Capitalism: People over Profit against Neoliberals

The conversation with Steve Miller about neoliberalism and social enterprise has opened my eyes slighty wider in the last few days.

In 1999 with Noam Chomsky drew out attention to the consolidation of wealth in the hands of a neoliberal minority who are able to maximise their profit at the expense of people..

It was back in 1996 that our own work began with a critique of laissez-faire capitalism in a white paper proposing an alternative 'people first' model  

This was the paper which drew attention to the creation of money from thin air and the strategic risk of the inequality it creates. It was delivered to US President Bill Clinton in September 1996 warning of the risk of global uprisings. 

 

 

It was the New Labour government of Tony Blair which made social enterprise UK government policy. In 2001, UnLtd was formed with a £100 million endowment of which it is sole trustee.

In 2004, we introduced P-CED to the UK with a business plan to tackle poverty, it repeated the warning made to Clinton 8 years earlier:

"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."

"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 Crimea , a year earlier  founder Terry Hallman observed 

 

"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."

Terry Hallman was cleared to enter the UK as a visitor from the US in 2004  He declared his intention and my financial support,  yet within 3 months he'd been identified as a potential economic migrant and blocked from returning. My appeal for support to my Labour MP Tom Cox fell on stony ground:

"I don;t know what kind of business you and your colleague are involved in but you can't expect me to interfere with immigration decisions" was his testy response.  The "kind of business" just happened to be that which his party had introduced as policy..

Tom Cox also happened to be secretary of the APPG for Ukraine where our focus would return to in 2004.

Response to our work was far from enthusiastic. Social Enterprise London said they coudn't help and the Social Enterprise Coalition said it was beyond their focus.

Poverty reduction and childcare reform in Ukraine would become our focus from 2004. Our 'Death Camps, For Children' article had drawn attention to the extent that unscrupulous individuals were maximising profit through perpetrating neglect. Many children had died having been dumped in the care of the state, in what were known as psycho-neurological internats.

It took 5 years before the story would reach mainstream media and even longer for me to understand the hostility it created among those who in theory were "on side". Our 'Marshall Plan for mcroeconomic development and social enterprise in Ukraine was given to Ukraine's government with one condition, that it made these children a priority.

'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.

In 2009 we began our collaboration with Sumy State University which delivered  two presentation papers and a study guide on the cause of the economic crisis.  This included the core argument from the 1996 paper on an alternative to capitalism.

Within weeks of our first presentation, there was a conference at Oxford Social Enterprise Forum on 'A New Form of Capitalism'. The "leading names" shaping this new economy were to be under one roof. The comment about business opportunity by Walmart's CEO is indicative of where this was heading. UnLtd had sponsored the event. 

The global focus of business is changing and a new economy is emerging. Indeed Wal-Mart's CEO Lee Scott claims that sustainability is 'the single biggest business opportunity of the twenty-first century'.

I joined a conversation about this on the Unltd forum,, describing our work. My post was deleted.  .

In the US where Walmart invests heavily in opposing wage reforms, it had been a hunger strike for economic rights and a living wage which drew me into the cause. The International Covenant for Economc Social and Cultural Rights was embedded in our business plan as a policy guide. 

This theme of opportunity - business making profit by resolving social problems would re-surface under 'Creating Shared Value' again the resonse to putting another point of view was censorship from The Guardian. 

In 2009 at Davos, it was Sir Richard Branson's call for business to focus more on social problems whic drew my attention. The Philanthropic Roundatable, formerly known as the Ukrainian Lunch was and still is, hosted by one of Ukraine's weathiest oligarchs who as would be revealed later, has strong connections with Tony Blair.  I wrote to Virgin Unite, introducing our social business activity.

"This is what we’ve been doing in Ukraine for 7 years to reach the point that our efforts have persuaded government to adopt changes to childcare policy. We’re a small business rendering 100% profit to do something about the plight of orphans and street children in Ukraine."

Five years later, I'm astonished to find Virgin Unite publishing an article about 'for profit" social enterprise, as we'd introduced to the UK in 2004.

According to Cliff Southcombe, it comes from UnLtd and represents the organsations they've supported. It makes very clear what happens to those not supported, reminding me of our deceased founder's words:

"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."

New Labour neoliberals would soon be making their presence felt in Ukraine. While Blair's Faith Foundation took donations from Pinchuk. Lord Mandelson would befriend Rinat Akhmetov.  As EU Trade Minister, Mandelson had been a leading advocate for the trade association agreement which triggered the current crisis in Ukraine.

As the Death Camps, for Children article pointed out:

“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..”

If we'd had £100 million, no doubt  we'd want to justify the investment made in us, but how many would go as far as to obstruct others?   For the vulnerable, the consequences of the "our brand only" philosophy has but one outcome. 

It may be difficult to believe, considering this:

 

 

Meanwhile the rhetoric of business with social and environmental concern has reached the mainstream and is now being promoted by campaigns like Breakthrough Capitalism and the Purpose Economy. Paul Polman of Unilever says: this:

"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."

I know only one who has put this into practice and it would cost him his life It's a story that neoliberals seem desperate not to hear  

Re-imagining capitalism the new 'bottom line'

 

 

 

 

 

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