Steve Hutcheson

Capitalism as we know it is perhaps at a crossroad. It may have reached a position in the way we live our lives that only social disorder will resolve some of the difficulties we are now facing unless new options are created to alter the way our communities co-exist. Presently hundreds of millions of people around the world have been affected by the fallout of the financial collapse that has occurred over the past year. Millions upon millions are presently unemployed; countless millions of others have lost their homes and lifestyles and again hundreds of millions if not billions have suffered financial loss through the collapse of investments.

Part of the problem is the development of unfettered capitalism, the belief that the acquisition of more and more wealth is immutable and inscribed in stone. Thirty to forty years ago the salary difference between the lowest and highest in any organization may have been in the order of three to four times. Now differences in compensation in the hundreds of times are not unusual. It raises the question of how much additional contribution the highest paid is making to the overall success of the operation.

I was once complimented in that as the former manager of a program in Afghanistan and after considerable absence I gave credit and greeted as a friend a humble man whose single role was to open and close the gate as we entered the compound. As I explained to my engineer, I saw that the gatekeeper’s role was as important to the overall operation as anyone. If he was not vigilant in his task to secure the compound as he did, we were all at risk and in that respect he was critical to the safe operation of us all. The same can be said in any organization today.

People and governments however in another respect are intrinsically generous.  For the past decade I have had the good fortune to have been engaged in dispensing some of the universal largess in some of the world’s more difficult crisis zones, Kosovo, Afghanistan, Aceh and to a lesser extent Thailand and now Malaysia. People with the most have been the most generous. Bill Gates has contributed billions in the fight against malaria; countless trusts have been established by philanthropists worldwide to engage in social restoration, building schools and clinics or simply provide financial aid and hundreds of millions of people have contributed to millions of charities and social programs worldwide. From my own small involvement I have been given the managerial task to dispense more than two hundred million dollars over the period I have been working in these operations.

 But in all the time I have been involved in this line of work I have questioned the overall impact that all this generosity has made in solving the problems of half of the world’s population. If we provide aid today, we often need to provide more aid tomorrow. I liken it to placing a dollar in the cup of a beggar. We don’t solve his problem since he will most likely be there again tomorrow. We take on a role of Benefactor and Beneficiary where one party is always kept at a disadvantage and is unlikely to become our equal.

Since 2002 more than thirty billion dollars has been provided in direct aid to Afghanistan yet they still have the worst social indicators across all measures of all the countries in the world. The aid program has not been successful. We have however perpetuated the roles of benefactor and beneficiary without developing any sort of successful partnership between the two parties.

I firmly believe it is now time to address this particular issue directly. If I give you something, I want you to something in return to develop the partnership. I was heartened to see an article recently about an admirable young Sudanese man, Valentino Deng who has been moderately successful in the US and is now actively working towards building schools in his own country. He view is that “he is the lucky one so it is incumbent upon him to help his people solve some of their problems.”

In some ways, (I am an engineer so am taking an engineering approach to developing a solution) I believe that for the most part, people are prepared to work. Over the years I have employed more than 60,000 people on cash for work programs and I know and they know that the money we would hand out each week was theirs, they had earned it. But the question that always niggled me was the lack of sustainability these programs had. We would employ a thousand people for three months to construct a road to market for some isolated community. At the end of the project however, there was no continuing work for the thousand engaged in the process.     

Presently UNESCO has listed part of Penang to be a cultural and social World Heritage site. That in itself has created something of a commercial flurry in the development of the region however the most likely scenario is that it will become a gentrified enclave, eliminating in its progress the lifestyle and social framework of those that presently live within its boundaries.

The solution as I see it is to put the property development aspect required for Penang to work in conjunction with the social development work that is necessary to retain the social and cultural structures as they are. Through this there is also an opportunity to modify our approach to dealing with the social issues of the disadvantaged such that we arrive at sustainable outcomes and that problems are not simply solved only for as long as the aid continues, we enable the poor and disadvantaged to reach a position where they no longer require aid. That then brings into account a new means of addressing social philanthropy, philanthropy that enables the poor to have sustainable incomes and permanent jobs where they are in partnership with those that provide them the means to achieve that status, the benefactor and the beneficiary are as equals.

To do this requires the philanthropist to become not simple the benefactor giving alms to a beneficiary but working as the financier providing soft loans that need to be repaid and as that is returned providing further soft loans to start more projects and so on and so on all the while retaining a direct connection and equity with the process.  It is not simple one gives and the other takes, they both have a common objective and outcome in mind. Perhaps that is a solution to address the existing faults of capitalism. It is one that I am certainly working on.

Of recent times, I have decided to scale back my thankless pursuit of money and opt to establish a more balanced set of objectives before me for the future. Now if you read my posts you will have established I am generally a liberal sort of person. For the past ten years I have been engaged in the humanitarian business, another thankless task. I have worked for non-government organizations in war torn high risk countries for the pittance they pay, I have been a UN volunteer living on a ridiculously small stipend, more recently I have worked for one of the beltway bandits sucking up US taxpayer money faster than the new hoover it has bought for our maid.  But things have changed, for my next exercise  I am looking not so much to how much I can make, but to how much I can do.

The beltway income has been sufficient to lay down a sizable deposit on a small house in Penang in Malaysia where we are currently setting down some roots and it will also pay to undertake a major renovation of the building before we finally decide if we will live in it or rent it out. The building however happens to be within the boundaries of a newly conscripted UNESCO World Heritage site which draws me into the reasons to do what I am doing. The idea that I can spend time on a project that will with some degree of personal satisfaction, recover some aspect of a history that has been allowed to degrade appeals to me. What I need to be conscious of is the possibility of over gentrification of the region and even in my own little project I am in since it is the cultural and ethnic inhabitants that form the heritage significance as much as it is the architecture.

What I am now also engaged in is putting together a proposal that will enable me to take on bigger projects that are not just for the moment, I will be able to create projects that, like buying art, are done as much for the sake that the end result can be enjoyed and is a sound investment.

I am reading a column by George Monbiot in the Guardian where  he is lamenting the fact that a TESCO is coming to his small Welsh village. The people who live in the village do so because they are satisfied with the slower pace it offers them and would seem to be universally driven to ward off the TESCO if they can however the inevitability of big business succeeding is ever present. The same can be said about my new project in Penang although not for the same reasons.

Penang is very busy. It has a multicultural community that over the years have bought in a diversity from all over Asia. Yet it is slowly dying. Over the past few years there have been local developers wanting to pul down part of the decayed buildings and construct multi storied hotels and office blocks. Thankfully they have been resisted. This small segment of the city should be enabled to retain its historic outlook, it will nto make one iota of difference to the world at large if these rich developers do not have their way.

The city blocks do however need developing and undertaken on a larger scale than private investment can manage before they totally disappear into a rotting mess. Money nees to be provided to preserve the cultural backdrop against which we measure our progress, money should be invested simply because the outcome provides us with pleasure. Not every thing we do has to be for a profit.

When I finish my tour in Afghanistan at the end of this month, I already have interested some major financiers in my proposition that there is investment potential in conserving Penang’s heritage. In it I am appealing to individual investors who care not just about the next tenth of a percent, but that they are contributing to worthwhile projects that will also repay due to the fact that their projects have greater interest than the availability of a new t-shirt. it may not be for everyone but then it doesn’t require everyone, just enough.