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Welfare destruction

(Peter Drucker reference sourcing: Mr. Adriaan Meij, www.ame.nl )

In 1995 Peter Drucker stated that “companies that make less profit than their costs of capital actually make no profit at all, they in fact destruct welfare”. Using this economic reason we go a little further and state that “companies that have no sustainable ideological basis for the material successes actually parasite on themselves and the environment”. Combining both criteria we get our multidimensional model and we use that to index companies along the multidimensional axes representing a forward equilibrium between the moral policy development and capital development. Money is a means not a goal.

We index groups of companies of a same sector and came to the conclusion overall 99% are destructive for welfare due to an excessive material focus. In Holland a colleague company (www.ame.nl)  publishes the index of the top 120 ICT enterprises concluding that they all together invoiced over 631 billion euros world wide, employing nearly 2 million people full time and destructing all together 14 billion euros of our wealth. This loss was the total balans. The companies representing 78% of the total turnover and over 54% of the amont of companies where the worst performers. The balans was lifted to the current level over a deficite of 14 billion by the 22% of great performers. 

Interestingly we did a similar research but without the statistics, since we are more interested in the policies in the boardroom connected to the identity of the company, on supermarketschains, banks and wasterecovery companies. The result was equally staggering  as the ICT branch. Over 75% was not even bothered about their moral responsiibilities distroying happily our habbitat in order to make a profit. Oly a few actually bothered and were even the ones tha presented better overall financial results. All this indexing only shows that large organisations are not at all used anymore to create added value and compete by subtracting values (cheaper labor, cheaper materials, cheaper housing, etc.). When you sum all that up you come to the conclusion that business is destroying everthing we care just by trying to be successful. We did not need a credit crisis to get into trouble, in the end it would have been something else that would have done the same trick.

It appears to be difficult to get back to a situation of competing on added values because of the material mindset of business nowadays. But it is imperitive to do so if we want to get back, in years, to a stable economy again. The world has avoided to change according the laws of sustainability for over 20 years follow the all destructive path that we can visualize now with numbers. We are now confronted with billion of people wanting to live life with welfare instead of a few hundred million. This means that things need to be transformed rapidly, we have no time. So we might as well get started.

If interested download f.o.c. the document “the convenient solution to the inconvenient truth”.

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