Capitalism ain’t broke but it might need fixing

Bernie Sanders is angry about capitalism. He has told us in the title of his latest book that “It’s OK to Be Angry About Capitalism”. But is socialism the answer? Probably not – but…

What can capitalists with an interest in a social impact do short of transitioning to socialism?

Firstly, philanthropy remains a compelling option. There are increasingly impactful ways to donate money to worthy causes – donor-advised funds, outcomes-based contracts, establishing foundations and bequests.

Secondly, ESG approaches. There is an increasing understanding that pursuit of pure short-term profit at any cost is not sustainable for anyone. Investors, institutions and family offices can apply ESG (environmental/social/governance) approaches to their operations and investments. In essence, these are risk mitigation tools to examine the ESG implications of a company’s investments and activities. Does it harm the earth? Does it harm our suppliers? Does it harm people? All questions with long-term impacts on the company and society.

The reputation of ESG has taken a small battering in certain markets lately (partially due to inconsistent application of standards, and partially due to culture wars). However, it is hard to see how this kind of basic due diligence on matters other than the bottom line is “wokery”, and there is increasing evidence of a correlation between good ESG practices and positive financial and business outcomes (see my earlier post from May!). In the coming years, ESG considerations will not just be a ‘nice to have’ but a key part of any organisation’s standard operating procedure.

Thirdly, socially responsible (or ‘conscious’) investing (SRI). SRI is, in essence, a form of negative screening. It sets out the types of activities or investments the organisation is not willing to give capital to. For some organisations, this might be tobacco, fossil fuels, extractives, or areas with high risk of illicit labour. The actual parameters vary from organisation to organisation but the ‘negative screening’ (i.e. screening out opportunities) is its hallmark.

Lastly, impact investing. A touch further than the others, because it flips the coin. Rather than risk-mitigating or screening out, impact investing actively seeks catalytic change with its capital. The peak body for impact investing, the Global Impact Investing Network, differentiates it by describing the activity as “investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return”. Namely, intentionally seeking a financial return and an impact return. Impact investing involves intentionally seeking impactful opportunities. So there is an opportunity to do well while doing good. No need to give it away when you can catalyse change and recycle the capital for re-investing.

Can we fix the perception of capitalism’s heart being avarice-driven through risk mitigation? Negative screening? Impact investing? Perhaps. Perhaps not. But in the meantime it’s not okay to just be angry. We can do something about it.

What I’ve been reading – May 2023

Snapshot of the covers I read

I’ve read some really flipping good books this year and now I’m going to subject you to my thoughts on what should make its way onto your reading list.

EMPIRE OF PAIN RADDEN KEEFE:Oh man. The Sacklers and their OxyContin drug were the beating (avarice-driven) heart of the opioid epidemic. But seeing the epidemic set in its generational context and how actions of the second generation Sacklers were rooted in the sins of the first was mind-blowing. Also a salutary tale on what happens when you outsource your morals to lawyers (ahem).

WHERE THE LIGHT FELL, YANCEY: I’ve always liked Yancey’s books. I met the man once and he was genuinely kind to me. His memoir was thought provoking, interesting and engaging. Like the man himself. Highly recommend.

JURASSIC PARK, CRICHTON: Somehow I’d never read this book. Stands the test of time as a fun little read.

THE KEY MAN, CLARK AND LOUCHE: I couldn’t put this narrative about the Abraaj rise/collapse down. Heartbreaking for those of us in impact investing, but the story is so utterly absurd and engrossing and maddening. Also funny to read a book where you know some of the players!

THE CULT OF WE, BROWN AND FARRELL: The rise and fall of WeWork and its founder is a rollercoaster of Silicon Valley and VC-fuelled madness. I particularly liked the description of WeWork space as “catnip for millennials”

SENSITIVITY OF THE SPIRIT, RT KENDALL: Very challenging. Stewarding the presence requires the gentleness of dealing with a dove.

(Cross-post from my Instagram)

Surprised by fatherhood: a list

1. The washing. My goodness, the washing. How does somebody so small generate so much laundry?!

2. Everything I own has a little bit of vomit on it now.

3. The love I immediately had for him was unconditional and irrational and visceral and fully complete.

4. It is surprisingly easy to switch from “playtime Dad voice” to “serious lawyer voice” in mere seconds.

5. You spend more time than you would think on your hands and knees every day looking for dummies and teethers and lost socks.

6. How he can wake up every hour from midnight to 5am but somehow when he smiles at me at 7am the room will brighten and all is forgotten.

7. It’s possible to attend relatively serious (Teams) meetings with vomit on one’s shirt but still project credibility.

8. I wouldn’t trade any of it for the world (though I would pay a handsome sum for a good night’s sleep).

2021: a bit much…

I’ve become fond of saying “2021 is a bit much”. And to be frank, it has been. Perhaps that’s an understatement.

That’s not to say it’s been a bad year, personally; it hasn’t.

It’s just been… a bit much.

At its height, its gift from God was our beautiful baby boy. At its nadir, its cruellest cut was saying goodbye to my grandfather by zoom. Then there was changing jobs and balancing career growth with a family, navigating the highs and lows parenthood, entering a third year without seeing my family, loved ones’ health issues, watching lockdowns come and go, making new friends and trying to be the best husband I can.

