what is E2M?
E2M is an innovative economic solution to the social, economic, and environmental problems we face as communities and individuals—it is an economic model for millennium 2000.
Change is Necessary Now: There is a growing consensus among people of all backgrounds that current strategies for solving our social, economic, and environmental problems are simply not working. Despite the best efforts of many committed organizations and individuals, these problems persist and in many cases are worsening. Demands for truly innovative solutions and measurable results are growing louder. E2M answers these demands with a simple yet effective economic option that attacks the most significant cause of many societal problems.
There is one root cause of many problems: Many of the social, economic, and environmental problems that afflict our communities, our nation, and our planet are the results of a single root cause. It is easier to eliminate the root cause than to eliminate any one of the many problems it creates. By focusing on that root cause, E2M provides unprecedented opportunities for individuals and communities to create significant change through simple actions.
The Root Cause: The investment goal of achieving maximum profits and maximum growth is the root cause of many of our most serious social, economic, and environmental problems.
Most individuals and institutions make financial investments with the goal of achieving maximum profits and maximum growth. In fact, corporations are required by law to maximize profits and growth for their investors and stockholders. This investment goal forces corporations and their management to focus on showing maximum short-term profits to continually attract investors. But profits are not enough for investors; they demand growth in profits too! If corporations and their managers do not “hit the numbers” that investors demand, they end up out of business or out of a job.
Because it is a matter of survival, corporations and management will do anything they can to meet the investment goal of maximum profits and maximum growth. This includes producing unnecessary products for the sake of creating sales, barraging our society with more and more advertisements to grow sales, and continually consuming ever-decreasing resources to produce the products that will deliver a return to the investors. It also requires corporations to continually cut costs, resulting in poorer quality products, layoffs of long-time employees, and more recently, even the false reporting of billions of dollars of non-existent sales and profits as it becomes increasingly obvious to corporate managers that the current investment goal is unrealistic.
Corporations, their management, their employees, and our communities are at the mercy of an unrealistic investment goal driven by greed and the desire to get as much as one can as soon as one can. Some have said that greed is a part of human nature. Even if that is the case, there is still a solution.
What is the Solution? In order to create large-scale positive change in our society, we must institutionalize an additional new investment goal of adequate profits and sustainable growth for the common good. If this community-conscious investment goal became prevalent in our economy, corporations could concentrate on producing truly useful, high-quality products to serve their employees, communities, and investors while feeling less pressured to act in ways that are detrimental to employee security, community stability, and environmental sustainability.
To institutionalize this community-conscious investment goal, we need an investor with trillions of dollars of broadly distributed, sustainable investment funds that will always be there so long as commerce and corporations exist. A sparse scattering of community conscious individual investors will not solve the problem because their economic resources are not large enough, sustainable enough, or reliable enough. But there is one investor that meets these requirements. There is one powerful, long-term investor that transcends the limitations of greed-based individual investment because its most selfish interests demand the establishment of a community-conscious investment goal. In fact, its survival depends on it!
Who is the Investor? The investor is the community itself! As an investor, the community will do what is necessary to keep employment stable, produce truly useful and high quality products, reduce resource consumption and pollution to a minimum, nurture entrepreneurs and corporations whose mission is to serve the community and its people, and usher in a new era of community conscious capitalism. To achieve this, however, requires that the community possess very large amounts of money to invest.
And this is what E2M does. It creates the infrastructure that allows the community itself to pick up the income producing, wealth-concentrating tool of capitalism to create wealth for itself, just as individuals and corporations have been doing for more than two hundreds years. Using capitalism in this new and historically promising way, the community can easily create billions of dollars of community wealth so it can become the investor we need. E2M provides the missing link that allows capitalism to truly serve the common good.
The E2M infrastructure: The E2M infrastructure consists of three main elements: the general public (we call them “the community”); the E2M Regional Economic Council (REC); and E2M Certified businesses. Together, these three elements constitute the E2M Economic Community. E2M Economic Communities are established on a highly decentralized, regional basis. Each regional E2M Economic Community acts independently yet may also act collectively with other regional E2M Communities when necessary. The first regional E2M Economic Community has been formed in Western Massachusetts, a region that includes the four westernmost Massachusetts counties.
The E2M Certified business: An ‘E2M Certified’ business is any business enterprise that voluntarily contributes 5-20% of its profits and equity (if it has equity) to its community through the REC and sets aside an additional 5-20% of its profits and equity (if it has equity) to be shared with or purchased by its employees. E2M Certified businesses may be existing businesses that chose to join the E2M Economic Community or new businesses formed by community conscious entrepreneurs.
The Regional Economic Council (REC): The REC is a non-profit organization directed by a board of twenty-four community members that serves the best interests of the community. It receives the equity and profits from E2M certified businesses and uses the community’s funds to serve the public good.
