Caux Round Table for Moral Capitalism
We make the case for Moral Capitalism.
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Reconciliation is not an act of benevolence, but a strategic choice!
Dinh Hoang Thang (PhD, CRT Fellow)
April 30, 1975 marked the end of a cruel and bloody war that had lasted for decades on Vietnamese soil. In territorial terms, it was a day of reunification for a divided people. But in terms of collective consciousness, it was not necessarily a day when political and moral divisions selflessly evaporated. More than half a century has since passed since the end of that war, yet invisible lines distinguishing North from South, and “nationalists” from “communists,” and between opposing memories of victory on the one side and of anger over defeat on the other, still persist across many strata and different subcultures within the national family of Vietnamese.
The question that must now be asked candidly is not which side was right or wrong, but rather: Why could the war end so decisively on one day, while reconciliation continues to elude the Vietnamese at home and abroad?
Lessons from the American Civil War: Victory Without Annihilation
After its devastating Civil War from 1861 to 1865, the United States found itself deeply divided, no less than Vietnam. More than half a million people had been killed, the Southern economy was devastated, and hard feelings spread widely throughout society as the Southerners bitterly resented the victors while the Northern victors looked down on the White southerners. Yet what stands out is the way Americans handled the postwar era without indulging in unremitting antipathy and disdain for the other.
The South was defeated, but it was not completely stripped of its honor or identity. Some of its leaders such as Robert E. Lee continued to be recognized as part of the nation’s history, rather than erased from collective memory. This conveyed an important message: defeat does not mean exclusion from the national community. Southerners were permitted – once they abolished slavery – to reconstitute their local governments as part of a united America. All prisoners were freed and there were no ‘re-education” camps for the losers.
Upon Lee’s surrender, Union General Grant allowed Confederate officers to keep their sidearms, horses, and baggage as they returned to their homes. Confederate officers and men were allowed to return to their homes, promising not to take up arms against the United States. Rebel soldiers who owned their own horses or mules were allowed to keep them for spring planting. Grant ordered 25,000 meals to be issued to the hungry Confederate troops
The victorious federal government, instead of insisting on punishment of its enemies, prioritized their economic and infrastructural reconstruction. The Republican Party victors understood that a nation cannot be strong if half of it remains trapped in the traumatic mindset of defeat. Reconciliation, therefore, was not only an act of charity, but a strategic choice.
This strategic but so honorable wisdom, came from one leader – President Abraham Lincoln. In his second inaugural address after re-election as the President of the Federal Union and before the war ended, Lincoln so vey wisely asked his people to act as follows: “ With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation’s wounds, to care for him who shall have borne the battle and for his widow and his orphan, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations.”
Vietnam: When Victory Is Tied to Absolute Truth
Unlike the American Civil War, the Vietnam War was not merely a civil war dividing one people against one another, but it was also part of international Hot and Cold Wars between secular faiths. This reality made any victory in the struggle for systemic domination not only a military triumph, but also the affirmation of a trans-national ideological dogma.
When a victor obtains authority to define “legitimacy” for an entire people, the space for alternative perspectives within that community inevitably narrows. History, in such a case, is easily thrust forward in a single direction, and memories that do not align with the dominant narrative are pushed to the margins. The result is that portions of the post-victory governed population cannot find themselves accepted within the officially sanctioned national story.
Military victory in such an intra-communal conflict may have been achieved swiftly, but thereafter the process of social healing might or might not be pursued with equal passion and priority. This creates a paradox: the war of ideas and ideals could end on the battlefield, but continue in opposed memories and in conflicting perceptions, even as, in the Vietnam War, “the winning side itself acknowledged that ‘a million people were happy, a million were sad…’”
External Factors and the Limits of the “Shadow Effect”
It is understandable, given historical and geopolitical contexts, that some point to the influence of China or the Soviet Union on the war in Vietnam. However, attributing all internal divisions or developmental stagnation solely to external factors risks oversimplifying the dynamics of that struggle of Vietnamese one with another. Vietnamese reality does not always fall under the shadow of outside preferences.
In recent decades, both the Soviet Union and China have made significant modifications to their economic systems and modes of governance, even if they have not entirely abandoned their earlier political choices. Vietnam, in its development process, has been shaped both by external influences and by its own internal constraints. The choices confronting Vietnam now lie not only in “who will exert influence on national policies,” but also in deciding upon internal options for structural adjustments and reconciliation.
A society cannot fully mobilize its internal strength if unresolved, divisive psychological fixations remain post conflict. When part of collective memory is silenced, social consensus struggles to pull forth from the depths of the national spirit the convictions and energies necessary for sustainable progress.
A Hard Truth: Peace Does Not Automatically Create Reconciliation
No nation can move forward rapidly if within it there remain communities that feel excluded from the official narrative of history. Peace, if it merely means the absence of gunfire, is only a necessary condition, but not a sufficient one for sustainable development—especially for a nation that truly seeks to rise high in wealth and well-being in comparison with others.
Reconciliation requires more than an end to the shooting and the killing: it demands recognition of diverse memories, the willingness to accept that history can be viewed from multiple perspectives, and that a conscious effort among people of good faith and good moral character can build a shared identity that transcends old divisions.
Reconciliation Is Not about Forgetting, But Coexisting and Collaborating
Reconciliation does not mean erasing the past or forcing everyone to think alike. On the contrary, it requires the maturity to accept that the people of a nation can live with multiple memories while still coexisting within a common framework and agreeing to build shared futures for mutual benefit.
