Gioele Rampinelli 17-12-12

PHILOSOPHY,SOCIOLOGY;PSYCHOLOGY AND BUSINESS

CONSCIOUS CAPITALISM:

Lecture: Josè Alarcòn

EXECUTIVE SUMMARY:

Conscious Capitalism: A more complex form of Capitalism that hold within itself the possibility to enhancing corporate performance while contributing to advance billion peoples’ quality of life...or...just good business.
When approaching to this “new” horizon we have to know that is not new...capitalism doesn’t involve avidity and disrespect, it just has been corrupted.
When Kant and Montesquieu were talking about the reducing of conflict through commerce, they were talking about just good business.
This is a really important thing that has to enlighten everyone while approaching to capitalism in general and, obviously, to Conscious Capitalism.
This philosophical and economical theory has to be understood in all its details because it seems there are no trap this time, we have eroded our world till today but maybe tomorrow we can began to “reconstruct” it.
In fact, now, we can see our reality and our future “on the shoulder of the giants” (passage from Bernard de Chartres) and of the other tall men that have kept thinking about what the giants saw and sad.
We need a “new” focus, we need a wider one, a multiple stakeholder one...without forgetting we need more, wise stakeholder and wise stockholders.

TABLES OF CONTENTS:

* Executive summary…………………………………………………………………..2 * Table of contents……………………………………………………………………..3 * Conscious Capitalism: The “new” horizon and its origin ……………………...…..4 * Introduction…………………………………………………………………………...4 * Giants and tall men…………………………………………………………………...5 * Conclusion……………………………………………………………………………11 * Appendix……………………………………………………………………………...12 * Bibliography…………………………………………………………………………..13

Conscious Capitalism: The “new” horizon and its origin

Introduction:

Consumerism, deforestation, greenhouse effect, global warming, Pollution, disrespect for the planet, disrespect for the people, inequalities, poorness, wars...many people calls for the only guilty...capitalism...
But that was the mean of a multitude made of human-being convicts.
The capitalism in itself does not include this horrible consequences, is the greediness of the man that has turned a theory for the well-being of everyone to a theory for the excessive-being of someone.
Marx did not want dictators, Adam Smith did not want “financial sharks” and the Nietzke’s Super-man wouldn’t kill 6.000.000 Jews...but WE, as human being, have been willing to be dictators and financial sharks since the first sunrise.
But nowadays we are getting to the extreme, we have gone too far, our world, we and our human-being fellows can not stand any more this exploitation.
This is the moment to clarify the corruption, to go through the real theory , to go through what the liberal commerce can do for the cultures, for the economy, for the people, for the poorness and for the peace.
The principle of the commerce and of capitalism has to be found in Adam Smith’s, Kant’s and Montesquieu’s thought, not in Bernie Maddof‘s ones.
In fact, it’s from the study and the revise of those philosophers that some people have understood that the real need is to be conscious, conscious capitalist.

