Category: Commentary

I recently read a short book by Kengo Sakurada, President and CEO of SOMPO Holdings, titled Bushido Capitalism: The Code to Redefine Business for a Sustainable Future.

Sakurada takes the ethic of Bushido, the way of service as a Samurai, as interpreted by Inazo Nitobe.  Nitobe wrote his book, Bushido: The Soul of Japan, in English for publication in New York in 1899.

I was taken by Sakurada’s recommendation of this virtue ethic for business because another Japanese business leader, Ryuzaburo Kaku, then CEO of Canon, contributed his Japanese ethic of kyosei to the Caux Round Table Principles for Business, the basis for a moral capitalism.

The experience of the Japanese over the centuries in articulating a balance between individual mindfulness – Zen – with participation in natural environments and community – Shinto – has given their culture insights into living well through virtue ethics.

The Bushido code has 7 principles, each of which Sakurada applies to business to enhance both its profitability and its sustainability.

The first principle is justice – achieving success through assuming responsibility.  Self-seeking narcissism won’t work.  Decisions must be supported by reasoned consideration and be in the interest of the many.

The second principle is courage.  Courage is needed to constantly ask questions, scrutinize everything high and low, near and far and be ready to leave the status quo behind.

The third principle is a duty of care.  Empathy, compassion, even a tenderness towards others, keeps them within the compass of our lives.  This principle is to acknowledge our emotions and not suppress them.

The fourth principle is politeness.  This should be a natural, free-flowing, outward manifestation of a sympathetic regard for the feelings of others.  Sakurada advises that respect should never be conditioned on selfish benefit.

The fifth principle is veracity.  This requires never exaggerating or underplaying your skills and being brave enough to admit mistakes and acknowledge your limits.

The sixth principle is honor.  Honor comes to us when we act as if we deserve to be honored and esteemed by others.  How you think of yourself in providing service and meeting your responsibilities rebounds in how others do or do not show you honor.

The seventh principle is loyalty.  Loyalty is commitment; accepting a vocation or higher calling which makes demands on you and tests your selflessness.  The virtue of loyalty enhances one’s ability to work with stakeholders.

In thinking about these virtues, I am reminded of the sensibility of the American poet, Robert Frost.  In his poem, “Stopping by Woods on a Snowy Evening,” he was evocative of a life worth one’s commitment to excellence:

Thanks to those of you who joined us by Zoom on December 28 for our annual Brandl Program.  I hope you enjoyed it and found it to be of value.

Here are the proceedings.

Happy New Year!

These past couple of years, I have found myself more and more keen to find “facts” with which to advocate the objective constructiveness of the Caux Round Table principles of moral capitalism.

I presume that we have, in fact, passed into a “post-truth” global epistemology for the human endeavor. Facebook and Twitter decide on what facts are true to them. Xi Jinping thinks in terms of facts which will validate and extol his “China dream.” Intolerant Muslims will kill to impose their narratives on the rest of us. Joe Biden tells Americans to “follow the science.” But which scientists does he consider unimpeachable? Same with other ideologues. Intellectually and emotionally, we are drowning in narratives created – might I say, fabricated? – without respect for realities which do not yield themselves to the cause of human willfulness and narcissism.

To swim through the great waves of this inhospitable, post-modern geist, I look for stubborn facts, hard facts which resist any reframing to subordinate them as proof-points for our self-referential narratives.

So, I was delighted to read on the first day of 2022 some facts which point to an appreciation of capitalism.

What excited Adam Smith about the new economic system of wealth creation he saw emerging around him in the late 18th century was its capacity for innovation, disruption and bettering of the human condition. Since then, many advocates of capitalism have also looked to the creative destruction drive of free markets and rich-taking by private capital.

A corollary observation has been that small enterprises employ the majority of workers and new firms are the source of most innovation. The big firms are not always the best and the brightest when it comes to innovation and effective response to change and customers.

Now, in the U.S., it has been a worrisome concern for some social economists that large firms have taken on more and more market share and that the number of startup firms has been declining for years. Now, most industrial sectors in the U.S. are dominated by 3 or 4 big firms.