What matters—and it is by no means easy—is not to make all memories identical, but to create a space where those different memories are acknowledged to be true but without closing minds to the truth of other memories. Only then can a viable national identity emerge and build a prosperous and honorable future above the distractions of “factions” or conflicts of “us versus them,” and instead bring forth a foundation for diversity in unity and unity embracing diversity.
Conclusion: Ending a War Is One Thing; Ending Division Is Another
The United States became strong not because it avoided division, but because it found a way to overcome it after the Civil War. So too did Europe after World War II when rival French and German nationalisms jointly brought forth the European Union. Vietnam has come a long way since April 30, 1975, but the more difficult journey—the journey toward genuine reconciliation within and among all its people—likely still continues.
One day, when April 30 is seen not only as a marker of victory, but also as a symbol of understanding and healing, only then will peace and Vietnamese truly be complete.
Introduction by Professor Stephen Young
The metaphor “politics as a market” authored and developed by Dr. Đinh Hoàng Thắng in the essay below, in fact points to a natural constituent element of political economy, both in theory and practice, and has, at times, found concrete expression in history. Politics has been, and still is, a natural condition for all human communities, so too markets.
In 1945, Friedrich August von Hayek, in his seminal essay The Use of Knowledge in Society, challenged the traditional assumption in economics that all information necessary for beneficial decision-making could be collected and processed by a single “central brain.” In his view, this assumption was unrealistic. In real life, knowledge exists in a dispersed, uneven form, often local in nature—tied to specific circumstances of time and place. In short, information for Hayek was a commodity dispersed and “owned” by individual members of a community or other relevant social network, transitory or more reliably institutionalized
Yet nearly nine centuries before Hayek, Vietnam’s Prince Trần Hưng Đạo had already emphasized the enduring significance of the concept of Xã Tắc (the ”altars of soil and grain”) as the sacred foundation for the enduring political self-determination of the Vietnamese as a national community). Reverencing the soil and the grain it brought to life and made available for harvest was directly giving respect to the common people. For Tran Hung Dao, the survival of this country depended very much on more than loyalty to the monarch; it demanded concern for the people as a moral vector in history. Thus, to speak of the Xã Tắc was to speak of the nation itself. Ultimately, political and economic strength resided in the wisdom of the people.
Later the great statesman Nguyen Trai would write: humaneness and righteousness rest in the well-being of the people. As the people needed food and belongings, so did they need good governance. Markets (economics) and politics (allocation of decision-making) were foundational supports of the nation. In his moral essay on the humane and righteous education to be provided by each family, Nguyen Trai wrote that for each individual prosperity and well-being depended on the moral accomplishments of the mothers – not of the Emperors and their mandarins.
Still later, in his morality tale – the poem Kim Van Kieu, Nguyen Du would conclude, harmonizing with Shakespeare’s depictions of human tragedy in the decisions made by King Lear, Macbeth and Othello, that individual virtue and goodness drove destiny towards the good, not the selfish passions of kings and those who serve them. Such individualism – for better or for worse – always and inevitably delivers results for both markets and politics.
Thus, for Tran Hung Dao, Nguyen Trai, and Nguyen Du, the most important information and decision-making for building and sustaining national vitality and geo-strategic positional power is distributed widely among individuals – those mothers who bring about good fortunes (phuc duc) for their descendants, those individuals who, hopefully, decide matters only as instructed by their good hearts (tam), and all those who work hard to till the soil, harvest the grain, and in so doing bring prosperity to markets.
In my work on “moral capitalism,” I have sought to underscore a similar insight: that sustainable systems—whether economic or political—cannot rely solely on centralized control, but must also depend on widely dispersed moral capacity and knowledge, along with the responsible participation of individuals throughout society. In this sense, the metaphor of “politics as a market” should not be understood literally as an institutional model, but rather as a perspective suggesting that excellence in decision-making benefits from having access to multiple sources of knowledge, from competition among ideas, and from mechanisms that allow better solutions to emerge through comparison and accountability. If markets thrive through a decentralized pluralism avoiding monopolies, cartels, and cronyism, then so can a nation’s politics contribute sustainability to its possession of good fortune through a similar expansion of its participatory substructures.
In his essay, Dr. Đinh Hoàng Thắng sketches a journey across time and space, through what might be called the “flow of human intelligence.” Without imposing a definitive conclusion, he opens up a direction of thought—creating space for deeper reflection on how to balance inherently tension-filled elements within a contemporary political system structured around a single party.
In that spirit, I am honored to introduce this essay within the framework of the Caux Round Table’s “U.S.–Vietnam Project”: “Market Politics – Why Not?”
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“Market Politics” – Why Not?
Đinh Hoàng Thắng, (PhD, CRT Fellow)
Recently, the online platform “Tiếng Dân” recalled an intriguing historical detail: Party General Secretary Hà Huy Tập once criticized comrade Nguyễn Ái Quốc (later Hồ Chí Minh) in the mid-1930s. (1) At that time, the communist party was still very young, “like a newborn lying on the grass” (as described in Tố Hữu’s poetry). Yet even in that seemingly embryonic stage, differences in strategic thinking had already become routine—and notably, this reality did not disappear over time.
Looking along the subsequent course of history—from the resistance period, land reform, intense debates over “dogmatism” versus “revisionism,” to the turning point of adopting the Đổi Mới reformation of doctrine—we can observe a consistent thread: differences in policy thinking have always existed as a natural part of Vietnam’s political life. This is by no means a sign of instability, but rather the inevitable consequence of a deeper reality—that knowledge, experience, and perspectives on the realities of our world are never fully concentrated in one place.
