Purpose With Profit & Capital Cubed

• Capitalism has created the greatest wealth and advancement for humanity. Yet, unchecked, capitalism can lead us towards an existential crisis.

• The evolution of economics helps us appreciate capitalism, the battle between incumbent and new industries, and how this plays out in Western democracies.  

• This is where we introduce the new concept of Capital Cubed, where capital is invested in the ‘do better’ sector and champions public advocacy. Further, employees and the community can also benefit by investing in the company at fair value.

• A Purpose-with-Profit approach, where people, planet, and profit strategies are measured and shared, allows the public, government and capital to make better decisions. This can give founders, their leadership team, and impact capital the winning edge.

We use the term ‘do better’ businesses to sectors bettering humanity or helping create a more sustainable world.

This contrasts with ‘do badder’ capital, which can include industries like gambling, tobacco, fossil fuels, industrial military, industrial animal farming, unhealthy food, exploitative mining, exploitative pharmaceuticals, etc. For this article, we narrow the ‘do badder’ to fossil fuel, industrial animal agriculture, and exploitative mining to compare sectors.

This article is written for five audiences. They are:

1. Scale Up ‘Do Better’ Businesses – They may face external hurdles to adoption. 'Capital Cubed' can help find values-aligned capital and strategies to help build tribes around your brand.
    
2. For Philanthropy, Impact, & Climate Capital – To provide better strategies to win the public discourse and enable the growth of the ‘do better’ sectors.
    
3. For Intermediaries, Associations, Institutions and NFPs – To appreciate the changing landscape of capital and economy.
    
4. For Governments – Western democracy is in decline.  Building back public trust requires truth and transparency for Western democracies to flourish. Capital Cubed is an ally in bringing a better democracy to life.
    
5. Economics Enthusiasts – Economists and those curious about public policy.

Note - We have written this topic as an introduction to promote discussion from a Western democratic lens.

We introduce economic theory here. We realise that all the major economic theories are almost created in a vacuum. They disregard national debt, industry subsidies, currency manipulation, foreign interference and wars! We’ll continue to keep things simple.

Most recently, different forms of capital, like human and nature, have been recognised. For this article, capital refers to a generally accepted view of financial capital.

From Indigenous rights to the climate tech sector, including alternative proteins, we are seeing hurdles and a great deal of misinformation being distributed – which will continue to suffocate progressive movements. This article is about giving the public and the ‘do better’ sectors the winning edge.

We are happy to be challenged. We welcome all feedback.

The ideas seeded here will eventually be brought to life in a book.

Capitalism has created wonders for humanity, providing innovation, uplifting people from poverty, increasing longevity, providing luxury and connecting the world.

Yet, unchecked, capitalism can lead humanity towards an existential crisis by overshooting the planetary boundaries, creating social disharmony in society and wars, and providing a fertile ground for a dystopian world with artificial intelligence.

The growing inequality and housing crisis in the West is causing disharmony and tension.

Many concerned citizens and some capitalists have realised something needs to change.

We must find a new way to uplift humanity without destroying the earth.

To do this, we need to win the hearts and minds of the public.

To appreciate the current state of capitalism, we need to appreciate the evolution of economic theory and practice. Today, we have large capital on one side, wanting to slow change, versus the much smaller ‘do better’ capital on the other. How can ‘do better’ capital compete or even win? Who is telling the truth?

This is where we would like to introduce the concept of Capital Cubed.

Capital Cubed starts with capital invested in ‘do better’ businesses that improve society or the planet's sustainability. This capital enables the employees to become shareholders in the company. This is one dimension.

Then, this capital and the businesses it supports enable advocacy - championing change. This is the second dimension.

The final missing piece is for ‘do better’ capital and the businesses to enable the community to benefit by being able to invest in these companies at fair value. This is the third dimension.

Two ingredients are essential in bringing this all together: truth and transparency.

This is where our Purpose-with-Profit approach supports capital and ‘do better’ businesses to stand out in a crowded marketplace.
 

We create scorecards to measure the ‘Purpose with Profit’ approach so that impact businesses and capital have their business metrics and impact metrics to share with various stakeholders. This effectively builds tribes around a brand.

