Category: Commentary

In the years when participants in the Caux Round Table for Moral Capitalism (CRT) have met to contribute insights to the betterment of global capitalism, they drew on experience, as well as on “book” learning.  The tensions in ethics between aspiration and reality, thought and action, hope and commitment, long-term and short-term, profit and community benefits, seem inexorably necessary.  Abstractions, what the philosopher Jurgen Habermas calls “normativity,” have their necessary place in human affairs.  But abstractions without more remain disembodied in the realm of thought and language.  To reify what is merely conscious is to leave normativity behind and enter the realm of facticity.

The CRT has, therefore, sought, with dedication, to be present in both realms – normativity and facticity.  Ideas and ideals guide and inspire and implementation – key performance indicators – changes the world.

Here in Minnesota, after the death of George Floyd at the end of May, demands for defunding police forces in Minneapolis and St. Paul and insistence on more effective steps to reduce traditional inequalities of wealth among African Americans became immediate challenges in our home community.  To meet the challenge, the CRT applied its principles to design very practical responses to policing, building personal assets and re-framing how we, as Americans, should understand and talk with each other about “racism.”

However, all three responses can have global applications in 1) policing; 2) providing an on-ramp for inclusion of poor families in banking and investments; and 3) reducing mistrust and even enmity between ethnicities and religions.

Frankly, we have responded to injustices differently than others here have recommended.  Our analysis of the causes of inequality reflects our learning about how societies, cultures and economies intersect.  At the root of human efforts are values.  Values cannot be separated from the causes of human failures and successes.

Values alone cannot bring about success, nor are they solely responsible for the “slings and arrows of outrageous fortune.”  Circumstances, skills and qualifications, emotions – constructive and destructive – and personal dispositions combine to impact the outcomes we all experience. But skills, competencies, personal efforts and power and money cannot compensate for bad values.

We have applied a values approach to policing as first proposed by Sir Robert Peel in his Nine Principles of Policing of 1829, written to provide a moral compass for the first modern police force, the London Metropolitan Police.  We proposed that police officers should first be hired for character and then trained for competence.

Secondly, on building personal financial assets in African American communities, we have mobilized a team to deploy a FinTech Smartphone App so that youth and families can start their own individual investment accounts with investments as low as $5.00.  The values foundation for this program is the personal habit of savings and planning for the future.

Thirdly, in considering whether America is systemically racist, we prefer to elevate the value of individual, not collective, responsibility.  We believe that individuals of different backgrounds and life experiences can come to learn about others and appreciate how they view life through a process of translation and interpretation across cultures and perspectives.

In these ways, we seek very constructively to use the CRT methodology of applying the moral sense – wisdom and virtue – to decision-making and to shape the course of facticity.  By tapping into core realities of the human person and drawing on those powers in our actions, we believe good can be achieved.

Yesterday, we held what turned out to be a most interesting round table discussion via Zoom with some of our fellows.

I would like to note some of the major points tabled:

• What the pandemic has revealed here in the U.S. are “underlying deficits.” While there has been much talk and media narratives on heroism of those confronting Covid to liven our spirits, we have seen with more clarity differentials among different sectors and classes and ethnicities. Our education system has not responded well to keeping learning achievement up during distance learning for many in lower income families. The economy does not lift all boats.
• Do you have a job or what’s your life’s work? Which question should we ask? Having a sense of a life’s work gives meaning and inspires dedication and gives one “skin in the game” of accomplishing our assigned role. Work is a team sport and we can’t be moral all alone. Morality is a higher calling for us, beyond earning our daily bread. Being present for others contributes our capital to the effort.
• In a discussion of how to measure the success of a company – “Numbers never speak for themselves.”
• Perhaps we should think of capital not as accumulated wealth, but as the capacity to take future action.
• Capitals should be understood as vectors, each with different speeds and weights, force fields, working on different time horizons which may or may not converge one with the other. Capital vectors can also diverge, creating more chaotic conditions. Capitals are a complex system, but that only means there is an architecture to capitals. We are comfortable with narrow, vertical systems when they may be more beneficial when they have a wide range of interactions and stimulations.
• What is value creation really? There is thick value creation and there is thin value creation. Thin value is money; thick value is a broad range of accomplishments, which then go on to support more accomplishments. What is the social value of economic value creation? What is the economic value of creating social values?
• Sustainability is more than protecting the environment. It is our systems which need to be sustainable. Distributed systems are more sustainable – robust – than centralized systems.
• Being in nature, not urban centers where wind and trees have obvious presence to us, is important for a good life. Coping with Covid in population centers is provoking people to reconsider the affirming side of being with nature. This should be a philosophy for capitalism.
• Is not a key condition of human happiness to have a “home?” We seek to create spaces for our homes, but homes are more than just a space. They need relationships and values.

I hope these observations stimulate your reflections at this time when one year comes to an end and we, on a cycle of our own making, energize our ambitions, thoughts and resolve to a new passage of time.

Here in the U.S., the Friday after the Thanksgiving holiday is known as Black Friday, the day when stores go from “red to black,” due to great sales on merchandise.

On the occasion of this year’s Black Friday, our board member, Devry Boughner Vorwerk, and our former colleague, Erik Sande, penned an article on how the U.S. can go from “red to black.”

It’s very much inline with the Caux Round Table Principle for Business #5: “Support responsible globalization.”

The rest of our Principles for Business, as well as the other four sets of our principles, can be found here. 

Below is an email we recently sent to the Minnesota Business Partnership, the business community here in Minnesota, about our efforts in responding to the death of George Floyd while in police custody last May.

I thought it would be of interest to you.

