Elegant Intellectual Foundation for the Caux Round Table’s Ethical Principles

I just read in the Wall Street Journal a very favorable review of Jonathan Rauch’s new book, The Constitution of Knowledge.

The review highlights why Rauch’s philosophical stance on finding truth demands use of the Caux Round Table Principles for Business and for the discourse ethics of our principles for moral government.  Open-mindedness, opportunity to falsify and flexibility in engaging with reality result from application of the principles to our institutions and relationships with others.

Here is the review for your consideration:

‘The Constitution of Knowledge’ Review: Credentials Versus Fruits

Knowledge-class expertise is the source of many blessings.  But as a guide to collective life, it’s neither sufficient nor incontestible.

By Benjamin and Jenna Storey
Oct. 12, 2021

The Constitution of Knowledge: A Defense of Truth

By Jonathan Rauch
Brookings Institute

In The Constitution of Knowledge, Jonathan Rauch makes a convincing case that we still need our institutions of expertise and the people who work for them.  Mr. Rauch, a senior fellow at the Brookings Institution, argues that human beings have a natural tendency to believe whatever they wish, irrespective of evidence.  Our institutions of expertise incentivize intellectual rigor through practices such as peer review and fact checking, which help tame this tendency.

To remind us of why we developed these institutions in the first place, Mr. Rauch returns to the beginning of modernity.  When the wars of religion were drenching Europe in blood, writers and philosophers such as Michel de Montaigne and John Locke saw a way through that impasse of intransigence.  They originated an approach to thinking that systematized doubt and made it productive.

The institutions built to encourage constructive doubt embody Mr. Rauch’s constitution of knowledge.  Their cardinal principles are “fallibilism” and “empiricism.”  Knowledge is fallible if it might be debunked yet “withstands attempts to debunk it.”  It is empirical if the method we use to check it “gives the same result regardless of the identity of the checker.”  While our processes of review don’t tell us exactly what truth is, they often identify what truth isn’t.  And they produce tested hypotheses that help us govern ourselves.

Mr. Rauch draws a parallel between this constitution of knowledge and two of liberalism’s other hallmark institutions, constitutional government and free-market economics.  All of them “organize far-flung cooperation, distribute decision-making across social networks and exploit network intelligence.”  The result is political cooperation, reliable scientific findings and economic prosperity.

For much of the 20th century, Americans implicitly trusted the institutions of the constitution of knowledge.  If a claim showed up in a prestigious newspaper or scientific journal, most people assumed it had survived critical scrutiny.  If the FDA approved a medicine, most believed it was safe and effective.

Many no longer do.  Why?  Mr. Rauch identifies two forces undermining the constitution of knowledge.  The first is the nihilism of the internet.  “The commercial internet was born with an epistemic defect,” he writes.  Its “metrics and algorithms and optimization tools were sensitive to popularity but indifferent to truth.”  Sensational rumors, salacious images and outrage-driven social media pile-ons are clickbait; truth is at best a secondary consideration.

Some see the confusion that results as a political opportunity.  State actors deploy bots to soak social media in conspiracy theories—less to promote certain electoral outcomes than to “induce uncertainty, disorientation and attendant cynicism.”  The point is to “exhaust your critical thinking,” as Garry Kasparov has put it, and produce “epistemic helplessness.”  Such cynicism and despair undermine our capacity for thinking together and make republican self-government harder.

The constitution of knowledge also faces a challenge from the inside: cancel culture.  Cancel culture is rooted in what Mr. Rauch calls “emotional safetyism,” which construes arguments one disagrees with as threats that must be policed.  Emotional safetyism turns a culture of critical review into a culture of confirmation bias and censorship.

Mr. Rauch’s defense of the constitution of knowledge is an insightful and important reminder of the real goods produced by expertise.  But he largely ignores the deepest reasons for the crisis of public confidence in the institutions he cares about.  His intellectual history proceeds as if no serious person had ever challenged the constitution of knowledge.  He describes those who think outside its framework as a collection of cranks: “creationists, Christian Scientists, homeopaths, astrologists, flat-earthers, anti-vaxxers” and so on.  To this list, one might add many of the mightiest minds ever to have put pen to paper: religious thinkers, from Blaise Pascal to C.S. Lewis, but also secular ones, from Jean Jacques Rousseau to Friedrich Nietzsche.

All of them pointed out that the trouble with the Montaignean and Lockean worldview is that it truncates our minds, enervates our hearts and leaves us existentially clueless.  This is why no society has ever fully accepted Mr. Rauch’s vaunting proposition that “liberal science . . . is the only legitimate validator of knowledge.”  Greater familiarity with the best arguments against this Enlightenment worldview would give its proponents some much-needed humility.

Mr. Rauch defends a ruling class: the “reality-based community” that determines what views get published, platformed and enacted as policies.  But a ruling class that systematically blinds itself to the most profound longings of human beings will misunderstand and misgovern those under its sway.

In recent years, the expert class has undermined its pretensions to authority with high-profile displays of ineptitude, from shifting and contradictory pandemic policies to the botched withdrawal from Afghanistan.

