What might it mean to be a just company or corporation?
This morning, one of the Ted Talks I listened to while at the gym by was Paul Tudor Jones II and is titled “Why we need to rethink Capitalism” which was posted April of 2015.
In case you, the reader, are not familiar with Mr. Jones, Wikipedia tells us:
Paul Tudor Jones II (born September 28, 1954) is an American businessman who founded Tudor Investment Corporation, a private asset management company and hedge fund. As of March 2014, he was estimated to have a net worth of US$4.3 billion by Forbes Magazine and ranked as the 108th richest American[3] and 345th richest in the world.[2]
He founded the Robin Hood Foundation in 1988, which focuses on poverty reduction.
He has also been instrumental in creating another organization called Just Capital. Their mission is to:
“JUST Capital is an independent nonprofit information platform that seeks to measure and track corporate performance based on the American public’s definition of just business behavior. Each year, we'll survey more than 40,000 Americans to find out what they believe defines corporate justness. From there, we'll measure how corporations are performing, based on the values of the American public. “ The board members of Just Capital include the following individuals:
Paul Tudor Jones II TUDOR INVESTMENT CORPORATION
Founder, Co-Chairman & Chief Investment Officer
Rinaldo Brutoco WORLD BUSINESS ACADEMY
Founding President & CEO
Ray Chambers UNITED NATIONS Special Envoy for Financing the Health Millennium Development Goals and For Malaria
Deepak Chopra CHOPRA FOUNDATION Founder
Alan Fleischmann LAUREL STRATEGIES President & CEO
Peter Georgescu Young & Rubicam Chairman Emeritus
John Hofmeister CITIZENS FOR AFFORDABLE ENERGY Founder & CEO
Arianna Huffington HUFFINGTON POST President & Editor-In-Chief
Mindy Lubber CERES President & CEO
Fred Matser Humanitarian, philanthropist & social entrepreneur
Jennifer McCrea BORN FREE AFRICA Co-Founder & CEO
HARVARD UNIVERSITY Senior Research Fellow
Marc H. Morial NATIONAL URBAN LEAGUE President & CEO
Blake Mycoskie TOM’S SHOES Founder & Chief Shoe Giver
Jean Oelwang VIRGIN UNITE CEO & Virgin Group Partner
Andrew Paul TUDOR INVESTMENT CORPORATION General Counsel & Managing Director
Lynn De Rothschild E L ROTHSCHILD Founder & CEO
Paul Scialla DELOS LIVING Founder & CEO
James P. Steyer COMMON SENSE MEDIA CEO
Michael Weinstein ROBIN HOOD FOUNDATION Chief Program Officer
Jochen Zeitz B TEAM Co-Founder & Co-Chair
KERING Director Just Corporate behavior
In his Ted Talk, Mr. Jones states:
“This chart (not shown) is corporate profit margins going back 40 years as a percentage of revenues, and you can see that we're at a 40-year high of 12.5 percent. Now, hooray if you're a shareholder, but if you're the other side of that, and you're the average American worker, then you can see it's not such a good thing. ["U.S. Share of Income Going to Labor vs. CEO-to-Worker Compensation Ratio"]
Now, higher profit margins do not increase societal wealth. What they actually do is they exacerbate income inequality, and that's not a good thing. But intuitively, that makes sense, right? Because if the top 10 percent of American families own 90 percent of the stocks, as they take a greater share of corporate profits, then there's less wealth left for the rest of society.
Again, income inequality is not a good thing. This next chart, made by The Equality Trust, shows 21 countries from Austria to Japan to New Zealand. On the horizontal axis is income inequality. The further to the right you go, the greater the income inequality. On the vertical axis are nine social and health metrics. The more you go up that, the worse the problems are, and those metrics include life expectancy, teenage pregnancy, literacy, social mobility, just to name a few. Now, those of you in the audience who are Americans may wonder, well, where does the United States rank? Where does it lie on that chart? And guess what? We're literally off the chart. Yes, that's us, with the greatest income inequality and the greatest social problems, according to those metrics.
Now, here's a macro forecast that's easy to make, and that's, that gap between the wealthiest and the poorest, it will get closed. History always does it. It typically happens in one of three ways: either through revolution, higher taxes, or wars. None of those are on my bucket list. (Laughter)
Now, there's another way to do it, and that's by increasing justness in corporate behavior, but the way that we're operating right now, that would require a tremendous change in behavior, and like an addict trying to kick a habit, the first step is to acknowledge that you have a problem.”
