Blog

As you know, the Caux Round Table for Moral Capitalism seeks annually to recognize and honor leaders in the Minnesota business community and so presents an annual Dayton Award for Distinction in   Moral Capitalism.

In 2019, the first Dayton Award was given to Douglas M. Baker, Jr. of Ecolab, in 2020 to Andrew Cecere of USBank and Don and Sondra Samuels for leadership in the community, in 2021 to police chiefs Medaria Arradondo of Minneapolis and Todd Axtell of St. Paul for leadership in public service and in 2022 to Mary Kowalski and Kris Kowalski Christiansen of Kowalski’s Markets and Kyle Smith of Reell Precision Manufacturing Corporation.

This year, the Caux Round Table will present the fifth Dayton Award.  I write to ask for your recommendations as to a suitable business executive to receive the award.  Our board has established  the criteria for selection of an award recipient as:

– CEO of a Minnesota company or similar operational organization
– Revenue and profits if relevant to mission
– Community impact if relevant to mission
– Demonstrated innovation/response to market opportunities
– Quality of company culture
– Care of employees
– Customer satisfaction
– Environmental stewardship
– Personal community commitment
– Company community commitment
– Vision and prudence: level 5 leadership traits (Jim Collins: From Good to Great)

In 250 words or less, please tell us why your nominee is deserving of the award.

In addition, we will take into consideration other factors you bring to our attention as deserving of recognition for their contribution to the enhanced well-being of Minnesota.

Please send completed nominations to jed@cauxroundtable.net.

The deadline for nominations is 5:00 pm tomorrow, Wednesday, January 31.

Our colleague, Jan Peter Balkenende, former prime minister of The Netherlands, with Govert Buijs of the Free University in Amsterdam, have just published a new book, Capitalism Reconnected, which carries forward the vision of the Caux Round Table ethical principles for business, government and civil society organizations.

My review of the book can be found here.

One hundred years ago today, Vladimir Ilyich Lenin died.

My first thought on learning this was that, indeed, he lived up to the expectations of the “Great Man” approach to thinking about human history – individuals who drive events and are not driven by them.

Lenin was an organizer, a man who built and directed systems of human collaboration.  He was a master of the “executive function,” adjusting and tacking before the wind when necessary, imposing his personal will when possible, putting others to work to realize his dreams.

The 1997 Black Book of Communism asserts that communist regimes killed over 94 million human persons.  Not a small legacy for Vladimir Ilyich.  Who else in history can take credit for anything so grand?

Karl Marx had only been an academic, writing up theory and commentating on history, politics, society and economics.  But Marxism without Lenin would have been no more than a minority partisan fancy of disenchanted intellectuals and a handful of their working class allies – the reality of Marxism in Bismark’s Germany.

Lenin made real, for all time, Georg Fredrich Hegel’s dream of the state as history.  Hegel had been gobsmacked by Napoleon, saying as he saw him ride through Jena: “I saw the Emperor – this world-soul – riding out of the city on reconnaissance.  It is indeed a wonderful sensation to see such an individual who, concentrated here at a single point, astride a horse, reaches out over the world and masters it.”

In his Outlines of the Philosophy of Right, Hegel wrote that “The state is the actuality of the ethical Ideal.  It is ethical spirit as the substantial will manifest and clear to itself, knowing and thinking itself, accomplishing what it knows and insofar as it knows it.”  The state, he proposed, is self-consciousness raised to its universality.  The state, therefore, is to be our overlord, Godlike.

It was Lenin who first created such a man-God on Earth, though the pharaohs before him and the Chinese in Asia had achieved a similar absolute submission of a people beneath a ruling apparatus claiming divine authority for its legitimacy.

In 1903, when he was 33 years old, Lenin precipitated a schism in the Russian socialist movement, demanding a “hard” cadre-led party of militants willing to use violence in place of a “soft” open party working within the law by building alliances.  Lenin’s principles were “vanguardism” and “democratic centralism” or centralizing power in the state, a la Hegel, to tell the masses – the “demos” – what they should think and do.

In 1921, Lenin would put his vision of justice in the phrase “The whole question is – who will overtake whom?” – which became the Russian communist mantra for legitimation of everything: “Who – Whom” (kto kogo).  This central and very practical concern of Leninism is “Who does what to whom?,” with the point being that you always want to be the doer and never the victim.