However, something to the contrary has happened in the US.

According to the U.S. Census Bureau, more than 4.4 million new businesses were created in 2020 – the highest total ever recorded. It’s also a 24.3% increase over 2019 and 51% higher than the 2010 through 2019 average.

While the 2021 numbers aren’t in yet, more than 500,000 businesses were started in the first half of 2021 alone and this during a pandemic.

I would hazard a guess that it was the very threat of, the disturbances created by the pandemic which provoked some Americans to, on their own without elite direction or government patronage and reduction of risk, to start a private business seeking to serve the needs and wants of others.

Steve references a recent article regarding an action plan to solve the climate crisis. Sounds a but too easy to him.

A somewhat off the wall article in the Wall Street Journal makes a case, by accident, for the value of capitalism.

The article was a short note on the history of Christmas stockings, part of the Christmas holiday ritual developed in the 19th century in Europe, especially in England.

One part of the innovative middle class celebration of Christmas was for children – Santa Claus, who brought gifts to children who had been nice, not naughty, during the year, then ending. Small gifts were put in stockings, hung from a mantle over the fireplace.

Stockings used for that special purpose evolved from stockings made for daily wear.

The first modern stockings were knitted by hand and by a machine invented in 1589 called a stocking frame. Foot-powered stocking frames evolved over time. By the mid-18th century, England had some 14,000 stocking frames. Stockings were no longer only for the aristocracy. Very ordinary people could acquire such status coverings for their legs.

In mercantilist France, stocking frames were restricted to protect hand workers.

In 1758, Jedediah Strutt invented a way of incorporating the purl stitch into the making of the fabric, resulting in ribbed stockings. With his profits, Strutt financed the first spinning mills built by Richard Arkwright, whose invention of the water frame transformed cloth making from a low-productivity craft to an industrial product. Arkwright’s invention took only minutes to make enough wool yarn to make a pair of knee socks, when previously that task would have taken five hours.

Cotton hosiery, more desirable than wool, was one of the first consumer products made from the newly abundant thread. What could be produced in quantity could profitably be sold at lower prices and so could become more affordable to more people and so also more abundant in the lives of the many.

And Christmas stockings, too, could become part of most every English family’s Christmas celebration.

Thanks to the capacity of capitalism to evolve technology, expand and expand productivity, new wealth, including ownership of stockings, was created, which could more inclusively devolve to the people.

Our thanks to those of you who recently contributed to the work of the Caux Round Table during the Give to the Max special day of fundraising for non-profits here in Minnesota.

During the last two weeks, I have surprisingly received many emails from all kinds of organizations asking me for a personal contribution.  These requests seem here in the U.S. to be a new part of our holiday season, perhaps encouraged by increased use of Zoom and internet relationships over these past 18 months.

It is the end of our fiscal year and so I presume on your goodwill and concern to ask again for your financial support, particularly to defray the costs of our monthly newsletter, Pegasus.

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I wish you all the best in the New Year.

One of the surprises to me about the otherwise predictable and pedestrian meeting of leaders to “save” the world from global warming was the emergence of a new alternative or rather, the coming in from the cold of a well-known, but controversial technology for generating electricity.

As I have written, humanity’s mastery of technological innovation to generate power has brought about our current climate challenge and so reverse technological innovation is needed to get us out of the difficulties we are in, so I’m open to consideration of all new technologies, even those using nuclear fission.

Dan Byers, Vice President for Policy at the U.S. Chamber of Commerce’s Global Energy Institute, recently wrote for the Real Clear Energy website:

Walking the halls of COP26, one can’t go far without bumping into young activists in bright blue shirts emblazoned with a simple request: “Let’s Talk About Nuclear.”  Their accompanying social media hashtag—#NetZeroNeedsNuclear—speaks for itself and is indisputable: achieving net-zero global emissions is simply not realistic without significant deployment of expanded nuclear generation.  The activists and their allies seem to be getting their message across.  As the conference winds down and we take stock of the most meaningful outcomes, strengthened support for nuclear energy is likely to emerge as a major COP26 success story.

