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Jed Emerson, 59, widely recognized in the impact investing community, recently published a new book, The Purpose of Capital: Elements of Impact, Financial Flows and Natural Being, that calls into question some of the fundamental precepts of the movement, the very underpinnings of capitalism.
Impact investors seek to solve social problems from poverty to climate change by making investments that will not only mitigate the ills but will provide a financial return.
Early in his book, Emerson observes, “There is a central challenge in this effort to ‘do well and do good’ in that at its core is a commitment to making use of the very financial tools that have failed to create a just, equitable and sustainable world in the pursuit of creating a more just, equitable and sustainable world.”
He’s suggesting we may be treating burn victims with fire because we depend on the light it provides. He may also be questioning our sanity by suggesting we're hoping to solve a problem by continuing to do much the same thing that created it.
Jed Emerson
Credit: Ralph ReutimannHe goes on to reject the notion that markets are amoral, objective and rational. Commenting on the book, he says, people who argue for the rational behavior of markets will quickly admit that they are moved principally by fear and greed. “Those to me are fundamentally social dynamics and issues.”
Emerson is no communist. His firm, Blended Value Group, works with ultra-high net work families to manage their money, often with an impact focus. He has twice been selected by the NonProfit Times as one of the 50 most influential people in the sector.
“Those who know Jed and have read his large body of work know that he is the creator of the term ‘blended value’ that helped define the intermingled goals of impact investing,” says Catherine Clark, faculty director, CASE and CASE i3 Initiative on Impact Investing at Duke University. “In this book, Jed adds new ingredients to the purpose blend, a thoughtful and reflective journey into how western political and spiritual thought has intersected with the purposes of capital at an individual and societal level.”
The book differs from Winners Take All by Anand Giridharadas, which addresses some of the same themes. While Giridharadas offers a stirring critique of impact investing, social entrepreneurship and most other efforts to change the world, Emerson’s Purpose of Capital is more introspective. It is almost as if Emerson is talking through the issues for his own benefit as much as ours.
That is one of the lessons of the book that Emerson seems to have learned as much as shared. “I think the most important lesson is the need for us each to come into this process from a place of humility,” he said.
He’s chosen to apply that lesson to the promotion of the book, committing not to give any keynote speeches, choosing instead to only have discussions (like the one he had with me that you can watch in the player at the top of this article.) The book is available for free download here.
Seeking for insights to help people “get to this next place together,” Emerson plans to engage in exchanging ideas “because I have a part of that answer, but I only have a part of that answer. And I think that we're going to really find the answer by stepping back and be more deliberative and dialogue with each other, which I think is how we come to be in better dialogue with self.
