Category: Commentary

A few days ago, I sent to our network some personal thoughts on our late former President Jimmy Carter.  A few days before Christmas, I received from a colleague in Washington, D.C., who follows what is privately shared among Chinese in China thanks to his friendship with Chinese Americans, a letter asking Xi Jinping to resign.

The letter is a classic in the neo-Confucian tradition, especially the writings of Mencius on the people’s right to overthrow an evil king.  As the ancient Book of History records, the founder of the Zhou Dynasty proclaimed that “Heaven sees as the people see; Heaven hears as the people hear.”

In the letter, included below, the writer, a person of status and familiar with Chinese classical values and political philosophy, directs attention to Xi’s failings in moral character and personal leadership.  In Confucian terms, Xi lacks virtue – Te.

If the letter’s representations about Xi’s leadership are correct, he is not living up to the Caux Round Table’s ethical principles for moral government.

And he is no Jimmy Carter either.

Most publicly humiliating to Xi is, at the end of the long letter, the comparison of his reign with that of the Dowager Empress Cixi, who has been widely denigrated and very emotionally despised for leading the Qing Dynasty into collapse in the great humiliation of China before the West.  For example, she spent funds on the summer palace and not on the navy.

The letter reads as follows in English translation:

Since taking on leadership roles in the party, government and military, Comrade Xi Jinping has exhibited numerous serious problems and grave shortcomings, which have caused significant harm to the country, its people and the entire party:

