Long Term Capitalism

In 2007, it was the threat of hijack that persuaded a pioneer of for-purpose business to publish a ‘Marshall Plan’ strategy online. It was a proposal for putting social purpose before shareholder value on a national scale:

“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. “

Two years later author Terry Hallman addressed the International Conference on Economics for Ecology describing the recent economic crisis and urgent need for a new economic system. He returned in 2010 to share the core argument from his original treatise, which included a warning:

“Modifying the output of capitalism is the only method available to resolving the problem of capitalism where numbers trumped people — at the hands of people trained toward profit represented only by numbers and currencies rather than human beings. Profit rules, people are expendable commodities represented by numbers. The solution, and only solution, is to modify that output, measuring profit in terms of real human beings instead of numbers.

“We can choose to not reform capitalism, leave human beings to die from deprivation — where we are now — and understand that that puts people in self-defense mode.”

He concluded:

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.

We didn’t have long to wait, Occupy Wall Street and the Arab Spring were soon with us.

It was a year later in March 2011 that McKinsey CEO Dominic Barton wrote of the same threat, warning of the need for change.

“Business leaders today face a choice: We can reform capitalism, or we can let capitalism be reformed for us, through political measures and the pressures of an angry public. The good news is that the reforms will not only increase trust in the system; they will also strengthen the system itself. They will unleash the innovation needed to tackle the world’s grand challenges, pave the way for a new era of shared prosperity, and restore public faith in business.”

Since the developing crisis in Ukraine was one of those grand challenges, I submitted ‘The New Bottom Line’ which described how our ‘Marshall Plan’ had evolved from an argument that the purpose of business is more than maximisng shareholder value.

‘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.’

It gained a surprising level of approval from readers, but perhaps not as much as might have been expected , given the traction that purpose in business has gained since.

Before Terry Hallman died in 2011, he’d described how he’d come to the decision to publish his ‘Marshall Plan’ in 2007:

“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. I reviewed the original Marshall Plan and realized that what I had written was, in fact, the definition and spirit of the original Marshall Plan. Thus, in June 2007, I appended the original title with “A Marshall Plan for Ukraine.” After some discussion among trusted colleagues over timing, I published an abbreviated version of the paper in two parts in August 2007 in the ‘analytics’ section of the Ukrainian news journal for-ua.com.”

PM Yulia Tymoshenko had also seen it coming when she wrote of how a leading oligarch was hiring ‘American experts’ to create a ‘Marshall Plan’

As it turned out, these experts were Paul Manafort and Mckinsey.

It takes a violent uprisng between Ukraine and Russia, for billionaires and politicians to ask:

“How can capitalism deliver economic and social returns”