 

Lenin’s faith in the rightness of dictatorship was set forth in his 1902 pamphlet, What is to be Done? Burning Questions of our Movement.

Lenin believed with all his heart that proletarians would not, on their own, become political and seize state power through strikes and seeking better working conditions.  To produce a Marxist thinking proletariat capable of taking state power and eradicating the power of capital, Lenin insisted that Marxists should form a political party to be the vanguard of revolutionary progress.  He wrote: “Class political consciousness can be brought to the workers only from without; that is, only from outside the economic struggle, from outside the sphere of relations between workers and employers.  The sphere from which alone it is possible to obtain this knowledge is the sphere of relationships (of all classes and strata) to the state and the government, the sphere of the interrelations between all classes.”

When we recall the achievements of Lenin, we should never fail to note that there are evil people in the world and sometimes, they even make history.

My thanks to the Wall Street Journal for publishing the below excerpts of a recent speech at Davos where Argentine President Javier Milei makes his case for the good to be ascribed to capitalism:

The Western world is in danger and it is in danger because those who are supposed to have to defend the values of the West are co-opted by a vision of the world that inexorably leads to socialism and thereby to poverty.  Unfortunately, in recent decades, motivated by some well-meaning individuals willing to help others and others motivated by the wish to belong to a privileged caste, the main leaders of the Western world have abandoned the model of freedom for different versions of what we call collectivism.  We are here to tell you that collectivist experiments are never the solution to the problems that afflict the citizens of the world.  Rather, they are the root cause.  Do believe me, no one better placed than us, Argentines, to testify to these two points.

When we adopted the model of freedom back in 1860, in 35 years, we became a leading world power.  And when we embraced collectivism over the course of the last 100 years, we saw how our citizens started to become systematically impoverished and we dropped to spot No. 140 globally. . . .

Since there is no doubt that free-enterprise capitalism is superior in productive terms, the left-wing doxa [public opinion] has attacked capitalism alleging matters of morality. . . . They say that capitalism is evil because it’s individualistic and that collectivism is good because it’s altruistic—of course with the money of others—so they therefore advocate for social justice.

But this concept, which in the developed world became fashionable in recent times, in my country has been a constant in political discourse for over 80 years.  The problem is that social justice is not just and it doesn’t contribute either to the general well-being.  Quite on the contrary, it’s an intrinsically unfair idea because it’s violent.  It’s unjust because the state is financed through tax and taxes are collected coercively—or can any one of us say that they voluntarily pay taxes?  Which means that the state is financed through coercion and that the higher the tax burden, the higher the coercion and the lower the freedom. . . .

Unfortunately, these harmful ideas have taken a stronghold in our society.  Neo-Marxists have managed to co-opt the common sense of the Western world and this they have achieved by appropriating the media, culture, universities—and also international organizations.  The latter case is the most serious one probably because these are institutions that have enormous influence on political and economic decisions of the countries that make up the multilateral organizations.

Fortunately, there are more and more of us who are daring to make our voices heard because we see that if we don’t truly and decisively fight against these ideas, the only possible fate is for us to have increasing levels of state regulation, socialism, poverty and less freedom and therefore will be having worse standards of living.  The West has unfortunately already started to go along this path.  I know to many it may sound ridiculous to suggest that the West has turned to socialism, but it’s only ridiculous if you only limit yourself to the traditional economic definition of socialism, which says that it’s an economic system where the state owns the means of production.

This definition, in my view, should be updated in the light of current circumstances.  Today, states don’t need to directly control the means of production to control every aspect of the lives of individuals.  With tools such as printing money, debt, subsidies, controlling the interest rate, price controls and regulations to correct the so-called market failures, they can control the lives and fates of millions of individuals.  This is how we come to the point where, by using different names or guises, a good deal of the generally accepted political offers in most Western countries are collectivist variants, whether they proclaim to be openly communist, fascist, Nazis, socialists, social Democrats, socialists, Democrat Christians or Christian Democrats, neo-Keynesians, progressive, populists, nationalists or globalists.

At bottom, there are no major differences.  They all say that the state should steer all aspects of the lives of individuals.  They all defend a model contrary to that one which led humanity to the most spectacular progress in its history.  We have come here today to invite the rest of the countries in the Western world to get back on the path of prosperity, economic freedom, limited government and unlimited respect for private property—essential elements for economic growth. And the impoverishment produced by collectivism is no fantasy, nor is it an inescapable fate.

