Caux Round Table for Moral Capitalism

On Second Thought: A Renaissance of Highly Paid Blue Collar Jobs?

The Economist, in its June 14^th issue, put national industrial policy – such as President Trump’s big, beautiful plan to revive American manufacturing (and by so-doing) Make America Great Again – in a different, more dyspeptic frame of analysis.

The magazine reported:

Politicians hope that boosting manufacturing means decent employment for workers without university degrees or, in developing countries, who have migrated from the countryside. But factory work has become highly automated. Globally, it provides 20m, or 6%, fewer jobs than in 2013, even as output has increased 5% by value.

Many of the good jobs created by today’s production lines are for technicians and engineers, not lunch-pail Joes. Less than a third of American manufacturing jobs today are production roles carried out by workers without a degree.

By one estimate, bringing home enough manufacturing to close America’s trade deficit would create only enough new production jobs to account for an extra 1% of the workforce. Manufacturing no longer pays those without a degree more than other comparable jobs in industries such as construction. As productivity growth is lower in manufacturing than it is in service work, wage growth is likely to be disappointing, too.

Another misconception is that manufacturing is essential for economic growth. India’s manufacturing output, as a share of GDP, languishes about ten percentage points below Mr. Modi’s target of 25%. But that has not stopped India’s economy growing at an impressive rate. In the past few years, China has struggled to meet its growth targets, even as its manufacturers have come to dominate entire sectors, such as renewable energy and electric vehicles.

As our modes of production change and with AI yet to release its full potentials in our economies, should we rethink the benefits of trying, yet again, to out-think markets by turning to managers and implementing their plans?

Civilization States: Progress or Retrogression? Please Join Us June 30 on Zoom

Over the last few years, notably in time for Putin to wage territorial war against Ukraine, both Russia and China have proposed a new concept for international relations: the civilization state. The international community has ignored this new way of thinking about who is right and who is wrong.

When I brought it up recently with Archbishop Paul Gallagher, Secretary for Relations with States at the Vatican, he was keen to learn more.

I shared with him the important article on civilization states written by Ivan Timofeev in Moscow. We included Ivan’s article in the November 2023 issue of Pegasus.

Here is George Will’s take on the failure of the American foreign policy elite to take notice of this new theory of international relations (Will is a columnist for the Washington Post):

Although there is no excuse for it, there is a reason for the failure of U.S. leaders to understand Putin. He is an open book who has been reading himself to the world since long before he published his 2021 essay, “On the Historical Unity of Russians and Ukrainians.” This farrago of ethnic mysticisms and history seen through a pseudo-theological lens is Putin’s “Mein Kampf.” His resentments and revenge aspirations are all there. But are largely ignored or disbelieved by the West’s statesmen and publics who complacently believe that the end of history meant the end of toxic nonsense such as this:

Putin believes Russia is a “civilization-state” with cultural-cum-religious significance, rights and responsibilities that justify the erasure of other nations. Which is why the Economist correctly says that for Putin, “war has become an ideology.”

What Johns Hopkins University’s Hal Brands describes as Putin’s “quasi-genocidal barbarities” are committed in the name of a totalizing, uncompromisable objective: the political and cultural extinction of Ukraine. Russia has kidnapped, for the purpose of “Russification,” uncountable thousands of Ukrainian children. Their return is, Ukrainian President Volodymyr Zelensky says, Kyiv’s “number one” priority in negotiations. Try explaining that to Steve Witkoff.

This real estate developer, Donald Trump’s designated war-ender, says he and Putin have developed a “friendship.” Witkoff echoes Jimmy Carter’s secretary of state, Cyrus Vance, saying that Soviet leader Leonid Brezhnev shares similar “dreams and aspirations.” Witkoff wonders, “Why would Russia want to absorb Ukraine?” Putin explained in his 2021 essay, which shows that peace is impossible.

Please join us at 9:00 am (CDT) on Monday, June 30 on Zoom to share your thoughts with us about the credibility of the “civilization state.”

