Stories
Stories
Letters
Corruption, Poverty, and Global Finance
Thank you for your excellent article about global poverty in the March Bulletin. I’m delighted to see these issues getting more attention.
This year marks the 45th year of my involvement in the developing countries. Across this period, the prescriptions for reducing poverty have generally been the same. More aid. More debt relief. More foreign direct investment. And, of late, more free trade. I agree with all of these.
However, the greatest contribution Western countries and corporations can make to poverty reduction is to curtail their receipt of illicit money that flows out of developing and transitional economies. These sums — corrupt, criminal, and commercially tax-evading in origin — are staggering, estimated at some $500 to $750 billion annually. The biggest part of this is the commercial component, with multinational corporations often being active participants.
All forms of illicit financial flows are assisted by a global structure that comprises 72 tax havens, secrecy jurisdictions, millions of disguised corporations, anonymous trust accounts, fake charitable foundations, money-laundering techniques, and holes left in Western laws that channel illicit money ultimately into Western economies.
First and foremost, to reduce global poverty, clean up the global financial system. This is the most effective step we can take to assure that capitalism maximizes its contribution to spreading global prosperity.
Raymond Baker
(MBA ’60)
Washington, D.C.
Business Alone Can’t End Poverty
The cover of your March 2007 issue asks the question “Can business end global poverty?” Perhaps you are unaware of the Initiative for Global Development (IGD), a business orga-nization founded in Seattle. Not only does IGD answer the above question, but it has a detailed plan for public- and private- sector efforts to end extreme global poverty.
Business alone cannot do the job because, as the IGD plan points out, it is necessary to invest in good governments as well as investing in people. But taking a business approach to solving the extreme global-poverty problem, which is what IGD has done, is an important step that the public sector would be wise to study.
One thing stands in the way: lack of a broad-based understanding in the business community that ending extreme global poverty is beneficial for business because it creates markets, eliminates a core source of international instability, and replaces expensive, tax-supported aid with productive, locally generated economic activities.
Henry L. Kotkins Jr.
(MBA ’72)
Seattle, WA
Poor Taste?
Did the juxtaposition of the images on the front and back covers of the March issue, which examined the role of business in ending global poverty, strike anyone else as being in poor taste? If “Every day, nearly 3 billion people have to get by on this,” as the headline and stark image of two crumpled dollar bills on the magazine’s front cover inform us, then I can’t help but wonder how many people could get by on the ruby and diamond-laden necklace, earrings, and ring pictured on the back cover’s advertisement.
Robin Alper
(MBA ’94)
Los Angeles, CA
HBS “Mamsy-Pansies”
I much enjoyed “Inside Intel: The Art of Andy Grove” (December issue) and thought alumni might be interested in how Andy Grove was first introduced to HBS. I joined Intel from DEC in Boston in late 1978 as a senior group controller based in Santa Clara, California. Working with the HR department, I created the first recruitment effort for all of Harvard, focused on HBS, made travel arrangements, and reserved interview dates on campus.
I was all set to go when I received a call from Grove to come to his office, where he directed me to cancel my trip. When I asked why, his blunt Hungarian-accented response was that “HBS graduates were a bunch of mamsy-pansies.” I protested that I was an HBS grad, and fortunately, he stated that I was different. I asked Grove what it would take to change his mind, and his cryptic response was, “Try me.” This was a typical Grove two-minute meeting: enigmatic yet to the point. In an always busy day, Grove somehow found the time to review all college recruiting efforts. And he always remained open to a better idea if someone truly believed in it.
I only had a few days before I would have to cancel my HBS trip. Knowing that Grove by reputation was, above all, a manufacturing maven, I called Professor Bob Hayes, who was head of the Production and Operations Management area and a mentor from my days at HBS. Professor Hayes had just returned from doing research in Japan and had written a white paper comparing differences in manufacturing management between American and Japanese electronics production. Hayes sent me a copy for Grove. The research paper was terrific, about forty pages long, very detailed, and very specific in its comparisons. I delivered it to Grove on a Friday and was summoned to his office first thing Monday morning. He requested that I contact Professor Hayes to introduce him and to get permission to make copies of the paper for internal use. Two weeks later, Grove was on a plane to Boston to meet Professor Hayes and has spoken on campus many times since.