If experts want to regain the trust they need to be effective, they must remember that, while they judge themselves by their credentials, others judge them by their fruits.  Mr. Rauch rightly points out the invaluable work done by the institutions of the constitution of knowledge.  But those who rule can only justify their place by ruling well—and knowing their limits.

From a Famous Battle for a Throne to the Start of Modern Constitutional Democracy and Capitalism in 600 Years or So

It is almost always overlooked that our modern constitutional democracy and capitalism had their origins in English Calvinism.  Those political and economic institutions which have given humanity the best of what it enjoys today had their roots in a moral vision of responsible, trustworthy, individualism.

That moral vision and those institutions emerged in an England arising out of the adaptation of Norman and French rule to a Saxon culture and society.

That process of adaptation started with the victory of William, Duke of Normandy, over Harold, King of England, in the Battle of Hastings on October 14, 1066, 955 years ago today.

Here are some reflections on the significance for our time of that battle.

Please Join Us For an In-person Round Table on the Financialization of Everything – Tuesday, October 26

Inflation worries are in the news.  The rise in financial asset prices continues willy-nilly.  Bernie Sanders wants more taxes on the rich and transfer of money to the poor and nearly poor.  The gap between those with access to money and the middle class grows wider and wider.  Middle incomes, in real terms, have stagnated since 1973.

The interconnections between finance and capitalism – the money economy and the real economy – are complex and legendary.  Marx, Keynes and Milton Friedman all had strong opinions about how finance does or does not contribute to a good and a responsible capitalism.

The topic is so important that we should not turn aside from seeking to learn more about what finance is doing to our economies in our time.

Please join us for an in-person round table on the financialization of everything at 9:00 am on Tuesday, October 26, at Landmark Center in St. Paul.

We are very pleased to provide a meeting space at Landmark Center to continue its tradition of public service and to share with the community its spacious rooms and architecture of distinction.  In Landmark, one can experience the contributions of design to our self-regard and our feelings of citizenship, as being part of something larger and worthy of note.

Registration and a light breakfast will begin at 8:30 am.

The cost to attend is $10.00 per person.

Space is limited.

For more information or to register, please email Jed at jed@cauxroundtable.net.

The event will last about 2 hours.

Important Insight on Win/Lose and Win/Win Economics

Recently, Paul Rubin, an emeritus professor of economics at Emory University, had an important insight for moral capitalism which rests on the moral sense, published in the Wall Street Journal:

Karl Marx called his system “scientific socialism.”  Modern leftists advocate a similar ideology and call themselves “woke” to indicate that they understand the world better than the rest of us. Yet the worldview of Marxists and woke leftists alike is fundamentally primitive.

Folk economics is the economics of people untrained in economics.  It is the economic view of the world that evolved in our brains before the development of the modern economy.  During this period of evolution, the economy was simple, with little specialization except by age and sex, no economic growth, no technological change, limited trade, little capital and warfare between neighboring tribes.

Zero-sum thinking was well-adapted to this world.  Since there was no economic growth, incomes and wealth didn’t grow.  If one person had access to more food or other goods or greater access to females, it was likely because of expropriation from others.  Since there was little capital, a “labor theory of value”— the idea that all value is created by labor alone — would have been appropriate and there was little need to protect capital through property rights. Frequent warfare encouraged xenophobia.

Adam Smith and other economists challenged this worldview in the 18th century.  They taught that specialization of labor was valuable, that capital was productive and that labor and capital could work together to increase income.  They also showed that property rights needed protection, that members of other tribes or groups could cooperate through trade, that wealth could be created with the proper incentives and that the creation of wealth would benefit everyone in a society, not only the wealthy.  Most important, they showed that a complex economy could work with little or no central direction.

Marx’s economic system was based on the primitive worldview of our ancestors.  For him, conflict rather than cooperation between labor and capital defined the economy.  He thought that the wealthy became rich only by exploiting the poor, that all income came from labor and that the economy needed central direction because he didn’t believe markets were good at self-correction.  The collapse of the Soviet Union, the largest and most expensive social-science experiment ever conducted, proved Smith right and Marx wrong.

Members of the woke left want to return to policies based on this primitive economic thinking. One of their major errors is thinking that the world is zero-sum.  That assumption drives identity politics, which sees, among other things, an intrinsic conflict between blacks and whites.  The Black Lives Matter movement and Critical Race Theory foment racial antagonism and resurrect xenophobia.  Leftists vilify “millionaires and billionaires” like Bill Gates and Elon Musk as evil and exploitative.  They should recognize them as productive entrepreneurs whose innovations benefit us all.

Dislike of the rich makes sense in a world where one can become rich only by exploiting others, but not in a society full of creativity and useful inventions.  Changing tax laws to soak the rich makes sense with a labor theory of value, but not with a sophisticated understanding of continual investment and technological change.

Remarks by Jan Peter Balkenende, former Prime Minister of The Netherlands

Recently, our colleague Jan Peter Balkenende, former Prime Minister of The Netherlands, was chosen to give a reflection the night before the king opens the new parliamentary year with a speech on behalf of the government.

