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Capitalism: You say "conscious" like it's a good thing

Conscious capitalism and conscious business are terms which has gained popularity in the wake of the 2008 economic crisis. The term is generally attributed to John Mackey of Wholefoods Inc who began using this term to describe the philosophy of his own business.

In something of a "Kings New Clothes" moment a few weeks ago in online discussion, somebody asked "What do we mean by Conscious Capitalism?"

Adam Smith had argued that an 'Invisible Hand' operates in the free market, such that society as a whole benefits from each pursuing our own self interest to create a profit. An unobservable rather than an imaginary effect.

It was a conscious political act on the other hand to create a fractional reserve banking system. New money was imagined to propagate the demand for growth, but it was anchored theoretically by gold a finite substance. When this relationship was abandoned in 1971 bankers had succeeded where alchemists of old had floundered. They could create infinite wealth by simply creating imaginary money. Or so it seemed.

The problem was that in this process, the imaginary wealth tended to accumulate in the hands of a minority, to the detriment of the people least able to compete.. The creation of conscious minds had trumped real human beings who were considered less important.

This was the core argument for a people-centered approach to economics, business which puts people first.  In 1996, it was pitchef where it might create the greatest influence, to the President of the Unitied States. The argument was delivered again in 2010 as the second of two papers for the international Economics for Ecology conference:

"Adam Smith’s 'invisible hand' does not mean 'non-existent', nor detached.  It means what it says: invisible.  That is, not observable."

"Manipulation of numbers, represented by currency/money, allows writing “new” money as needed.  There is no tangible asset, or anchor.  There are only numbers, managed by whomever might maneuver into position to do so.  Economics came to be based on numbers, rather than real human beings."

"On that basis, capitalism trumped people and therefore trumped democracy.  Democracy is about people, who since Descartes are considered necessarily real, rather than numbers which are not necessarily real.  An imaginary construct, numbers, rule a real construct, people.  That arrangement allows for disposal of real human beings, in the name of the imaginary construct."

"Dismissing people and consciously leaving them to die is probably not the way to go."

"Economics, and indeed human civilization, can only be measured and calibrated in terms of human beings.  Everything in economics has to be adjusted for people, first, and abandoning the illusory numerical analyses that inevitably put numbers ahead of people, capitalism ahead of democracy, and degradation ahead of compassion."

"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".

From `1999 this led on to practical application as a business for social purpose. First in Russia with the Tomsk Regional Initiatve, then in Crimea, where focus became the repatriated Tatars. Founder Terry Hallman reflected on his warning to Clinton:

"By leaving people in poverty, at risk of their lives due to lack of basic living essentials, we have stepped across the boundary of civilization. We have conceded that these people do not matter, are not important. Allowing them to starve to death, freeze to death, die from deprivation, or simply shooting them, is in the end exactly the same thing. Inflicting or allowing poverty on a group of people or an entire country is a formula for disaster.

These points were made to the President of the United States near the end of 1996. They were heard, appreciated and acted upon, but unfortunately, were not able to be addressed fully and quickly due primarily to political inertia. By way of September 11, 2001 attacks on the US out of Afghanistan – on which the US and the former Soviet Union both inflicted havoc, destruction, and certainly poverty – I rest my case. The tragedy was proof of all I warned about, but, was no more tragedy than that left behind to a people in an far corner of the world whom we thought did not matter and whom we thought were less important than ourselves.

We were wrong."

It had begun with a pitch to Clinton and by 2008 with our focus on Ukraine and their childcare system, founder Terry Hallman appealed to USAID and the Council on Foreign Realtions where a president in waiting and his VP were to be found. Calling on their suppott for a 'Marshall Plan' strategy, it brought their attention to the 'Death Camps, For Children' issue    

"Let me talk briefly about one issue in particular that will illustrate this as perhaps nothing else can. This won’t necessarily read politely, as it concerns matters and issues that are not at all suited for polite discussion. That is the matter of tens of thousands of children tossed aside in state child “care” institutions, most particularly psychoneurological (PN) “care” facilities.

Whether by intent or default, rural PN facilities have become money farms and money laundries having almost nothing to do with child care. Kids are thrown in at age 4, often with barbaric and draconian misdiagnoses, and essentially left to die from neglect. They are not there for medical help. They are there to justify government budget expenditures out into the middle of nowhere in places most people haven’t reason to know about and thus no reason to ask or care about. When folks do know about it, they almost without exception do not dare to speak openly about it. These facilities have been extremely difficult to research. University professors, social protection officers, pediatricians, judges, lawyers, doctors and ordinary citizens who have some knowledge of PNs all understand full well that PNs are hands-off and people do NOT ask questions about them"

"There is increasing congruence and synchronicity in play now, to the point of attunement. 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. That is reflected in P-CED’s home page and history section. In fact, you might notice a number of ideas and writings there that have now made their way into the mainstream of economics and aid thinking, how to make business and aid work smarter and more effectively in relieving poverty and the misery and risks that result. Bill Gates – as hard-edged a capitalist as has ever existed – reiterated the same things in Wall Street Journal a couple of weeks ago (ref below.) It sounds as though Ms. Fore’s remarks very much reflect this sort of thinking. Now it’s time to move forward and get it done."

The case for applying business for social benefit now has many advocates in the world of mainstream business. In The New Bottom LIne, I describe how the concept was applied in Russia, Crimea and Ukraine. 

Conscious capitalism, as it turns out is really a variation on this theme and it's in Russia, where business for social benefit was deployed 15 years ago with the Tomsk regional initiative where this is now being discussed:

 

 

The conversation above raises the interesting issue of self interest. As P-CED's founder had said on the subject of social enterprise  

'The term “social enterprise” in the various but similar forms in which it is being used today — 2008 — refers to enterprises created specifically to help those people that traditional capitalism and for profit enterprise don’t address for the simple reason that poor or insufficiently affluent people haven’t enough money to be of concern or interest. Put another way, social enterprise aims specifically to help and assist people who fall through the cracks. Allowing that some people do not matter, as things are turning out, allows that other people do not matter and those cracks are widening to swallow up more and more people. Social enterprise is the first concerted effort in the Information Age to at least attempt to rectify that problem, if only because letting it get worse and worse threatens more and more of us. Growing numbers of people are coming to understand that “them” might equal “me.” Call it compassion, or call it enlightened and increasingly impassioned self-interest. Either way, we are all in this together, and we will each have to decide for ourselves what it means to ignore someone to death, or not.'

The concept of embedding compassion in business and ecomomics had been influenced by humanists like Erich Fromm, Rollo May and above all Carl Rogers, who in his person-centered counselling recognised that given access to the resources they need, people could resolve their own problems, flourish and grow. 

Love and compassion in business and economics

In the case of Ukraine's children the 'Marshall Plan for Ukraine' spelt it out clearly:

'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. '

It was around the same time as the 'Marshall Plan for Ukraine' that Muhammad Yunus described his social business concept in 'Creating a World Without Poverty'. In the presentation below on the subject, he argues that this kind of business is "all about others". The bottom line in the case of Grameen Danone, is the number of children removed from malnutrition.

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Business with a human face wasn't much understood in Russia where our founder was once confronted by a perplexed local:

"You came here to create business and give it away to other people. Are you some new kind of communist or just crazy?"

In 2003 like venture capitalist Bill Browder, he became a threat to national security after refusing to pay a bribe to a minor FSB officer.

     

 

 

 

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