Author: CRT Admin

I just read the current issue of The Economist while flying to Washington, D.C. to speak on a panel about Ukraine on ethics and economic development during a war.

I found it aligned with our thinking about moral capitalism in three articles.

First, about the virtue of capitalism in bringing forth innovation and new technologies:

Two years after ChatGPT took the world by storm, generative artificial intelligence seems to have hit a roadblock.  The energy costs of building and using bigger models are spiraling and breakthroughs are getting harder.  Fortunately, researchers and entrepreneurs are racing for ways around the constraints.  Their ingenuity will not just transform AI.  It will determine which firms prevail, whether investors win and which country holds sway over the technology.

Large language models have a keen appetite for electricity.  The energy used to train OpenAI’s GPT-4 model could have powered 50 American homes for a century.  And as models get bigger, costs rise rapidly.  By one estimate, today’s biggest models cost $100m to train; the next generation could cost $1bn and the following one $10bn.  On top of this, asking a model to answer a query comes at a computational cost—anything from $2,400 to $223,000 to summarize the financial reports of the world’s 58,000 public companies.  In time, such “inference” costs, when added up, can exceed the cost of training.  If so, it is hard to see how generative AI could ever become economically viable.

There is no need to panic.  Plenty of other technologies have faced limits and gone on to prosper, thanks to human ingenuity.  The difficulty of getting people into space led to innovations that are now used on Earth, too.  The oil-price shock in the 1970s encouraged energy efficiency and in some countries, alternative means of generation, including nuclear.  Three decades later, fracking made it possible to reach oil and gas reserves that had previously been uneconomical to extract.  As a consequence, America now produces more oil than any other country.

Already, developments in AI are showing how constraints can stimulate creativity.

Secondly, poverty needs good capitalism to put it out of its misery:

Since the Industrial Revolution, rich countries have mostly grown faster than poor ones.  The two decades after around 1995 were an astonishing exception.  During this period, gaps in GDP narrowed, extreme poverty plummeted and global public health and education improved vastly, with a big fall in malaria deaths and infant mortality and a rise in school enrolment.   Globalization’s critics will tell you that capitalism’s excesses and the global financial crisis should define this era.  They are wrong.  It was defined by its miracles.

As the world has turned towards intervention, so the chosen instrument for poor countries has become trade restrictions, as IMF research shows.  This contains an uncomfortable echo of the failed development plans of the 1950s, built around freezing out imports rather than embracing global competition.  Fans of industrial policy will point to East Asia’s “tiger economies,” such as South Korea and Taiwan.  Yet, both embraced harsh global competition.  And several African countries that tried to copy their industrial policies in the 1970s failed miserably.

The world will pay for its failure to learn from history.  Rich countries will cope, as they usually do.  For the poorest people, however, growth can be the difference between a good life and penury.  It should not be a surprise that development has stalled as governments have increasingly rejected the principles that powered a golden era.  Nobody will suffer more as a result than the world’s poor.

Thirdly, woke antiracism and DEI programs are losing their welcomed seat at the table for discussions of what Americans must rightly do.  I argued 2 years ago that DEI, in particular, did not fit with the universalistic and humanistic ethics of moral capitalism:

The simplest way to measure the spread of woke views is through polling.  We examined responses over the past 25 years to polls conducted by Gallup, the General Social Survey (GSS), Pew and YouGov.  Woke opinions on racial discrimination began to grow around 2015 and peaked around 2021.  In the most recent Gallup data, from earlier this year, 35% of people said they worried “a great deal” about race relations, down from a peak of 48% in 2021, but up from 17% in 2014.  According to Pew, the share of Americans who agree that white people enjoy advantages in life that black people do not (“white privilege” in the jargon) peaked in 2020.  In GSS’s data, the view that discrimination is the main reason for differences in outcomes between races peaked in 2021 and fell in the most recent version of the survey, in 2022.  Some of the biggest leaps and subsequent declines in woke thinking have been among young people and those on the left.