Jan Peter’s remarks are a thoughtful – realistic, yet optimistic – assessment of our time.  He graciously mentions the Caux Round Table’s work in seeking to find common threads of belief, meaning and values among our different religions and wisdom traditions.

You may read his reflections here.

What Does a Moral Capitalism Expect of Consumers?

In the U.S., we have just experienced a moral capitalism episode with respect to the use of the internet.  It seems that Facebook’s Instagram product (or is it a service?) has negative, net impacts (externalities) on many users.

Facebook was aware that postings on Instagram made 25% of its teenage users “feel worse” about themselves.  Forty-two percent said that Instagram made them feel better.  Facebook knew that “being in a low or vulnerable state of mind means teens are more vulnerable to the content they see online.”

So what is to be done?  What should be the response of a moral business?  How should it internalize dealing with the consequences associated with use of its product or service?

One option under serious consideration in the U.S. is government regulation of what internet companies allow on their platforms or subjecting such companies to legal responsibility for misuse of the platform causing harm to others.  Another is voluntary company censorship of what is posted on its online platform.

But a third, overlooked option is setting forth ethical expectations for those who use Instagram and other platforms to communicate their thoughts, words and pictures.  Users exercise freedom to post.  They act on their own authority, for their own purposes.  Any such use of power implicates ethics and morals: is it good or bad, ethical or unethical, helpful or harmful?

Why do we not expect more of consumers of products and services?  The outcomes of capitalism, really of any system, flow from the decisions of those who use the system.  Consumers, as stakeholders of society, shape the quality of their own lives and the lives of those around them.

Can we not expect thoughtful personal assumption of responsibility as part of living in a moral society?

Mountain House/Initiatives of Change Remembers the 1994 Adoption of the Caux Round Table Principles for Business

The path-breaking Caux Round Table Principles for Business were first proposed at a meeting in Mountain House, Caux, Switzerland in July 1994.

At the time, Mountain House was a conference center of the Moral Re-Armament Movement.  That Movement is now Initiatives of Change.

This year is the 75th anniversary of the opening of Mountain House as a conference center.  Initiatives of Change is producing 75 stories of the important events which took place at Mountain House – one for each of its 75 years.

You can see the story of the launch of our Principles for Business here.

The website for Initiatives of Change, with information about its current global engagements, can be found here.

September Pegasus Now Available!

Here’s the September issue of Pegasus.

First is an article from Richard Van Scotter about education being necessary if we are to understand the subtleties of life and the skills for holding the office of citizen.

Next, we include two short book reviews, one on Amazon and the other on Facebook.

Lastly, we have a collection of cartoons meant to bring meaning and humor to some of today’s important issues.  We hope they serve as discussion starters, suggesting points of view that can only be presented metaphorically

I would be most interested in your thoughts and feedback.

Once Again, Capitalism Saves Humanity – Really?

Merck and Ridgeback Biotherapeutics – two capitalist companies – have collaborated to create a pill with the off-putting name of “molnupiravir” to effectively treat Covid infections, saving lives and reducing hospitalizations.

The biological impact of the pill is to degrade the ability of the Covid virus to replicate itself into more viruses inside its host, thus reducing the number of viruses blindly working away, turning our cells against us. The fewer viruses in us, the less harm done to us by the infection and the less dangerous the virus to humanity in general.

Molnupiravir and similar antiviral drugs yet to be developed, promise, first, stabilization of the impacts of Covid infections and then subjugation of the global pandemic.

Similarly, the novel vaccines developed by Pfizer, Moderna and others have done more to thwart the pandemic and reduce transmission of the virus than most every regulation and order issued and imposed by our governments.

Thus, inventions made by capitalist companies have once again thwarted nature and reduced its capacity to harm civilization.

Some 250 years ago, the industrial revolution brought about by capitalist modes of production and distribution similarly manipulated nature into providing resources for human wealth creation.

The industrial revolution, now in its 4th generation of technological inventiveness, saved humanity from poverty, existential stagnation, elitist autocracies and theocracies and much suffering and brought us into enjoyment of our current standards of living – with modern medicines, electricity, the internet, longer lives, more education and all the rest of what we consume, enjoy and abuse.

Now, it must be admitted that capitalism did not do this all on its own. Public goods – law, police, market and political freedoms, roads, bridges, sewers, risk mitigation subsidies, etc. – were necessary supports for private sector invention and production. But as wealth was created by capitalism, taxes collected by governments increased so that governments could buy more public goods.

A capitalist may have invented the flush toilet, which did so much to lower death rates and extend lives, but governments or public utilities put in the water mains to bring water to our homes and the sewers to carry away our effluent.

Thus, has modern civilization been created by a virtuous circle of first, capitalism, then wealth creation, then more effective, responsible, government, leading to more fruitful capitalism, then to more wealth creation and then to more sophisticated and responsible government, which then gave rise to more…

We should, however, never overlook, nor diminish with ingratitude, the role of capitalism in bringing to us so much of the lives we live and wish to live.