Caux Round Table for Moral Capitalism
We make the case for Moral Capitalism.
I saw recently in the Wall Street Journal this anecdote (PDF) about a “boss” looking out for an employee.
It reminded me that even in the throws of making a living, we can make life better for those around us, especially those who can rise or fall thanks to our powers and decisions made as to how we use them.
In many of our discussions here in the U.S. about capitalism and our shortcomings as a nation, the example of Sweden and Nordic welfare-state capitalism is often raised as a better model for us to follow.
Thus, I thought it telling when the Wall Street Journal, no friend of socialism, recently published a commentary on stealth capitalism in Sweden titled “How Sweden Overcame Socialism.”
Two new books make the case for moral capitalism irrefutable. According to two students of human evolution, it turns out that integrating social calculations into real world strategies for living well is what we humans are designed to do.
Therefore, being moral with the use of private property and with free-market entrepreneurship is feasible. We can expect those in capitalism to listen to “the better angels of their natures” because such angels can really be a compelling part of their natures.
Richard Wrangham has a new book titled The Goodness Paradox: The Strange Relationship between Virtue and Violence in Human Evolution and Michael Tomasello has a new book with the title Becoming Human.
Wrangham argues that as humans evolved physically out of their original primate bodily configuration, they turned from wild creatures to domesticated ones with their bodies changing shape as evidence of such growing socialization.
Tomasello argues that human children display “joint intentionality” with their caregivers to better succeed in cooperative living.
In other words, just as Aristotle postulated in the pre-scientific age, humans are social animals. In his Politics, Aristotle wrote:
“Man is by nature a social animal; an individual who is unsocial naturally and not accidentally is either beneath our notice or more than human. Society is something that precedes the individual. Anyone who either cannot lead the common life or is so self-sufficient as not to need to, and therefore does not partake of society, is either a beast or a god.”
Wrangham and Tomasello use science to validate the thinking of: Confucius, Mencius, Buddha, Jesus, the Qur’an, Saint Thomas Aquinas, Martin Luther, John Calvin and Adam Smith when he wrote on the moral sentiments in 1759 and today’s Catholic Social Teachings.
We would be fools not to follow what has been taught to us over so many centuries.
For ten years now, we have listened to Professor Doran Hunter, now a member of our board of directors, on the constructive lessons to be learned from evolutionary biology and neuro-science.
Because we are social animals, we can set expectations for each other to be ethical and responsible. Ethics and responsibility, duty that we use our powers thoughtful of the consequences, are part of human nature.
Social Darwinism, which is used by some to justify brute capitalism (think of Wall Street in the run up to 2008) – the Hobbesian law of the jungle where only the fittest in tooth and claw are said to survive – is inconsistent with our deepest needs as human persons.
As Harvard psychologist William James affirmed:
“The community stagnates without the impulse of the individual. The impulse dies away without the sympathy of the community.”
The implication of what Wrangham and Tomasello are telling us is that we cannot be well unless we are social. But as society is a reciprocal arrangement among the one and the many, society has its corresponding duty to keep us well as individuals.
But how we have evolved leaves us with decisions to make daily: do we listen to the “better angels of our nature” or do we behave as brutes do, or alternatively, seek to be Gods liberated from all obligation and moral sense?
The infusion of morality, ethics and the acceptance of personal responsibility into our decision-making is leadership. We must learn to lead by activating our moral sense.
Thus, as I wrote in my 2004 book Moral Capitalism, it can’t happen on its own; it must be made to happen, by us.
Since our first ancestor thought of using a tool to strike, maim or kill a friend, neighbor or foe, the technology which can make our lives better and more fulfilling can also be used nefariously for destruction and evil.
Defense against technology is therefore a necessary part of living well.
The Democratic National Committee could not defend itself against a hack and that did its presidential candidate no good. Huawei allegedly uses technology to steal intellectual property for its own advancement. Our own home computers need security protection against malware. These days, who doesn’t have so many usernames and corresponding passwords that they can’t remember most of them and need technology to keep track of their security codes?