1. In managing the nation and economy, he has adopted extremely left-leaning practices, including overly emphasizing public ownership, promoting state advancement and private retreat, which have undermined market fairness, suppressed private enterprises, including forcing companies like Tencent and Alibaba to submit under investigations, fines and other forms of suppression and excessively intervening in the economy, causing everyone to feel constrained and lacking investment enthusiasm, leading to a significant decline in the vitality of the national economy.
2. Incompetent in governance.  Without thoroughly investigating and analyzing problems, rushing for quick results, making numerous misguided decisions that have devastated industries; sectors like real estate, education, finance and online platforms have all suffered from his harsh, irrational and excessive interventions that violate market principles, leading to severe impacts, massive losses or even bankruptcy, with industries withering rapidly.
3. Recklessly causing trouble and wasting resources.  Ignoring the people’s hardship while pursuing grandiose projects, investing unlimitedly in infrastructure, including inefficiently pouring huge sums into projects like the Xiong’an New Area and spending lavishly on the Belt and Road Initiative projects worldwide.
4. Violating the principles of separation between party and government and between politics and business.  Overemphasizing party leadership, demanding party control over everything with absolute decision-making power, including administrative affairs of the government and affairs of enterprises and institutions, even forcibly requiring private businesses to establish party organizations under party control.
5. Destroying the term limits for leadership.  Ignoring the lessons learned from painful historical experiences that led to the establishment of term limits, he forcibly amended the constitution to allow himself indefinite terms.  This has regressed the national system, making power unchecked by term limits, leading the country into a dangerous situation prone to authoritarianism and causing both domestic and international loss of confidence in our government’s system, isolating and alienating China from the world, losing opportunities for global integration and development.
6. Undermining the principle of democratic centralism, engaging in personal authoritarian dictatorship.  Overemphasizing power centralization and core authoritarian leadership, severely weakening democratic decision-making, not adhering to the principle that the minority should submit to the majority, individuals to the organization, by intimidating subordinates to monopolize all power, not tolerating or allowing any constraints, reaching the pinnacle of authoritarianism, thereby implementing many wrong personal decisions. At present, the whole country and party are essentially under his one-man rule, with other Standing Committee members being mere decorations, monopolizing media coverage, rarely allowing other members visibility, even turning collegial relationships into a monarch-subject dynamic.
7. Promoting personal cult.  Ignoring the great disasters personal cults have brought to the party and the country, directing subordinates to sing his praises, pretending to understand and guide various affairs, demanding that all levels adhere to his words as golden rules and spend a lot of time studying them and allowing many ghostwriters to publish books under his name for widespread distribution, both domestically and internationally.
8. Disrupting political order and norms.  Seizing power, appointing loyalists and sycophants, forming cliques, repeatedly undermining political order and norms, causing a significant regression in China’s nascent political civilization.
9. Seriously damaging unity within and outside the party and undermining united front work.  Instead of uniting more people, he often suppresses others, making enemies everywhere.
10. Attempting to achieve comprehensive control over everyone.  To act more freely, he tries to revive the governance model from the Cultural Revolution to control people economically and administratively, including promoting the Fengqiao Experience, mass movements, public ownership, communal canteens, collective economy, supply and marketing cooperatives and relocating enterprises for war preparation.  He uses high-tech surveillance like cameras and communication apps with big data and AI to monitor everyone’s lives, including senior officials and retired leaders.  He has also introduced draconian laws like the National Security Law, Anti-Espionage Law, Secrecy Law and Internet Regulation Law to control and suppress the populace.
11. Incompetence and errors in controlling the Covid-19 outbreak have led to numerous deaths and enormous economic losses.  Initial concealment led to loss of control, followed by excessive quarantine causing many infections and deaths, then excessive personnel isolation and mass nucleic acid testing consumed vast resources, locking down people and making life unbearable and finally, sudden lifting of restrictions leading to widespread infection and many deaths.
12. In diplomacy, lacking integrity, morality and rule of law.  Supporting aggressors, terrorists and tyrannical regimes worldwide, causing China’s isolation and sanctions, leading countries to reduce purchases of Chinese products, increase tariffs and foreign investments and companies to withdraw, severely impacting national economic development and destroying many people’s livelihoods.
13. Violating the strategy of keeping a low profile, souring relations with many countries, damaging China’s favorable international development environment.  Pursuing an aggressive anti-Western line, not resolving conflicts, seeking common ground while shelving differences or coexisting peacefully with Western countries, instead promoting “Wolf Warrior” diplomacy emphasizing struggle, provoking conflicts, making enemies with many countries and engaging in trade wars with the U.S., aiming for global dominance and control, severely violating the strategy of lying low and making friends with all, putting China in the worst, most disadvantageous development situation.
14. Selling out the country for personal glory.  To please other nations, he often generously offers financial aid, spending lavishly during visits and receptions, even through profit concessions, ceding territory and appeasing through agreements, transferring China’s wealth and land to other countries.
15. Destroying Hong Kong’s democracy, freedom and rule of law, causing Hong Kong to lose its prosperity, with industries and population fleeing; his aggressive approach to reunify Taiwan through threats has alienated the people of Hong Kong, Macau and Taiwan, causing immeasurable damage to national integration and unity.  The harsh anti-independence laws he promoted have scared away many Taiwanese businesses and talents from the mainland.
16. In social management, emphasizing stability maintenance over addressing and resolving issues.  Instead of solving problems and coordinating contradictions, he emphasizes forceful stability, resulting in high costs and poor outcomes.
17. Lacking empathy, not understanding or addressing public concerns and showing no humanity.  Frequently issuing policies disconnected from reality and overly harsh, such as destroying people’s properties and homes under the guise of protecting mountains, waters and farmland, forcibly evicting low-end populations for the safety of Beijing or claiming to clear social residues for a new society, arbitrarily locking down people under the pretext of epidemic control, often leading to public distress and widespread complaints.  He insists on rigid, one-size-fits-all policy enforcement, ignoring the complex local situations and historical reasons.
18. Driven by a thirst for power.  Controlling everything, establishing numerous “groups” above government agencies, intervening in affairs at will.  Amending the constitution for indefinite terms and using the epidemic as an excuse for long-term, strict lockdowns to prevent opposition to his re-election.
19. Arbitrary and intolerant of dissent.  Not good at listening to or considering others’ opinions, ignoring public sentiment, not allowing criticism or commentary, labeling well-meaning suggestions as “irresponsible remarks” and punishing them harshly.  Creating a one-man show, not tolerating advice, punishing advisors, prohibiting opposition, blocking criticism, censoring the internet, restricting freedom of speech, suppressing bloggers and active netizens, arresting human rights lawyers and dissidents, making the whole society silent, with all channels of expression cut off, leading to poor decision-making, unaddressed issues accumulating and worsening governance in all aspects.
20. Vain, stubborn and never admitting mistakes, even when facing a wall.  Believing himself to be the greatest contributor to the nation, unmatched in capability and a once-in-a-millennium emperor.
21. Narrow-minded, cruel, often pushing people to despair or death over minor disagreements, using espionage, anti-corruption or tax audits to widely attack opponents, making everyone feel insecure.
22. Lacking steadiness, with a volatile temper.  Decisions often made without careful consideration of consequences, frequently made in anger, leading to irrational decisions.
23. Lacking the spirit of the rule of law.  Substituting party for government, bypassing legal procedures in decision-making, acting unilaterally, enforcing special treatments, often punishing companies and dissenters based on personal whims, causing Fujikura, Alibaba and NVIDIA to suffer from his displeasure, leading to reduced or withdrawn investments in China.  Entrepreneur Sun Dawu was arrested for criticizing the suppression of human rights lawyers, while netizens like Niu Tengyu were heavily sentenced for sharing Xi’s and his family’s ID information.  Also, establishing the Tax Police Combat Center, aiming to imitate the land redistribution of past eras for tax collection through combat-like operations.
24. Psychologically twisted, with severe envy of the wealthy.  Under the guise of common prosperity, attacking the wealthy, stripping assets, causing many elites and wealthy individuals to emigrate with significant capital, leading to a drain on national wealth and undermining the economy.
25. Unscrupulous in methods, including purges, threats, torture and assassinations for power struggles, allegedly orchestrating events like the Tianjin explosion and multiple fires in Shanghai for political battles.
26. Habitually fabricating and lying constantly.  Often covering up problems, demanding all levels to beautify the situation and pretend peace, even when issues are severe.
27. Stubbornly rejecting new ideas, acting against democracy.  Denying and firmly rejecting political reform, going against the global democratic tide (including the “Seven Don’ts,” which prohibit discussing universal values, civil society, press freedom, civil rights, historical errors of the party, the privileged class and press freedom).
28. Completely disregarding the interests of the country and its people, prioritizing personal power security (which he calls “political security”).  Sacrificing national interests and affecting people’s livelihood for his personal power and historical legacy.  Showing no regard for the lives and property of the populace, casually trampling them, feeling no compassion as people commit suicide or are violently suppressed, believing these are normal or acceptable outcomes.  Such a person is clearly unfit to lead the party, government and military.