GIANTS AND TALL MEN:
The one way focus of Unconscious Capitalism has to be wider, it has to become all-comprehensive, to create a deeper purpose for itself that carry it beyond the maximization of profit. The most ethical and conscious businesses over the long-term create value for all of their interdependent stakeholders—customers, employees, investors, suppliers, community, and the environment.
This is Conscious Capitalism, according to the official web page of the movement, it can be stated as a more complex form of Capitalism that hold within itself the possibility to enhancing corporate performance while contributing to advance billion peoples’ quality of life.
Furthermore, Conscious Capitalism is, in a way, means to be aware we are not alone in the society and we are just renting a space on our mother earth, we don’t own her.
Conscious capitalism means even more than corporate social responsibility do, it’s the overall perspective of how to conceive and build a business that comes, like a necessity, from within rather than a response to some duties. Moreover ,as it will be explained through the text, this wide focus it’s the ultimate path to long-term competitive advantage.
Among this priority Conscious Capitalism advocates for free market, entrepreneurship, competition, freedom to trade, property right and rule of law as key element to reach its objectives.
Those purposes have been collect together forming the system that any company should apply in order to be “Conscious”.
This process is made by four different step, the first two one concerning the theoretical orientation of the company and the second two regarding the way to implement the values and objectives proposed: Higher Purpose, Stakeholder orientation, Conscious Leadership and Conscious culture.
Higher purpose means, as we already sad, to transcend the maximization of profit having higher, deeper purpose creating extraordinary degree of engagement for stakeholders and catalyze incredible organizational energy.
The step of Stakeholder orientation come straight from the first one stating that in an interdependent and interrelated social and economical system by creating value for all the stakeholders the whole system advances. A stakeholder orientation has became a necessity today as we are realizing companies can no longer treat other participants in their ecosystem as “resources” to be exploited to serve the well-being of investors.
And a major necessity is to effectively implement this approach to management. Companies must align and synergize stakeholder interests, not just balance them, striving to reach all the difference needs of all stakeholders , from physiological to self actualization ones.
Towards this aim, in fact, The multiple stakeholder relationship (MSR) business model, the organizational foundation of conscious capitalism was built. This model enlists all stakeholders in co-creating value for Everyone’s benefit. Some companies as Whole Food Market (appendix) already has begun to use this approach becoming the exemplification of the “Paradox of Profits”: “the counter-intuitive insight that profits are optimized, not by focusing exclusively on the bottom line, but by taking into account and aligning the interests of various stakeholders in making business decisions.”; as we can read on the web page, inspired by the thought of Michael Strong among other personality in the field of conscious capitalism, FLOW -liberating the entrepreneurial spirit for good- (accessed the 15th of December 2012)
As we sad the last two steps deal with the implementing of those ideas through a conscious capitalism value-oriented leadership and an overall T.A.C.T.I.L.E. company’s culture: Trust, Authenticity, Caring, Transparency, Integrity, Learning and Empowerment.
This new horizon of being whole-conscious gave rise to different programs and objectives, like the Peace Through Commerce program.
These related theory state some actual goal reachable through the ,as normal as revolutionary, new guide-line. Several scholars and author as James Gwartney, Robert Lawson,Erik Gartzke, Michael Strong have took place In the creation of this way to look at commerce beginning from the assumption, according to the Economic Freedom of the World 2005 Annual Report, considered among some really important philosopher and thinker like Montesquieu, Adam Smith and Immanuel Kant, that economic interdependence inhibits conflict behaviour. “Peace is the natural effect of trade. Two nations who traffic with each other become reciprocally dependent; for if one has an interest in buying, the other has an interest in selling; and thus their union is founded on their mutual necessities” (Montesquieu, Spirit of Laws, bk. 20, CHS. 1—8)
In this way Montesquieu express it’s thought in his main work Spirit of Laws.
In order to complete this assumption and to strongly link it with our actual society and the horizon of conscious capitalism we have to consider Kant’s point of view that put as condition to this result the extent to which nations have to have Republican Government, a league of nations, common markets and "The law of world citizenship shall be limited to conditions of universal hospitality" as we can read in his work from 1795: Perpetual peace.
From these beginning point many theories has came out ascribing to commerce more or less peace-holding power.
The P.T.C. programme leaded buy Michael Strong ( Conscious Capitalism Thought leader and Author) and Erik Gartzke, among others, has one of the more optimistic view over the argument.
In fact, as we can read on the Michael Strong Publication of the Carnegie Council on the 12th of March 2008,
He strongly link the economic situation of the people with the stableness of a democracy or to the consequente civil war. Really interesting is the analysis made by the author that ties hard a certain GDP per capita with the probability to face a civil war. He stated: “Democracies are generally stable above $6,000 GDP per capita, but they are vulnerable to coups and civil wars between $3,000 and $6,000 GDP per capita, and are likely to fail below $3,000 GDP per capita”. He, then, point out that the number of death in the past 15th year due to internal wars in Africa is the same of the one of all other wars around the world during the same period. The evidence seem strong leading him to think that increasing economic freedom is the most effective means of increasing GDP per capita.
Moreover M. Strong in the same publication share some data and thought born from another thought leader of the movement, Erik Gartzke.
The Political Scientist Erik Gartzke thinks that economic freedom is 50 times more powerful than democracy in predicting decreased violence. He reach this conclusion due to his study on the reduction in the number of civil wars in relation with an increasing of economic freedom. His studies were also directed toward the bilateral trade as an additional and excellent measure of decreased conflict.
His point regarding this specific issue is that “when two nations are big trading partners, they are unlikely to go to war with each other, even when they are going to war with other nations” (cit Erik Gatzke, Michael Strong Publication of the Carnegie Council on the 12th of March 2008).
This conclusion, as M. Strong report, has been criticised putting as the greater counterexample to this thesis, the World War I in the measure where France and Germany were trading partners and yet went to war.
In order to support his own theory Gartzke points out that Germany was more a military dictatorship than a democracy. In addiction, the war began in the least commercial and developed part of Europe and then spread. In fact, High levels of mutual foreign direct investment, a deeper relation, is a better predictor of peaceful bilateral commercial relations than is the level of trade. So that, given the case of two nation’s economies which are not largely integrated by every measure, the counterexample could deaden.
<< ...Democratic government is stable only when combined with relatively high levels of economic development.[...]>>
This is what we find Analysing more in depth the Gartzke prospective, from his intervention in the Economic Freedom of the World: 2005 Annual Report, chapter 2: Economic Freedom and Peace, where we can find a such intensive phrase strength his position towards the relative importance of democratic government over economic development.
In fact he explain that If policies designed to make poor country democratic are made and adopted in isolation thus can’t guarantee neither political stability nor international peace. So...<<Since prosperity is necessary for stable democracy and sufficient to produce peace, the best foreign policy is one that enhances and extends capitalism.>>.
In this way Gartkze is making relative the importance of one (democratic/republican government) of the Kantian tripod leg over another one (economic interdependency).
On the other hand, relying << on Russett and Oneal (2001) - in this section explicitly- because we - (Jaroslav Tir_ Douglas M. Giblery, from Rethinking Kantian Peace: Positive Territorial Peace, Dyadic Democracy, Trade, and IGO Memberships, February 2012) - see their body of work as probably the most influential and familiar example in the literature on the democratic peace>>, we find Russett and Oneal that instead point out that the three of the Kantian tripod leg have the same importance in introducing nations in the virtuous circle that create peace, but that these factors varied and have varied across the nations. At this purpose they write: <<“In Europe after World War II, the most effective entry point in creating a virtuous circle may have been through promoting economic interdependence. In South America, in the last decade or so, the effective entry point was probably the revival of democracy… In contemporary East Asia, a region that is still far short of a generalized system of virtuous circles and where there are only a minority of stable democracies, the most effective entry point for the promotion of peace may again be through continuing growth in economic interdependence.”>>.

