Corporate Management - The new market culture
by Rajni Bakshi
GIFTS TO HUMANITYGiving without expectation, receiving without judgement
W hat do Wikipedia, a cafe in Ahmedabad, a social architect from San Francisco, a musician from Mumbai and the potluck ritual
“The real work of planet-saving will be small, humble, and humbling, and (in so far as it involves love) pleasing and rewarding. Its jobs will be too many to count, too many to report, too many to be publicly noticed or rewarded, too small to make anyone rich or famous.”-– Wendell Berry, poet and farmer
Market-based solutions are now commonly deemed to be the way forward for the whole world. Excitement about this approach has spun a web of buzzwords and catchphrases – ‘Social Enterprise’, ‘Corporate Social Responsibility’, ‘Sustainable Business’, and ‘Inclusive Growth’.
Behind this web of words is a quixotic combination of hype, confusion and some sincere aspirations for the larger good. This muddle is only natural.
For about two and a half centuries, the dominant concept of the market required us to keep our business-self and our social, caring-self in two separate boxes. ‘Free market’ has been equated with a survival-of-the-fittest variety of competition, and this has been considered the most efficient and reliable method for allocating resources.
We may now be in the midst of a historic shift that could, possibly, heal the rupture of society from the market and ecology from the economy.
Betwixt and between
Our future is being incubated in the little known, or seen and ignored, spaces between two old warring camps. One side has been terminally suspicious of the market mechanism. The other consists of those who blindly worship the ‘free market’. Both have been a bit deluded. We now live in a time of unprecedented opportunity when a wide variety of people are re-examining the relationship between market, freedom, economic dynamism and building a humane society. A lot of creativity in this sphere begins by unbundling ‘free’ from ‘market’. There is no dispute that freedom works. Most people don’t want a committee of bureaucrats, or commissars, to dictate where they should live and work, nor what they should read, wear, eat, and drink and so on.
Markets or bazaars have indeed brought people together for over two millennia, more fruitfully than closed door government committees, or private cartels. What all those buzz terms indicate is a growing consensus that the freedom of exchange and opportunity must be more evenly available. Thus those who have been chronically disadvantaged are sought to be ‘included’ through a variety of socially oriented enterprises – such as community-owned companies, and socially responsible investing. Mechanisms such as micro-finance sometimes aim to unfurl the entrepreneurial energy of the proverbial ‘last woman’.
However, these are just ripples on the surface of the prevailing market mindset. At a deeper level there are diverse processes which are challenging the idea of ‘economic man’ which overwhelmed West European societies, including north America, sometime in the 18th century. Most subsequent economic theory was founded on the premise that homo economicus is a utility-maximising, often self-aggrandising, individual unit. Ever since then the world has been dominated by the view that social and economic progress depends on tapping the narrow self-interest of individuals. Moreover, it was claimed, greed is in surplus while human affection, generosity, and co-operation are scarce qualities.
The accelerating environmental crisis has overturned a fundamental premise of the free market orthodoxy. Namely that if we all pursue our own pecuniary interest, the common good, will somehow unfold naturally. In a limited and short term context this is true. But can this serve as the foundation for a civilised society?
Across the world people are asking this question, and answering it with a resounding ‘no’. Take the case of Amy Domini, a pioneer of socially responsible investing in the USA. Many people are tired of leading a double life, says Domini. That is, a personal life anchored in caring for family, for community, and a work life of scrambling for superior investment results in a social and moral vacuum. Domini’s answer was to launch a string of socially responsible investing (SRI) funds, back in the 1980s, when most bankers and stock brokers laughed at her. Today SRI funds are mainstream and are estimated to globally manage just a little under $3 trillion.
Muhammad Yunus’ pioneering work in micro-finance was driven by a rebellion against these same restrictions. Why, asked Yunus, do we assume that entrepreneurs must be one-dimensional beings driven entirely by profit maximisation? In many cases this insulates entrepreneurs from all political, emotional, social, spiritual, and environmental dimensions of their own life.
“We have remained so impressed by the success of the free market that we never dared to express any doubt about our basic assumption. To make it worse, we worked extra hard to transform ourselves, as closely as possible, into the one-dimensional human beings as conceptualised in the theory, to allow smooth functioning of the free market mechanism,” Yunus said in his Nobel Peace Prize acceptance speech in 2006.
Significantly, the other recent Nobel Laureate from our sub-continent has also made a seminal contribution to rectifying these distortions in classical economics. Amartya Sen has shown that Adam Smith’s view of human nature was actually broader and well-rounded, but that it was misinterpreted by 19th century thinkers. “Indeed, it is precisely the narrowing of the broad Smithian view of human beings, in modern economics, which can be seen as one of the major deficiencies of contemporary economic theory. This impoverishment is closely related to the distancing of economics from ethics,” wrote Sen.
The space for such views on mainstream platforms is also being expanded by the findings of behavioural and neuro-economics. For example, research in this field is showing that people care as much about values, like being treated fairly, as about material gains. Neuroeconomics is a field in which psychologists, neuroscientists and economists are collaborating, to acquire a more nuanced understanding of the human mind and its decision-making processes. Outcomes of this research present a view of human nature, which is much closer to our everyday observations, and shows homo economicus to be a distorted caricature.
Towards a better world
Above all, there is a wide range of people – activists, business persons, and just plain citizens – who are finding diverse ways to assert the primacy of society over market. What such innovators strive for, is a socially, ethically, and ecologically grounded, market culture. These are not deluded idealists. They are not attempting to abolish greed and fear. Rather they are living out a simple truth – the old market culture based on a celebration of greed, and fear, is a narrow incomplete view of reality. Those with a wider view of reality are creating, not only entirely new opportunities for themselves, but a richer range of choices for all of us.
At present a lot of the excitement about ‘market-based solutions’ is still wedded to the assumptions of the old market culture. That is why terms like ‘social enterprise’ and ‘corporate social responsibility’ seem hollow even to those who now have to use them as part of their job. But many, who deploy these terms, see themselves as instruments of a larger transformation – a vision of the kind that Wendell Berry so simply articulated.
For such people, a market-based approach works, if and only if, it is linked to the vision of a society that would make life better – not only for all humans but also the ecosystems on which we depend. They do indeed value the freedom of material opportunity and acquisition. But they celebrate with equal gusto the freedom to seek higher purpose, to be one’s self, to share, and also to keep some areas of life entirely outside the marketplace.
For more see: http://www.bazaarsconversationsfreedom.com
See more articles on Corporate Management at http://www.lifepositive.com/articles/CorporateManagement
|HOME | SUBSCRIBE | WALLPAPERS | ADVERTISING | POLICY | PRACTITIONERS | WRITERS | PEOPLE | ABOUT | CONTACT|