Hasta La Gadget!

By: Paul Robinson

The truth is I work in what – alongside tobacco, organised crime and slavery – is one of the few remaining industries where being irresponsible is apparently considered a good thing. I work in finance — or to be more precise, I am the founder and CEO of a fund management company specialising in emerging and frontier economies mainly across Asia, Africa and Latin America.

Finance is an industry that in spite of its very recent failings (that continue to be played out in front of an aghast world populous), has successfully perpetuated the myth that “responsible investment” equals “bad investment”.

In today’s so-called advanced economies, leading a life that does not contribute to human suffering and misery is generally encouraged. Capitalism is giving us all the chance to drink Fairtrade coffee, wear organic cotton, go on ethical holidays, drive a Toyota Prius and donate hard earned (or otherwise) personal wealth to charity.

But even as wars ravage, nation states collapse and global inequality has been allowed to spike to levels unprecedented at any time in human history, prevailing common sense dictates that finance should be immune to conversations about delivering positive social change.

Perhaps the journalist Jon Ronson was on to something when, discussing his work on the classification of mental illness, he mused: “Perhaps capitalism at its most remorseless is a physical manifestation of psychopathy.” Indeed, a lack of empathy, glibness and narcissism are omnipresent in the financial services industry that “serves” us today.

The fact this industry presides over a world where, as Oxfam’s recent Even it up campaign reminds us, 1% of the population owns 48% of the world’s wealth, surely points to a market failure worthy of some intervention.

In spite of all this, I believe finance and financial services can be a powerful force for good.

Indeed, I would go so far as to say that my industry, with a few small tweaks and a commitment to drive out the psychopaths, holds many of the keys to unravelling what on the surface, appear to be the intractable and deeply engrained socio-economic and geo-political issues that humanity faces today.

What is more, I believe this is what investors want. According to recently published research by strategy consultants Scorpio Partners, nearly two-thirds of the high net-worth people they surveyed (63%) appear to be active, socially-conscious investors. Strikingly, that figure rose to 79% of those under the age of 40.

The results suggest that the younger demographic are widely engaged in the issues and want to invest responsibly. Moreover, in research for his 2013 book Capital in the twenty-first century, French economist Thomas Piketty found that 92% of people surveyed in the USA indicated a preference for greater economic equality more akin to the income distribution of Sweden than the one representing the reality in the USA.

I set up Alquity because I believe there is massive demand for a better model of investment management and, indeed, capitalism itself. This model would not only deliver attractive returns to investors and transform the lives of entire communities, but it would also secure a competitive advantage over its more conventional competitors because it’s a better way to do business.

Alquity is based on a reciprocal model of investment. We directly and proactively manage our investments in ways that create sustainable returns for investors, but also in ways that benefit more than those already at the top. We do this by employing a rigorous analytical process powered by what is known in the fund management world as “Environmental, Social and Governance” (ESG).

ESG allows us to ensure we put our investors’ money into well-run, responsible businesses. These can be huge multinationals or much smaller listed companies. What they all have in common is that they achieve success sustainably: by looking after their people, their communities and the environment. The extremely important, and often denied fact, is that this approach yields better returns.

It is common sense when you do think about it – do you really expect companies that behave irresponsibly or unethically to do well over the long run?

But this is only part of the story. The social value of finance and investment in emerging and frontier economies will only ever be realised if economic growth doesn’t result in extreme polarisation. For this reason we believe investment can complete a virtuous circle by using part of its profit to invest in those at risk of being left behind.

Alquity invests up to 25% of its management fees to support small entrepreneurs in the developing world to get their business ideas off the ground.

This isn’t a simple matter of altruism or selflessness. Nor is it about subsidy. It is also about good business sense — by creating wealth across society, fund managers can help build new markets, which, in turn, will offer new opportunities for the companies in which their investors invest.