Under his misguided policies, China’s economy has significantly declined and stagnated, industries have withered, the treasury is empty, the country faces internal and external challenges, both officials and civilians suffer, with domestic and foreign capital completely disillusioned and losing all hope for the future, leading to a downturn in investment and consumption, further economic depression.  Countless people have lost their means of livelihood, becoming refugees, with cries of despair and complaints echoing across the land, businesses collapsing, people jobless and desperate, some even driven to suicide or violent acts against society out of frustration.

He is entirely incompetent, causing catastrophic impacts in politics, economy, diplomacy and military, leading to severe socio-economic, social, political and Taiwan Strait crisis.  China’s economy is irreversibly deteriorating, with public hardship, the national finance on the brink of bankruptcy, public resentment boiling, officials becoming passive and a full-blown societal crisis imminent.

He is as backward as Wang Mang, as grandiose as Yang Guang, as obstinate as Chongzhen, as ignorant and arrogant as Xianfeng and as disastrous as Cixi, unfit to continue as the leader of the nation.

He is the root of China’s current chaos and with every day he remains in power, the country and its people suffer more; if allowed to continue, China will descend into an irredeemable abyss.  He must be removed from office as soon as possible.

Almost everyone in the nation, from officials to civilians, would rejoice in his downfall, with the military and police ready to turn against him.  We hereby demand his immediate resignation from all leadership roles and to apologize to the nation.

We also demand that the country uses this opportunity to abandon the current system prone to autocracy, establishing a new democratic republic society where everyone can enjoy a free and open life.

It was early 1976, as I remember.  As a young lawyer working for a Wall Street law firm, where Cyrus Vance – later to be President Carter’s Secretary of State – was a senior partner, on a whim, I went to a reception to learn about a Jimmy Carter from Georgia who was running for the Democratic Party’s nomination for the Presidency.