Just the other day, I read that $1 billion in cryptocurrency had been stolen.
Cybersecurity is a new buzzword and necessity for living well. Few of us know about it. It is more and more a part of business success. Protection against those with malicious intent is a new ethical obligation of business, especially in finance.
Please join us and two local experts, Chip Laingen, Executive Director of the Defense Alliance and Corporate Vice President, Midwest Region, for Logistic Specialties, Inc. and Jeremy Swenson, CEO of Abstract Forward Consulting LLC, for a round table discussion on cybersecurity and business responsibility at 9:00 am on Thursday, February 21st at the University Club of St. Paul.
Registration and a light breakfast will begin at 8:30 am and the event at 9:00 am.
Cost to attend is $15 for Business and Public Policy Round Table members and $35 for non-members. Payment will be accepted at the door.
Space is limited.
To register, please contact Jed at jed@cauxroundtable.net or (651) 223-2863 (email preferred).
The University Club is located at 420 Summit Ave in St. Paul.
Parking will be available along Summit Ave.
The event will conclude at 11:00 am.
This post is a request for your help and support.
As I look around our world with its achievements in improving living standards but its growing inequalities, antagonisms and rising mistrust of elites and others, I am reminded of David Livingstone’s last words:
“ALL I CAN ADD IN MY SOLITUDE, IS, MAY HEAVEN’S RICH BLESSING COME DOWN ON EVERY ONE, AMERICAN, ENGLISH, OR TURK, WHO WILL HELP TO HEAL THIS OPEN SORE OF THE WORLD”
Each of us has opportunities daily to help in healing; each of us can lead; each of us can make a difference.
I am grateful to all in our Caux Round Table for Moral Capitalism network for their contributions and their leaderships. We strive to contribute to the cause of healing and improving with ideas and recommendations – big picture and small bore – to put in the public domain for all to take up, improve upon and use in their many vocations.
During 2019, we plan to:
Your donations to our travel and organizational expenses are needed. Small donations can be particularly helpful:
You can donate here and a contribution form can be found here.
Anything you can give would be most appreciated.
John Bogle passed away recently. He understood financial markets, as we do, that they have a stewardship responsibility inside capitalism to support real wealth creation which raises the living standards of all fairly.
He opened financial markets for ordinary people – the arms and legs of capitalism – by making no-frills, low cost index funds easily available. He started a company, Vanguard Group, in 1975.
Vanguard’s business model allowed investors to minimize their risks by investing in a diversified portfolio of company stocks and so avoid the fees charged by fund managers who bought and sold individual stocks for their clients but who most often failed to outperform the market.
Vanguard was set up as a non-profit with its mutual funds and fund shareholders as owners of the business. Profits were plowed back into the business to reduce fees charged to buyers of its funds. Vanguard now manages $5 trillion globally. Vanguard has an expense ratio substantially lower than any other fund complex in the world.
Then, in 1977, Vanguard marketed its funds directly to individual investors and did not require them to go through brokers, who took fees for their service.
Bogle’s investment philosophy was to mimic the market, not try to outsmart other investors in the short run. Rather, his approach was to grow the market over time – little by little, but steady, year after year. This minimized the risk of loss which kept many with small or no fortunes from putting their assets at hazard in equity markets. Investors could obtain a market rate of return at lower cost with index funds. Even today, almost half of all American households don’t invest for the future at all.
Taken altogether, many Americans are richer and the financial industry poorer thanks to John Bogle. Warren Buffet said that John “did more for American investors … than any individual I’ve known.”
Bogle understood that it was the financial service industry that chased risk in order to get higher returns – greed for money. He saw Wall Street as “Financialism,” not honest capitalism. Bogle argued that financial advisors had a duty to be good stewards of the best interests of their clients only.