To register, please email jed@cauxroundtable.net.

The event will last about an hour.

May Pegasus Now Available!

Here’s the May issue of Pegasus.

This edition carries two essays on seemingly separate themes. One focuses on leadership and the other on the roles of a citizen.

In the first essay, “On Failure of Leadership,” I survey the world and find much of it wanting as it relates to leadership.

Michael Hartoonian then weighs in with his essay, “There is No Prosthetic for an Amputated Soul.” It contains several great observations, primarily in the context of being a citizen vs. being a subject.

As usual, I would be most interested in your thoughts and feedback.

An Audience with Pope Leo XIV

Last week, I was in Rome for the annual meeting of the Papal Foundation Centesimus Annus, which advocates Catholic social teachings on business, finance and the economy. The Caux Round Table Principles for Business of 1994 were, in part, derived directly from Pope John Paul II’s 1991 encyclical, Centesimus Annus. That encyclical was written to recall and extend the 1891 encyclical of Pope Leo XIII, Rerum Novarum. Pope Leo XIV has noted his choice of name as intentionally directed to recall the contributions of Pope Leo XIII to Catholic social teachings in the modern era of industrialization as the economic foundation for modern humanity. Pope Leo XIV must now propose his reflections for a post-industrial global economic order and soon, AI-driven wealth creation.

On coming to the Caux Round Table, I, for the first time, read Papal encyclicals, thanks to the mentorship of Jean-Loup Dherse, an author of our principles for business. Though raised a Protestant, I immediately appreciated the quality of the thoughts and arguments presented by the Popes in their social teachings, the skill in articulation of how values and the ups and downs of life intersect and could intersect if we would but pay closer attention to ourselves and others. Many passages and sections reminded me of the best U.S. Supreme Court opinions of Chief Justice John Marshall, written 200 years ago.

Last Saturday morning, Pope Leo XIV graciously met with our participants. I found him most at ease and seemingly assured in the execution of his responsibility to provide thoughtful guidance to all who will listen. He framed his thinking for the work of all of us who care “to raise a standard to which the wise and the honest may repair.”

You can read his remarks here.

The Pontiff’s thoughts also apply to the work of the Caux Round Table.

April Pegasus Now Available

Here’s the April issue of Pegasus.

In this edition, we include 2 articles.

First, I argue that instead of diversity, equity and inclusion (DEI) to fight current and past injustice and discrimination, friendship would be a better way forward. I lean into the concept, as articulated by Aristotle and Cicero, as an alternate path.

Secondly, Michael Hartoonian continues his investigation into a global ethic through three central questions that address justice by way of trust, wisdom and enlightenment, all being necessary standards for living a life of meaning.

I would be most interested in your thoughts and feedback.

Keeping on Top of the Implosion of Our World Economic Order: Please Join Us May 13 on Zoom

Please join us for a Zoom round table on tariffs and the future of our world economic order at 9:00 am (CDT) on Tuesday, May 13.

Here is a timely cartoon from the cover of the New Yorker, no fan of Donald Trump:

I also attach here a critique of Trump’s tariff proposals in the Wall Street Journal from the very conservative former U.S. Senator Phil Gramm.

To register, please email jed@cauxroundtable.net.

The event will last about an hour.

Is Donald Trump a Brute Capitalist?

Some 20 years ago, when I wrote my book, Moral Capitalism, to provide a thoughtful framework to vindicate the importance of the Caux Round Table Principles for Business, I brought forward a tension between the capitalism promoted by Adam Smith and the capitalism promoted by Herbert Spencer.

In 1851, Spencer wrote Social Statics to present human nature as self-centered, without a moral compass. Smith, on the other hand, had written a book of moral philosophy, The Theory of Moral Sentiments, which universalized to all persons an inborn capacity for seeking and acting on constructive, wealth-creating, social connectivity.

