The Purpose of Capital

Elements of Impact, Financial Flows, and Natural Being

Blended Value Group Press, 2018

15 min read

9 take-aways

Audio & text

What's inside?

Forget quarterly returns – think instead about how your investment will improve the world.

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Editorial Rating

Qualities

Analytical
Applicable
Visionary

Recommendation

Chances are you view investments through the prism of financial metrics. Investment adviser Jed Emerson argues that you should find a radically new way to think about the capital you deploy. Forget about short-term returns to your portfolio – consider instead how your investment improves life on Earth. Emerson argues that a dramatic reassessment of priorities is the only way to avoid ecological catastrophe and social unrest. This wide-ranging study, which delves into the thinking of Martin Luther, René Descartes and Adam Smith, will appeal to anyone seeking alternative viewpoints on capitalism.

Summary

Investing shouldn’t be about creating wealth for just one person.

Capital should have a higher purpose, that of creating a better world – not just for people but also for plants and animals. Many investors focus on their personal gains and pay no heed to the wider ramifications of how they invest their money. Even seemingly enlightened investors do little more than pay lip service to the notion of impact investing. They’re mainly concerned with profits and personal rewards. But there’s another way to measure results – social impact. The author once invested in a social enterprise that proved financially disappointing. Yet it helped a young man who had just left addiction treatment to thrive, and he in turn helped many others successfully move on after rehab.

While that investment created a positive effect, Emerson remains haunted by another venture he launched that failed one person. The nonprofit aimed to help get homeless youth off the streets. But one teen client killed himself. It was a valuable lesson for Emerson: As much as impact investors want to believe in their mission, things don’t always work to plan. The standard measure of investment...

About the Author

Jed Emerson is a senior strategic adviser to family offices and investment firms. He is a senior research fellow at the University of Heidelberg's Center on Social Investing.

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M. C. 4 years ago

Over-rated. Would not give it more than a 6 or 7. Failed scholarship - the author fails to accurately characterize Adam Smith, in particular his moral philosophy where he makes clear that narrow profit-maximizing is NOT a healthy path for a society.

Jed Emerson