To the credit of this billionaire, Just Capital was created to explore this question. I listed the board of directors to show that it includes such spiritual leaders as Deepak Chopra. Obviously if one is going to take the concerns about the growing income inequality in the United States seriously, it is important to ask whether it is possible to so organize a society so that a more equitable distribution of the income. Certainly it is lovely that the corporations such as that which Mr. Jones heads accepts responsibility to not only be more philanthropic but to be a leader in rethinking basic economic theory and basic concepts of justness, but that is just the beginning step. I am hopeful that organizations such as Just Capital are going to reexamine:
What are the basic principles of economists such as Adam Smith, John Maynard Keynes, Karl Marx, Friedrich Hayek and Milton Friedman. As “wallstreetphychology.com” remind us: “These scholars laid the groundwork for modern thinking about commerce, money theory, credit/debt, the business cycle, production, government intervention, and intervention.”
What products and services do all members of a society have a right to? Does one have an intrinsic right or does one need to earn the right to health care, food, clothing, education, and shelter?
What do we do with those members of society who do not “earn” their right to basic needs?
Can one have a just society and allow the laws of supply and demand to determine price, access, and distribution?
What does it mean to be a world economy rather than a group of national economies? Can organizations such as the European Union work when millions of refugees from non-members of the Union start arriving at their doorstep?
What is a free market economy? What is capitalism? What is democratic socialism?
Is it just, workable, or fair to be dependent on billionaires to identify and meet needs which a free market economy is not meeting?
What is a living wage?
What is a fair profit?
Can we have a just corporation without addressing the addictive need to prove one’s worth over other corporate leaders by being paid millions of dollars?
Where do company/corporations such as those responsible for the professional sports or artistic stars fit into the overall economics of a society?
Are we humans at our core so unhealthy that we need “big brother” or the threat of “eternal hell” to ensure that we are our brother’s keepers?
I am sure that there are many related questions which must be asked and examined. As Mr. Jones points out in his Ted Talk, “…like an addict trying to kick a habit, the first step is to acknowledge that you have a problem.”
I also know that it is not good enough for any of us to use sound bites to criticize and complain. If I am serious about addressing these questions, I must do the tedious work of being able to cogently discuss such terms as free market, capitalism, the basic theories of economists, price fixing, and many more. Spending three hours just reviewing some of these basic terms this morning is not enough to participate in a cogent solution. I need to do more homework or to keep my mouth shut. I am good at spiritual and philosophical questions and concepts. I need to be better at the nuts and bolts of what works or what might work and listening to those who better understand these nuts and bolts. I applaud those such as Paul Tudor Jones who are willing to challenge us to begin to ask the tough questions. I am also quite aware that I going to have to listen for my preconceived prejudices instead of just naming those of others.
This is a start, but only a start!
Written February 16, 2016
This morning, one of the Ted Talks I listened to while at the gym by was Paul Tudor Jones II and is titled “Why we need to rethink Capitalism” which was posted April of 2015.
In case you, the reader, are not familiar with Mr. Jones, Wikipedia tells us:
Paul Tudor Jones II (born September 28, 1954) is an American businessman who founded Tudor Investment Corporation, a private asset management company and hedge fund. As of March 2014, he was estimated to have a net worth of US$4.3 billion by Forbes Magazine and ranked as the 108th richest American[3] and 345th richest in the world.[2]
He founded the Robin Hood Foundation in 1988, which focuses on poverty reduction.
He has also been instrumental in creating another organization called Just Capital. Their mission is to:
“JUST Capital is an independent nonprofit information platform that seeks to measure and track corporate performance based on the American public’s definition of just business behavior. Each year, we'll survey more than 40,000 Americans to find out what they believe defines corporate justness. From there, we'll measure how corporations are performing, based on the values of the American public. “ The board members of Just Capital include the following individuals:
Paul Tudor Jones II TUDOR INVESTMENT CORPORATION
Founder, Co-Chairman & Chief Investment Officer
Rinaldo Brutoco WORLD BUSINESS ACADEMY
Founding President & CEO
Ray Chambers UNITED NATIONS Special Envoy for Financing the Health Millennium Development Goals and For Malaria
Deepak Chopra CHOPRA FOUNDATION Founder
Alan Fleischmann LAUREL STRATEGIES President & CEO
Peter Georgescu Young & Rubicam Chairman Emeritus
John Hofmeister CITIZENS FOR AFFORDABLE ENERGY Founder & CEO
Arianna Huffington HUFFINGTON POST President & Editor-In-Chief
Mindy Lubber CERES President & CEO
Fred Matser Humanitarian, philanthropist & social entrepreneur
Jennifer McCrea BORN FREE AFRICA Co-Founder & CEO
HARVARD UNIVERSITY Senior Research Fellow
Marc H. Morial NATIONAL URBAN LEAGUE President & CEO
Blake Mycoskie TOM’S SHOES Founder & Chief Shoe Giver
Jean Oelwang VIRGIN UNITE CEO & Virgin Group Partner
Andrew Paul TUDOR INVESTMENT CORPORATION General Counsel & Managing Director
Lynn De Rothschild E L ROTHSCHILD Founder & CEO
Paul Scialla DELOS LIVING Founder & CEO
James P. Steyer COMMON SENSE MEDIA CEO
Michael Weinstein ROBIN HOOD FOUNDATION Chief Program Officer
Jochen Zeitz B TEAM Co-Founder & Co-Chair
KERING Director Just Corporate behavior
In his Ted Talk, Mr. Jones states:
“This chart (not shown) is corporate profit margins going back 40 years as a percentage of revenues, and you can see that we're at a 40-year high of 12.5 percent. Now, hooray if you're a shareholder, but if you're the other side of that, and you're the average American worker, then you can see it's not such a good thing. ["U.S. Share of Income Going to Labor vs. CEO-to-Worker Compensation Ratio"]
Now, higher profit margins do not increase societal wealth. What they actually do is they exacerbate income inequality, and that's not a good thing. But intuitively, that makes sense, right? Because if the top 10 percent of American families own 90 percent of the stocks, as they take a greater share of corporate profits, then there's less wealth left for the rest of society.
