Economic Development, P-CED, derived from a paper for the steering
committee to reelect the [US] President in 1996. Following is a
synopsis of that paper.
glance, it might seem redundant to emphasize people as the central
focus of economics. After all, isn't the purpose of economics, as well
as business, people? Aren't people automatically the central focus of
business and economic activities? Yes and no.
People certainly gain and
benefit, but the rub is: which people? More than a billion children,
women, and men on this planet suffer from hunger. It is a travesty that
this is the case, a blight upon us all as a global social group.
Perhaps an even greater travesty is that it does not have to be this
way; the problems of human suffering on such a massive scale are not
unsolvable. If a few businesses were conducted only slightly
differently, much of the misery and suffering as we now know it could
be eliminated. This is where the concept of a "people-centered"
economics system comes in.
The P-CED concept is to
create new businesses that do things differently from their inception,
and perhaps modify existing businesses that want to do it. This
business model entails doing exactly the same things by which any
business is set up and conducted in the free-market system of
economics. The only difference is this: that at least fifty percent of
profits go to stimulate a given local economy, instead of going to
private hands. In effect, the business would operate in much the same
manner as a non-profit organization. The only restrictions are the
normal terms and conditions of free-enterprise. If a corporation wants
to donate a portion of profits to its local community, it can do so, be
it one percent, five percent, or even fifty percent. There is no one to
protest or dictate otherwise, except a board of directors and
stockholders. This is not a small consideration, since most boards and
stockholders would object. But, if an arrangement has been made with
said stockholders and directors such that this direction of profits is
entirely the point, then no one will object. The corporate charter can
require that these monies be directed into community development funds,
such as a permanent, irrevocable trust fund. The trust fund, in turn,
would be under the oversight of a board of directors made up of
employees and community leaders.
How can such a thing
work? Where would the initial venture capital come from? This capital
in each case can come from each community if available, or from
sponsoring communities or funding organizations. In Chapel Hill, North
Carolina, for example -- where P-CED was born in 1997 -- multi-millions
of dollars are donated each year to charities, after which the money is
typically given away, spent, and gone. Two churches adjacent to the
university campus recently raised in excess of four million dollars to
improve their buildings. (As a counterbalance, a third church chose to
forego its own plans for a building and donated its entire building
fund to a badly-needed support program for the elderly.) If twenty
percent were set aside to fund a "P-CED enterprise", that money would
never go away, but would instead grow as it should in business. Once
the seed capital is available and the business plan implemented,
everything after that goes the normal way of business. Employees are
paid according to the local pay scales, receive benefits, and so on.
They would also enjoy profit-sharing directly for themselves from a
total pool of ten percent of profits. Forty percent of profits would be
rolled back over into the company for growth. The remaining fifty
percent would go to the trust fund. Thus, aside from the final
direction of profits, everything is exactly the same as with any other
We are at the very
beginning of a new type of society and civilization, the Information
Age. Historically, this is only the third distinct age of civilization.
We lived in an agricultural age for thousands of years, which gave way
to the Industrial Revolution and Industrial Age during the last three
hundred years. The Industrial Age is now giving way to the Information
Revolution, which is giving rise to the Information Age. Understanding
this, it is appropriate to be concerned with the impact this transition
is having and will continue to have on the lives of all of us. In that
it is a fundamental predicate of "people-centered" economic development
that no person is disposable, it follows that close attention be paid
to those in the waning Industrial Age who are not equipped and prepared
to take active and productive roles in an Information Age. Many, in
fact, are scared, angry, and deeply resentful that they are being left
out, ignored, effectively disenfranchised, discarded, thrown away as
human flotsam in the name of human and social progress. We have only to
ask ourselves individually whether or not this is the sort of progress
we want, where we accept consciously and intentionally that human
progress allows for disposing of other human beings.
This is a tricky
question. Except in the case of self-defense, if for any reason we
answer "Yes", regardless of what that reason is, we are in effect
agreeing with the proposition of disposing of human beings. Whether
disposal be from deprivation or execution, the result is the same for
the victim. If we agree that sometimes, for some reasons, it is
acceptable and permissible to dispose of human beings, actively or
passively, the next question is "Which people?" Of course I will never
argue that one of them should be me, though perhaps it should be you.
