Eudemonist Investment, a New Asset Class?

This is my first blog post and yet, I am going to go big: I am creating a new asset class. Yes, nothing less. It started as a long thought process in a plane from San Francisco. I had 14 hours to think… Upon landing, I googled the topic only to find… nothing. Seriously? Nobody before me to think that a legitimate goal of investment could be… making people happy? I can almost hear half of you already thinking: “that’s cheesy”, “who’s going to back that?” Well, my view is that there is enough philosophy and psychology literature to provide a solid intellectual backbone to this. As it turns out, Sheikh Mohammed Bin Rasheed Al-Maktoum, the UAE’s prime minister and ruler of Dubai has just appointed a Minister of Happiness. Maybe I am onto something after all. Since JP Morgan issued a report in 2010 stating that Impact Investment was a new asset class, the financial community has started to accept the idea. Well, my contention is that "Eudemonistic Investment", as I am about to define it below, is a more accomplished form of Impact Investment; it is impact with a better clarity of purpose.

Aristotle held that eudaimonia (εὐδαιμονία) is the goal of human thought and action. Eudaimonia is accurately translated as "human flourishing" and involves activity, exhibiting virtue in accordance with reason. Eudemonism is the system of ethics that give moral value to actions based on their potential to bring happiness.

There is a long term, secular investment case / strategy, to derive high returns from investment in companies and projects that contribute to Eudemonia - the intelligent, sustainable, and collective pursuit of happiness.

  1. Intelligent implies the mobilization of the intellect (frontal cortex vs. reptilian brain if you see what I mean), the understanding of what we do, its consequences, and the responsibilities associated;
  2. Sustainable means that the happiness is a lasting or repeatable state, and cannot be generated at the expense of future happiness, or that of future generations;
  3. Collective means that while we advocate individual empowerment, happiness is achieved and shared with others, and not achieved at the expense of others.

There is a considerable philosophical (Epicure, Spinoza, Nietzsche), psychological and statistical sources and evidence that can be leveraged to define the key endpoints that contribute to happy individual and societies. It usually revolves around simple pillars:

  1. Peace and security, defined as ataraxia, or "absence of trouble" (ἀταραξία) - Epicure
  2. Satisfaction of human basic needs (food, health, housing) - Epicure
  3. Empowerment of the individual, physically, intellectually, socially - Nietzsche
  4. Strengthening of social contract, reduction of income inequalities - Rousseau
  5. Harmonious relationship with nature - Spinoza

For clarity, the conception of happiness is not derived from any religious belief and is only pre-occupied with happiness in this world, neither do we believe that there is one single conception of happiness. In fact, we believe societies where individuals develop their own personal and responsible ethics of happiness, with due respect to the right of others to do the same, are more likely to achieve intelligent, sustainable, and collective happiness.

Eudemonist investments should focus on innovative and cutting edge ways to achieve the key endpoints listed above, whether by introducing new products and services, new technologies, new business models. Eudemonist investment can involve technology but technology is not eudemonist in itself. When looking at innovative technologies and approaches, we will look at the original intent of the party that originated the invention and the likelihood that the invention may be used for a different purpose. Investment themes considered:

  • Education broadly defined, with special focus on niche, cutting-edge segments like individual education, special needs, new delivery mediums (ed-tech) – Examples: AltSchool, DIY, NovoED, Brain Balance;
  • Intelligent leisure and entertainment, sustainable tourism; includes tourism that promote the discovery of other cultures, leisure form that enhance health, fitness and wellness, promote collective and participative entertainment – Example: Surf District (Interested in this one? Call me!);
  • Consumer empowerment though information, choice, participation, responsible access to capital. That includes certain elements of peer-to-peer economy, transparency, do-it-yourself approaches, but also consumer education – Examples: Affirm, RESA Weareables;
  • Healthy living, including sports and wellness with emphasis on prevention and promotion of drug-free therapies, initiatives that strengthen the body’s own ability to resist to pathogens – Example: Glow, Surf District, Brain Balance, RESA Wearables;
  • Food and food security. That includes tasty and healthy food that respect the environment and promote health, solutions that help secure, control and shortens supply chains, foster communities of producers and consumers – Example: PureHarvest; Aerofarms;
  • Personal and collective security solutions that provide peace of mind to individuals, families and societies, by preventing crime, acts of terrorism and other challenges to the social contracts while reducing the use of force – Example: FlightWave;
  • Sustainable and affordable housing, including novel financing solutions to broaden home ownership, energy efficient communities, integrative communities, with a focus on creating qualitative lifestyle environments for all – Examples: Aditazz;
  • Ecology, that is everything that enhances the relationship between human beings and their environment, including renewable energy, pollution reduction, climate change control, respectful animal treatment, nature conservancy, bio diversity – Examples: Vence, PureHarvest, Aerofarms.
Jean-Noel Odier