But it’s a reality that we Argentines know very well.  We have lived through this, we have been through this because as I said earlier, ever since we decided to abandon the model of freedom that had made us rich, we have been caught up in a downward spiral as part of which we are poorer and poorer, day by day.  So, this is something we have lived through and we are here to warn you about what can happen if the countries in the Western world that became rich through the model of freedom stay on this path of servitude.  The case of Argentina is an empirical demonstration that no matter how rich you may be or how much you may have in terms of natural resources or how skilled your population may be or educated or how many bars of gold you may have in the central bank, if measures are adopted that hinder the free functioning of markets, free competition, free price systems, if you hinder trade, if you attack private property, the only possible fate is poverty.

Therefore, in conclusion, I would like to leave a message for all businesspeople here and for those who are not here in person, but are following from around the world.  Do not be intimidated, either by the political caste or by parasites who live off the state.  Do not surrender to a political class that only wants to stay in power and retain its privileges.  You are social benefactors.  You’re heroes.  You’re the creators of the most extraordinary period of prosperity we’ve ever seen.  Let no one tell you that your ambition is immoral.  If you make money, it’s because you offer a better product at a better price, thereby contributing to general well-being. Do not surrender to the advance of the state.  The state is not the solution.  The state is the problem itself.  You are the true protagonists of this story and rest assured that as from today, Argentina is your staunch unconditional ally.  Thank you very much and long live freedom, damn it.

My apologies.  I recently learned that last year, 2023 in the Christian calendar, was the 300^th anniversary of the birth of Adam Smith.  He was baptized on June 5, 1723, in Kirkcaldy, Fife, Scotland.  The Caux Round Table should have been more alert and made some comment months ago on Smith’s contributions to the well-being of humanity.

What is notable is that there has been no commemoration, to my knowledge, of the birth of that most important architect of modern civilization.

While Smith was a thinker and writer and not a doer, his theory on how the “the wealth of nations” could be created year-in and year-out, ad infinitum, provided a compass and road map for humanity to build modern economies.

Even socialisms have had to defer to Smith’s discovery of the “factory system,” with its specialization of function, division of labor, introduction of technology into the means of production, all to create from nothing but innovative thoughts increased productivity and lower per-unit costs of production.

Those socialisms, actually national socialisms or fascisms, like Pol Pot’s Khmer Rouge or Mao’s Great Leap Forward, which never mastered the factory system, were collectives of miserable peoples living in poverty and under inhumane oppression.

And we should not wonder, even for a second, why, after World War II, every nation in the world sought economic growth and “modernization,” one way or another.

As Mae West quipped in one of her movies: “Honey, I’ve been rich and I’ve been poor and rich is better.”

Here is a chart revealing what capitalism has done for humanity:

While money isn’t everything (listen to the Beatles on “Money Can’t Buy Me Love”), it’s more helpful to living well and living long than whatever else is in second place.

To give Smith his rightful due, we must never overlook his first book – The Theory of Moral Sentiments.  Smith was, first and foremost, an observing student of human nature.  He belonged to the first generation of “scientists,” those who observed first and drew conclusions second. Like Newton and the apocryphal apple falling on his head, leading him to find gravity as a natural phenomenon or the first to use telescopes to view the heavens or microscopes to see minutia or Linneas coming up with names for so many genus and species.

Smith observed how we are governed well or badly by a “moral sense” and then how a mode of production was emerging around him in his time, something new in history.  In his second book, An Inquiry into the Nature and Causes of the Wealth of Nations, Smith described the patterns of cause and effect in this new system based on “factories,” markets and steam power.

Still, as I wrote in my book, Moral Capitalism, we would be better off if our business practices and laws brought together, in one social system, Smith’s recommendations to use our moral sense, with his observations as to how best to profit from the factory system and its supporting market institutions.

My feeling on just discovering Smith’s birth 300 years ago is to say: “Thank you very much.  We wouldn’t be where we are today without you.”

Back on December 12, our Caux Round Table fellows met for their quarterly meeting over Zoom to share reflections and concerns as 2023 entered the history books.  A summary of their comments is here:

The question was asked: what happened to cosmopolitanism?  Why has particularity replaced universality?  The collective over the individual?  The volk over the human?