Let us explore these topics in more detail.

Imagine a modern city landscape that blends nature.

Nature is valued, and flora and fauna flourish.
Public transport is easily accessible.

Animals are cared for and raised well.

Farmers are growing real food close by with quality soil.

The food we eat has the nutrients we need.

We are rewarded and fulfilled at work.

Children are taught the importance of food. We have time for family dinners, friends and community.

We work for businesses that value the people and planet, as well as profit.

Society measures success on the well-being of the citizens and the environment.

The governments are trusted at all levels. They act in the best interests of the public and the planet to ensure a truly sustainable world for future generations.

Can you imagine this world? It’s a ‘better’ world.
 

Now, let’s imagine another world.

The city is full of steel and concrete.

The citizens drive everywhere on highways.

The weather is more extreme and unpredictable.

All animals are raised in factory farms to reduce costs and increase profits.

The animals are pumped with hormones and antibiotics to grow fast.

The rivers are polluted because the factory farm sends all the effluent without treatment.

We are losing wildlife rapidly with increased habitation loss due to rising global meat consumption.

The soil is being destroyed because farmers have used chemicals to increase production for several years. It’s not the farmer’s fault; if they don’t, another farm will, so they must use the chemicals.

After exhausting the land, food is increasingly grown in building towers.

The food is owned by a corporation, maximising returns for the shareholders.

We don’t have much time for family, friends or community. Cooking is seen as a chore.

Citizens are so busy with work that they buy packaged cooked foods quickly.

Corporations focus on profit only, using AI and automation as much as possible.

Society measures the contribution of a citizen by consumption.

The governments are not trusted. The public feels the governments represent vested corporate interests.

Which world would you prefer, the ‘better’ or the ‘badder’?

Almost all citizens prefer the first scenario over the second.

In contrast, those who own the largest swathes of capital and are only concerned about shareholder returns may choose the second.

Investors look for the unique selling advantage of a brand or a service.

One of the greatest investors of the 20th century is Warren Buffett. He invests in household staple brands like Coca-Cola, the insurance sector, and market-dominant businesses.

Even in start-ups, investors look for a competitive advantage, a ‘moat’ around a brand.

In the scenarios above, where food is grown in towers, the consumption and production are far more predictable. A market-dominating position can create superior returns.

A society that is only measured by consumption provides superior returns.

But it does not measure the well-being of the people.

Similarly, farming is about superior returns versus caring for the land, wildlife, rivers, and oceans.

We’ll exhaust the land and continue producing in buildings with robots.

One of the most stark examples of public vs. private interests occurred in the transport sector in the US, where companies that benefited from car ownership bought and tore down public transport in the middle of the 20th century. The public electric train lines of 25 cities were purchased and stopped, only to be replaced by automobiles. This naturally benefits car makers, tyre companies, and petroleum companies.

Another more recent example that impacted the world was the Global Financial Crisis, which was started by bankers and predatory lending. Hundreds of millions of people were severely impacted worldwide.

It’s not all so bad.

Let’s return to the positives of capitalism.

Looking back at history, capitalism has undoubtedly been a great tool to uplift humanity, thanks to innovation and wealth creation.

Looking at China's recent developments over the past 40 years, we can see that millions of people have been lifted from below the poverty line to become a middle GDP/capita country. This has been due to China embracing a version of guided capitalism.

Capitalism has provided unbridled innovation, prosperity and connectivity for many of us, from human health advances to houses with fridges and washing machines to the cars we drive and our ability to fly worldwide.

But as you can see, capitalism has two sides, like Dr Jekyll and Mr Hyde.

To appreciate the evolution of modern capitalism, we need to appreciate the briefest history and evolution of Western economic theory.

Humanity has always traded. Indigenous ways looked after the earth and the people in society. They traded with the excess.

Then, we moved to having kingdoms and nobles, where the majority were equivalent to serfs.

Fast-forward to our modern Western economic theory, starting with Adam Smith, led us to believe in the ‘invisible hand’ of market forces, of supply and demand without intervention. It is important to note that this theory was based on micro-enterprises of the time.

