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Title: Professor Niall Ferguson Validates Caux Round Table Principles
Date: 15-Dec-2010
Category: Announcements
Source/Author: Caux Round Table

Recently in the Wall Street Journal, the noted economic historian Niall Ferguson, now at Harvard, contributed a commentary on what makes for successful economic development, a topic of great concern, not only to the Caux Round Table, but to many around the world.

“As I've researched my forthcoming book over the past two years, I've concluded that the West developed six "killer applications" that "the Rest" lacked. These were:

  1. Competition: Europe was politically fragmented and within each monarchy or republic there were multiple competing corporate entities.
     
  2. The Scientific Revolution: All the major 17th-century breakthroughs in mathematics, astronomy, physics, chemistry and biology happened in Western Europe. 
     
  3. The rule of law and representative government: This optimal system of social and political order emerged in the English-speaking world, based on property rights and the representation of property owners in elected legislatures. 
     
  4. Modern medicine: All the major 19th and 20th century advances in health care, including the control of tropical diseases, were made by Western Europeans and North Americans. 
     
  5. The consumer society: The Industrial Revolution took place where there was both a supply of productivity-enhancing technologies and a demand for more, better and cheaper goods, beginning with cotton garments. 
     
  6. The work ethic: Westerners were the first people in the world to combine more extensive and intensive labor with higher savings rates, permitting sustained capital accumulation.

Then, he argued that globalization has been a process of non-Western cultures appropriating step by step these “cultural killer apps.”

We had a very happy sense of affirmation in reading Ferguson’s conclusions on the rise of modern civilization for his six “killer apps.” All bring to life core Caux Round Table Principles for business, government and civil society.

This is not to say that the Caux Round Table is merely an extension of Western values and institutions. Quite to the contrary, much of our work in recent years has been to identify the global consistencies among cultures and religions that lend themselves to appropriation of these modernization “applications” anywhere in our world.

We would, however, re-order his six applications to provide for a cause and effect sequence of development.

First, we would put the Rule of Law and representative government. These systems protect individuals and so release their energies and encourage them to invent and work.

Second, would be competition – legal entities protected by law in their autonomy and capacity for decision-making following their own values.

Third, we would put “the Work Ethic.” This places values as the source of a “take-off” in production methods and follows Max Weber’s explanation of capitalism as a product of the Protestant Ethic. The work ethic takes advantage of civil society opportunities and converts them into wealth.

Fourth, would be the scientific revolution, which resulted from individual creativity and perseverance in the face of natural conditions.

Fifth, medicine grew from the application of scientific approaches to health.

And, finally, sixth came consumer society where individuals could buy what others had invented and produced.

The CRT Principles for Government provide standards for the Rule of Law and the discourse ethics needed for representative government.
 
Our Principles for Responsible Business advocate competition within the bounds of equitable market activity – fair pricing and no exploitation. They also encourage the use of science and innovation to better deliver goods and services that serve the needs of consumers.

A final observation, however, would link the realm of ethics, values and vision to each “application” of progress from traditional societies to modernity.

As far as development is concerned, you can’t get from here to there without some vision of right and some personal commitment to narrow the gap between what is and what could be.



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