.
‘It doesn’t have to be this way, say Porter, of Harvard Business School, and Kramer, the managing director of the social impact advisory firm FSG. Companies could bring business and society back together if they redefined their purpose as creating “shared value” — generating economic value in a way that also produces value for society by addressing its challenges. A shared value approach reconnects company success with social progress.’
Forward another half-decade and Oxfam is drawing our attention to the accumulation of wealth in the hands of just 8 people.
‘It doesn’t have to be this way. We can choose another future. A future where governments act to help everyone, where people are put before profits, and everyone is given a fair chance. We can help end poverty, and the rich and powerful need to play their part.’
Following introduction of people-centered economic development to the UK, we’d deliver a plan to tackle poverty in the UK, moving on to Ukraine by the end of the year. Profits from our software development business were used to fund activism for childcare reform and a ‘Marshall Plan’ strategy which once again spelt out the case for putting people before profit:
‘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. ‘
I shared the story on the Long Term Capitalism Challenge as The New Bottom Line
In 2009, we would hear both the Vatican and the UN make reference to a people-centered economy. With Caritas in Veritate, Pope Benedict called for an ethics which is people-centred and the use of “profit as a means of achieving the goal of a more humane market and society. “
Miguel D’Escoto Brockmann, the President of the United Nations General Assembly offered this in a speech:
‘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.’
So why isn’t anyone with us in the trenches?
Stepping back to 2004, we called on UK government for support, saying:
‘Enterprise for the primary objective of poverty relief, localized community economic development, and social support became the business model which guided P-CED’s efforts and development at a time in the US when terms such as ‘social enterprise’ and ‘social capitalism’ had not yet been coined.
‘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.”
With a recent report on Mission-Led business, there are signs that this is something now being considered, albeit without the participation of any practitioner.