When factories developed, with capital controlling the production, Karl Marx's writings became popular, leading to the rise of communism. Marx felt the public (labour class) would eventually revolt against the capital class. He predicted the capital class would exploit the workers. What has not worked is communism. Let’s nip this in the bud right here.

Seeing the development of the West & East, Marx's theories have not come to pass.

The public has made significant advancements in their lives.

In the West, we have had other models of modifying capitalism to include other stakeholders, not just the shareholders.

Cooperatives and Mutuals have existed for hundreds of years. These models ensured the ‘businesses’ ran fairly for employees and the community. They were non-exploitative from a human perspective. And yet, these models did not accelerate adoption.

There could be a few explanations for this:

1. The existing shareholders did not receive as much reward.
2. The public could not invest in these companies.
3. The administrative burden to set up and grow these entities.

In 1957, an economist, Gardiner Means, wrote a paper on economic theory that opened discussion on the term ‘Collective Capitalism’.

“We now have single corporate enterprises employing hundreds of thousands of workers, having hundreds of thousands of stockholders, using billions of dollars' worth of the instruments of production, serving millions of customers, and controlled by a single management group. These are great collectives of enterprise, and a system composed of them might well be called "collective capitalism.”

He based his hypothesis on the rise of US corporations since the Second World War.

Means included philosophy by introducing the topic of public perception or paradigm and how our paradigm is shaped as a collective. This could be culture or the faith the majority holds.

He also raised the policies that need to be in place for the public and corporations to plan for the long term.

Today, we can see this implemented with incentives for businesses to adopt renewables, like solar on rooftops or electric vehicles.

Even though Means wrote this reflecting the US in 1957, with the benefit of time, Scandinavian countries and Japan appear to be closer to the ideals of ‘collective capitalism’.

In Japan, there is a high level of care for businesses, not wanting to lose the public trust.

Most Japanese employees are loyal to the business, and they hold shareholdings. In return, the business treats them well into retirement. Some large Japanese corporations also invest in each other, creating a collective nature. This ensures foreign entities cannot take control for short-term gains.

One of the most successful philosophies in Japanese business is called ‘Sanpo Yoshi’, which includes three elements: good for the buyer, the seller, and the community.

Effectively, the Japanese adapted mutual and cooperative approaches into their mainstream business models.

As for Scandinavia, in the OECD, the citizens from these countries have a higher degree of trust in government and institutions.

Means’ description of Collective Capitalism may exist in single-party nations or nations with far more social cohesion, like Japan or Scandinavian countries. But does it exist in English-speaking democracies like Australia, the US, and the UK? In these countries, politicians and policymakers must balance the public good against current private interests and the weight of capital lobbying for their interests.

After all, capital creates citizens' jobs and generates revenue for the country.
Furthermore, large donations from vested interests are critical for the political success of the major political parties.
 

Did you notice something missing?

While we have made human advancements in material gains, they have come at the cost of the planet, which is local and global.

No major economic theories captured the planet's sustainability and true human well-being until recently.

Indigenous nations lived in more harmony with the earth. A Native American Haudenosaunee philosophy and system of government contained the Seventh Generation Principle, which states that every decision made today should result in a sustainable world in seven generations.

How profound is this?

Bhutan is the only country to come close to maintaining its indigenous ways through its Gross National Happiness measures. Our article shares the elements in full.

While some models, such as mutuals, cooperatives, and Sanpo Yoshi, value humanity, they are a minority, and they still do not value the greater sustainability of the planet.

In the 1960s, an ecologist referred to a term called Tragedy of the Commons, which argued that “if many people enjoy unfettered access to a finite, valuable resource such as a pasture, they will tend to overuse it and may end up destroying its value altogether.” Around the same time, the planetary threshold (boundaries) was raised in 1972 in Limits to Growth.

Thankfully, the world is much more aware of climate change but has yet to grasp the full scope of planetary boundaries (pictured above). In our articles, Five Levers of True Sustainability and Humanitarian and Planetary Crises, we describe the polycrisis humanity is facing and the collective action the world is starting to stage:

• Measuring the Planetary Boundaries – So we can all act. With the primary focus on Climate Change.
• Global Population, Affluence & Inequality
• UN Sustainable Development Goals & Tracking
• Doughnut Economics
• Governments & Global Accounting Shifts

Just as Means described, public perception is critical. By acting, this changes the ‘way’ we live.