Bogle’s strategy was encouraged by federal government tax policies in the authorization of IRAs (individual retirement accounts) and 401(k) savings plans. These two arrangements allowed investors to defer the payment of taxes on their earnings in such funds. Index funds are now just under 30% of the stock market.
He received me graciously in December 2012. He had liked what I had written in my book Moral Capitalism – ”Moral Responsibility is a form of stewardship, of agency, of fiduciary undertaking. … it is a vision of mutuality, of service, of both self and others.”
In giving me a copy of his book The Clash of Cultures, he signed it with this word of encouragement: “Press on – Regardless!”
John differentiated between investment and speculation. The first was good use of money and the second was just gambling to make a money play off the misjudgment of others about the odds of future contingencies happening or not. He understood that speculation did not necessarily create new wealth; it just moved money around from some to others, as happens in any poker game.
Bogle called his industry “The poster-boy for one of the most baneful chapters in the modern history of capitalism.”
Another one of his books, which I have, is just called Enough.
We’ve just released our annual report, the 2018 Year In Review. We had a productive year last year. We’re looking forward to a very productive 2019.
What was Wall Street telling us in the closing months of 2018? How can we know? Should we care?
Who drives prices in financial markets anyway?
Financial markets happened just about from the birth of capitalism in Holland and England. The Tulip Mania, the South Sea Bubble and the Mississippi Company Bubble demonstrated early on in the evolution of capitalism the incentive power of finance and the frequent irrationality of its pricing.
As we move into more and more advanced post-industrial capitalism, it seems prudent to reflect on the role of financial markets with the borrowings which keep them robust.
As the 2020 campaign begins, the issues around Wall Street will take center stage for the next two years.
Please join us for a round table discussion about Wall Street at 9:00 am on Thursday, January 31st at the University Club of St. Paul.
Registration and a light breakfast will begin at 8:30 am and the event at 9:00 am.
Cost to attend is $15 for Business and Public Policy Round Table members and $35 for non-members. Payment will be accepted at the door.
Space is limited.
To register, please contact Jed at jed@cauxroundtable.net or (651) 223-2863 (email preferred).
The University Club is located at 420 Summit Ave in St. Paul.
Parking will be available along Summit Ave.
The event will conclude at 11:00 am.
I received a Christmas card from one of our colleagues, a Christian who has a substantial business in the Middle East.
He chose for his message a poem by Ibn Al-Arabi who lived in Andalusia, Spain from 1165 to 1240 C.E. I had not known of his poetry before but found his sense of the spirit compelling for our times of distrust and hard-edged competition.
He wrote:
A Garden Among the Flames
My heart is capable of wearing all forms.
It is a pasture for gazelles and a monastery for monks,
A temple for idols and the Kaaba for the pilgrim.
It is the tablets of the Torah and it is the book of the Koran.
I profess the religion of love, wherever the destination of it caravan may be.
That is the belief, the faith I keep.
Happy New Year.
What was Wall Street telling us in the closing months of 2018? How can we know? Should we care?
Who drives prices in financial markets anyway?
Financial markets happened just about from the birth of capitalism in Holland and England. The Tulip Mania, the South Sea Bubble and the Mississippi Company Bubble demonstrated early on in the evolution of capitalism the incentive power of finance and the frequent irrationality of its pricing.
As we move into more and more advanced post-industrial capitalism, it seems prudent to reflect on the role of financial markets with the borrowings which keep them robust.
As the 2020 campaign begins, the issues around Wall Street will take center stage for the next two years.
Please join us for a round table discussion about Wall Street at 9:00 am on Thursday, January 31st at the University Club of St. Paul.
Registration and a light breakfast will begin at 8:30 am and the event at 9:00 am.
Cost to attend is $15 for Business and Public Policy Round Table members and $35 for non-members. Payment will be accepted at the door.
Space is limited.
To register, please contact Jed at jed@cauxroundtable.net or (651) 223-2863 (email preferred).
The University Club is located at 420 Summit Ave in St. Paul.
Parking will be available along Summit Ave.
The event will conclude at 11:00 am.