What We Need IS More Conscious Capitalism!

Deirdre McCloskey in her wonderful book “Bourgeois Dignity: Why Economics Cannot Explain The Modern World,” makes a wonderful point, “As the political scientist John Muellar put it, capitalism – or as I like to call it, innovation – is like Ralph’s Grocery in Garrison Keillor’s self-effacing little Minnesota town of Lake Wobegon: pretty good. Something’s that pretty good, after all is pretty good. Not perfect, not a utopia, but probably worth keeping in view of the worse alternatives so easily fallen into.” This and our conversation yesterday has inspired today’s blog.

I love our conversations around the lunchroom table. We talk about many different topics. I am usually the token conservative, which I am ok with. But, I love the conversation because it gets me thinking. The conversation recently has been around the inaugural address by President Obama. Much has been written about his new resolve, and his focus on promoting large government ideas. On the other hand you have John Boehner who is making statements about President Obama’s attempt to destroy the Republican Party. In both cases, I am concerned with the rhetoric, and its continuing polarization of our political leaders. But there may be a light shining in the wilderness. Paul Ryan is a voice crying in the wilderness for a Jack Kemp process within the Republicans. Momma said life was never going to be easy.

I think all of the players need to pay attention to the four tenets of Conscious Capitalism. According to John Mackey the four tenets are: higher purpose, stakeholder integration, conscious leadership and conscious culture and management. Conscious Capitalism, or innovation as McCloskey defines it, chooses a win-win higher-purpose. “Business,” Mackey states, “has a much broader positive impact on the world when it is based on a higher purpose that goes beyond only generating profits and creating shareholder value.” Conscious Capitalism recognizes the importance of creating value, because as they create value, profits will follow. This type of business model recognizes that “each stakeholder is important,” and it “must seek to optimize value creation for all of them.”

Some would argue that all this is doing is putting lipstick on the lips of a pig. Capitalism is the cause of all the world’s ills. However, McCloskey would argue otherwise. She notes that Paul Collier, an Economist stated, “since 1980 world poverty has been falling for the first time in history.” As an absolute number, poverty has actually been falling for two centuries. McCloskey recognizes this change, but she states, “An economics of a bourgeois or Marxist sort does not account for the unprecedented size and egalitarian spread of the benefits from growth, only the details of its pattern.” Poignantly she identifies that “talk and ethics and ideas caused the innovation. Ethical (and unethical) talk runs the world.” I think she is correct, innovation (Capitalism), created through creative dialog, helped to advance living standards of people around the world. To support this idea, all we need to do is look at Japan after WWII, and currently China and India.

Too long we have allowed innovative and dialog to be replaced with zero-sum negotiations. Stakeholder integration and conscious leadership embraces dialog and creative collaboration. “Conscious leaders are motivated primarily by service to the firms higher purpose and creating value for all stakeholders. They reject a zero-sum, trade-off-oriented view of business and look for creative, synergistic Win-Win approaches that deliver multiple kinds of value simultaneously.” Now that is what I am talking about.

Maybe our political leaders need to become Conscious Capitalists, instead of zero-sum antagonizers.

And that is my thought for the day!



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