While the Government is a lever of change, in democracies, various think tanks, lobbyists, and media act as ‘hands’ to pull on these levers. Many effectively lobby for the largest capital class – these are the ‘do badder’ sectors. Any great marketers and PR advocates will share that public perception can be won.
 

Rising inequalities in Western democracies have created growing disharmony, leading to populism and misinformation. This discontent can be seen as a hurdle or an opportunity for ‘do better’ activities.

Let us share our experience from the Australian context, which led us to realise that we need a new approach to win over the public and governments to include planetary and human well-being.

At Purpose with Profit, we champion businesses that measure money and more. We have scorecards to measure Purpose, People, Planet, and Precision strategies as well as Profit. In corporate language, this is like Purpose + Profit + ESG (Environment, Social, Governance).

We will share our experience in the alternative protein sector and how the large animal industry presented hurdles to adoption. Then, with the Australian referendum, our founder, Bob Sudharshan, volunteered for the ‘Yes’ side to share the reasons with the multicultural Tamil-speaking community. After the referendum's shock defeat, Bob conducted extensive research to understand how public perception changed so quickly.

While there are many lessons for both, there is still a common thread between both: ‘do badder’ capital.

From 2017 to date, we have focused on growing plant-based businesses and the economy. As we have shared in the Five Levers of True Sustainability, moving to a more plant-based diet is one of the single biggest actions an individual can take for their health and to be more sustainable (carbon, biodiversity loss, water, etc.). We need to support more companies that are introducing more plant-based foods to the public. From the UN to European governments, corporations to environmental groups and health bodies champion this shift.

Billionaires like Bill Gates (US) and Jack Cowan (Australia) started investing in alternative proteins. Major investment and consulting firms like BCG, McKinsey, and others also signalled this shift.

One of our assumptions was that the industry would rapidly grow when large amounts of capital entered the plant-based and alternative protein space.

We presumed the ‘do better’ capital would invest in PR & marketing to win public opinion.

In 2020, we presented a keynote, Driver Accelerating a Plant-based World, to prepare purpose-led founders for the shift.

And yet, the take-up has been poor in Australia, the UK and the USA.

Globally, the pandemic, followed by supply price shocks and the cost-of-living crisis, has hurt many. However, the added lobbying by the existing animal agriculture industry virtually stalled the sector’s growth.

For example, a Federal senate inquiry was held into meat labelling laws in Australia. The meat and dairy industry championed the inquiry and its findings. Product placement in the major supermarkets changed after this.

In 2019, the meat and dairy industries also wanted to change European labelling laws. They proposed naming burger discs and sausage logs. Fortunately, these attempts eventually failed.

A Stanford study on subsidies and lobbying found that, in the US, 800 times more public funding and 190 times more lobbying efforts go into animal food sources. In the EU, 1200 times more public funding and 3 times more lobbying go into animal-sourced food.

The argument is that the public is being confused. This is not the case. The public wants a similar ingredient that’s better for them and the planet. We wrote an opinion piece about the inquiry, which threatens more than just the alternative protein industry.

To top it off, clever PR strategies by the meat industry questioning the health standards further dampened public adoption globally.

These patterns are not new. It’s the same as the tobacco industry providing scientific evidence to confuse the public.

‘Do badder’ lobbies politicians and institutions like health and dietary boards and concludes with a public relations campaign to discredit the challenger.

This is just one sector of ‘do badder’ currently winning over the ‘do better’ capital.

Purpose With Profit is a social enterprise that dedicates time to civic duties.

For the recent Australia Referendum, our founder, Bob Sudharshan, was one of the co-convenors for the Tamils for Yes, connecting over 40 community members and four states. He also collaborated with other South Asian and multicultural communities to support the grassroots campaign.

The Australian referendum was about recognising the First Nations people as the first in the country and giving them a voice in parliament so they could manage their affairs.