Ultimately, businesses won’t succeed in parts of the world where schools, hospitals and roads don’t work. We can also clearly see how creating a polarised world represents a security risk. Indeed, the World Economic Forum cited income disparity as one of the top global risks for the coming next decade in its 2013 Global Risks Survey.

Put simply, if we don’t find ways to offer economic opportunity to more than a privileged few, there will be no shortage of other — more destructive and terrifying — opportunities offered to them by others elsewhere. Given what is happening around the world today, perhaps we’re already seeing this happen.

These are some of the themes explored and celebrated by UK based social enterprise Pioneers for Change. Their inaugural 6-month Fellowship kicked off on 23 and 24 March, 2015 in London. Pioneers for Change is an initiative of Adessy Associates.

About Paul Robinson:
Paul, Founder and CEO of Alquity, is on a quest to prove finance and investment can give us the tools to change the world. He has spent the past 20 years building financial services businesses, funds and social enterprises globally. After growing his first funds business to $0.5bn he helped found the ethical consumer brand One Water that has donated more than $20m over 10 years – giving 2.5m people access to clean drinking water.

Paul has spent considerable time in emerging markets, living in Asia and Africa for over a decade (including amongst the Masai). He founded Alquity to demonstrate that there is a better model for investment management. Paul’s anchoring belief is that no person’s future should be dictated simply by where they were born. Every person on the planet deserves the opportunity to succeed – to go as far as their own talent and hard work can take them.

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Last week, the Pew Research Center released a report on how Americans identify in terms of their religious beliefs, noting the growth of non-Christian traditions within the country.

According to Pew, Hinduism is now tied with Buddhism as the country’s fourth-largest religion, with approximately 2.23 million adherents. What’s fascinating about this count is that, according to the survey, the population of Hindus in the United States jumped over a million since the last time Pew collected the data, which led to the research center’s acknowledging of a potential undercount last time.

Before we get to the prospect of undercounting, it’s important to touch on the improbability (or impossibility) of any group jumping in population by 1 million in just six years. Even if, as Pew suggests, the growth of Hindus is fueled by immigration, the statistics of immigration from countries with high Hindu populations (India, Nepal, Guyana, Fiji, Bangladesh, Suriname, Trinidad, Sri Lanka, and Mauritius) would not be able to match the jump in numbers between surveys.

In 2008, Hinduism Today conducted its own survey of Hindu adherents, finding that the number of Hindus in the United States was roughly 2.3 million. Even if there was a reconciliation of numbers between the surveys, and the Hindu population has not grown as highly as Pew suggests, there’s a distinct likelihood that the Hindu population in this country is upwards of 2.5 million.

Why is there such a disparity between the Hinduism Today and Pew surveys? Part of it might just be the respondent and population size and composition, as well as statistical assumptions about just who Hindus are. Hinduism Today – published by the Kauai Hindu Monastery and read widely by the Hindu-American community – likely had a larger and more responsive sample size, while Pew might have relied more on “traditional” barometers of Hindu community growth, such as concentrations of Indian-Americans. Even then, the likelihood of getting a reflective and responsive sample size might have proved to be challenging, given that minority religious groups – particularly those whose populations tend to significantly comprise immigrants – are often reluctant to participate in surveys, as Pew noted in a 2007 study of Muslim- Americans.

In addition to the lack of participation, the potential undercounting of Hindu-Americans in these religious surveys might be attributable to three factors: oversampling of Indian communities and undersampling of non-Indian Hindu communities; Hinduism’s decentralization; and diverse interpretations of what it actually means to be Hindu.