Carter was supposed to introduce himself to us over a speaker phone, but the connection didn’t work, so his campaign representatives delivered a different “vibe,” as we say these days.   America had just lost its first war, in defense of the nationalists in South Vietnam.  Though nobody wanted to talk about defeat, many Americans knew something had gone very wrong and were uneasy in their consciences.

Somehow, Carter spoke to that unease with reassurance.  People could be good.  There could be reconciliation.  There could be trust in one another.  He won election as President of the United States.

Those sentiments and those ideals are very much a part of the moral foundation that the Caux Round Table advocates for moral capitalism, moral government and moral society.

At the beginning of the day and at the end of the day, it is character and conscience that make the difference for good.  Character, of course, includes both ethical principles and practical wisdom. One without the other can easily become either evil or useless.

A mark of Jimmy Carter’s character was his July 15, 1979, speech to the American people on living up to high expectations of goodwill and trustworthy citizenship.  That speech, derided as his malaise speech, was not esteemed by our movers and shakers, to our great loss as a nation.

Carter forthrightly said:

“You’ve heard more and more about what the government thinks or what the government should be doing and less and less about our nation’s hopes, our dreams and our vision of the future. …

Why have we not been able to get together as a nation to resolve our serious energy problem?

It’s clear that the true problems of our nation are much deeper – deeper than gasoline lines or energy shortages, deeper even than inflation or recession.  And I realize more than ever that as president, I need your help.  So, I decided to reach out and listen to the voices of America.”

He invited many to meet with him at Camp David in the hilly Catoctin mountains.  After listening, Carter summarized what he had heard: “Mr. President, we are confronted with a moral and a spiritual crisis.”

He continued in his speech:

“The threat is nearly invisible in ordinary ways.  It is a crisis of confidence.  It is a crisis that strikes at the very heart and soul and spirit of our national will.  We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation.

The erosion of our confidence in the future is threatening to destroy the social and the political fabric of America. …

But we’ve discovered that owning things and consuming things does not satisfy our longing for meaning.  We’ve learned that piling up material goods cannot fill the emptiness of lives which have no confidence or purpose.

The symptoms of this crisis of the American spirit are all around us.  For the first time in the history of our country, a majority of our people believe that the next five years will be worse than the past five years.  Two-thirds of our people do not even vote.  The productivity of American workers is actually dropping and the willingness of Americans to save for the future has fallen below that of all other people in the Western world.

As you know, there is a growing disrespect for government and for churches and for schools, the news media and other institutions.  This is not a message of happiness or reassurance, but it is the truth and it is a warning. …

First of all, we must face the truth and then we can change our course.  We simply must have faith in each other, faith in our ability to govern ourselves and faith in the future of this nation. Restoring that faith and that confidence to America is now the most important task we face.  It is a true challenge of this generation of Americans. …

We are at a turning point in our history.  There are two paths to choose.  One is a path I’ve warned about tonight, the path that leads to fragmentation and self-interest.  Down that road lies a mistaken idea of freedom, the right to grasp for ourselves some advantage over others.  That path would be one of constant conflict between narrow interests ending in chaos and immobility. It is a certain route to failure.

All the traditions of our past, all the lessons of our heritage, all the promises of our future point to another path, the path of common purpose and the restoration of American values.  That path leads to true freedom for our nation and ourselves.”

Americans did not listen to Jimmy Carter.  Against his advice, they chose the path of division and not of common purpose.

In our recent presidential election, voters split roughly 50/50 between two bitter and incorrigible rivals – the Democrats and Donald Trump.

As history has shown again and again, a “house divided cannot stand.”

“He that troubleth his own house shall inherit the wind.” – Proverbs 11:29

“They sow the wind and reap the whirlwind.  The stalk has no head; it will produce no flour.” – Hosea 8:7

Jimmy Carter understood that Biblical wisdom.

My gratitude to Jimmy Carter is for his leadership in providing safe haven in the U.S. for the victims of communism in South Vietnam, Cambodia and Laos.  In 1978, I was part of a small team – the Citizens Commission for Indochinese Refugees – that visited refugee camps in Thailand and returned to Washington asking the Carter Administration and Congress for a new law giving new homes and new lives to those refugees.