The health, incarceration and lifestyle standards are far below the average Australians. The referendum was an approach to redress this.

At one stage, with bipartisan support, the ‘Yes side had the majority support.

They also had arguably a much larger budget. Many large corporations, public institutions, and major religious organisations publicly supported the ‘Yes’ campaign, which was estimated to have cost about $50 million.

Over 60,000 grassroots volunteers were enabled nationwide to support the ‘Yes’ side.

Over 400 Multicultural community leaders participated in the calls.

After all this, you would think the ‘Yes’ side would win.

They lost. The referendum failed. With approximately 60% of all Australians voting ‘No’.

Bob analysed the loss in great detail, researching the ‘No’ side's successes and how it was possible with clever strategies and misinformation (Referendum Aftermath I).

Bob also presents a detailed account of who is to gain from the referendum’s failure. Importantly, he identifies the disenfranchised public who were targets of the ‘No’ campaign.

The articles share links to investigative journalists who found that the elite, fossil fuel, and mining interests funded the ‘No’ side (Referendum Aftermath II). Their funding estimates were around $10 million.

It’s effectively a distortion of democracy or state capture by significant vested interests who were able to manipulate the disenfranchised public and win over the majority.

It’s natural for fossil fuel and mining interests to oppose First Nations rights if it impacts their projects.

There's a common thread, whether it’s Fossil Fuels (Petrol vs. EV, Coal vs. Renewables) or industrial animal agriculture vs. alternative protein. The ‘do better’ smaller capital competes against the better-funded, more coordinated ‘do badder’ capital.

It doesn’t look good. It can seem depressing.

From an advocacy perspective, we have Australian Energy Producers for the fossil fuel industry, the Minerals Council of Australia for mining, and the Meat and Livestock Authority for industrial animal agriculture. These are just the major industry associations. Then, we have the global Atlas Network and vast capital to fund over 500 organisations globally. Add to this the PR to win over the public and the lobbyists to win over politicians.

If we look at Australia's plant-based and alternative protein sector, does it have a chance? There is no effective plant-based food association to support the sector's growth.

The local brands don’t appear to have funds for growing public advocacy. The pandemic, the cost-of-living crisis, and the dominating two major supermarkets did not help their cause either.

The current battle is squarely focused on the renewable industry. We see this in the news and the social media memes shared.

Some private equity firms, like Boundless VC, invest in environmentally disruptive start-ups and advocacy because they realise this importance.

At the next level up, the Climate Capital Forum was created in 2023 after the success of the US government's incentives for the renewable sector. The body champions the Australian government's investment in Australia’s post-carbon economy.

There’s the Investor Group on Climate Change at an even larger scale. The members include the largest corporations in Australia, global investment and pension funds, and the world's leading sustainable technology companies. They all want certainty in the global direction and are lobbying for the government to make a decisive decision.

The advocacy of these bodies is all behind the scenes.

Is this enough? We don’t believe so.

With the growing inequality, the public is becoming sceptical. For the disenfranchised person, it appears to be a battle between the existing elite and the green elite:

‘Do badder’ capital (fossil fuel, mining, animal ag): Don’t want the public to change habits or behaviour. They will retain their jobs. Citizens can consume as normal.

‘Do better’ capital: Want people to change their behaviour, from the foods we eat to how we live and what we drive.

With the growing inequality in the West, for the disenfranchised, being concerned about the future appears to be a luxury they don’t have.

We realised ‘do better’ businesses and capital need to become better organised. This leads us to Capital Cubed.

As we have seen, capital can be the superhero or the villain.

From ancient tales to Hollywood, we share that those who do good will win. In biblical times, it was David and Goliath.

From Hollywood, Star Wars, Matrix, and Hunger Games come to mind. The person fighting to ‘do better’ appears to win.

In the real world, the ‘do better’ community generally supports change, but we are a minority. Furthermore, the ‘do better’ citizens can only be agents of change when they are not suffering from a housing or cost-of-living crisis.

If the Referendum taught us anything, much work must be done to win over the majority of the public.

So how can the ‘do better’ companies and capital win over the majority? Especially with a vast inequality and disempowered public.