Clearly it wasn’t all bad. It was just… a bit much.

I’m tired.

I think many of us are.

Here’s to 2022 being the right amount of stuff and not another year of being… a bit much.

2020 reading highs and lows

“You know what we haven’t had a lot of lately? Rambling from James about what he has loved and hated reading this year!” Well then… Some selections from the ~30 I’ve got through so far.

The good, the bad and the meh

THE PLACES IN BETWEEN (Stewart): Rory Stewart literally walked through Afghanistan in 2001. This was his endearing and engaging account of that. Must read. It’s nearly 20 years old but holds up very well (and with some closing salutary lessons about my own industry, international development). I wish I could write with the same pith that Stewart writes with.
CHURCH HISTORY (Shelley): a gracious walk through church history – though really a walk through the history of the Western church as it sadly neglects the post-schism eastern church, and believers in the far East pre-1800. I was left reflecting on the damage done to the church – in its witness and to its integrity – when the church compromises its principles in pursuit of influence or power (a lesson our evangelical American friends would do well to heed).
SABBATH (Else): Slee is a CoE academic and this really helped me at the start of the year when I was completely wrung out and needed to rediscover a rhythm of rest.
WILDING (Tree): a fascinating account of returning a dairy farm to nature, and the process and controversies that go with it. Opened my eyes to species reintroducions and other debates.
JERUSALEM: THE BIOGRAPHY (Montefiore): this was also excellent but I’ve already written about it!

12 RULES FOR LIFE (Peterson): psychobabble claptrap.
THE TIPPING POINT (Gladwell): How is this famous? Boring boring boring.

What I’m reading over Christmas to follow… Cheese, Arabia and babies.

Letter to a teacher

I’m currently reading a very wholesome book called Write a Letter by Jodi Ann Bickley.

One of the early exercises asks you to write a letter to a teacher who inspired you. Well, here it is.


Dear Max

It feels strange to call you that, but I’m in my mid 30’s now and so I think it’s reasonable for me to do so!

It has been nearly 20 years since I finished up at [school name redacted]. Since then, I’ve lived in five different cities across the world and visited or worked in something like 25 different countries. I say this not to aggrandise myself, but to point out that God has been good to me in giving me the sort of experiences that the awkward ‘teenager me’ could only have dreamed about (but probably didn’t dream about, because teenagers are not clever enough).

I write clearly enough; I always have. But what I haven’t been doing well enough in is writing for pleasure, or to stay in touch. As a result, I have spent a good amount of 2020 writing for pleasure, writing to friends or just typing and seeing where the words take me. Some of my writing has been published in a few industry publications. Even then, finding inspiration is sometimes a bit difficult.

As a kind of remedy, I’m currently reading a book called ‘Write a Letter’. The very first exercise asks you to write to a teacher who inspired you. I feel as though you won’t be offended that I didn’t think of you first. I was at [school] 20 years ago and, frankly, barely remember it, let alone the teachers.

However, as I mulled over it this morning, you bubbled to mind. And as I thought about it more, I realised that it was because the enduring memory that sticks with me is that you had respect for me.

There are good teachers and there are bad teachers, I am sure… But ‘teachers’ aside, there are also educators and potential-seekers. I think you were one of those.

The respect you had for me – as an individual, as a human – is something that I can still vividly remember, and set you apart from others in the faculty (not just at [School], but generally).

A few distinct memories of you from my time at [School] came to mind today. Two are pertinent here:

  1. In probably the only ‘bad’ thing I ever did at school, I found myself in trouble for being a smart-arse to a teacher (whose name I recall but I won’t mention). I was dropped a ‘behaviour level’ (which, in hindsight, was a pretty ungracious system) and sent off to a few detentions. Incidentally, my sentence was kindly mitigated by my ally – the deputy principal – which proved to be an early lesson in the value of what is known in the Middle East as ‘wasta’. As I came to the end of my last detention, you publicly commended me in the detention room for accepting my sentence in good grace, accepting what I did was wrong and moving on with life. It probably made me look like a golden child, but you called out the good in a (very mildly) bad situation and the lesson stuck with me.
  2. On my very last day of school – education complete, bar for the ceremony – you took time to pull me aside and give me (and my Dad, if I recall), some guidance on possible career that you felt I might not have come across or given enough thought to. You were extremely gracious in doing so, and called out skills that you saw in me that (as a skinny 16 year old) I hadn’t yet seen. In fact, I didn’t really begin to use those skills until about 5 years into my career (ten years or so after you saw them).

So, all of that aside – thank you. You showed respect to a 16 year old who was a bit of a non-entity. I think that is why I thought of you when the book asked me to think about a teacher who inspired you. That kindness has stuck with me.



Social Impact Bonds – when are they the right choice?

I’m very fortunate that my work takes me into interesting and innovative territory, including working on transactions that mobilise capital for social aims. One such emerging mechanism (albeit one with a 10 year track record) is social impact bonds.

I have this piece out today in The Catalyst called “When is the Right Time to Use a Social Impact Bond?”, exploring when a Social Impact Bond is the right choice for your social transaction (and, by extension, when not!).