Alliance Leader Nathan Rothstein, Founder & CEO of Project Repat, provided the following remarks at the Roosevelt Institute Boston event “Re-writing the Rules” event on November 10, 2015:
A few days ago, I was explaining to a group of people what is unique about our business. I told them- “At Project Repat- customers send us their old t-shirts, and we turn them into t-shirt quilts. All of our products are made in the USA and it is a 100% recycled product. They kind of stared at me blankly, and asked.
“Does your business do anything good for the world? Do you donate anything?”
This is not the first time I’ve heard this question and it gets at a problem that we are trying to address tonight. In a lot of ways, our thinking about what is good and adds value is deeply flawed. For some reason, we seem to define “doing good” with companies that donate a small percentage of their proceeds to charity, but we look the other way as they destroy the earth and exploit their workers.
Over the last thirty years as our current state of capitalism has become more and more rigged against the average American, there is a winner take all mantra. Unfortunately, the people who are winning have a false sense of why they won. An incredible amount of business success is concentrated in the financial sectors where they have used their unfettered financial power to gain political power, and write rules and regulations in their favor that stack the deck against everyone else.
As they have become, the quote un quote, “winners,” they get to reap the spoils, and those spoils are not just in fancy cars, multiple houses, but also the decision making in philanthropy and what is considered — good.
Oil companies, big banks, insurance companies, large car companies now have Corporate Social Responsibility (CSR) Departments, where they get points for having volunteer programs or do more recycling in the office. This is obviously an over simplification, but their CSR does not undo their reckless pursuit of profit. Yes, their employees may recycle more, but it is also while their front line workers are exploited, they pay people to discredit global warming studies, and cheat carbon emissions regulations. You can find some of these titans of industry at Davos and the Clinton Global Initiative talking about their “corporate social responsibility,” while at the same time millions of gallons get dumped into the Gulf Coast (see BP). Maybe, what large corporations consider “good” is not the right medicine for us since it has caused so much destruction.
The travel writer, Paul Theroux, who has spent decades exploring the developing world, and spent the last few years driving around the rural south. It depressed him because, in many ways, he saw an eery similarity to some of the poorest parts of the world. He wrote recently in the Times.
“….it is possible to impoverish an American community to the point where it is indistinguishable from a hard-up town in the dusty heartland of a third world country. The strategy of getting rich on cheap labor in foreign countries while offering a sop to America’s poor with charity seems to me a wicked form of indirection. If these wealthy chief executives are such visionaries, why don’t they understand the simple fact that what people want is not a handout along with the uplift ditty but a decent job?
So going back to what good do we do? We help bring back some textile jobs to the US. All of our t-shirts used to be made here, now they are not. The billion dollar apparel brands have spent the last twenty-five years chasing cheap labor around the world, and then turn around and build a basketball court in a town or neighborhood that once made their shoes or shirts. In other words- a company gets to chase cheap labor across the world, hollow out the American middle class, lobby government to create complex tax laws that favor their financial pillaging, and then they build a basketball court or paint a school as their way of giving back.
At Project Repat, we are working hard to create a business that makes deliberate choices about our spending power. Each manufacturing job that our customers create by shopping with us, create four other jobs. From our biodegradable packaging, to encouraging our customers to use the postal service- a place that hires veterans and gives good benefits, we want to make the biggest economic impact that we can.
Our work at Project Repat is not going to change the world alone, neither is a widget that helps share your photos, creates an easier way to get home, or finds a way for someone to do your laundry- don’t let the founders of those companies tell you other wise.
The original purpose of business is to build value to customers and create good jobs to support it, but we have lost our way in a pursuit for the most profit possible. This was not always the case.
During the leveraged buyout booms of the 1980s and 90s, private equity drained the workforce of so many companies, and left a hollowed out America. Millions of manufacturing jobs were lost, but, hey, we had cheap products from China. Unfortunately, all those manufacturing jobs were gone, and the government picked up the tab, due to an increase in welfare rolls. I’m not the first person to ask, “What’s the point of having cheap products if there’s nobody left that has a job?
Philanthropy is one of the key levers in making the world a better place, but it can not be done without a government that creates rules that help a majority of Americans. We can not rely soley on what a few companies decide is “good” when it disguises bad behavior that takes value away, instead of adds to it. My definition of what is good is obviously different than others, but none of us are really doing that good of job when millions of Americans are out of work and living in poverty. Let’s help lift people out of poverty, and balance the playing field by re-writing the rules.