Excerpt from Chapter 6 -- Constructive Capitalism

Chapter 6  --  page 100

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One of my guiding business principles is what I referred to as “Constructive Capitalism."  Let’s face it, I got rich simply by making the world a better place.  That was always my goal from a young age.  I’ll be honest and admit that I also went into business for recognition, wealth and challenge.  However, I always operated with the philosophy that I would like to build a legacy that would be respected.  When my company developed the efficient food product known as “NutrisHouse” Bars which delivered a person’s complete nutritional daily requirements, then that really was the fulfillment of my dreams.  I ultimately have far surpassed any and all of my hopes.

Upon my company’s ultimate success in the USA and Europe, we then started developing the same food products for poorer countries.  The products for these regions cost about a third of the more consumer-oriented products that were being sold and marketed in the western areas.  Of course, everyone knows that the flavor was not as good and the packaging was not as elaborate, but the nutrition value was the same.  Every single country in the world that imported NutrisHouse Bars saw improved health almost immediately.  Even where there were still dictators and civil wars at the time, the health of the citizens improved.

 “Constructive Capitalism” evolved as a concept that in essence requires a company in order to be successful to do doing something tangibly beneficial to improve the state of the world.  This was not necessarily a unique concept that I developed, rather a progression of the changing consumer-mindset and some companies realizing that it was in their best interest to go this route in order to maximize profitability.  “Constructive Capitalism” was also not just about financial contribution either.  Just writing a check to a charitable organization seemed unsettling to most people after the success of NutrisHouse Bars where genuinely positive results were being realized.  Consumers would not accept anymore that if a company does business they just cannot hand over a payment to make them feel or in the worst case scenario, look good.  The contribution of the company must be genuine, involve the resources of the company and be done with the spirit of improving the conditions in the surrounding areas.  Even in the US, the spirit of corporate contribution became more about first-hand infrastructure development rather than continuing to do “fun runs, bake sales and raffles”, as Bill Gates put it in 2007.

Excerpt from Chapter 1 - changing perspective towards wealth

Chapter 1 -  Pages 8 & 9

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Historically, where the personal valuation had gone awry, however, was in terms of the origin of one's individual wealth.  The mere possession of money had come to supersede the means of accumulating it.  In the early twenty-first century, any individual could accumulate wealth with no regard to the impact one made on other individuals or society. The worst aspect of that system, however, is that one could accumulate wealth at the expense of others.  This was a flawed model, as the most aggressive people and organizations, that seemingly prioritized wealth and power, ended up accumulating a disproportionate amount of both and subsequently started persecuting and taking an authoritative position in relation to those who had less.  This ultimately led to the “Occupy Movement” in 2011 and 2012.

America fortunately came to realize that accumulation of wealth at the expense of others is not wealth that should be judged as valuable or honorable. Through the “New Freedom Initiative” (NFI), wealth that was accumulated without adding value to individuals or society, started to become less respected or desired, and per my initial point regarding human judgment, “unsavory money” actually became judged as negative by a great majority of Americans.  Just as an easy example, banks in America came to refuse drug money out right by 2015.

The effect of this unsavory label was to encourage individual and corporate wealth-building as a result of benefiting a wider group of society.  It would also serve to keep those who had amassed their fortunes in a less than honorable manner from having personal influence or access to broader political, business or social institutions.  No one ever argued that any individual could not make money in America any way they liked.  What came to pass, however, was that the holding of that money did not automatically include power and influence along with it.

By the mid-2030s, ethics have since returned and are now a key component to wealth-building such that the amount of money that one accumulates is reasonably proportionate to the contribution one makes throughout that process.

In today’s world, those individuals that provide the greatest benefit to society receive the greatest return in terms of money, property, power and authority.  As a result, most people can claim a higher level of happiness and stability in 2043 than they ever could in 2013.  This claim to happiness extends well beyond American borders into parts of the world where in 2013 even having a claim on clean water was rare.  The world genuinely has improved significantly as a result of changed attitudes toward money.

Post from the Road: Dallas Morning News

I am on a mutli-city road trip for the next couple of weeks so I will take my inspiration from news stories found in the local newspapers:  As I am currently in North Texas I will comment on the Dallas Morning News cover story regarding the alleged bribery scandal at Walmart in their Mexican operations.
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One significant challenge all multinational companies face is adapting their current business practices to foreign cultures.

The Walmart story is a perfect example of just such a challenge. Walmart (it is claimed) paid bribes mostly in 2005 to local government officials in order to accelerate the process of Walmart expansion in Mexico.  Obviously bribery is an illegal business practice.

The second questionable behavior is in terms of Walmart's investigation of the in incident and the subsequent silence and evasion to regulatory agencies.

This second issue reflects the requirement for transparency in private companies and is testament to the need for the "Spirit of Law" mandate I set out in a prior post (April 12, 2012).  Companies need to at a minimum attempt to play by the rules and not try to hide findings purely for the desire of avoiding poor press and subsequent drops in share holder value.  It is inherent in any fairly run organization, that shareholders have access to truthful information in order to make educated decisions in terms of financial investment.  Executive level management has to come to believe in this philosophy and "the Spirit of Law" provisions would be useful in ensuring appropriate behavior. In instances like this though whereby obviously illegal activities are being undertaken then the Executives need to be liable and subject to criminal punishment.

The bigger issue of course goes back to the first point regarding the bribes. In the era when Sam Walton was in charge, Walmart was generally seen as an extremely admirable and ethical organization in context of its operations. Walton would never have authorized or condoned bribery as he knew that was bad for business in the long run. Short-term profiteering once again is just testament to the selfishness and shortsightedness of many of today's CEO's. It is also representative of the win at all cost too many of today's boomer possess overall in their attitude towards life in general.

American companies specifically have to become the role model for appropriate corporate behavior globally. There can be no challenge to put ethical agenda as a primary objective of business expansion. American companies have to be the benchmark on how foreign companies conduct their operations and also how foreign governments learn to work with them. Economic expediency can never be the only purpose of an American company in a foreign land. The era of exploiting foreign nations is long over.

Finally, as more and more countries around the world have access to capitalism then there is more and more competition for investment dollars. American companies have to be the ones that lead the way in making their profits honestly and ethically in countries where they operate. American companies have to embrace the mindset that if they do business in a foreign land then they have to bring the experience and advanced business knowledge to those regions in order to expedite global development. Successful business practices by these American companies will have positive influence over foreign areas and aide to bring them into a positive, honest and free market environment. Under this model, American companies can thrive by opering new markets without having to embrace the poor business environment that preceded them.

The notion of "ethical capitalism" I put forth earlier (February 28, 2012) is the future for American companies. Brand value and revenue streams will flow to the companies that operate in the most humane and honorable way possible. Corporate valuation and investor confidence will be given not from just domestic operations but international as well.