We can look back in history for a guide. Gandhi, Nelson Mandela, and Martin Luther King championed change against all odds and eventually won.

What were their superpowers? – They Cared, with Truth and Transparency.

We believe the ‘do better’ capital and community need to become far better organised to bring about the shift for humanity and the planet.

They cared for all citizens, even those who opposed them.

With the truth and transparency on their side, they could mobilise the majority to support change.

Similarly, the starting point is that ‘do better’ businesses need to measure more than money.

Effectively, businesses and capital need ‘Purpose With Profit’ scorecards so all stakeholders can differentiate them from the ‘do badder’ capital.

To be clear, it’s not just about the product or service—it’s about HOW the business operates, from the employees to stakeholders, the community, and the environment.

This can then be communicated internally and externally to the community. This is the starting point.

Then, the following three dimensions can amplify the scale and results:

1. Employees should be allowed to participate in the company's ownership. This is common in the start-up tech world or senior management with share options.
    
2. ‘Do better’ capital and businesses can continue advocating with various stakeholders, from the public to corporations, institutions to government and beyond. We see this in renewable space, as shown above.
    
3. For the third and final dimension, we propose a ‘do better’ community, and the public should be able to become shareholders of these businesses so the public can be part of the change. We are starting to see glimpses of this with crowdsourcing but rarely is this at fair value. We need stewards to ensure good governance of these companies.

With these three dimensions, we call this Capital Cubed!

A brand that lives up to these dimensions is an alternative protein brand called Heura Foods from Spain. They presented at COP 28. They champion change and have a loyal following. They recently created a crowd raise where their fans can be part of the company. Recently, even in a challenging market, they completed a series B raise for 40M Euro.

Tesla is one of the biggest disruptors in the climate space. The company single-handedly changed the trajectory of the global electric vehicle market. The US Federal Government and many state government incentives played a significant role in helping Tesla become established. Tesla fans are certainly very loyal to the brand. While the founder’s style is erratic, we must credit this massive disrupter.

In a functioning democracy, no matter how big the ‘do badder’ capital is, a ‘do better’ business with a Purpose With Profit scorecard and ‘Capital Cubed’ can start to disrupt the sector and industry.

While capitalism has provided many of us with wealth and luxuries, it’s also come at a significant cost.

While some economic models valued stakeholders, generally, the evolution of Western economic theories didn’t value the planet's sustainability or the well-being of its citizens.

The growing inequality and polarisation in societies worldwide are creating greater tension.

From the planetary crises, with the exhaustion of the planetary boundaries, to the growing inequality and the cost-of-living crises, humanity is calling for a new way forward.

Many are waking up to this reality.

We now have a choice in the worlds we want to create.

Between the two worlds, we asked you to imagine which one we are closer to living in.

We can either support a ‘do better’ capitalism and create a better world or continue to allow ‘do badder’ capital to dominate. We remember that unchecked capitalism prioritises short-term gains and perpetuates social and environmental harm.

‘Do better’ capital and businesses have difficulty competing with the existing weight of capital. It’s a battle between David and Goliath. In business, one key to winning over the general public is taking a ‘Purpose With Proft’ approach to measuring business and ESG metrics. We are committed to guiding businesses and impact investors on this path. We create scorecards that measure and showcase your commitment to Purpose with Profit, helping you build a loyal tribe around your brand.

The second key is to apply a ‘Capital Cubed’ approach, allowing employees and the public to benefit as business shareholders while also dedicating resources towards advocacy.

Measuring how businesses operate and participate with society and offering the ‘do better’ public an opportunity to invest in change provides a platform for self-empowerment and growth for all citizens.

This is a transformative approach.

Purpose with Profit and Capital Cubed empowers a future where business truly serves the greater good.

The underlying threads are care, truth, and transparency, which will end inequality and empower citizens — we all deserve to live well.

The choice is clear: embrace Purpose with Profit & Capital Cubed and join a movement that ensures prosperity and sustainability for all.

Let’s create a better world together.

Contact Purpose With Profit today to learn how to integrate these principles into your business strategy and make a real impact.

Together, we can turn the tide and build a future where business is truly a force for good.

Contact us now to get started.