Until last week I had never heard the words “greater good” come out of the mouth of someone in finance. “Doing good” was defined bizarrely by one person, who will remain nameless, as ensuring asset managers paid the least for their trades.
The general partners at venture capital firm OneVentures define “the greater good” as improving the lives of others.
OneVentures are putting their money where their mouths are, so to speak. They are helping to fund a company that may be able to deliver vaccines through a patch. One Ventures has invested in a cpompany that monitors, measures and manages diesel particulates at underground mines. Yet another may revolutionize learning by giving instant feedback through an intelligent learning platform.
And unlike the billions of dollars many firms have at their disposal, OneVentures’ fund is very modest, $40 million, half of it courtesy of the Australian tax payer.
Heck, Henry Kravis and George Roberts got $94 million in 2011; each.
Amid high unemployment in the US and riots over austerity in Greece and Spain such pay packages for billionaires further cements a perception that Wall Street is so out of touch that it is on Mars.
Finance needs to think about the public good. It is not enough for those enriched by finance to tout their charitable activities as proof of their commitment to their fellow man. They must examine who they do business with and how. After all, the global banks that do business today are alive courtesy of the taxpayer.
J. Pierpoint Morgan once was asked to define what he and his eponymous firm did. “First class business in a first class way,” was his reply.
Recent generations of financiers can make no such claim.
Paul Volcker, the former Federal Reserve Chairman, has said that in the last 20 years the greatest innovation in finance has been the ATM.
That’s a sad indictment. And Volcker did not even mention anything about a “greater good.”