(For the U.S., this raises the question: is there an American volk?  Hillary Clinton denigrated about half the American people as being “deplorable.”  Was that her way of saying they did not belong to the American volk?  When the southern border of the country is open, does that illustrate that Americans have no sense of being a “volk”?)

When systems close in on themselves, lose ties to the cosmopolitan, they trigger an increase in entropy.  Entropic forces then whirl and spin and so chaos results.  Such a system stagnates, internalizes and polarizes emotions and psychic energies, losing, bit by bit, any sense of a common good, of continuity from the past into the future.

Now Americans (and many others) have no clear vision of their future.  They don’t know what to do.  They are passengers, not drivers.  They are frightened, having lost hope.  Tomorrow will be as today is and today is as yesterday was.  One senses trauma, but uncertainty over how to process distress and dis-alignment, which deepens the traumatic mode of being.

Simple answers provide comfort.  Blaming others deflects responsibility.

Resilience is needed more than ever.  Relationships need creating and tending.  Risks need to be foreseen and mitigated.  Solidarity from the bottom up, not engineering from the top down, is needed.  An engineered system is a closed one, like a steam engine.  A solidarity system evolves and invokes mutuality and reciprocity.

Whose narrative is correct?  What paradigms make the most sense and provide the best guidance?  Which are superstitions?

The fights are on to have the unchallenged word.  Globally, the fights are not really over land, but over morality, identity.

We must rebuild, taking nothing for granted and rethinking assumptions, starting with an understanding of who we are as humans – of what is our nature.

In the middle ground, there is hope, as the Buddha advised.

The current travails of Harvard University around the institutionalization of “wokeness” through rigorous diversity, equity and inclusion management metrics and with the decision of its president, Claudine Gay, to resign, reminded me of a commentary I wrote nearly three years ago (April 9, 2021, to be exact) addressing the then new question of whether moral capitalism should embrace “wokeness.”

I said “no” on the grounds that wokeness is the psycho-social expression of a Nietzschean will to power on the part of its advocates.  As such, it is destructive of the moral sense in each of us and so has no claim for inclusion in any moral capitalism.

You can read my argument against the morality of “woke” here.

(The recent trend to question the benefits and fairness of “wokeness”/DEI would seem to socially validate my argument.  A friend, William Colby, once told me after serving as director of the CIA, that if your hypothesis turns out to have predictive accuracy, stick with it.)

Back in 2021, I was sharply criticized by one senior business executive for being “racist” in my views.

I wrote back that he most likely did not know that my wife is Vietnamese.

I presumed he would be alert enough to then realize that I had lived for decades on a border between races, fully part of neither.  Too Vietnamese in thinking to be fully American white and too American white in thinking to be fully Vietnamese.

He did not respond.

I did not share with him a family story about my maternal grandmother.  Through her husband, our family descends from a signer of the Declaration of Independence and from a framer of our Constitution.  My direct ancestor, Winthrop Young, in 1776, took the association oath in New Hampshire to oppose with arms the operations of His Majesty’s armies in the North American colonies.

When learning of my engagement, grandmother said, “I can’t understand what has gotten into Stephen.  Two thousand years of WASP blood down the drain!”

However, after my marriage, she was most delightfully gracious to her new granddaughter-in-law.

So, the realities of racism in America have been part of “my truth” for decades.

If the racism implicit in wokeness and explicit in DEI discriminations is wrong and harmful, what narrative or frame of mind, then, would be a right fit for moral capitalism?

Post-racism.

If we live in a post-modern culture, then a post-racism is possible.  Post-modernism applies critical thinking to delegitimate concepts, values, cognitive biases and ideologies.  Thus, post-modernist thinking – in the right hands – can delegitimate racism, leading to a culture that would be “post” racist.

Secondly, I suggest that the moral basis for a post-racist world is friendship.

I recommend your quickly reading Aristotle and Cicero on friendship.

The recent encyclical of Pope Francis, Fratelli Tutti, adds a Christian dimension to friendship – “do unto others ….”  He takes as his ideal person the Good Samaritan, who comes to the aid of one not of his “race.”

Other readings that would open minds, expose biases and promote friendships are the Tao Te Jing and the Zhuang Zi from China.