While many Americans conflate Hindus with people directly from India (or the Indian subcontinent), a good part of the Hindu-American population is made up of Indo-Caribbean people, as well as those from countries such as Fiji, South Africa, Mauritius, Indonesia, and Malaysia. It’s also likely that second and third-generation Hindus aren’t part of the samples because fewer of them are part of the temple-attending community. Moreover, because Hinduism is largely considered a non-proselytizing religion, there aren’t any universally recognized conversion processes into the faith. While the Pew study estimated roughly 10 percent of Hindus are converts, Hinduism Today estimates that number to be much higher. Even from a distance, groups like ISKCON (Hare Krishnas), Art of Living, and the Sathya Sai Baba movement have a significant number of those who have adopted Hinduism, underscoring the universality of Hindu philosophy.

The other challenge of tracking the Hindu community is the religion’s inherent decentralization. The majority of Hindus do not regularly attend temples or religious centers, and the very personalized nature of practice – as well as the lack of signifying features among most practicing Hindus – and the lack of doctrines make Hindu-Americans fall outside the traditional American definition of organized religion.

Lastly, Hindus rarely chest thump their religious identities in the public sphere, and since there is no scale of religiosity, a Hindu can be an atheist (and there are more than a handful who identify as atheist Hindus) or a devout Bhakta – and everything in between. Therefore, putting the Hindu population in the 2 million range still doesn’t tell the whole story of who Hindu-Americans are, how they identify, and how they practice. While the ambiguous diversity of just who a Hindu is may lead to more undersampling – and undercounting – in future religious landscape surveys, it still reveals a lot more about the organic and continued growth of a religion that, over thousands of years, has shown itself to be remarkably adaptable to any environment.

That qualifiable growth, more than the numerical one, is worth celebrating.

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It’s been apparent for years that the for-profit college chain Corinthian systematically deceived and mistreated its students. Less well understood has been the company’s abuse of its workers, many of them hard-working and sincere teachers and administrators.  Many were underpaid, many were misled by their bosses, and sometimes they were directed to be party to bad behavior or else lose their jobs.

The final indignity arrived as Corinthian shuttered all its remaining campuses a few weeks ago: Corinthian fired at least some of its teachers without any human involvement. Instead, the teachers were fired by robo-call.

The San Bernadino County Sun reported late yesterday on Michelle Wallace, who taught classes in English and other subjects at Corinthian’s Heald College campus in Hayward, California. Wallace has been a teacher for 27 years, the last seven at Heald. “And then,” according to the Sun, “on April 26, Wallace and her coworkers got the automated phone call that told them their jobs were gone.”

After I tweeted about this last night, I got a number of communications from for-profit college teachers describing similar impersonal terminations. One wrote, “My online teaching gig at EDMC/Argosy came to an end with no word/explanation, they just deleted my email account.”

Firing long-time teachers by robo-call?  That needs to be repeated, loudly, with expletives, by Jon Oliver.

Corinthian’s owners included Wells Fargo bank and Graham Holdings, formerly known as the Washington Post Company.  Its CEO is Jack Massimino.  Its board members include National Urban League President Marc Morial. Its Washington, DC, lobbyists have included Richard Gephardt, the law firms Akin Gump, Akerman, and Dickstein Shapiro, and, through Corinthian’s membership in the trade association APSCU, Trent Lott. Politicians who have done Corinthian’s bidding include Senator Marco Rubio (R-FL), and Corinthian has been the number one donor to House of Representatives higher education committee chair Virginia Foxx (R-NC).

This article also appears on Republic Report. 

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They say timing is everything in life. Well, if that’s true, the timing of this legislation to approve fast-track trade authority could not be worse for middle-class families.

The middle class is having a terribly hard time – perhaps the worst time in modern history. In California, a new study just found that our state’s lowest paid workers have seen their real wages decline 12 percent since 1979.

Our middle class needs help – not a fast track to trade deals that could threaten their jobs, their wages, their health and the environment.

The last time Congress debated such sweeping trade legislation was nearly 25 years ago when we took up the North American Free Trade Agreement, or NAFTA. Now, as the Congress considers Trade Promotion Authority (TPA) legislation and the 12-nation Trans-Pacific Partnership (TPP), I am hearing the same arguments all over again.