Again, income inequality is not a good thing. This next chart, made by The Equality Trust, shows 21 countries from Austria to Japan to New Zealand. On the horizontal axis is income inequality. The further to the right you go, the greater the income inequality. On the vertical axis are nine social and health metrics. The more you go up that, the worse the problems are, and those metrics include life expectancy, teenage pregnancy, literacy, social mobility, just to name a few. Now, those of you in the audience who are Americans may wonder, well, where does the United States rank? Where does it lie on that chart? And guess what? We're literally off the chart. Yes, that's us, with the greatest income inequality and the greatest social problems, according to those metrics.
Now, here's a macro forecast that's easy to make, and that's, that gap between the wealthiest and the poorest, it will get closed. History always does it. It typically happens in one of three ways: either through revolution, higher taxes, or wars. None of those are on my bucket list. (Laughter)
Now, there's another way to do it, and that's by increasing justness in corporate behavior, but the way that we're operating right now, that would require a tremendous change in behavior, and like an addict trying to kick a habit, the first step is to acknowledge that you have a problem.”
To the credit of this billionaire, Just Capital was created to explore this question. I listed the board of directors to show that it includes such spiritual leaders as Deepak Chopra. Obviously if one is going to take the concerns about the growing income inequality in the United States seriously, it is important to ask whether it is possible to so organize a society so that a more equitable distribution of the income. Certainly it is lovely that the corporations such as that which Mr. Jones heads accepts responsibility to not only be more philanthropic but to be a leader in rethinking basic economic theory and basic concepts of justness, but that is just the beginning step. I am hopeful that organizations such as Just Capital are going to reexamine:
What are the basic principles of economists such as Adam Smith, John Maynard Keynes, Karl Marx, Friedrich Hayek and Milton Friedman. As “wallstreetphychology.com” remind us: “These scholars laid the groundwork for modern thinking about commerce, money theory, credit/debt, the business cycle, production, government intervention, and intervention.”
What products and services do all members of a society have a right to? Does one have an intrinsic right or does one need to earn the right to health care, food, clothing, education, and shelter?
What do we do with those members of society who do not “earn” their right to basic needs?
Can one have a just society and allow the laws of supply and demand to determine price, access, and distribution?
What does it mean to be a world economy rather than a group of national economies? Can organizations such as the European Union work when millions of refugees from non-members of the Union start arriving at their doorstep?
What is a free market economy? What is capitalism? What is democratic socialism?
Is it just, workable, or fair to be dependent on billionaires to identify and meet needs which a free market economy is not meeting?
What is a living wage?
What is a fair profit?
Can we have a just corporation without addressing the addictive need to prove one’s worth over other corporate leaders by being paid millions of dollars?
Where do company/corporations such as those responsible for the professional sports or artistic stars fit into the overall economics of a society?
Are we humans at our core so unhealthy that we need “big brother” or the threat of “eternal hell” to ensure that we are our brother’s keepers?
I am sure that there are many related questions which must be asked and examined. As Mr. Jones points out in his Ted Talk, “…like an addict trying to kick a habit, the first step is to acknowledge that you have a problem.”
I also know that it is not good enough for any of us to use sound bites to criticize and complain. If I am serious about addressing these questions, I must do the tedious work of being able to cogently discuss such terms as free market, capitalism, the basic theories of economists, price fixing, and many more. Spending three hours just reviewing some of these basic terms this morning is not enough to participate in a cogent solution. I need to do more homework or to keep my mouth shut. I am good at spiritual and philosophical questions and concepts. I need to be better at the nuts and bolts of what works or what might work and listening to those who better understand these nuts and bolts. I applaud those such as Paul Tudor Jones who are willing to challenge us to begin to ask the tough questions. I am also quite aware that I going to have to listen for my preconceived prejudices instead of just naming those of others.
This is a start, but only a start!
Written February 16, 2016
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