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This is a story about capitalism.

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It's a system I love

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because of the successes and opportunities
it's afforded me and millions of others.

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I started in my 20s trading commodities,
cotton in particular, in the pits,

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and if there was ever a free market
free-for-all, this was it,

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where men wearing ties 
but acting like gladiators

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fought literally 
and physically for a profit.

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Fortunately, I was good enough
that by the time I was 30,

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I was able to move into the upstairs 
world of money management,

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where I spent the next three decades
as a global macro trader.

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And over that time, I've seen
a lot of crazy things in the markets,

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and I've traded a lot of crazy manias.

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And unfortunately,

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I'm sad to report that right now 
we might be in the grips

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of one of the most disastrous,
certainly of my career,

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and one consistent takeaway is
manias never end well.

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Now, over the past 50 years,

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we as a society have come to view
our companies and corporations

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in a very narrow, almost
monomaniacal fashion

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with regard to how we value them,

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and we have put
so much emphasis on profits,

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on short-term quarterly
earnings and share prices,

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at the exclusion of all else.

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It's like we've ripped the humanity
out of our companies.

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Now, we don't do that --
conveniently reduce something

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to a set of numbers that you
can play with like Lego toys --

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we don't do that in our individual life.

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We don't treat somebody or value them

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based on their monthly income 
or their credit score,

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but we have this double standard

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when it comes to the way
that we value our businesses,

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and you know what?

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It's threatening the very
underpinnings of our society.

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And here's how you'll see.

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This chart is corporate profit margins
going back 40 years

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as a percentage of revenues,

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and you can see that we're
at a 40-year high of 12.5 percent.

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Now, hooray if you're a shareholder,


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but if you're the other side of that,
and you're the average American worker,

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then you can see it's not
such a good thing.

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["U.S. Share of Income Going to Labor vs.
CEO-to-Worker Compensation Ratio"]

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Now, higher profit margins
do not increase societal wealth.

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What they actually do is they
exacerbate income inequality,

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and that's not a good thing.

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But intuitively, that makes sense, right?

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Because if the top 10 percent
of American families

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own 90 percent of the stocks,

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as they take a greater share
of corporate profits,

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then there's less wealth left
for the rest of society.

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Again, income inequality
is not a good thing.

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This next chart,
made by The Equality Trust,

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shows 21 countries from Austria
to Japan to New Zealand.

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On the horizontal axis
is income inequality.

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The further to the right you go,
the greater the income inequality.

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On the vertical axis
are nine social and health metrics.

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The more you go up that,
the worse the problems are,

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and those metrics include life expectancy,
teenage pregnancy, literacy,

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social mobility, just to name a few.

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Now, those of you in the audience
who are Americans may wonder,

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well, where does the United States rank?

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Where does it lie on that chart?

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And guess what?

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We're literally off the chart.

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Yes, that's us,

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with the greatest income inequality

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and the greatest social problems,
according to those metrics.

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Now, here's a macro forecast
that's easy to make,

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and that's, that gap between
the wealthiest and the poorest,

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it will get closed.

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History always does it.

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It typically happens in one of three ways:

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either through revolution,
higher taxes, or wars.

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None of those are on my bucket list.

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(Laughter)

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Now, there's another way to do it,

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and that's by increasing justness
in corporate behavior,

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but the way that we're
operating right now,

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that would require
a tremendous change in behavior,

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and like an addict trying to kick a habit,

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the first step is to acknowledge
that you have a problem.

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And let me just say,
this profits mania that we're on

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is so deeply entrenched

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that we don't even realize
how we're harming society.

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Here's a small but startling example
of exactly how we're doing that:

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this chart shows corporate giving

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as a percentage of profits, 
not revenues, over the last 30 years.

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Juxtapose that to the earlier chart
of corporate profit margins,

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and I ask you, does that feel right?

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In all fairness, when I
started writing this, I thought,

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"Oh wow, what does my company,
what does Tudor do?"

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And I realized we give one percent
of corporate profits

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to charity every year.

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And I'm supposed to be a philanthropist.

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When I realized that, I literally
wanted to throw up.

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But the point is, this mania
is so deeply entrenched

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that well-intentioned people like myself
don't even realize that we're part of it.

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Now, we're not going
to change corporate behavior

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by simply increasing corporate
philanthropy or charitable contributions.

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And oh, by the way,
we've since quadrupled that,

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but -- (Applause) -- Please.

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But we can do it by driving
more just behavior.

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And one way to do it is actually trusting

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the system that got us
here in the first place,

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and that's the free market system.

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About a year ago,
some friends of mine and I

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started a not-for-profit
called Just Capital.

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Its mission is very simple:

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to help companies and corporations

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learn how to operate in a more just
fashion by using the public's input

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to define exactly what the criteria are
for just corporate behavior.

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Now, right now, there's
no widely accepted standard

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that a company or corporation can follow,
and that's where Just Capital comes in,

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because beginning this year and every year
we'll be conducting a nationwide survey

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of a representative sample
of 20,000 Americans

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to find out exactly what they think

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are the criteria for justness
in corporate behavior.

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Now, this is a model that's going
to start in the United States

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but can be expanded
anywhere around the globe,

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and maybe we'll find out

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that the most important
thing for the public

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is that we create living wage jobs,
or make healthy products,

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or help, not harm, the environment.

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At Just Capital, we don't know,
and it's not for us to decide.

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We're but messengers,

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but we have 100 percent confidence 
and faith in the American public

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to get it right.

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So we'll release the findings
this September for the first time,

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and then next year, we'll poll again,

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and we'll take the additive step this time

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of ranking the 1,000
largest U.S. companies

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from number one to number 1,000
and everything in between.

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We're calling it the Just Index,

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and remember, we're an independent
not-for-profit with no bias,

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and we will be giving
the American public a voice.

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And maybe over time, we'll find out
that as people come to know

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which companies are the most just,

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human and economic resources
will be driven towards them,

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and they'll become the most prosperous

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and help our country
be the most prosperous.

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Now, capitalism has been responsible
for every major innovation

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that's made this world a more inspiring
and wonderful place to live in.

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Capitalism has to be based on justice.

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It has to be, and now more than ever,

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with economic divisions
growing wider every day.

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It's estimated that 47 percent
of American workers

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can be displaced in the next 20 years.

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I'm not against progress.

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I want the driverless car and the jet pack
just like everyone else.

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But I'm pleading for recognition
that with increased wealth and profits

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has to come greater
corporate social responsibility.

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"If justice is removed," said Adam Smith,
the father of capitalism,

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"the great, the immense fabric
of human society must in a moment

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crumble into atoms."

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Now, when I was young,
and there was a problem,

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my mama used to always
sigh and shake her head and say,

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"Have mercy, have mercy."

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Now's not the time for us,
for the rest of us to show them mercy.

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The time is now for us
to show them fairness,

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and we can do that, you and I,

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by starting where we work,
in the businesses that we operate in.

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And when we put justness
on par with profits,

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we'll get the most wonderful thing
in all the world.

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We'll take back our humanity.

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Thank you.

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(Applause)