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Private Vice v

Public Benefit

Nick Bravery

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Before the Free Market

No economic growth

For the overwhelmingly majority:

A short lifespan

Oppression

Unfulfilling lives

For a tiny minority:

Education, wealth, participation in political processes and freedom to travel

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What’s happened since?

Economic growth Liberal democracy Privacy Freedom of speech Due process of law Equality before the law Representative and transparent

government Equal rights & entitlements

Votes for every adult

Choose if & who to marry

Whether to have children

Where to live

Whether to travel

Longer lifespan

Leisure opportunities

Technological & medical advances

Access to education and healthcare………..

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The Triumph of Capitalism

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Paradox

We are all “better off” yet success is based on: exploitation of labour, selfishness, greed and the

desire to accumulate wealth.

From a moral viewpoint - “Greed is a sin”

Or should this natural inclination be harnessed?

A dilemma - Private Vice/Public Benefit?

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The Purpose of a Company

Its primary responsibility is to serve its customers; to provide the goods or services which the company exists to produce. Other responsibilities eg to employees and society exist to support the company’s continued ability to carry out its primary purpose.

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No mention of Profit?

Profit is not the primary goal but rather an essential condition for the company’s

continued existence.

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Jo Jo Maman Bebe

“Our energy and effort is put into keeping our customers happy.”

“We are committed to providing a first class service

through honesty, integrity and respect for our customers' and employees' point of view.”

“Our intention is to retain our independent status which permits us to ensure that attention to detail, customer

service and corporate social responsibility are never compromised in pursuit of increased profit.”

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Jenson & Meckling – 1976

Align executive self interest with shareholders interest i.e. increase shareholder value.

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Well, not quite………

Annual return from 1933 to 1976 = 7.5%

Annual return from 1977 to 2010 = 6.5%

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Corporate behaviour

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Articles of Association

….the directors are responsible for the

management of the company’s business, for

which purpose they may exercise all the

powers of the company.

Unless Articles say otherwise.

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Michael E Porter - 1979

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Michael E Porter - 2011

Capitalism under siege

In a bubble

Societal issues are at the periphery

Companies must take the lead

Principle of shared value

Company progress and social progress

Capitalism unparalleled for meeting human needs

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Reasons for optimism

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Some “Nudges”

Private Vice/Public Benefit

Customers are the primary responsibility

Closer links: Private, Public, Charity and Voluntary