I love the story from the Zhuang Zi that: “One night, Zhuang Zi went to sleep and dreamed that he was a butterfly.  He dreamt that he was flying around from flower to flower and while he was dreaming, he felt free, blown about by the breeze hither and thither.  He was quite sure that he was a butterfly.  But when he awoke, he realized that he had just been dreaming and that he was really Chuang Tzu dreaming he was a butterfly.

But then, Chuang Tzu asked himself the following question: was I Chuang Tzu dreaming I was a butterfly or am I now really a butterfly dreaming that I am Chuang Tzu?”

Apply that to who you are – is it really you who are dreaming that you are of the race that you think you are when it might be someone of another race dreaming that they are you?  Who are you really and who are they really?

The teachings of the Buddha on overcoming illusions would guide us to a post-racist way of living.  And perhaps the advice of Marcus Aurelius and other Stoics would also tend to confirm that it is possible for you and for me to put our minds in the right way.

Almost a year ago, I threw three coins six times and from those “heads” and “tails” derived a Yi Jing hexagram predicting what was likely to happen in 2023.

Here is a retrospective report on my predictions:

Then, in general, I predicted for 2023 that “this is not going to be a year of rest and success for narcissists and nihilists.”

Most dramatically perhaps, the October 7 aggression by Hamas against Israel did not work out well for the Palestinian residents of Gaza.

One year of Vladimir Putin’s war against Ukrainians – not close family, but more distant cousins of the Russians – did not go well.  There was retreat and static defense of a border.

The year did not go well for the very self-centered Donald Trump and Joe Biden.  Trump was attacked by his enemies with criminal allegations in the courts.  Biden’s poll numbers dropped and dropped.  By the end of the lunar year – right now – polling shows that significant numbers of black, Hispanic and younger voters have turned against him.  The economy has not gone his way.  Inflation – Bidenflation? – reduced the real standard of living for the middle class and the poor, while making it easier for the rich to make money off the higher interest rates paid on their investment portfolios.

Last February, I proposed that: “President Biden would be well advised to stop illegal immigration across the U.S. border with Mexico, as such an inflow of strangers will not contribute to reassuring ordered liberty in the American “dwelling.”  Similarly, the hexagram indicates that advantages will come in general from reducing criminality in American cities to restore the confidence of Americans in feeling “at home.””  Biden did neither and his support among the people for those failures declined and declined.

The nihilism which is critical race theory took a big hit in the last month of lunar year 2023 – January 2024 – when Claudine Gay, president of Harvard University and career-focused on the promotion of racism as the lens Americans should use in arranging their domestic relationships, resigned after her consistent use of plagiarism to boost herself up the academic pecking order was exposed to the public.

Last February, I had predicted that: “In the U.S., it may bring the peaking and then the initial decline of “wokeness” in business, education and government.  Critical race theory will continue to lose its hold over the public’s mind.  Diversity, equity and inclusion programs for differential treatment of individuals will encounter growing resistance. … Americans will become more demanding that individual merit, intellectual rigor and blindness to skin color determine success in educational institutions.  Those who teach should be teachers, not babysitters.  Those who study should be students, not coddled wards of the state.”

And for Putin, I commented that: “The year will not be auspicious for Vladimir Putin as long as his “dwelling” is in disorder and fails to provide warm radiance across the community of Russians.  The hexagram indicates that reaching peace in Ukraine and providing a good “home” for its people will be well rewarded with achievement.”

I also predicted that: “In general, it will not be a year of success for hard-fisted, dictatorial rulers who ignore the moral needs and dignity of those they rule.”  An outsider won the presidency of Argentina and the army dictatorship of Myanmar grew weaker.

As for China, I said that: “2023 may be more auspicious for Xi Jinping if he focuses on the economy, the well-being of the Chinese and gives individuals more autonomy to be dutiful to one another.”  He did not and China’s economy stagnated, with warning signs of more trouble ahead appearing towards the end of the year.  Just now, stories are in the papers about younger Chinese going on a disrespectful and counterproductive “work-slowdown” to show their disenchantment with Xi Jinping Thought.  Chinese women are resisting regime calls to get pregnant and have babies.  Later in the year, Xi purged senior generals, his foreign minister and others.  None of this is a sign of “domestic tranquility.”

Lunar year 2024 begins at midnight on February 10.  Then, I will consult the Yi Jing as to what might lie ahead for us all during the next 12 months and report my predictions and observations to you.