December Pegasus Now Available!

Here is the December edition of Pegasus.

In this issue, we include a piece from yours truly about our Principles for Business and Stoic humanism.  We also added an excerpt of a recent decision by the U.S. Securities and Exchange Commission which now requires companies to provide the public with more information on their human capital.

I would be most interested in your thoughts and feedback.

Happy New Year!

End of Year Reflection and Request

Of what use is an effort like the Caux Round Table for Moral Capitalism (CRT) during a time of pandemic?

What is the case for financial support of our mission and the many thoughtful contributions of members of our network?

As 2020 comes to an end, in this holiday season for many of us, I have been reflecting on this.

For the past months, key phrases and words pushed upon us by the pandemic have been “follow the science,” “lockdowns” and “what should the government do?,” among others.

But does science have a moral compass?  Does government?  Do politicians and regulators?

The moral compass of science is in the minds of the scientists.  Data, as we know, must be interpreted.  Data can be manipulated to fit narratives.  Who controls making the narratives to which data is subordinated?  Which narratives are sound, reliable?  Which ones should be taken as truth?

Scientists have power and power always needs moral guidance to seek what is good, right and fair.

Ordering lockdowns is another use of power.  All government is the use of power over others. What moral standards set limits on the use of public power?

One lesson taught to us by the pandemic is the foundational importance of work in morals and ethics, in finding principles which can be applied in action to affect the outcomes of our lives.

It’s an old point actually, but technology, tools, instruments and expertise without more is unguided and, therefore, can be shaped by human purposes for good, bad or indifference and irrelevance.  Human purposes, of course, have many sources, venture out on many roads seeking disparate goals and objectives and justify themselves with many rationalizations.  The pandemic has taught us to consider ethics, as well as expertise.

The perspective of moral capitalism would have enterprise respond to a pandemic by quickly developing new technologies for detection of the virus, care of those taken ill and creation of vaccines to protect against infection.  In addition, the well-being of stakeholders, especially customers and employees, must be factored into the search for profit.

Lockdowns also demonstrated the ethical need for businesses to remain profitable under such conditions, to provide needed goods and services and to fund families through employment of workers.

Though they can create liquidity, it seems self-evident that public agencies cannot fund economies indefinitely.  At some point, real wealth must be created to sustain community well-being.

With respect to governments, the CRT application of morality to public office prioritizes the role of trust as a requirement for good government.  Government has an obligation to earn public trust.

Secondly, the moral imperative of earning trust leads to a second standard for good government – the use of discourse, full and free discourse, tolerant and comprehensive, where data and arguments are scrutinized and not taken for granted as a priori truth.

One example of our work, which is both unique and bears within it the seeds of greater harmony between Christians and Muslims, is our study of the moral standards contained in certain covenants made with Christian communities by the Prophet Muhammad.  No one else has undertaken such a study, which grew out of our explorations of ethical teachings across our global communities.

With the start of the pandemic, we made special efforts to reach out to our fellows and others to gather their insights and wisdom about finding meaning and purpose in these unexpected and unnerving times.  We framed this work as reaching out to the moral sense as an active force for good in our world.

If this perspective on the importance of moral reflection makes sense to you, we would be grateful for your assistance, both financially and with ideas, on how best to strengthen the quality of CRT round tables and publications.

Please also consider who you might interest in the work of the CRT and introduce them to us.

You may contribute to us one of three ways:

-by credit card via PayPal

-by mailing us a check: 75 West Fifth Street, Suite 219, St. Paul, MN 55102

-or via wire transfer (please respond to this message for instructions).

Thank you again for your past interest in our work and for your continued support.

Trying to Walk the Talk: Putting the CRT Approach to Work in Minnesota in a Time of Moral Crisis

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.

Report on Discussion Among CRT Fellows

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.

2020 Dayton Award Recipients Announced

Our board has decided to award 2020 Dayton Awards to Andrew Cecere, Chairman, President and CEO of U.S. Bancorp, Don Samuels, CEO of MicroGrants and Sondra Samuels, President and CEO of the Northside Achievement Zone.

Also, in recalling Minnesota’s long legacy of business leadership, we wanted to also recognize James Ford Bell, Founder, President and Chairman of General Mills, for his remarkable leadership in helping feed Europeans and Russians after World War I.

Information about the award ceremony will be announced shortly.

Get “Moral Capitalism” at 40% Off!

Berrett-Koehler, the publisher of Moral Capitalism, is having a holiday book sale now through December 15. They’re offering a 40% discount on books bought through its website here.

To get the discount, enter the code ONWARD at checkout.

Moral Capitalism, published in 2003, has withstood the swings of fate and the ravages of time very well. It has just been translated into Russian. The premise of the book was validated last year by the Business Roundtable and World Economic Forum (WEF) in their endorsements of “stakeholder capitalism” as the purpose of business enterprise.

But neither the Business Roundtable nor WEF provided a theory integrating moral factors with microeconomics in a workable theory of the firm. Nor has the U.N.’s Global Compact or its Sustainable Development Goals provided such a useful theory to guide business practice. Nor has the investment community, with its very recent fascination with its environmental, social and governance (ESG) outcomes for enterprise.

What has stood the test of time may be reliable. As the author, I prefer to defer to the judgments of others, but I do want to let you know of the opportunity to buy Moral Capitalism at a good price.

How the U.S. Can Go from Red to Black

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