Here, Friedrich August von Hayek’s intuition from 1945 becomes particularly valuable. In The Use of Knowledge in Society, he was not merely revisiting economic questions, but fundamentally posing a question for all social systems: where is knowledge located, and how is it used? (2) His answer was, in essence, “deconstructive”: knowledge in not a concentrate, but a gas; it does not have only one residence, but lives scattered across the minds of countless individuals, caught up in specific contexts of time, place, and lived experience. No individual or institution can fully gather and process this entire body of knowledge.
If this holds true in economics, it is even more deeply and persistently true in politics.
For politics does not deal merely with data, but with interests, values, and expectations—elements far more resistant to centralization than market information. In this context, the existence of policy debates that largely remain internal within officialdom, with limited public visibility, is not just an organizational feature. It is also a choice about how social knowledge is used: keeping it within a small cage, rather than bringing it into a broader arena for comparison, testing, and adjustment.
From this arises a natural question: if differences are inevitable, if knowledge is dispersed, then why is the mechanism for handling those differences not more “open”?
After more than forty years of Đổi Mới, this question has become more urgent than ever. Vietnam has transitioned from a centrally planned economy to one operating under market logic—a shift not only in management technique, but in worldview. In Hayek’s deepest sense, the market is not merely a place for exchanging goods. It is a mechanism for processing dispersed knowledge: through prices, competition, and countless individual decisions, society “computes” outcomes in a way that no central brain could ever calculate. We might say that markets are a form of AI data management operating down through the centuries.
Yet the striking point is this: while the economy has embraced that logic, politics appears to continue operating under a different one—the logic of centralization, of narrowing the space in which data is collected and processed and decision alternatives are evaluated one against another.
This misalignment does not necessarily lead to crisis, but it has created a particular condition: society is increasingly diverse in its interests, knowledge, and expectations, yet the mechanisms for reflecting and processing such diversity have not expanded accordingly. Differences persist but become harder to observe from the outside. Citizens are directly affected by policies, but do not meaningfully participate in the process of comparing and choosing among alternatives.
From Stephen Young’s perspective, this is precisely where a system begins to encounter its limits. In his concept of “moral capitalism,” he emphasizes that the sustainability of any system—economic or political—cannot rely primarily on centralized control. It must rest on three elements: moral capacity (ethical and legal), dispersed knowledge within society, and the responsible participation of individuals in decision-making. (3)
When one of these elements is minimized—especially dispersed knowledge—the system’s adaptive capacity declines. Not because of a lack of capable people, but because of a lack of mechanisms that allow different understandings to “dialogue” one with another.
It is here that the metaphor of a “political market” begins to make sense.
It is not a literal institutional proposal. No serious observer would suggest that politics could function exactly like a commodity market. But if we strip away the surface differences between markets and politics, we arrive at a deeper understanding: a market is a mechanism that allows alternatives to compete in order to reveal their value. Without competition, without comparison, concepts such as “better” or “more efficient” become vague.
Hayek emphasized that competition is not merely a state, but a “discovery procedure.” Firms do not know in advance which solution is optimal; they experiment, fail, and adjust. It is this very process that generates new knowledge. Applied to politics, the same insight holds: no group can know in advance which policy is best under all circumstances. The only viable approach is to create a mechanism that allows alternatives to be tested, compared, and refined.
In his widely praised recommendations for how the new republic of the United States of America could optimize the outcomes of its future politics, James Madison wrote in 1787 that traditional constricted systems of politics designed to minimize divisiveness within the nation imposed great burdens on a people. One approach – government imposition of uniform lifestyles on all citizens – would abolish self-advancing individualism. The other approach – “giving to every citizen the same opinions, the same passions, and the same interests” – would similarly rob the society of energy, innovation, wealth-creation, creativity. (4)
Madison rather recommended a kind of market competition among those will different interests, different ideas, different cultural and religious orientations. “Great and aggregate” national interests would be referred to a central government while, simultaneously, local and particular interests would be consigned to local governments to consider and regulate. In short, politics would be distributed over different markets, each balancing buyers and sellers of different products seeking mutual satisfaction, compromise, through persuasion and bargaining.
In Federalist 37, Madison again used a market analogy of bargaining, saying that all political power should be derived from the people as purchasing decisions made by politicians and administrators. (5)
In Federalist #51 (written either by James Madison or Alexander Hamilton) the point is made of the power of having checks and balances – market competition among sellers: “Ambition must be made to counter ambition.” “This policy of supplying by opposite and rival interests, the defect of better motives, might be traced through the whole system of human affairs, private as well as public. We see it particularly displayed in all the subordinate distributions of power, where the constant aim is to divide and arrange the several offices in such a manner as that each may be a check on the other that the private interest of every individual may be a sentinel over the public rights.”