The columnist, Lexington, ended that weekly commentary with these thoughts on white supremacy:

The left is due for a reckoning over the reckoning on race.  The protesters have moved on, the book sales have dried up, the DEI departments are emptying and the elite white groveling and self-flagellation … have been, on the left, politely memory holed.  Yet, a movement concerned with structural injustice has achieved little structural change, whether to policing or the black-white wealth gap.  Was it all, in the end, just a performance?

I attach here part of a recent article from the Wall Street Journal which I think has an important moral message:

Consider how stakeholders can benefit from free market entrepreneurship and how the externalities of entrepreneurial success can benefit society and culture.

These are not the happiest of times for the United States of America or for our world, for that matter.  There are two wars underway between rival peoples with unhappy historic memories of each other.  Many say that the post-World War II international order is not what it once was.

Already several years ago now, a friend of the Caux Round Table said to me: “Everyone knows that we are living at the end of an age.  They don’t know what the next age will bring or how they will need to adjust.  So, everyone just does today what they did yesterday.”

In such circumstances, as the tides of time shift their flow, discernment is needed more than ever – discernment of what is happening, discernment of what is fundamental, discernment of what is eternal and discernment of the truth.

As important as discernment is having the courage to act on the truth.

With these moral parameters in mind, our board selected reporter Liz Collin of Alpha News to receive the 2023 Dayton Award for her documentary, The Fall of Minneapolis.

Her work in that documentary provides discernment of disturbing facts and conditions in our new America.  Bringing before the public a different perspective on a tragic event was an act of civic courage.

You may watch the event here.

Many thanks to Loren Swanson, one of our regular participants, for recording it.

Last week, Pope Francis visited Indonesia, home to the world’s largest community of Muslim faithful.  There, the Istiqlal Mosque is connected by a tunnel to the Catholic Cathedral of Our Lady of the Assumption – a marvelously apt metaphor for the respect shown to Christians by the Prophet Muhammad in his covenants and the respect for Muslims shown by Pope Francis in the “Document on Human Fraternity for World Peace and Living Together” and his encyclical, Fratelli Tutti.

I attach here a copy of the Pope’s remarks on his visit to the Mosque and the Cathedral.

At this time of war in Gaza and Ukraine and with dark clouds of aggrandizement gathering over the South China Sea, may we all learn to open our hearts and minds to others, as the Pope and the Prophet have requested of us.

I have been invited to speak on moral capitalism at a conference in Jinju, Korea.  The organizers sent to me a short paper on the important role of Jinju and its cultural heritage in leading the remarkable economic development of the South Korean people over the last 60 years.  Something was different in the regional culture of Jinju, related, as you can learn, to the thinking of Jo Shik, who lived and taught in the 1500s.

Now, a very important lesson taught us by the Korean peoples, north and south, needs to be taken to heart: why has South Korea been so successful and the North not at all?

One answer is governance.  Capitalism can’t work its benefits under political conditions of rent extraction (government as landlord) and moral, political and cultural oppressions.

Here is stunning evidence of the difference made by political and cultural systems on the quality of human living:

The darkness in North Korea is more than not having electricity.

Learning about the philosophy of Jo Shik may give us a clue as to the origins of South Korean excellence.  Morality might, after all, make a difference in the quality of our living in community.

Halim Rane, our colleague in the study of the covenants given by the Prophet Muhammad to respect and protect Christians and Jews – examples of principled leadership for peaceful coexistence – has recently published a new article, “Human Security and Peaceful Coexistence in Islam: Analysis of Covenants in the Qur’an and Sunnah,” written with impressive scholarly precision and offering us unusual insights concerning the textual traditions of Islam.

I urge you to read Halim’s thoughts and conclusions at your earliest convenience.

This article, to me, is one of the most important contributions yet made by a member of our small study group of volunteers who have examined and discussed the covenants of the Prophet for 4 years now.

In particular, Halim points to less noticed textual interdependencies providing excellent guidance on how best to read Surah 9 of the Qur’an on management of inter-faith and inter-communal relations under conditions of tension and disagreement at the time of the Prophet and the revelations of the Qur’an.

To me, Halim’s scholarship provides good reasons to believe in the contemporary importance of the covenants of the Prophet and related texts in the Qur’an and the Hadith, not to mention the Sunnah of the Prophet himself, for making practical and effective peaceful co-existence within the Abrahamic traditions.