When in the camp of Khmer refugees in Chanthaburi, Thailand – some of the very few Khmer who had escaped the Khmer Rouge – more than one refugee told me of the rule of the Khmer Rouge cadres: “If you live, we gain nothing.  If you die, we lose nothing.  So, why not kill you today?”

I asked a Buddhist monk in the camp about the monks in Cambodia. He replied: “All dead.”  I asked about the Buddhist scriptures. He replied: “All burned.”  I asked about the temples.  He replied: “Those not used for schools are destroyed.”

President Carter had added “human rights” to his foreign policy agenda.  Secretary of State Cyrus Vance and Assistant Secretary for Human Rights Patricia Derian supported us, as did Senator Ted Kennedy, responsible for immigration in the Senate.

The 1980 Refugee Act was passed by Congress and signed into law by President Carter.

Moral government at work, I would say.

Confucius advised: “Hold faithfulness and sincerity as first principles.” (The Analects, Bk 1, 8)

When thinking of Jimmy Carter and of ourselves, whoever we may be and wherever we may live, we can acknowledge the truth spoken by Confucius so many centuries ago: “See what a man does.  Mark his motives.  Examine in what things he rests.  How can a man conceal his character?  How can a man conceal his character?” (The Analects, Bk2, 10)

We recently posted a few more short videos on relevant and timely topics.  They include:

–Three Thoughts on the 2024 U.S. Election

–Social Media – Who’s Responsible?

–Quality Government and Quality Data

–Covenants as a Modern Model for Peace

All our videos can be found on our YouTube page here.  We recently put them into 9 playlists, which you can find here.

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An American federal judge in Texas has just ruled that racist thinking cannot supersede professional best practices where the safety of airline passengers is at stake.

As I wrote several years ago when the virtue-signaling of the woke, diversity, equity and inclusion movement spread like a viral pathogen across American bureaucracies – public and private – invidious racism has no place in a moral capitalism.

We can each be as proud as we want to be of our genetic heritage and the cultures which have nourished our families over generations, but moral standards demand something more than application of genetic codes for appearance and reproductive capacities or cultural traditions when we pass judgment on others.

The issue before the judge was who Boeing may select as a monitor of its safety practices.  The case involved remediation of Boeing’s business model after the crashes of two 737 MAX aircraft.

In settling its case against Boeing for negligence in causing 346 passenger deaths, the federal government insisted on an agreement that Boeing would use standards of diversity and inclusion when choosing an independent monitor of its production of aircraft.

Judge Reed O’Connor ruled that the government’s use of the words “diversity” and “inclusion” did not rule out racism and so opened the door to racist criteria in evaluating candidates for supervising the quality of the safety protections used in building airplanes and built into each aircraft brought to market.

I suppose the moral norm of justice is not to use racism to screen out qualified candidates and also not to use racism inappropriately to screen in qualified candidates.  That seems to be the basis for Judge O’Connor’s decision, which is in keeping with the Supreme Court’s refusal to legitimate racism in allocating acceptances for college admissions.

You may read Judge O’Connor’s opinion here.

On the day after the American Thanksgiving holiday, I spent a few hours walking about a pre-capitalist community.  It was the Plimoth Plantation in Plymouth, Massachusetts, on the coast south of Boston.  The plantation is a recreation of the hamlet erected by the Pilgrims in 1620 after their landing on the coast of what was to become the Massachusetts Bay Colony.

It is a tourist attraction, with some 10 thatched roofed houses built with historical accuracy and staffed with guides dressed in 17^th century style clothing and speaking a bit awkwardly in old English accents to the delight of young children and the amusement of adults.

After walking into three or so of the houses with gardens behind on a cold day, I thought of how did the Pilgrims grow enough vegetables to get themselves through the winter of 1620/1621?  Then, I thought of how many kegs of nails and barrels of flour they had brought over in the small Mayflower sailing ship?  Enough for a winter?  A year?  Two years?

They had no smithy then and so how could they have made or repaired iron tools – saws, hoes, etc.  Could their saws cut down enough trees for boards and firewood?  What if a saw broke?

