Ethical Performance
inside intelligence for responsible business


Profit motives and the pursuit of happiness

May 2012

When an entrepreneur has the inspiration to start a business, their first aspiration is not necessarily a financial one. Before the bit about developing a sustainable business model comes conceptualising products that meet a social need. In today’s low-trust age of economic uncertainty, there is a sense that the crash in 2009 confirmed that the relentless pursuit of profit was ultimately self-defeating and distracted us from something more important: happiness.

Last month, the UN held a high level meeting on the relationship between economic development and happiness, with secretary general Ban Ki-moon claiming that gross domestic product is an inadequate measure of progress. This is not a new idea: Robert Kennedy talked of ‘gross national happiness’ in 1968 and, just three years ago before becoming the UK’s prime minister, David Cameron mused on a ‘happiness index’. But what realistically can the enterprise of business or the state seek to achieve? Should happiness be a CSR issue?

If creating the conditions for people to be happy is a serious goal, then there is a great deal of work to do, particularly if we accept that being able to eat, for instance, is a prerequisite to being happy. Banks and hedge funds have collectively increased their investment in food commodity derivatives from $65bn to $126bn (£41bn to £79bn) in five years. According to the World Development Movement, Goldman Sachs, the largest player in this sector, earned £600m from food speculation in 2009, while Barclays Capital earned a reported £340m and £189m in 2010 and 2011 respectively. Thanks to deregulation in 2000, speculation has uncoupled prices from the normal effects of supply and demand, leading to wild and destabilising fluctuations: in 2008, world food prices rose 80% in 18 months, before falling back and then climbing again from 2009 to reach record highs in early 2011.

When prices rise so steeply, the world’s poorest suffer. During last year’s Occupy demonstrations, Barclays CEO Bob Diamond said banks must become “better citizens”, but what kind of citizen fuels a process that makes hundreds of millions of people hungry?

Set against this, of course, we see major companies making increasingly significant and concerted investments of money, expertise and energy into improving the lives of people at home and abroad. Investing in sustaining better lives is very much a CSR goal. Just in this issue, for instance, we report on Heineken and its commitment to building schools and hospitals in Haiti; on Merck helping to fight the spread of water-bourne disease in India; and the army of US corporations, also engaged in various projects in India. Corporations ‘giving something back’ is also not new, but perhaps it’s time to define the happiness agenda more closely as part of a hierarchy of human needs.

Peter Batt | Global | People

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