This stands in sharp contrast to prior meetings, where nuclear has long been ostracized, despite its role as the world’s leading source of emissions-free energy.

“This COP is perhaps the first where nuclear energy has a chair at the table, where it has been considered and has been able to exchange without the ideological burden that existed before,” according to Rafael Mariano Grossi, the head of the International Atomic Energy Agency, a U.N.-affiliated body responsible for promoting nuclear generation and safety.  Just two years ago in Madrid, Grossi attended the annual COP (Conference of the Parties) “in spite of the general assumption that nuclear would not be welcome,” but now he says the tide is clearly turning.

Enthusiastic support from the Biden Administration has provided a major boost.  Here in Glasgow, Energy Secretary Jennifer Granholm has evangelized for nuclear at event after event, describing nuclear as a “holy grail” climate solution thanks to its ability to provide dispatchable, clean power around the clock.

The bullish rhetoric has been accompanied by numerous announcements, such as the Nuclear Futures Package, under which the State Department will partner with Poland, Kenya, Ukraine, Brazil, Indonesia and other countries to support capacity building for expansion of nuclear power.  

In another important announcement, Oregon-based NuScale signed an agreement with Romania’s Nuclearelectrica to help deploy the first small modular reactors (SMR) in Europe.  The State Department hailed the agreement as a “pioneering step” that “will build significant momentum for reducing emissions across Europe.”  They continued, “with 30 coal power plants in the region, including seven in Romania, SMRs are ideally suited to replace this baseload power and employ many of the same workforce.”

In addition, on November 9^th, the U.K. awarded Rolls Royce 210 million pounds to pursue design and regulatory approval of SMRs in the U.K.  SMRs offer unique features and design advantages relative to traditional multi-billion-dollar, gigawatt-plus size light water reactors and efforts by the U.S. and U.K. governments to promote the technology represent the next step in the intensifying global race to deploy nuclear to advance climate and energy goals. Competition from Russia and China is significant—both have numerous SMR facilities under development, while China has announced plans to build at least 150 new reactors (both large and small) in the next 15 years—more than the rest of the world has built in the past 35 years, according to Bloomberg.

Elsewhere in Europe, a coalition of 12 countries are calling for nuclear to receive a “green” designation under the continent’s forthcoming sustainable finance taxonomy, thereby enabling cheaper build costs and E.U. economic support.

While Germany continues to oppose the designation as it inexplicably works to close its remaining reactors over the next year, advocates remain optimistic.  An E.U. industry representative recently commented that … “we have more and more member states recognizing that, in order to achieve the decarbonization goals, we need nuclear in the mix…But also [because of] the recent energy crisis, I think more and more people are starting to recognize the risk of depending on imports.”

Add it all up and the conclusion is clear: while the case for nuclear power has always been strong, growing political support from governments, businesses and environmental interests alike is making it stronger.  To reach our ambitious global climate objectives, we need every tool in the toolbox to reduce emissions and including nuclear energy needs to be a priority.  Of course, COP26 is just a brief moment in time and momentum will need to be sustained.  So, pass it on: #NetZeroNeedsNuclear. 

His report deserves our attention.

Henry Kissinger, along with Eric Schmidt, who was then the Executive Chairman of Google, have teamed up with the Dean of the MIT Schwarzman College of Computing, Daniel Huttenlocher, to write a trending new book, The Age of AI.

Belinda Luscombe of TIME Magazine writes: “The book argues that artificial intelligence processes have become so powerful, so seamlessly enmeshed in human affairs and so unpredictable, that without some forethought and management, the kind of “epoch-making transformations” they will deliver may send human history in a dangerous direction.”

Thus, the negotiator, the tech tycoon and the professor make the point that AI needs ethics.

Last year, the Caux Round Table asked around for inputs to a set of principles for AI, seeing that there was not yet a general set of guidelines for use of that technology.

You may read our proposed principles here.

Please let me know your thoughts on this draft.