Category: Commentary

The contextualizing of capitalism, free markets and innovations has been with us since the dawn of capitalism.  What are we to make of the tulip mania in Holland or the South Sea Bubble in London?  Or worse, the Mississippi Bubble (1718–1720), a massive 18^th century financial crisis in France caused by the rapid inflation and subsequent collapse of shares in the Compagnie des Indes, managed by John Law?

Driven by speculative investments in French Louisiana, share prices soared from 500 to 18,000 livres before crashing, ruining many investors and causing severe economic damage.  Some have thought that the collapse of the company’s stock wiped out the new, precarious, rising middle class in France, which contributed to the extremisms of the French Revolution.

Outcomes are realities which can be scrutinized from moral perspectives.

AI is now creating new realities.  What moral compasses are needed to frame our appreciation of AI?  What modalities are needed to impose that frame on the practices, production processes and products of AI?

In a recent piece for The Economist, Shuwei Fang of Harvard writes of AI from this perspective:

The conversation about AI and the information economy is mostly about supply.  Content is being commoditized.  Journalism is dying.  Intellectual property is being scraped without consent or compensation.  The internet is being flooded with misinformation and slop. …

What’s missing here is that AI’s impact on the information ecosystem is also a demand-side shock and arguably, a demand-side expansion.

Every major information revolution, from printing to mobile, expanded the market for knowledge, often dramatically.  AI is likely to do the same, but is also categorically different: the world is entering the age of machine audiences. …

Consider what happens when someone asks an AI a question about the world.  The system draws on vast amounts of knowledge and other content, synthesizes what it deems relevant and gives an answer shaped to serve that person’s intentions.  That answer is entirely new and may never be seen again. …

But AI does not only create machine demand.  It simultaneously expands human demand too.  The obscure corners of information demand – very specific needs that no article or broadcast could ever serve before – become addressable.  Conversational AI brings latent demand to the surface too, helping people articulate needs they could not previously express.  And AI lowers cognitive barriers: complex information, once comprehensible only to specialists, becomes digestible by anyone who can ask a question. …

This market has barely begun to form.  There are no stable mechanisms to match and price the demand signal against the supply that could serve it.  The information supply chain that could run from how knowledge is sourced, through how agents exchange it, to how AI delivers comprehension to humans, has no common rails and no incentive structure to reward rigor over fluency. …

The disciplines that journalism and the scientific method developed over centuries – of truth-seeking, accountability and self-correction – are the very operating principles that market will require.

Yesterday, President Donald Trump said that his ceasefire agreement with Iran is “on life support” and that the most recent negotiating proposal was “a piece of garbage.”

In Iran: “There is no alternative but to accept the rights of the Iranian people as laid out in the 14-point proposal,” Mohammad Bagher Ghalibaf, speaker of Iran’s Parliament, wrote on social media.  “Any other approach will be completely inconclusive; nothing but one failure after another.  The longer they drag their feet, the more American taxpayers will pay for it.”

Napoleon, quite put off by the American conduct of this war, could be heard in the far distance saying again, “Gentlemen, if you set out to take Vienna, take it.”

I recently sat in on a lunch meeting where the agenda was simply “values.”

We were asked to talk about what is good and what is bad.  The comments and questions that followed were unsurprising for Americans these days, but the group anchored itself in respectful listening.

But one member put on the table a list of behaviors associated with good motivations and others associated with “less than helpful” approaches to life.

Here is a list of those latter behaviors.  If they were to be associated with a prominent personality, who might come to mind?

Addictive, acquisitive, prohibiting, conquering, authoritarian, egotistical, competitive, controlling, dominating, insensitive, suspicious, aggressive, self-preserving, hierarchical, isolated, absolutist, contemptuous, closed/secretive, given to pretense, comfort-seeking, divisive.

These expressions of personality were associated with fear-based, materialistic, defensive approaches to life by Demi Miller of St. Paul, Minnesota.

