I have come to the conclusion that free enterprise has and will provide opportunities for people to better their own lives. However, I have also decided that community commitment is also a critical part of business. If Michael Porter, the business strategist from Harvard, has bought into this premise then there must be something to this belief.
Many questions have been raised about Corporate Social Responsibility (CSR) and commerce. Several journalists have questioned whether CSR is a part of a businesses DNA. They have argued that when the times get rough CSR goes away. We are definitely in difficult times, and CSR does not seem to be disappearing. In fact, it appears to be getting stronger.
There is no question that times are tough. In a recent article in the Economist the author compared the 1930’s to our recent events. Industrial output during the 1930’s contracted 40%, while our current output fell by 13%. Our national unemployment in the 1930’s climbed to about 25%, but during our current recession peaked at about 10%, and has now fell back to about 8.6%. However, we do know that part of the reduction is a result of discouraged workers, people who have given up looking for a job. Those individuals are no longer counted.
The economists of the past have debated Fiscal Sociology trying to determine the relationship of taxes, the size of government, and people. We are still debating this, but through all of this there are business people who recognize opportunity. An opportunity to make a difference in this world.
I am reading several books, but two of them stand out to me now. The first was written by Richard Branson, of Virgin Air. I really want to meet this guy. He has had a very interesting life. The second book was written by Philip Zimbardo. Both are thought provoking and convinced me that philosophy of servant leadership is the way to go.
Branson in his book, “Screw Business as Usual” states “Capitalism as we know it, which essentially started around the time of the Industrial Revolution, has certainly created economic growth in the world and brought many wonderful benefits to people, but all this has come at a cost that is not reflected on the balance sheet. The focus on profit being king has cause significant negative, unintended consequences. For over a century and a half cheap labor, damaged lives, a destroyed planet and polluted seas were all irrelevant when set against the need for profit. But this is changing.” This is the guy who has started several business including Virgin Air, and is building a commercial space ship. He is capitalist to the core, but believes in helping others.
The second point the has been driven home to me is the relationship of power with corruption and abuse. In 1971 Philip Zimbardo initiated a research event at Stanford. Several students volunteered to be a part of this research involving the abuse of power. In a basement at Stanford the researchers created a prison. Half of the students became prison guards, and half were prisoners. It did not take long for evil to become evident. An evil that was ignored even by Zimbardo. It took a set of fresh eyes from outside of the system to identify the corruption within the system. “The Lucifer Effect” was published in 2008, over thirty years after the research project. Zimbardo said he was embarrassed that he did not stop the research any sooner than he did. It took him seven days to stop the event because it became too intense. However, the lessons were immense.
Zimbardo stated, “The power elite is composed of men whose positions enable them to transcend the ordinary environments of ordinary men and women; they are in positions to make decisions having major consequences. Whether they do or do not make such decisions is less important than the fact that they do occupy such pivotal positions; their failure to act, their failure to make decisions, is itself an act that is often of greater significance than the decisions they do make.”
The capitalist leaders of large corporations are powerful people. Several of the fortune 500 have larger budgets than more countries in the world. There are a plethora of opportunities for abuse within this system. But what is the percentage of ethical lapses? That will be a discussion for another time.
The opportunity for profit and using that profit to better the world has a lot of potential. However, we can never forget what evil lurks in the heart of mankind. When there is much given much is required, which means we don’t stop pursuing growth, we pursue growth, while maintaining an ethical perspective, and we give. Seems pretty simple to me.
And that is my thought for the day!