Conclusion:
Although we are forgetting something...something really important.
All those author, intellectuals and political philosopher are forgetting or not counting the constrain with which Kant introduce as one leg...not the political leg, not the economical leg...the one could seems the law’s leg but that is the ontological one.
The need to have just one law of world citizenship, that’s country should live in the conditions of universal hospitality doesn’t mean just economic freedom and minor economic regulations but the need to go straight to the ontological entity of the process and to change it...
The need to go straight to human being mind, soul, conscience and there install the value of respect.
The being of the process is ourselves .
Moreover a further decrease of economic regulation in the actual society is really dangerous.
In fact, according to the 2010’s documentary Inside Job, the economic regulation, specifically the financial one for banks, in the US has been declining at least since the Reagan administration and many important personality from the economic and financial field calls the deregulation process as one of the culpable of the 2008 Economic Recession.
The Horizon of Conscious Capitalism is a beautiful prospective and, actually, has all the resources to change the condition of this world in better because it’s something that has to start inside ourselves.
We can pursue it, we have to imposed it, we can’t trust them. APPENDIX:

The Whole Foods Market Stakeholder model

Bibliography:

* http://consciouscapitalism.org/ - (accessed the 15th of December 2012) * http://www.flowidealism.org - (accessed the 15th of December 2012) * Rethinking Kantian Peace: Positive Territorial Peace, Dyadic
Democracy, Trade, and IGO Memberships
Jaroslav Tir_ Douglas M. Giblery, 2012 * Perpetual peace, Immanuel Kant, 1795 * Spirit of Laws, Montesquieu, 1748 * Investing in the Peace: Economic Interdependence and International Conflict
Erik Gartzke, Quan Li, and Charles Boehmer, 2001 * Economic Freedom of the World: 2005 Annual Report * Michael Strong Publication of the Carnegie Council on the 12th of March 2008 * Russett and Oneal, 2001 * Inside Job, Documentary 2010