Fifty percent (50%) of the funds received by the REC from any E2M Certified business will be spent in a charitable manner decided by a vote of all employees of the company providing the funds. This will give those employees a sense that they are working for more than a paycheck by linking their daily work to charitable causes improving community health. Of the remaining funds, seventy five percent (75%) will be distributed in the local region, twenty percent (20%) will be distributed nationally to help expand the E2M Economic Community within the United Sates, and the remaining five percent (5%) will be spent internationally to begin to create the links of communication upon which the E2M global network will grow.
REC members are nominated by the regional community and are elected by the current REC to serve three-year terms. The first eight members of the REC in all new regional E2M Economic Communities must be approved by E2M.org, which acts as the national and international chartering organization for E2M Economic Communities. Eight additional REC seats will be created and filled with new members every year until the REC totals twenty-four members. Each year thereafter, eight of the twenty-four REC seats will become vacant and will be filled with new members or re-elected members. REC members can only serve two consecutive terms, and must leave the REC for two terms before seeking re-election.
Community members can apply to join REC subcommittees. Subcommittees make recommendations on grants to non-profit organizations, disbursement of venture capital, provision of low-interest loans to E2M Certified businesses, and other issues. There will be ample opportunities for community participation in these subcommittee meetings, as this will allow the REC to gather accurate information about community needs and will create an open forum for interested members of the public.
In the early stages of a regional E2M Economic Community’s development, the REC will use a significant amount of the community’s funds to make investments or low interest loans in new E2M Certified businesses to ensure the growth of the E2M Economic Community. As the E2M Economic Community becomes more developed, the REC will use a larger amount of its wealth to fund programs that address affordable housing, health care, education, and other issues important to the health of the community. The REC may also provide ultra-low interest home mortgages, personal loans, and credit cards through an E2M community credit union.
The Community: The community, or general public, plays a vital role in the E2M Economic Community. By simply purchasing goods and services—things they already need and buy—from E2M Certified businesses, community members can guarantee that these businesses will grow and provide a significant and steady flow of wealth to their community through the REC. The growth of the E2M Economic Community is entirely determined by this support of E2M certified companies by community members.
Can the community create enough wealth to truly make a difference? The Gross Domestic Product (GDP) of the United States, equal to the total value of US goods and services produced and sold each year, is approximately 12.45 trillion dollars ($12,450,000,000,000). Of that amount, over 9 trillion dollars is generated by the purchases of goods and services by individuals. This amount could sustain 9 million businesses, each with one million dollars ($1,000,000) a year in sales.
Currently, many of those purchase dollars support corporations whose primary goal is to produce maximum profits and growth for relatively few stockholders. If even a fraction of 9 million businesses were E2M certified, they would create enormous community wealth that could make a huge difference in our society.
Economic: E2M is an economic network that allows communities to use the commercial sector to ensure the health of the social sector. In an E2M Economic Community, money flows from the community to E2M Certified businesses in the form of consumer purchases. The profits that these purchases create are then shared with the Regional Economic Council, which pumps money back into the community through business investments, loans, grants, and other financial transactions. This cycle then repeats itself, forming a circular flow of cash that provides more opportunities for community members than the current economic system, in which cash accumulates in the hands of a relative few—this is demonstrated by the fact that 1% of the US population now owns almost 40% of all the private wealth. Thus, E2M is a tool to create a more equitable distribution of wealth and provide greater opportunities for all members of the community.
Ecological: Many corporations engage in environmentally destructive behaviors in order to meet their investors’ goal of maximum profits and maximum growth. The following are just a few examples.
- Corporations consistently make unnecessary products—things with no practical value—for the sake of maximizing profits and growth, resulting in an unnecessary over-consumption of finite global resources.
- Corporations often forgo ecologically beneficial strategies, such as updating production facilities to minimize toxic emissions, if these strategies jeopardize the maximization of profits and growth.
- Corporations use their enormous influence in politics to discourage or block legislation requiring ecologically beneficial (but costly) reforms.
- Planned obsolescence in manufacturing—deliberately designing products to break after a defined period of time—forces consumers to continually replace things. This practice increases sales and profits, but also requires excessive consumption of natural resources and a growth of landfills worldwide.
As E2M enables communities to become increasingly powerful investors, they will be able to ensure that the corporations they invest in place the health of the environment above the pursuit of profits.
Social and Spiritual: The E2M model engrains a motive of sharing, caring, social mission, and compassion in a commercial sector now driven by the desire to get as much as possible as quickly as possible. This is a balancing force that can empower society and help establish a sustainable economic system as we move together into the next millennium.
Global: E2M is a model of capitalism suitable for former-communist and developing countries that want a free market system but do not want 1% of their populations owning 40% of all private wealth, as is the case in the United States. The E2M model is designed to begin building global relationships and lines of communication immediately through the 5% international contribution by the Regional Economic Council.
E2M is an innovative economic solution to the most pressing economic, social, and environmental problems we face as communities and individuals.
We hope you’ll join us in an historic movement towards a more hopeful and sustainable future.