Dear Minnesota Business Partnership Members:

The death of George Floyd this past May 25th upsettingly surfaced for our community three very serious issues: 1) an assertion that systemic racism prevents Minnesota from doing justice to its African American neighbors after years of being disadvantaged and worse, by slavery, segregation and lack of equality; 2) a demand that policing and law enforcement be reformed to reduce unfeeling, unnecessary and sometimes deadly, discriminatory treatment of African Americans; and 3) a substantial gap in wealth and income experienced by many African American families compared to most other Minnesotans.

The Caux Round Table for Moral Capitalism (CRT) has responded immediately and directly to each need for remedial change by drawing on its Principles for Business and for government to guide implementation of three initiatives.

First, to improve law enforcement, we have held two workshops on community policing under our Principles for Government using Sir Robert Peel’s Nine Principles of Policing of 1829 and recent focus group data regarding the character traits communities want to see in police officers in order to trust them. The data was collected by our associate Matt Bostrom, former Sheriff of Ramsey County, for his Oxford University dissertation.

Sir Robert Peel’s principles, created for the first modern police force, the London Metropolitan Police, were inspired by the moral standard that “public office is a public trust.” Peel’s principles demand that the police be the community and the community the police in the effort to provide public safety and prevent crime. Such a strategy for the prevention of crime requires trust of the police by the community and, reciprocally, trust of community by the police.

Earning the community’s trust of the police can be enhanced by hiring as police officers only individuals who have the character traits admired by the community. Matt Bostrom’s data permits hiring for character and then training for competence.

As a result of the last workshop, St. Paul City Council members Jane Prince and Rebecca Noecker have decided to press for a City Council resolution setting forth a modernized version of Sir Robert’s principles as the City’s vision of community policing and law enforcement – a first in the nation if it happens.

Prior to the tragic death of George Floyd, Minnesota Commissioner of Public Safety, John Harrington, had retained Matt Bostrom to conduct focus groups among Minnesotans and then advise the Department of Public Safety on its hiring and training practices. The department is working to design a “Minnesota Model” of modern policing using the best practice of “hiring for character, training for competence.” The CRT is fully supporting the Commissioner in this pioneering improvement to law enforcement.

Secondly, on closing the wealth gap between African Americans and other Minnesotans, we are moving forward with a leadership group in St. Paul – Dr. Delores Henderson, Bishop Roz Caroll, Anita Spencer and Eric Clark – to bring a smartphone App to young people and families in the community to enable them to set up personal investment accounts in equity portfolios. The portfolios earn on average 6% a year so that compounding returns can make a difference in the acquisition of wealth and thus reward personal habits of saving and planning for the long-term.

The App has been developed by Newday Impact Investing in San Francisco. Several of the Newday equity portfolios available on the App use CRT metrics to rank companies according to alignment with a variety of moral standards – Protestant social teachings, Catholic Social Teachings, Jewish Halakhic norms and Qur’anic guidance. Company rankings are calculated by Magni Global Assets, LLC, a local asset management company.

The CRT introduced Newday to the St. Paul community leaders. We are also introducing Newday to community leaders in Minneapolis. Our initiative is being brought to the attention of Bernice King, daughter of the late Martin Luther King and Daymond John, one of the entrepreneurs featured on Shark Tank.

Thirdly, with respect to viewing American society through the lens of “systemic racism,” the CRT has recommended an alternate approach of “translation” or using “interpreters” to facilitate the building of community and not the alienation of some from others over different life experiences and divergent perspectives. In its international work over the past 35 years, the CRT has experienced the effectiveness of translation skills to bring strangers together, promoting collegiality and even very close collaboration, as better understanding of the other builds acceptance and trust.

The wise use of translation skills creates important social capital by reducing suspicions and anxieties.

Given this experience, we held an in-person round table on how Minnesotans should talk with one another about racism, asking if “racism” is even the right word to use, what words best frame our realities and what interactions most permanently further the common good?

The response of participants was enthusiastic. We are now scheduling future round tables in collaboration with Growth & Justice.

We are optimistic that each of these initiatives will produce constructive results. I look forward to reporting to you from time to time on our progress. I invite your support of our efforts.

Sincerely yours,

Stephen B. Young
Global Executive Director
Caux Round Table for Moral Capitalism

The Caux Round Table has supported the Minnesota Character Council since its inception. We believe that just as good values produce good leaders in business, government and society, so does character produce social justice and sustainable prosperity.

As Heraclitus advised: ethos anthropos daemon – character drives our destiny.

Another sage insight from the Greeks is that “Those whom the gods would destroy, they first deprive of good judgment.”

Americans, at this time of testing and dissention, need once again to hold our virtue dear and put good character first. Good character will resolve the issues we have with each other more quickly, more easily and more effectively than is permitted by our current culture.

As we go to the polls tomorrow, we will exercise the responsibilities of citizens in a republic, responsibilities that demand character in our decision-making, in our compassion and in our resolve to serve our country well.

Our Minnesota Character Council has released a statement of purpose and an invitation to join its work. That letter can be read here.

Our colleague in The Netherlands, Herman Mulder, has just published some sound and impressive recommendations for adjusting markets to accommodate “wealth” creation more comprehensively, as defined by the Sustainable Development Goals. I find his thinking closely aligned with the Caux Round Table’s vision of a moral capitalism.

You can read his piece here.

Herman now works with the Impact Institute. He is noted for being an advocate, expert in international law and a key player in the development of corporate responsibility, impact investment and ESG integration. Mulder is most notable for the initiation of the Equator Principles. He is currently a Chairman of the True Price Foundation, member of the board of the Dutch National Contact Point for the OECD Guidelines for MNE’s and the former Chairman of the Global Reporting Initiative.