Suddenly, every aspect of their lives appeared to have been arduous.  Cooking in a dark room. Walls that could not keep out the winter cold.  Did they bring enough woven cloth from which to make new shirts, dresses, pants and warm coats?

They had no shopping mall, no stores, no markets and no factories to provide wage employment.  The only money they had, most likely, was the coin they had brought with them.

I then thought of Adam Smith and his 1776 description of early capitalism in Wealth of Nations.  The Pilgrim lifestyle and its rigors were far inferior in quality of life than the realities he was describing.

That first winter perhaps half the new arrivals died.  Of course, their settlement had no doctors, no infirmaries, no antibiotics, no tubs for soaking baths, no showers, no flush toilets, maybe not much soap for washing.

I decided that I would not want to live that life.  If I were to choose between pre-capitalism and capitalism, I would take the latter in a heartbeat.

Adam Smith was wise: specialization of function, division of labor, the factory system, application of science in the invention of machinery, the manufacture of products, commodities, inventing property rights, holding markets, the creation of wealth, all made for improvements in the human condition.

Here is a chart that summarizes, in graphic form, the human good of capitalism:

Why are we today so concerned about social justice and economic inequality?  Is it not because those who live in poverty today still have lives more likely to be “solitary, poor, nasty, brutish, and short?”  Is not the quality of life a moral good to be sought and appreciated?  And therefore, from an equity perspective, we show concern for the quality of every life.

This appreciation of living with plenty, with opportunities to earn and to learn, with good health, with the manifold advantages of modernity, was especially voiced by Presidents Washinton and Lincoln in their proclamations asking Americans to set aside a day in the month of November to give thanks and not take their lives for granted or as an indulgence in undeserved privilege.

Washington wrote:

“Now therefore I do recommend and assign Thursday the 26^th day of November next to be devoted by the People of these States to the service of that great and glorious Being, who is the beneficent Author of all the good that was, that is, or that will be – That we may then all unite in rendering unto him our sincere and humble thanks – for his kind care and protection of the People of this Country previous to their becoming a Nation – for the signal and manifold mercies and the favorable interpositions of his Providence which we experienced in the course and conclusion of the late war – for the great degree of tranquility, union and plenty, which we have since enjoyed – for the peaceable and rational manner, in which we have been enabled to establish constitutions of government for our safety and happiness and particularly the national One now lately instituted – for the civil and religious liberty with which we are blessed; and the means we have of acquiring and diffusing useful knowledge; and in general for all the great and various favors which he hath been pleased to confer upon us.”

Abraham Lincoln wrote:

“The year that is drawing toward its close has been filled with the blessings of fruitful fields and healthful skies.  To these bounties, which are so constantly enjoyed that we are prone to forget the source from which they come, others have been added, which are of so extraordinary a nature that they cannot fail to penetrate and even soften the heart which is habitually insensible to the ever-watchful providence of Almighty God…”

“Needful diversions of wealth and of strength from the fields of peaceful industry to the national defense have not arrested the plow, the shuttle, or the ship; the ax has enlarged the borders of our settlements and the mines, as well of iron and coal as of the precious metals, have yielded even more abundantly than heretofore.  Population has steadily increased, notwithstanding the waste that has been made in the camp, the siege and the battlefield and the country, rejoicing in the consciousness of augmented strength and vigor, is permitted to expect continuance of years with large increase of freedom.  No human counsel hath devised, nor hath any mortal hand worked out these great things.  They are the gracious gifts of the Most High God, who while dealing with us in anger for our sins, hath nevertheless remembered mercy.  It has seemed to me fit and proper that they should be solemnly, reverently and gratefully acknowledged as with one heart and one voice by the whole American people.”

The December issue of The Atlantic magazine brings all of us a timely and important protest over mismanagement of the American elite.

David Brooks’ article is titled “How the Ivy League Broke America.”

Using institutions of higher education to recruit and condition future members of national elites is foundational to modernity.

Napoleon created the Grande Ecoles in France to elevate the French to the heights of Enlightenment reason and excellence.  Hegel and Humboldt did the same in Germany.  The German model of the university came to the U.S. after our Civil War, starting with Johns Hopkins University in Baltimore.