“It is of great importance … not only to guard the society against the oppression of its rulers, but to guard one part of the society against the injustice of the other part.” (6)
Federalist #55 (written either by Hamilton or Madison) includes an insight into human nature that echoes the moral wisdom of Nguyen Du on the need for persons with good hearts to have power to do what they think, based on their own determinations of fact, is right. “As there is a degree of depravity in mankind which requires a certain degree of circumspection and distrust, so there are other qualities in human nature which justify a certain portion of esteem and confidence. Republican government presupposes the existence of these qualities in a higher degree than any other form. Were the pictures which have been drawn by the political jealousy of some among us faithful likenesses of the human character, the inference would be, that there is not sufficient virtue among men for self-government; and that nothing less than the chains of despotism can restrain them from destroying and devouring one another.” (7)
In two volumes (1835 and 1840), the French student of society, culture and government, Alexis De Tocqueville, compared the decentralized, market-like, politics of the youthful American Republic with the centralized politics and governance of France, a system put in place successively by monarchs and their bureaucrats, the Revolutionary Jacobins, and by the autocrat Napoleon Bonaparte. De Tocqueville much preferred the American alternative.
He wrote: “But I think that administrative centralization only serves to enervate the peoples that submit to it, because it constantly tends to diminish their civic spirit.” (8)
Administrative centralization, he wrote, “militates against the increase of [national] resources. … So it can contribute wonderfully to the ephemeral greatness of one man but not to the permanent prosperity of a people”.
“A central power, however enlightened and wise one imagines it to be, cannot by itself embrace all the details of life of a great nation. Such a task exceeds human strength. When it attempts to create and set in motion so many complicated springs, it must be satisfied with a very imperfect result, or exhaust itself in futile efforts. … In a word, [centralization – a monopoly of the political marketplace] excels at preventing and not at doing.”
De Tocqueville admired America because it permitted local community self-governance. He was struck by how Americans governed themselves at the local level — town meetings, juries, and civic associations gave ordinary citizens real practice in the art of self-rule. He saw this as the foundation of American democracy. Americans formed voluntary associations for virtually everything — religious, civic, political, commercial. He found this remarkable and believed it was democracy’s answer to the aristocratic institutions of Europe. Americans were intensely energetic, commercially minded, and always in motion – like eager buyers and sellers in crowded market seeking to buy the best for the best price or sell the most for an acceptable profit.
The question, then, is: where is that mechanism today which can reach out to absorb knowledge wherever it sits and put ideas and facts, emotions and ideals, into competitive dialogues until some acceptable agreement emerges as to what is true, what is relevant, what is stupid, what is dangerous, what is reliable?
A common argument is that the current centralized political system can still make correct choices without open competition. This argument rests on confidence in the organization’s capacity for1) acquiring relevant knowledge and 2) self-adjustment. Yet, as Hayek warned, such confidence can easily fall into the “illusion of knowledge”—overestimating the ability of a central authority to grasp and process information.
From another perspective, Vietnamese history offers an interesting demonstration that knowledge cannot be monopolized. Trần Hưng Đạo—reverently called Đức Thánh Trần by the people—did not adopt a totalizing, centrally controlled approach even in moments of national survival. He understood that xã tắc was not an abstract concept, but the crystallization of the entire nation—its knowledge, will, and responsibility, distributed among its people.
His strategy was not one of absolute control, but of comprehensive mobilization. From the “scorched earth” policy to protracted resistance rooted in the people all designed to maximize an effective resistance movement against foreign invaders, reflected a fundamental principle: the strength of the system lies in activating the knowledge and capacity of the many, not in concentrating wisdom and morale at a single point of authoritarian discretion.
Placed alongside Hayek, we see a remarkable convergence between modern economic thought and historical experience: both point to the same conclusion—no center is large enough to substitute for society.
Thus, the question “Market Politics – Why Not?” can be reframed in a less contentious way: why not design a mechanism in which policy alternatives are placed within a broader space of comparison, where social knowledge can participate in the process of choice?
This does not mean abandoning control. On the contrary, it raises higher demands for institutional design. Politics, unlike economics, involves greater risks: fragmentation of power, conflicts of interest, social instability. These concerns are entirely legitimate.
But from Stephen Young’s perspective, the issue is not to avoid competition, but to place it within a moral framework. A system is truly sustainable only when its participants not only pursue their interests but are also accountable for the consequences of their actions. Ethics and legality, in this sense, are not slogans, but conditions that prevent competition from descending into chaos. Young wrote in his book Moral Capitalism: … free markets have an inherent tendency to bring about a convergence of virtue and interest. “In other words, the logic of self-interest considered upon the whole when applied to business over time leads to betterment for the individual as well as for society.” (9) Young noted that the German philosopher Hegel concluded that private property (see: Politburo Nghi Quyet 68, May 2015) was necessary for morals to emerge in human communities. Without the ability to take hold of some touchable part of Heaven and Earth, no person can fully bring his or her values into worldly effect. Young noted that moral choice presumes that people do in fact have the power to make a choice, that they are in command of some force or power that an make a difference – like sellers and buyers in a free market.
Young noted that markets cannot thrive with trust as human and social capital. So too politics. Where there is no trust, there can be no collaboration or compromise. Thus, to have good markets and good politics, trust must be encouraged and rewarded while suspicions and debilitating manipulations must be called out and sanctioned. Sincerity causes markets and politics to flourish for the benefit of all.
Both markets and politics thrive in states of equilibrium, where bargaining delivers a middle way and the Buddha advocated or a Mean which anchored Confucian decision-making.
When we combine three strands of thought—Hayek on dispersed knowledge, Trần Hưng Đạo on xã tắc rooted in the people, and Stephen Young on the moral capacity of market institutions—we begin to see a clearer logical structure which provides a practical answer to the original question – market politics – why not?
