private vice versus public benefit
TRANSCRIPT
1
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