You respond in kind, it cannot be you, but maybe it should be me. Not
only can it not be you, it also cannot be your spouse, your children,
your mother or father, your friends, your neighbors, but, maybe someone
else. Naturally I feel the same way. Maybe we come to an agreement that
it shouldn't be either you or me, or our families and friends, that can
be disposed of, but perhaps someone else. While we are debating this --
passionately and sincerely, no doubt -- a third party comes along and
without warning disposes of the both of us, or our families, or our
friends. And there is the trap we have fallen into, because whether or
not we approve of our or our families' and friends' demise is
irrelevant. It is fair because we accepted the principle of human
disposability. We just didn't intend that it be us who are tossed, but
if we or our families and friends die, it is in accordance with
principles that we ourselves have accepted and so must live -- and die
We can actually engineer,
very precisely and intentionally, a social system whereby human beings
are not disposable, and then go about setting forward our social
machinery with this requirement built-in as a part of our "social
software", as it were. Or, we can decide not to do it. Either way, a
decision is made as to the fate of those who would be dispossessed,
unwanted, and in the way.
these people are not going to go quietly into the night. Once a person
is intentionally cast aside, all prevailing social contracts which
might pertain no longer apply and all previous bets are off. It becomes
self-defense for the intended victim.
Once a nation or
government puts people in the position of defending their own lives, or
that of family and friends, and they all will die if they do nothing
about it, at that point all laws, social contracts and covenants end.
Laws, social contracts and covenants define civilization. Without them,
there is no civilization at all, there is only the law of the jungle:
kill, or be killed. This is where we started, tens of thousands of
By leaving people in
poverty, at risk of their lives due to lack of basic living essentials,
we have stepped across the boundary of civilization. We have conceded
that these people do not matter, are not important. Allowing them to
starve to death, freeze to death, die from deprivation, or simply
shooting them, is in the end exactly the same thing. Inflicting or
allowing poverty on a group of people or an entire country is a formula
The greatest initial
social and economic risk of the Information Age is in creating two
distinctly different classes of people: the technological haves and
have-nots. Those who have access to information and information
technology have a reasonable expectation to survive and prosper. Those
with limited or no access will be left out. This holds true for
individuals as well as nations. The key to the future is access to free
flow of information. To the extent that the free flow of information is
restricted or diminished, people will be left to endure diminished
prospects of prosperity and even survival.
In order for economic
development to take place in any given location, the very first thing
required, before anything else can possibly happen, is information.
This information includes first and foremost where to look for the
necessary resources to do anything. If new businesses are needed,
knowing they are needed and finding funding for them are two very
different things. The first step is to locate possible capital
resources in order to move forward, and this step is no more and no
less than information. Once resources are located, the next step is
what terms and conditions are involved in obtaining those resources --
more information. Once this is known, paperwork must be completed,
business plans made, market research and due diligence conducted, and
all of this compiled and forwarded to the appropriate parties. Again,
nothing more than information. In fact, most of the work involved
between identifying a need and solving the problem is information
acquisition and management: getting and developing information.
As Alvin Toffler
predicted in Power Shift, where once violence and then wealth were
dominant forms of power, information is now becoming the dominant
power. Those nations with the greatest freedom of information and means
of transmitting it have now become the most powerful and influential,
and the strongest economically. Toffler also predicted the collapse of
the Soviet Union would come about due primarily to its authoritarian
control and limiting of information. Unfortunately for Russian
citizens, this old habit has continued for them beyond the collapse of
the former Soviet Union and will at the least make an interesting case
study on the survivability of a once strong nation which still remains
committed to limiting and controlling information.
By going with the normal
flow of free-market enterprise and the emerging replacement of monetary
capital with intellectual capital as the dominant form of basic
enterprise capitalization, it becomes easier to set up new companies
primarily on the basis of invested intellectual capital. (See
Post-Capitalist Society, by Peter Drucker). In plain English, socially
responsible and forward-thinking companies can be set up quickly and
cheaply--and these companies have indefinite potential for earnings and
localized, targeted economic development. The initial objective is to
develop model enterprises and communities, then implement successful
strategies from those models into surrounding communities regionwide or
nationwide, as needed.