An effective political system cannot rely solely on centralized control, because necessary knowledge lies beyond the center’s reach. Nor can it rely solely on free, no-holds-barred, brutish competition, because without moral grounding such rivalries lead to dysfunctional and even dangerous instability. An effective political system requires a space where ideas can compete, but within a framework that ensures responsibility and stability. What is needed is a “moral politics” to complement “moral markets”.
This is where the “market” metaphor reveals its value—not as a model, but as a principle for acquiring and then organizing knowledge and for making informed choices.
Ultimately, “Why not?” is not a question demanding a definitive answer. It is an invitation to rethink centralization and the advantages of openness, to reconsider how systems function—not to reject what exists, but to expand what is possible.
For if history—from the Trần era through the 20th century to the present—has shown one consistent truth, it is this: the strength of a society lies not in eliminating differences, but in how it uses those differences to become wiser.
And in that sense, a “market for politics”—even as a metaphor—may not be a distant idea, but rather a way of naming a long-standing need: the need for social knowledge to be heard, compared, and transformed into better choices for both the economy and politics.
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REFERENCES:
(1)https://baotiengdan.com/2026/04/22/tbt-ha-huy-tap-phe-phan-dong-chi-nguyen-ai-quoc/
(3) Stephen Young, Moral Capitalism (Berrett-Koehler, 2003); www.cauxroundtable.org
(4) James Madison, Federalist # 10, https://avalon.law.yale.edu/18th_century/fed10.asp
(5) https://avalon.law.yale.edu/18th_century/fed37.asp
(6)) https://avalon.law.yale.edu/18th_century/fed51.asp
(7) https://avalon.law.yale.edu/18th_century/fed55.asp
(8) Alexis De Tocqueville, Democracy in America, New York, Doubleday and Company 1969, p. 88)
(9) Young, op. cit., p. 47
See also:
– https://cdn.mises.org/qjae5_3_3.pdf (COMPETITION AS A DISCOVERY PROCEDURE)
– https://www.bbc.com/vietnamese/articles/c78n7e28xeeo (50 năm kết thúc chiến tranh: Việt Nam, một lịch sử khác?)
– https://vi.wikisource.org/wiki/H%E1%BB%8Bch_t%C6%B0%E1%BB%9Bng_s%C4%A9
(Các bản dịch tiếng Việt của 諭諸裨將檄文 (Dụ chư tỳ tướng hịch văn) của Trần Hưng Đạo)
– https://press.uchicago.edu/books/excerpt/2011/hayek_constitution.html (Why I am Not a Conservative)
Here are a few more short videos on relevant and timely topics. They include:
–On War and Making Distinctions
–Steve’s Audience with the Pope
–Where Are the Bounds for Selfishness?
All our videos can be found on our YouTube page here. We recently put them into 9 playlists, which you can find here.
If you aren’t following us on Twitter or haven’t liked us on Facebook, please do so. We update both platforms frequently.
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 100th 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?
Living under Institutional Path Dependence, Patron-Client Governance, and the Rationality of De-Risked Reform
Stephen B. Young & Đinh Hoàng Thắng
Executive Summary
Vietnam is widely UNDERSTOOD through the lens of post-Cold War transition theory as a NATION-STATE moving gradually toward either liberal democracy or market-based convergence BUT NOT BOTH AT ONCE. This paper challenges that interpretation. Drawing on Magyar Bálint and Madlovics Bálint’s theory of post-communist regimes, combined with the stakeholder governance philosophy of the Caux Round Table (CRT) and the moral capitalism framework of Stephen B. Young, we argue that Vietnam is better understood as a stable managed-market authoritarian system embedded in patron-client networks of resource allocations (including all forms of discretionary power) .
This system is not transitional in the classic sense used in development theory, but neither is it static. It is adaptive within its own structural constraints. Reform outcomes therefore will depend less on ideological dispositions than on the internal reconfiguration of elite networks, institutional memory, and geopolitical risk management.
The central policy implication is that institutional change in Vietnam cannot be conceptualized as rupture or regime replacement. It must instead be approached as incremental, sequenced, and de-risked evolution within a constrained regime space. It will follow an evolutional trajectory keeping within boundaries set by its own cultural dynamic of legitimation.
I. BEYOND TRANSITION THEORY: VIETNAM AND THE STRUCTURE OF HYBRID ORDER
The dominant paradigm in post-Cold War political economy theorizing assumed that liberal democracy and market capitalism represented the endpoint of institutional evolution, along the lines of Francis Fukuyama’s “End of History” thesis. This assumption shaped what was known as “transition theory,” which treated political development as a linear progression from authoritarian rule to democratic consolidation. However, empirical trajectories in Vietnam and other post-socialist systems have revealed limitations in this conceptional model.
Magyar and Madlovics demonstrate that such frameworks rely on three assumptions that are empirically unstable in hybrid regimes: the separation of political and economic spheres, the active correspondence between formal institutions and actual power relations, and the role of the state as a neutral agent seeking public welfare. In Vietnam, none of these assumptions fully holds true.
Instead, Vietnam is better understood as having arrived at a stable position within a structured regime space characterized by the coexistence of formal institutions and parallel informal patronage coordination. In this bi-modal decision-making dynamic, markets function not as autonomous allocative systems but as embedded mechanisms within a politically structured resource distribution network. The network both provides input resources and extracts them in exchanges of value propositions. Economic liberalization therefore does not imply political liberalization; rather, it becomes an instrument for enhancing state capacity and elite coordination as more wealth is generated of which some is channeled to those systemically privileged,
Within Magyar’s typology, Vietnam aligns most closely with what he defines as a market-exploiting communist dictatorship, a regime type in which the ruling party maintains monopoly control over political authority while actively utilizing market mechanisms for growth, legitimacy, and integration into global capitalism. This configuration is not an incomplete transition to an “End of History” finish; it is a distinct equilibrium, an end-state of its own making.