Previously, Oxford and Cambridge had executed the same function of providing specialized social capital creation for Great Britain.

Countries around the world now very much want to send their children to the U.S. for higher education.

But what if the American system of higher education has fallen down on the job?  What if its graduates cannot and do not serve the American people well as adult professionals?

This is the question Brooks puts forward in his essay.  He insists that there has been a disgraceful failure in American higher education, failings which need to be stopped and replaced with a better system.

What Brooks writes is relevant to every country.  Higher education opens the gates of a nation’s capacity to build a moral society, moral capitalism and moral government.

You may read my shortened version of his essay here.

A recent story in the Wall Street Journal deserves our attention.

It reports on how a company – Starbucks – famous and once very profitable – can’t just float on the tides of capitalism, but must work for its money by taking care of stakeholders.

As I have asked students in my MBA classes on business ethics, “What is a company without customers?”

The students almost always show some surprise in their faces – thinking perhaps that “Of course companies have customers.  It’s a capitalist system.”

Then, I pause and answer my own questions: “Bankrupt.”

The students immediately get the point: in capitalism, you have to attract customers in order to profit.  No one directs them to spend their money in your store.

So, to prove my point, here are excerpts from the reporting of Heather Haddon:

In late summer, a customer started showing up at Los Angeles-area cafes at all hours of the day, quizzing baristas about their favorite drinks to make, or problems with how the stores operated.

That customer, Brian Niccol, is now Starbucks’s chief executive officer, and he is moving quickly to change the way customers experience the world’s largest coffee chain as it struggles to draw customers.

In less than two months in the role, Niccol has pushed to focus Starbucks’s operations, trimming menu items and paring back discounts.  Instead, Niccol is giving priority to delivering quality coffee quickly and accurately with friendly service, particularly in the mornings, when the chain needs to shine.

Niccol, an Americano drinker, said he sympathizes with customers who want drip coffee but have to wait while Starbucks’s baristas labor over elaborate, customized drinks.  “Sometimes you just want a brewed cup of coffee really quick,” Niccol said in an interview.

Starbucks’s challenges have mounted this year and deepened since Niccol assumed leadership in early September.  The company in October reported that U.S. transactions fell for a third consecutive quarter, while earnings and revenue for its most recent quarter undershot analysts’ estimates.  It scrapped its fiscal-year financial forecasts. 

Niccol has said Starbucks needs to be clear-eyed about its problems and move quickly to make customer-friendly changes—such as bringing back Sharpies for handwritten notes on cups, and possibly reinstating newspapers for those who linger in cafes.  When he announced last week that self-service condiment bars would come back to stores next year, some lapsed customers said they would return. 

Donald Trump has just been re-elected president of the United States, but with nearly half the American people voting against him.  As of this writing and somewhat surprising to me, is that Trump’s Republican Party has elected enough senators to take majority control of the Senate.

The recent campaigns reveal a deeply divided American people.  There are lessons here to be learned and multiple conflicting discourses to assess.

Seeking to expand the availability of heterodox discourse, Alpha News, a very small start-up source of news here in Minnesota, has produced a moving documentary looking at a fault line among Americans – the ethical quality of our police.

For many, the police are racist in their interactions with minorities, especially with African American men.  For others, the police are necessary to protect families and neighborhoods against violence and criminal trespasses on the vulnerable and the innocent.

In Minnesota recently, 5 police and firemen have been killed in trying to do their duty.  Alpha News believed that telling their stories and bringing forward to the public the grief of their families would provide more perspective to voters in this time of disagreement and intolerance of the views of others.

For some, this documentary – Minnesota v. We the People – brings out feelings of compassion and respect as emotional responses to individual sacrifices made that the community might be more safely livable and supportive.

For others, it may not be so welcomed and so be perceived as too one-sided in its appreciation of policing.

The producer of the documentary, Liz Collin, received our Dayton Award for 2023 for her courage and leadership in making an earlier documentary commenting unfavorably on the trial of police officer Derek Chauvin for murder in the death of George Floyd, when Floyd was in the custody of officer Chauvin and other members of the Minneapolis Force and protest riots breaking out in response to his death in police custody.