With an initial P-CED
business enterprise set up in a given community, it becomes possible to
bring people into the fold, so to speak, of the Information Age. No
existing company need change anything whatsoever about how it does
business. New web development, software development and information
management enterprises, for example, can be set up quickly for
extremely low seed capital outlays. Existing businesses who need
web/software development and management services can have their
business readily enhanced for costs that are relatively insignificant
compared to increased viability and long-term profitability of entering
into a much broader marketplace--without a brick being laid. The design
firm wins, the existing business wins. Most importantly, the
community-at-large wins by way of decreased poverty and unemployment,
since the design firm's profits for the most part go back into the
community--for adult education or retraining, high-tech head start
programs for underprivileged children, seeding new small businesses,
and social relief. Along the way, the design firm's employees benefit
from good wages, profit sharing, and normal benefit packages. Well paid
employees in effect produce, inevitably, highly desirable social and
community outcomes. In short, everyone benefits. In that this new
enterprise effectively becomes a primary node and locus of much-needed
information for the community, it is appropriate to seek seed capital
to start the enterprise from traditional development and aid funding
sources. The result is a self-sustaining and self-perpetuating
enterprise that feeds on the very need, or demand, for resources that
hampered the community and its people to begin with.
With globally dispersed
web sites deployed, the global resource base becomes available as a
means for each community to best determine resource locations to meet
its needs. Such a localized determination of needs, and connection into
a global resource network that provides a means to actually address
those needs, has not been possible prior to the onset of the
Information Revolution and the emergence of the Internet and Web.
The direction and
character of our new age of civilization can, for the first time in
human history, be proactively determined, planned and managed for the
global public good.
A primary impetus for the
P-CED project was the opportunity to pitch the idea at the very
top--i.e.., to the White House. President Clinton invited me in 1995 to
an honorary appointment to his re-election steering committee. Quite
frankly, I wasn't sure how to take the idea of an honorary appointment:
did it mean an active, passive, or invisible (just send money) role in
the re-election campaign? I suspected the latter and opted for the
former. After a great deal of reflection and consideration, I accepted
the appointment by way of a cover letter and an accompanying position
paper which was the outline and foundation for P-CED. This document is
a synopsis of that paper.
The initial business
model included in the paper was to set up a high-tech marketing company
which would operate along the same lines as the web site design firm
mentioned above. The marketing firm would focus on marketing hardware
and software components needed to build the global information
infrastructure, or GII -- a project being heavily promoted by the US
Department of Commerce. The thinking was that this is going to happen
anyway, so why not set up a firm to participate in the process which
would guarantee economic benefit to at-risk US as well as global
citizens? Similar enterprises could be implemented in widely dispersed
local areas, even areas as small as rural third world villages, as the
GII is extended. It is now possible to connect most remote areas to the
GII. A key ingredient in the deployment would be wireless Internet
connectivity, simply because it is faster and cheaper to set up and
offers maximum usage flexibility for network users.
proposed firm would follow in behind the physical deployment of the
information infrastructure by making it practical and useful by setting
up web and software development activities and following with
The benefit to the
initial marketing firm is perhaps fairly obvious. How much money will
be made in the construction of the GII? How much in the way of total
global annual revenues will it support once deployed? Will deployment
ever be "finished", or will it be an ongoing process yielding ongoing
construction/maintenance profits? In my view, we are facing not just
the emergence of the next age of human civilization, but also the
mushrooming of the most powerful economic force ever to appear on the
face of the earth. By its very nature of decentralized information and
education, it invites participation, involvement, and potential benefit
for essentially every locale on the planet. During 1997, the University
of North Carolina-Chapel Hill and IBM teamed together to make UNC's
curriculum and degree programs available by way of distance learning on
the Internet to the far reaches of the globe. Duke University has
implemented an MBA program available online, requiring only a
half-dozen or so meetings during the course--each in different parts of
Top-notch education is
leaving the confines of physical campus and four walls. A student in
remote Zaire, given an Internet connection, can become a Duke-educated
Master of Business Administration, while remaining mostly in his or her
home village to the village's benefit. The prospect of such
decentralized localization of education and economic activity allows a
great deal of autonomy, freedom and self-determinism in the village's
own character and identity. It need not be a risk to cultural heritage
and integrity to benefit economically; the means by which such benefit
will occur, how local citizens can have food, shelter, health care, and
a basic sustaining human standard of existence can be determined at the
local village level and then communicated at the regional, national,
and global level simultaneously at virtually no cost via the Internet
and a web site. It is this basic level of human sustenance, coupled
with self-sustaining enterprise to provide this basic level of support,
that I refer to as sustainable development -- which is just another way
of saying "people-centered" economic development.