Back then, supporters of NAFTA promised it would create jobs, raise wages and help our entire economy. Well, we know from history how NAFTA turned out. In fact, we’re still living with the consequences.

• Instead of the million new jobs that were promised, the United States had lost nearly 700,000 jobs by 2010. Out of those 700,000 lost jobs, 86,500 were from my home state of California.

• Instead of improving pay for our workers, NAFTA has pushed down American wages. It empowered employers in the U.S. to say to their workers, “Either accept lower wages and benefits, or we will move to Mexico.”

• Instead of strengthening our economy, it increased our trade deficit with Mexico. Last year the deficit hit $50 billion.

• Instead of lifting up our entire country, it has devastated too many communities and too many workers, who have seen their jobs shipped across the border.

Take Santa Ana, California. The city had worked hard to keep a Mitsubishi plant that assembled big-screen televisions – securing tax credits to help the plant stay competitive. And even after NAFTA passed, company officials promised that the Santa Ana plant would stay open.

But three years later, Mitsubishi closed the plant. Company officials said they had to cut costs so they were moving their operation to Mexico. In an instant, nearly 400 good-paying American jobs were lost.

Today, we have about 12.3 million manufacturing jobs in this country. Just think what could happen to those jobs under the Trans-Pacific Partnership – the largest trade deal in history, covering nearly 40 percent of the world’s economy.

Of the 12 countries in the TPP, three have minimum wages that are higher than ours: Australia, New Zealand, and Canada. But most of the countries have far lower wages – including Chile with a minimum wage of $1.91, Peru with a minimum wage of $1.15, and Vietnam with a minimum wage of 58 cents. Brunei and Singapore do not even have minimum wages.

And as Senator Elizabeth Warren pointed out in a new staff report, despite more than two decades of promises of tougher standards in our free trade agreements, the United States has repeatedly failed to adequately enforce key protections for workers’ rights, the environment and human rights – even as some of our trading partners continue to produce goods using forced labor and child labor.

I am also extremely concerned about a provision in the TPP that creates an entirely new legal framework that would allow corporations to sue if they don’t like our national and state labor laws or environmental laws.

Here’s how it works: If a big polluter fears its interests or its profits are at risk because of a law or regulation, it could use this separate legal system – called Investor-State Dispute Settlement, or ISDS – to sue for unlimited money damages. Just think of what this could mean for our country: Polluters could use it to try to undo state and federal rules to reduce dangerous carbon pollution or to protect our children and families from toxic chemicals.

How do we know this could happen? Because we’ve seen special interests do it in the past. We’ve seen corporations use these same provisions to challenge laws to stop the export of PCBs, to protect local water and air quality from the impacts of fracking, and to stop the contamination of communities from lead poisoning.

As former Labor Secretary Robert Reich has warned, the consequences could be disastrous. That’s why he called this new agreement, the Trans-Pacific Partnership, “a Trojan horse in a global race to the bottom, giving big corporations and Wall Street banks a way to eliminate any and all laws and regulations that get in the way of their profits.”

The American people might have more confidence in this trade deal if they could actually read it. But they can’t – it’s being kept secret. As a member of Congress, I was only allowed to look at it in a secure room in the Capitol. I couldn’t bring in any electronics. If I took any notes, I’d have to leave them in the room. Why should people trust that this is a good deal when they can’t even see it?

We should immediately put this fast-track legislation aside and take up legislation that will actually help the middle class.

We should increase the minimum wage and give 38 million Americans a raise. We should pass comprehensive immigration reform and bring workers out of the shadows. We should invest in a large-scale infrastructure program that will create millions of jobs. We should make college more affordable for our students. We should help women and families by ensuring equal pay for equal work. And we should create a level playing field for America’s workers and businesses by fighting for currency fairness.

Let’s put the middle class first. Let’s protect worker’s rights, public health and our environment. Let’s do the right thing and defeat this fast-track legislation.

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