Criminality is everywhere a human failing.  Policing, rightly done, is everywhere a human social asset.  Discourse everywhere facilitates both our becoming aware of our failings and our seeking betterment in our lives.

By sharing this documentary, we hope to provide you with a discourse worthy of reflection on how we, in every country, city, town and village, should meet our need for security of self and others and for providing respect for self and others.

You may watch the documentary here.

Ten years ago, some Peruvian farmers started growing blueberries for export.  They wanted to compete with growers in Chili for “profits.”  Imported berries sold in the U.S. in the cold months when they don’t grow there command high prices.

In 2013, Peruvians earned about $17 million in sales.  In 2023, their income from exporting blueberries was $1.7 billion.  A lot of Peruvian families and workers were better off.  Today, Peru exports more than its competitors, reports The Economist:

Innovation made this happen.  Shades of Adam Smith and creating the pin factory to make more pins and sell them for lower prices so that users of pins, those who wore the clothes they made, factory workers and factory owners, all saw a rise in their well-being.

Peruvians took from inventors in the U.S. new varieties of blueberries which did not need chilly winters and which could thrive on Peru’s coast.  By 1922, the yield of the typical Peruvian blueberry field was nearly double the global average, giving Peruvian growers and their customers a cost advantage.

The provision of public goods also lifted production and private wealth creation – tax breaks and irrigation megaprojects to bring coastal desert land into cultivation.

But as often happens with free markets, competitors join the party.  “Colombia, Morocco, everyone is growing blueberries now,” said one farmer in Peru.

Perhaps the stickiest objection to capitalism is that it produces – maybe for some, even thrives – on inequality.  The rich get richer and the poor stay poor.

A recent comment in The Economist complained that “The poor among us have stopped catching up.”  The system has failed them: extreme poverty has barely fallen since 2015.  The magazine, however, does not blame capitalism for this failure of economic growth.  Rather, the magazine puts the blame on governments for shifting from markets to industrial policy and trade restrictions.  It seems constricting markets puts the brakes on wealth creation – just as Adam Smith pointed out 249 years ago.  Indices of economic freedom have been largely flat in most of Africa and South America.

In addition, other data has surfaced that points the finger away from capitalism to culture as the incubator of economic inequality.  It seems that individual behaviors contribute to individual outcomes in life.  As Smith assumed and German sociologist Max Weber made explicit, values drive behaviors and behaviors bring about outcomes.  Social and human capital accounts are the foundations for the creation of financial capital.

A simple example is the entrepreneur.  Starting a new business requires finance, but what are the conditions which permit obtaining monetary capital?  Usually, it is the intangibles – the reputation of the entrepreneur, the practicality of his or her business model, trust that consumers will buy the new product or service with ready money, availability of labor skill and quality of worker diligence, etc.

In a recent article, Professor Roland Fryer of Harvard argued that choosing your identity or living with an identity provided to you by family, community and history, determines much of what your life will be like.  “How you view your role in the world will affect your choices.”  He follows the innovative thinking of George Akerlof, a Nobel laureate, on the complexity of rational economic decision-making once identity perceptions and priorities are taken into account.  Individuals intend to gain from both material outcomes and actions that affirm their ego-identities.  “A corporate job might offer financial stability, but if it conflicts with an individual’s identity as an environmentalist or feminist, the mismatch can lead to dissatisfaction and underperformance.  Lab experiments have shown that people may opt for lower-paying jobs if it means greater congruence with their social group or might choose consumer goods that signal affiliation to a particular identity, despite higher costs.

Then, a recent study published by the National Bureau of Economic Research in the U.S. concluded that the more you work, the more you earn when the major determinant of total lifetime working hours is individual choice – values, again, driving behaviors and life outcomes.

Those who work more, earn more because they spend more time acquiring skills.

Thirdly, religion adds weight to the scales of human capital.  Pious students have higher grades, better attendance records and complete more years of college (The Economist, August 17, 2024, p. 19).  Religious communities tend to be learning communities.  They read together, engage in dialogue together and build all kinds of social skills.  I recall my more conservative Jewish friends in high school and college with all the hours they put into reading and debating the Talmud.

Within nuclear families, the more religious siblings perform better in school.

Doing better in school also happens with faithful atheists.