The P-CED "type" of firm
demonstrates how a for-profit enterprise can be created and operated
for the benefit of those who need the profits, and who will not have
access to financial markets otherwise. In effect, those in poverty
would benefit much as if they were actual stockholders in the
enterprise. Networking with business development organizations enables
the poor to develop their own business enterprises. Microcredit, or
microfinance, organizations have proven to be very effective tools in
fostering small business development in cash-starved locations. A very
successful loan program in the US, Good Work, Inc., has operated in
Durham, North Carolina since 1992, with the aim of providing loans and
microloans in amounts from $500 to $10,000 to people who would not be
able to find money otherwise. Business planning and management training
are provided to applicants to ensure loan viability and business
success. Good Work reports a business survival rate of more than ninety
Clearly, profits can be
used very effectively in ways other than traditional investment and
profit outcomes. Moreover, this is not charity, it is business--good
business. One P-CED firm could be expected to spin off dozens of new
firms and businesses, all of which create new jobs and all of which
operate under traditional free-enterprise practices. That is, if a
spin-off business were to profit a million dollars a year, the owners
can bank the money for themselves and their stockholders as is the
normal practice. There is nothing wrong with individuals becoming
wealthy. It is only when wealth begins to concentrate in the hands of a
relative few at the expense of billions of others who are denied even a
small share of finite wealth that trouble starts and physical, human
suffering begins. It does not have to be this way. Massive greed and
consequent massive human misery and suffering do not have to be
accepted as a givens, unavoidable, intractable, irresolvable. Just
changing the way business is done, if only by a few companies, can
change the flow of wealth, ease and eliminate poverty, and leave us all
with something better to worry about. Basic human needs such as food
and shelter are fundamental human rights; there are more than enough
resources available to go around--if we can just figure out how to
share. It cannot be "Me first, mine first"; rather, "Me, too" is more
the order of the day.
Chapel Hill, NC
P-CED places people at
the center of economic development. P-CED takes the bottom line one
step further: to people, past numbers. Enterprise profitability and
economic success cannot be fairly measured in terms of gains of money
capital alone. Profit is redefined in human terms rather than pure
quantitative analyses that remove human and social concerns in the name
P-CED advocates for the development of localized
people-centered economics on a global basis. Toward this end, each
local community needs access to:
a comprehensive, easily
accessible information source about all of its currently available
an extended national and
global information resource base to facilitate locating and sharing of
resources for creation
of community funding enterprises for profit, with profits to be applied
to social needs in addition to private wealth creation
P-CED began as a
'poverty-relief via targeted community enterprise development' advocacy
in the US in 1997. P-CED now operates as a UK-registered
profit-for-purpose in the former Soviet Union.
The P-CED Manifesto: Principles of people-centered economics
1. The US economy transitioned from hard-asset based (gold, silver)
in 1971 to Fed paper notes written solely against the “good faith and
credit” of US citizens.
2. Gold (or silver) is tangible, observable, finite: whatever is on
hand, is on hand. That provides a firm, tangible, finite,
economic anchor. There is no way to create more of it at will.
ton of gold is one ton of gold. Its quantity and value are
in numbers. Since that time, the US national debt went from near
to nine trillion dollars in 2008 (~5 trillion in 1996 when these points
were first compiled.) That debt is backed by nothing more than
based on numbers which may or may not even exist.
3. Adam Smith’s “invisible hand” does not mean “non-existent”, nor
detached. It means what it says: invisible. That is, not
4. After disconnecting from the gold standard, US economics and
capitalism became purely a matter of manipulating numbers. There
no longer a hard, observable, tangible, finite anchor. Numbers
hard, observable, or tangible, and may not even exist outside the mind
of human beings.
5. With US and Western economics and capitalism shifted to
manipulation of numbers: are numbers real? That is, do numbers
independently of the human mind and imagination?
6. Plato claimed numbers exist independently of the human mind, are
real, but exist in an ideal, transcendent, unmanifest world.
exist because they are in that ideal world. That ideal world is
represented to us by numbers, and by extension, mathematics.
Therefore, numbers exist beause numbers exist. Circular
his protegé Aristotle.
7. Descartes, mathematician/philosopher, finally got around some
fifteen centuries later to further analyzing the questions of what
exists, what is real. He went past numbers to the question of
he himself even existed. He posited that some entity, some manner
consciousness and material world in the form he found himself, must
necessarily and logically exist in order to ponder the question to
begin with. He concluded "cogito, ergo sum." "I think,
am." Thus demonstrating that he, and by the same argument other
humans, have firm evidence that we exist, and are not mere fantasies or
cognitive constructs of an "Evil Genius" imaginining all of us, the
world, and the manifest universe. Human beings exist. He
was not able
to reach a similar conclusion about numbers, nor has anyone else, nor
is it possible to reach any such conclusion because it is not possible
to separate thinking of numbers by a human being from the human being
himself or herself without eradicating the human being. In which
there would be nothing to speak or think further.