When an earlier generation of Caux Round Table members discussed and settled upon certain ethical principles for a moral capitalism, the encyclical of Pope John Paul II, Centesimus Annus, provided welcome guidance.  Encyclicals provide the Catholic Church with social thought or as some say, social teachings.

The 1991 encyclical was written by Pope John Paul II to mark the 100^th anniversary of the first encyclical – authored by Pope Leo XIII to provide moral guidance for the post-feudal economic system of capitalism.

Such advocacy of what should be for the best in our earthly ambitions, ideals and daily practices reflects theology and intuitions of the divine, but confronts the realities of human-ness.

When, some years after presenting ethical principles for moral capitalism, under the leadership of then-chair Winston Wallin, former CEO of Medtronic, the Caux Round Table published ethical principles for moral government.  These principles were designed to provide moral capitalism with legal and regulatory foundations, drawing forth personal and social endorsement of and the actual practice of the fitting behaviors that would further moral capitalism’s idealism in business and finance.

No reliance was made then on Catholic social teachings.

However, several days ago, Pope Leo XIV spoke to a plenary session of the Pontifical Academy of Social Sciences convened to consider the uses of power: legitimacy, democracy and the international order.

I attach a copy of the Pope’s message (apologies for it being a little crooked on the page).

I also attach a copy of our Principles for Moral Government.

I am encouraged and reassured by the harmony between our principles and Catholic social teachings as presented by Pope Leo XIV.

Providing foundational rationality for moral government, in all cultures and religious traditions, empowers humanity to rise above abuses of power and the use of political governance as a tool of intolerance and oppression.

Which of these two men is the least admirable as a worthy leader?

When does anyone – president or not – risk going against the first of the Ten Commandments – “You shall have no other gods before me” – not even yourself?

One year ago last Thursday, Donald Trump stood up for rugged individualism in markets by imposing import taxes on Americans.  He called his edict a “liberation,” as if Americans were oppressed by importation of goods they desired to buy.  His hope was that domestic American production would respond with more output, more employment to make the American economy the “hottest” ever in the history of humanity.

Some hopes are false.

Two hundred and fifty years ago, Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations.  This was not a book about hope, but rather one of practical observations about the ways of the world.

As you know, the Caux Round Table has just published, with De Gruyter Brill, a book with chapters placing Adam Smith in a modern context, integrating his book on free market economics with his previous book on moral sentiments.

In Wealth of Nations, Smith observed the negative externalities that accompany tariffs.

In a recent commentary in the Wall Street Journal, two experienced economists looked at the data and like Adam Smith, observed negative externalities following on President Trumps imposition of tariffs on Americans.

Their commentary is here.

Are you interested in serving on corporate boards?  If so, our colleague, Eric Mahler, founder of Aretos Advisory, will be speaking on the topic from 8:30 am to 11:30 am next Thursday, March 26, at the Marriott Southwest in Minnetonka and I encourage you to attend.

In his presentation, Eric will cover the current “tensions” facing public, private, advisory and mission-based boards.  This will include how companies have departed from their values and how boards have increased pressure due to outside activism.

To learn more or register, please click here.

The event is sponsored by Financial Executives International Twin Cities, the CEO Roundtable and Private Directors Association Minnesota.

My thanks to John Mannillo, a man of dedication, determination and implementation, for convening a group of experienced and caring St. Paul residents to brainstorm how to set off a rejuvenation of the city.  John gave the name “defibrillator” to their analysis, conclusions and recommendations to focus attention on action now!  Get the heart of St. Paul pumping out progress and community self-confidence once again.

A press release announcing the project can be found here and a copy of the group report here for your review and comment.

I will send on to John your reactions and suggestions.

For the third time to provoke us to shift our perspectives, I have used the Yijing and its hexagrams to point us towards flows of success and failure as we move through another 12 months of a lunar year and see history unfold around us – for better or for worse.

Recently, I sent a notice on the accuracy of my predictions for last year.

This essay relates premonitions and predictions to what we see happening now.

President Trump’s war against Iran and its leaders fit the dynamic of a Fire Horse year very well, but may not be so in line with the modalities favored by the Yijing’s hexagram 45.