The key analytical shift is from viewing Vietnam today as “moving toward” democracy to understanding it as operating within a bounded adaptive space. Movement occurs, but it is movement within constraints rather than movement toward convergence of free markets and pluralism in governance.
A central explanatory mechanism in this system is what Magyar terms the adapted political family. This refers to a networked structure in which party institutions, state agencies, and economic actors are integrated into a unified system of coordination and resource allocation. Within such systems, the boundaries between public and private authority are functionally blurred. Governance is exercised not only through formal institutions but through relational networks that determine access, opportunity, and constraint. The moral autonomy of actors and the quality of their agency are compromised by inter-personal networks and reciprocating dyads of individuals each looking out for the other’s access to resources.
This structure helps explain a persistent paradox in Vietnam’s development: why market expansion and anti-corruption campaigns can coexist without fundamentally altering the distributional logic of the system. Reform is absorbed into the network through clever adaptations sustaining the status quo rather than qualitatively transforming it.
II. STRUCTURAL ACTORS AND THE DEMANDS OF PATERNALISTSIC AUTHORITY
Understanding Vietnam’s institutional resilience requires moving beyond formal institutional analysis toward An inter-personal, relational, understanding of power. In Magyar’s framework, the state is not a directive, monolithic actor but a forum for coordination among elite networks. Authority is distributed through layered relationships of dependency, loyalty, and protection rather than solely through legal-rational rules.
This produces what can be analytically described as a captured state from above, in which the ruling elite simultaneously governs the institutional system and operates through its formalities to accomplish desired coordination. Unlike classical models of state capture driven by external oligarchic pressure, this configuration is internally generated and sustained by elite self-interest.
Within such a system, reform dynamics must confront paradoxes. Individuals who are most capable of initiating change are also those most embedded in and wedded to the structures that constrain it. This creates what may be called a risk-lock equilibrium. As actors ascend within the system, their exposure to institutional vulnerability decreases, while their dependence on system stability increases. Reform thus rationally becomes individually costly even when systemically beneficial. Thus a lock is created keeping perceptions of risk to individual high and unchanging.
This risk-lock dynamic is reinforced by institutional memory. The collapse of the Soviet Union and the instability experienced in several post-socialist transitions remain powerful reference points for elite risk perception in Vietnam. As a result, institutional conservatism rests not simply on ideological devotion but is deeply embedded in lived experience. What appears externally as resistance to reform is internally interpreted as prudential governance of a system functionally efficient to insiders.
At the same time, Vietnam’s development trajectory has been shaped by a gradual evolution of legitimacy narratives. Here, Stephen B. Young’s concept of moral capitalism provides a useful interpretive bridge. In this framework, legitimacy is no longer derived solely from ideological coherence but increasingly from measurable outcomes in terms of social welfare, economic performance, and institutional effectiveness.
This aligns closely with the Caux Round Table’s stakeholder governance principles, which define legitimate authority as stewardship of power in trust for all affected stakeholders rather than ownership of authority by officeholders. From this perspective, governance legitimacy becomes increasingly dependent on performance rather than ideological orthodoxy.
However, a systemic shift to the practice of a moral capitalism is structurally constrained. Because elite cohesion depends on existing distributive mechanisms, any move toward performance-based legitimacy necessarily alters established internal, inter-personal, power balances. This creates an inherent tension between maintaining system stability and benefiting in the future from undertaking adaptive reforms in the present.
III. DE-RISKED EVOLUTION: POLICY PATHWAYS WITHIN CONSTRAINED TRANSFORMATION
The central policy question is not whether Vietnam will transform, but how institutional change can occur without triggering systemic instability. Magyar’s framework suggests that real regime evolution occurs not through crisis and zero-sum confrontations leading to rupture but through reconfiguration of coordination mechanisms within existing constraints.
From a policy perspective, this implies that reform must be understood as a process of reducing the perceived and actual risk of institutional change rather than maximizing its speed or ideological depth.
One key mechanism for enabling such evolution is the gradual shift toward performance-based legitimacy. When institutional authority is increasingly justified through economic productivity, administrative competence, and social outcomes, the ideological rigidity of the system is reduced. This does not eliminate existing power structures, but it changes the criteria by which those structures are evaluated.
For example, the Caux Round Table has pioneered assessment techniques for quantifying performance outcomes for both market enterprises and government agencies and officials.
A second mechanism involves the strengthening of institutional constraints. This does not necessarily imply Western institutional transplantation, but rather an increase in what can be called grounded predictability—the extent to which institutional behavior is governed by transparent, stable, and enforceable rules. Enhancing transparency in appointments, improving legislative oversight capacity, and institutionalizing policy evaluation mechanisms are examples of such incremental reforms. Their significance lies not in their symbolic alignment with external models, but in their capacity to reduce systemic uncertainty.
A third mechanism applies sequencing. Institutional change is more likely to succeed when it is structured in phases rather than pursued as an immediate, comprehensive, transformation. A phased approach—beginning with transparency and accountability, followed by institutional consolidation, and culminating in structural refinement—reduces uncertainty for all actors within the system. This is crucial because uncertainty, rather than policy or theoretical opposition, is often the primary driver of resistance to reform. Uncertainty intensifies perceptions of risk.