[Numbers are assumed by mathematicians to exist in a real sense for
the sake of their day-to-day work six days per week, but not on the
Sabbath when they feel more obliged to be honest. (reference “The
Mathematical Experience", Davis and Hersh, 1981.) ]
8. Capitalism based on numbers may or may not be valid, according to
whether or not numbers are valid, real, existent, independent of the
human mind. Positing them in Plato’s ideal realm and begging the
question of their existence on that basis was and is null and void.
9. Find a 1, or a 2. Not a symbolic representation of one or two,
or 2. Not a quantity of 1 of something, or 2 of something, but an
actual 1 or an actual 2, tangible, observable, on their own.
find a human being. It is possible to find a human being, one
being or two human beings. It is so far not possible to find a 1
2 in this world. There are no instances in recorded history where
either of those have even been located and identified as entities
independent of the human mind, nor any other number nor any mathematics
nor any equation.
10. Human beings are real.
11. If a) the independent existence of numbers is unknown, and
unknowable; b) human beings do exist; then c) any system of human
economics based on reality can only be based on human beings.
12. Positing numbers as real entities, and basing economics on that
unproved and unprovable hypothesis, risks disposing of real entities
(human beings) in favor of imaginary entities (numbers.) The only
variable needed for that to happen is unscrupulous human beings.
13. Human-based – that is, people-centered – economics is the only
valid measure of economics.
14. Manipulation of numbers, represented by currency/money, allows
writing “new” money as needed. There is no tangible asset, or
There are only numbers, managed by whomever might maneuver into
position to do so. Economics came to be based on numbers, rather
real human beings.
15. On that basis, capitalism trumped people and therefore trumped
democracy. Democracy is about people, who since Descartes are
considered necessarily real, rather than numbers which are not
necessarily real. An imaginary construct, numbers, rule a real
construct, people. That arrangement allows for disposal of real
beings, in the name of the imaginary construct.
16. Capitalism nevertheless remains the most powerful economic
system ever devised. The problem is not with the construct.
problem is with the output of the construct, wherein imaginary
constructs – numbers, and currencies represented symbolically by
numbers – are left to control real human beings to the material benefit
of relatively few people and to the exclusion of many others.
Classical capitalism has reached equilibrium in this regard.
and consequently, many and growing numbers of human beings are excluded
in the realm of finite resources hoarded by those most adept with
17. This is where we find ourselves at the advent of the third age
of human civilization – the Information Age, following from the
Agriculture Age and the Industrial Age. We are for the first time
human history in position to take note of where we are and what we are
doing to and with each other. Or, not.
18. Modifying the output of capitalism is the only method available
to resolving the problem of capitalism where numbers trumped people –
at the hands of people trained toward profit represented only by
numbers and currencies rather than human beings. Profit rules,
are expendable commodities represented by numbers. The solution,
only solution, is to modify that output, measuring profit in terms of
real human beings instead of numbers.
19. We can choose to not reform capitalism, leave human beings to
die from deprivation – where we are now – and understand that that puts
people in self-defense mode.
20. When in self-defense mode, kill or be killed, there is no
civilization at all. It is the law of the jungle, where we
eons ago. In that context, 'terrorism' will likely flourish
is 'terrorism' only for the haves, not for the have-nots. The
have-nots already live in terror, as their existence is threatened by
deprivation, and they have the right to fight back any way they can.
21. “They” will fight back, and do.
22. The Information Age can become the pinnacle of human
civilization, the Golden Age. Or, it can become the end of human
civilization. We get to decide which way to go, and act
23. Dismissing people and consciously leaving them to die is probably
not the way to go.
24. Economics, and indeed human civilization, can only be measured
and calibrated in terms of human beings. Everything in economics
to be adjusted for people, first, and abandoning the illusory numerical
analyses that inevitably put numbers ahead of people, capitalism ahead
of democracy, and degradation ahead of compassion.
25. Each of us who have a choice can choose what we want to do to
help or not. It is free-will, our choice, as human beings.
Posted 10 July 2008. (This is the core argument from the 1996 paper
September 2008 arrived two months later, and the rest is history.
T.H., 27 December 2008, Kharkiv