Grove gave me the go-ahead to recruit at HBS. By the time I left Intel six years later for a Silicon Valley start-up, I was leading a four-person recruiting team, and we had hired 26 HBS grads. The Intel/HBS relationship grew over the years, all because Andy Grove had the intuition to challenge what lay behind his own stereotyped view of HBS grads.
Paul C. Vilandré
(MBA ’68)
Hayden Lake, ID
We Lost a Legend
Professor Emeritus Bob Anthony was indeed “involved in every aspect of life at HBS.” Three significant achievements should be added to those mentioned in the March article:
- For eighteen months, between late 1950 and early 1952, Bob and his family lived in Washington, D.C., during which time he headed a four-person faculty team advising the U.S. Air Force on improving efficiency and economy in the military. Primary objectives included, would you believe, the initiation of double-entry accounting! This project obviously led to his later assignment in 1965 as assistant secretary of defense (comptroller).
- On February 1, 1955, the School’s first middle-management program, called MMP, later known as PMD and now GMP, was initiated. I don’t recall whether Bob taught in that program, but I do remember his participating actively with those who were teaching in it.
- Perhaps because of his MMP experience, in 1957–58, Bob and his family moved to Lausanne, Switzerland, where he participated with six other HBS faculty in initiating the middle-management center, IMEDE, a very successful program now known worldwide as IMD.
Beyond contributions directly related to the School, Bob wrote and worked tirelessly to improve governmental and nonprofit accounting. He especially focused on attempting to connect federal government appropriation accounting to the internal management systems of the various agencies. Of course, the Congress would have none of it!
Even in retirement and though unable to see, Bob continued to discuss accounting issues with former colleagues and to publish his recommendations. We truly lost a legend!
Leonard (“Ted”) Marks Jr.
(MBA 3/’48, DBA ’61)
Prescott, AZ
Supporting Inner-City Start-ups
Congratulations to Catherine Rohr for recognizing the entrepreneurial talent in Texas prisons, reported in the March article on the Prison Entrepreneurship Program she founded.
In New York City, we are launching a similar program, called Inner City Start-ups, that will set up qualified individuals, with or without criminal records, in small, legitimate businesses under a strict set of controls. Although most employers are reluctant to hire men and women released from prison, some of these same individuals, ironically, have the entrepreneurial talent to start their own businesses. What is missing, however, is the process, funding, controls, and commitment needed to make it happen.
To date, we have received a positive response from officials in corrections, parole, and prisoner reentry programs. The next step is to mobilize the business and faith-based communities to become involved. Business executives will provide the funding and management oversight, while faith-based organizations will provide mentoring for family-related issues.
William R. Watson
(MBA ’66)
Mt. Vernon, NY
The March issue’s “Last Look” photo inspired several e-mail responses, including two that appear below.
Games HBS Students Play
When I was growing up in Fort Thomas, Kentucky, in the 1930s and 1940s, boys walking to and from school would stand on the edge of a sidewalk and pitch their pennies against the side of a building. The one who got closest to the wall won all the pennies. I can imagine that the game was still popular in the early 1950s, although the coins then may have been nickels or dimes. What’s going on here may be the Boston version of penny pitching.
It is a wonderfully evocative photograph. Thanks for running it.
Gordon F. Kingsley
(MBA ’59)
Wellesley, MA
Gambling Ways
After all these HBS students learned about the probability of outcomes, and they gamble! They are gambling by pitching quarters to the other side of the path, and the player whose quarter lands nearest the other side without touching or going over the brick edge wins all. The Kennedy School of Government would have started the field of study called Behavioral Finance decades ago if they had seen this picture.
Paul S. Lausell
(MBA ’75)
Coral Gables, FL