Comparative evidence from Eastern Europe suggests that successful transitions were not primarily the result of revolutionary rupture but rather of carefully sequenced institutional adjustments combined with inter-elite negotiations under conditions of external anchoring. Conversely, cases of instability often reflected making abrupt changes without having in place sufficient internal coordination capacity.
Vietnam’s situation includes a significant and unique difference in that it lacks a clear external anchoring mechanism comparable to EU accession for countries in Eastern Europe. This increases the importance of internal sequencing and elite consensus formation as stabilizing mechanisms of reform.
Conclusion: Reform as Controlled Movement in a Constrained Space
Vietnam’s institutional trajectory cannot be adequately explained through binary categories of democracy versus authoritarianism or of transformation versus stagnation. Instead, it should be seen to be a process generating movement within a structured regime space shaped by patron-client networks, historical memory, and external anchors tied to geopolitical constraints.
The metaphor of a fearful “specter” haunting the Vietnamese elite is therefore analytically misleading if interpreted as an external force or ideological illusion. The constraints facing Vietnam are not metaphysical; they are structural and relational. They arise from the interaction between elite coordination systems, institutional design, and historical experience.
However, structural constraint does not imply immobility. Following Magyar, regimes evolve through shifts in coordination equilibrium rather than through systemic rupture. From the perspective of the Caux Round Table and Stephen B. Young’s moral capitalism, such evolution is most sustainable when legitimacy is increasingly grounded in outcomes that benefit all stakeholders.
The central policy implication is therefore clear: institutional reform in Vietnam is most viable when conceived not as transformation against the system, but as adaptive evolution within the system.
History does not present fixed endpoints. It presents structured possibilities.
And within structured constraints, opportunities for agency can remain meaningful.
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Footnotes (selected)
Magyar, B. & Madlovics, B. (2022). The Anatomy of Post-Communist Regimes. CEU Press.
Young, S. B. (2018). Moral Capitalism.
Caux Round Table (2009). Principles for Responsible Business.
North, D. (1990). Institutions, Institutional Change and Economic Performance.
Kornai, J. (2000). The Socialist System. Princeton University Press.
Helmke, G. & Levitsky, S. (2004). “Informal Institutions and Comparative Politics.”
O’Donnell, G. & Schmitter, P. (1986). Transitions from Authoritarian Rule.
Carothers, T. (2002). “The End of the Transition Paradigm.”
The war with Iran raises many concerns: issues of strategy and purpose, law and morality, intemperance and intolerance, retributive justice and forgiveness, fear and suspicion, religion and compassion and human arrogance and frailty.
The Caux Round Table has long provided its good offices to convene round tables for the exchange of views, perceptions, judgments, fears and aspirations, even passions, without rancor or disparagement. At times, process seems more needed than immediate affirmation of another’s beliefs.
Please join us for an in-person round table over lunch to reflect on the war with Iran and its consequences for all at noon on Thursday, April 30, in room 430 in Landmark Center in St. Paul.
Registration and lunch will begin at 11:30 am.
Cost to attend is $20, which you can pay at the door.
To register, please email jed@cauxroundtable.net.
Event will last between an hour and hour and a half.
This issue is all about Jeffrey Epstein.
I would be most interested in your thoughts and feedback!
Such can be a profoundly risky turning point. Because afterwards, systemic governance no longer follows the principle of “legitimizing power through law,” but privileges power “to selfishly legitimize itself.”
Introduction:
Stephen B. Young, Global Executive Director, the Caux Round Table for Moral Capitalism
This essay reflects on the implications of consolidating control of media and two academic institutions under the supervision of Vietnam’s Communist Party. The author – writing under a pen name – defends the Rule of Law consistent with the Caux Round Table’s Principles for Moral Government.
The fundamental Principle for Moral Government is:
Power brings responsibility; power is a necessary moral circumstance in that it binds the actions of one to the welfare of others. Therefore, the power given by public office is held in trust for the benefit of the community and its citizens. Officials are custodians only of the powers they hold; they have no personal entitlement to office or the prerogatives thereof. … The state is the servant and agent of higher ends; it is subordinate to society. Public power is to be exercised within a framework of moral responsibility for the welfare of others. Governments that abuse their trust shall lose their authority and may be removed from office.
Second, the CRT Principles for Moral Government affirm the wise and responsible use of discourse, including free expression of opinion:
Public power, however allocated by constitutions, referendums or laws, shall rest its legitimacy in processes of communication and discourse among autonomous moral agents who constitute the community to be served by the government. Free and open discourse, embracing independent media, shall not be curtailed except to protect legitimate expectations of personal privacy, sustain the confidentiality needed for the proper separation of powers, or for the most dire of reasons relating to national security.
Third, the CRT principles for Moral Government affirm the Rule of Law as the foundation for legitimacy of public decision-making:
Only the Rule of Law is consistent with a principled approach to use of public power.
Nguyễn Hữu Quang, taking a Microscopic eye view
No need for euphemisms: the decision to transfer a wide range of key state institutions—from the national media system to the two academies—under the direct authority of the Vietnamese Communist Party’s Central Committee is unconstitutional.
This is not just another “bureaucratic restructuring,” nor is it about “strengthening the leadership role” of the Communist Party. It is a reorganization that warps the power structure as has been authorized by the Constitution for many years.
A constitution—under any regime— provides the necessary, protective, boundaries between potentially competitive institutions: the state, political parties, and society. It is not a superficial, only decorative, trapping. It is a promise to the people that power, no matter how overwhelming, must always remain within limits.
But when state institutions—belonging to the nation, funded by public resources, and carrying public authority—are transferred outright to a political organization, what is erased is not merely an administrative structure. What disappears is a definitive boundary between the State and the Party. The Party thus assumes for itself the authority of the people.
And if the Constitution has not been amended to allow this, then there is no other way to describe it than to plainly say out loud: power has suppressed the Constitution.
NOT A LEGAL WORKAROUND — BUT STOMPING THE LAW UNDER FOOT
For years, major changes have typically followed a familiar sequence: adjusting policy first, formalizing the law later. That is how power politely and circumspectly “worked around” institutional constraints.
But what is happening now is no longer a workaround. It is a direct suppression.
The timing of the change—before the National Assembly session scheduled for April 6—is not a technical detail. It is a political message.
And that message is clear: there is no need to wait for formal legal ratification. What the Party decides, that is the law.
If there were still respect for the Constitution, the process would begin with a constitutional amendment followed by a reordering of structures. But when reform action precedes legal authorization, it can only mean one thing: the law has lost its power.
Taking such a shift comes with many risks. From this point forward, the system no longer legitimizes power through law, but allows power to legitimize itself.
In other words, the Constitution ceases to be a foundation of the nation and becomes just a byproduct of history.
“SITTING ON” THE CONSTITUTION — NO LONGER A METAPHOR BUT A REALITY
There were stages in the past when power needed to maintain respectful appearances—when a veneer of constitutionality was thought necessary for its legitimacy.
But when a structural decision is made without seeking any constitutional approval, then even that veneer is devalued as superfluous.
This is when metaphor becomes reality.
The Constitution—rather than the apex of the legal system—is reduced to nothing more than a document capriciously revised at will. Its words no longer constrain power; the entire document is no more than a tool in the service of power.
What else can this subjugation be called if not “sitting on the Constitution”?
What is striking is that such disrespect is no longer concealed. It is open, direct, and requires no justification.
That disrespect reveals a system which has crossed a psychic threshold: it no longer feels the need to pretend to follow rules.
“NOT LIKE ANY OTHER” DECISION —THAT IS THE PROBLEM
Supporters may call this decision to place state functions under the Party “exceptional.” But in politics, being “unlike any other” is rarely a sign of thoughtful evolution. More often, it signals willful radicalization.
Even in highly centralized systems, certain limits still exist:
Why don’t the Chinese Communists and Russian autocrats erase that boundary between personal power and constitutional legitimacy entirely?
Because they understand one thing: if the state dissolves into a just a factional political organization, the entire legal structure of the country loses its meaning, encouraging lawlessness across the board
The state, even when subordinate in practice, must still exist as a formally independent entity. That is a condition for maintaining international relations, signing agreements, assuming responsibility, and functioning within the global system.
But the current decision goes further than re-arranging supervisory control relationships: it is direct and explicit absorption of state functions by a sub-state apparatus. It is a tail wagging a dog.
This is no longer “the Party leading the state.” It is the Party replacing the state.
And that is precisely why it is “unlike any other.”
WHEN MEDIA NO LONGER BELONGS TO THE NATION
Radio, television, and news agencies are, by nature, the public voice of a nation—not of a party, but, ideally, of the collective.
They are founded with taxpayers’ money, operated with public resources, and represent the country as a body-politic both domestically and internationally.
When these institutions are transferred to a political organization, what changes is not just governance. The very nature of the national voice is what changes.
From such a point on, there is no longer a “Voice of Vietnam” in the national sense—only the voice of a political organization purporting to speak in the name of the nation.
This distinction is not superficial. It is elemental. The one can never become the other.
A country without a voice independent from its ruling organization loses part of its internal sovereignty.
WHEN SCIENCE TOO BECOMES AN INSTRUMENT OF POWER
If media provides the flow of information, science is the foundation of knowledge.
The academies, in principle, must safeguard intellectual independence, provide policy critique, and generate knowledge free from short-term political objectives.
But when they are placed under the direct command of a political organization, an unavoidable question arises: how much intellectual space remains for academic freedom?
Science cannot develop in an environment where conclusions are predetermined. Research cannot survive if its goal is not the pursuit of truth, but compliance with elite narratives.
At that point, science becomes something history has seen before: a tool for legitimizing willful self-interest.
And once science is politicized, the consequences extend far beyond laboratories and conferences—they spread across society, from education to technology to national competitiveness.
AN INEVITABLE CHAIN OF CONSEQUENCES
A decision like this is not a singularity. It belongs to a familiar pattern seen in centralized systems:
There are no exceptions.
THE COST MAY BE DELAYED – BUT INEVITABLY IT WILL BE PAID
Advocates of the by-passing the Constitution might argue that the decision will guarantee “stability”.
But stability based on absolute control is not sustainable. It can only cover the surface of society, with no more adhesive holding power than cellophane tape.
Beneath such surface stability lies:
CONCLUSION: HOW MUCH DAMAGE HAS BEEN DONE?
The pertinent question now is no longer whether the system is moving toward centralization.
Rather, the important question is: how much centralization of power has been consolidated?
A social condition in which power no longer needs to conceal itself, justify itself, or limit itself.
And history has made one thing clear: systems like this do not collapse from a lack of power.
They collapse because they lose the ability to self-correct.
The question is not whether destabilizing consequences will come.
It is: when?