Smith’s capitalism, therefore, was synergistic and symbiotic, ending towards a balanced dynamic equilibrium and win/win transactions.

Spencer’s capitalism was more a dog-eat-dog struggle, driven by instincts of endless self-seeking, where only the fit prospered and the devil take the hindmost. Spencer aligned with the political views of Thomas Hobbes on the nature of us being, at best, a grim scenario, where life is “solitary, poor, nasty, brutish and short.” Spencer presumed that since we descended from the great apes, we retain their self-referential animalism and lack of conscience and that we, too, followed the law of nature that either kill or be killed, eat or be eaten.

Later in the 19^th century, Spencer’s approach was given the name “social Darwinism.” This, though, was an unkind misuse of Darwin’s thinking about human nature. Darwin, in fact, wrote a book, The Descent of Man, which was closer to Smith’s thinking. Darwin argued that humanity was an evolutionary step beyond animality, where regard for others, a capacity for rational thought and language and a sophisticated and reciprocal socialization gave us moral sentiments and a capacity for collaboration.

But in presenting the Spencerian alternative to Smith, I aligned it with Hobbes’ thinking and called it “brute capitalism.”

I attach here chapter 3 on brute capitalism from my book.

The timely question is whether or not Donald Trump is a brute capitalist. If he is, his policies will be out of sync with what is best for America and the world.

This past Tuesday, in an editorial, the Wall Street Journal said of Trump: “Mr. Trump thinks he can bully everyone into submission, but he can’t bully Adam Smith, who deals in reality. Markets know that tariffs are taxes and taxes are anti-growth.”

Trump’s win/lose understanding of globalization and international trade and markets seems to adopt Spencer’s understanding of the human condition.

Consider Trump’s remarks on “Liberation Day,” when he proposed to throw off the shackles which foreigners had used to “rip off” Americans. Were they not win/lose, beggar your neighbor, don’t give the suckers an even break?

He said:

“For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike. American steelworkers, auto workers, farmers and skilled craftsmen, we have a lot of them here with us today. They really suffered gravely. They watched in anguish as foreign leaders have stolen our jobs, foreign cheaters have ransacked our factories and foreign scavengers have torn apart our once beautiful American dream. … Our country and its taxpayers have been ripped off for more than 50 years, but it is not going to happen anymore. It’s not going to happen. In a few moments, I will sign an historic executive order instituting reciprocal tariffs on countries throughout the world, reciprocal. That means they do it to us and we do it to them, very simple, can’t get any simpler than that. This is one of the most important days, in my opinion, in American history. It’s our declaration of economic independence. For years, hardworking American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense, but now it’s our turn to prosper.”

This is win/lose thinking, as Spencer would validate as quintessentially human. Kind of brutish, don’t you think?

Jamelle Bouie recently wrote in the New York Times his own take on Trump as a brute capitalist:

He did not reason himself into his preoccupation with tariffs and can neither reason nor speak coherently about them. There is no grand plan or strategic vision, no matter what his advisers claim — only the impulsive actions of a mad king, untethered from any responsibility to the nation or its people. For as much as the president’s apologists would like us to believe otherwise, Trump’s tariffs are not a policy as we traditionally understand it. What they are is an instantiation of his psyche: a concrete expression of his zero-sum worldview.

The fundamental truth of Donald Trump is that he apparently cannot conceive of any relationship between individuals, peoples or states as anything other than a status game, a competition for dominance. His long history of scams and hostile litigation — not to mention his frequent refusal to pay contractors, lawyers, brokers and other people who were working for him — is evidence enough of the reality that a deal with Trump is less an agreement between equals than an opportunity for Trump to abuse and exploit the other party for his own benefit. For Trump, there is no such thing as a mutually beneficial relationship or a positive-sum outcome. In every interaction, no matter how trivial or insignificant, someone has to win and someone has to lose. And Trump, as we all know, is a winner.

On the Passing of Pope Francis

The passing of Pope Francis is a great loss for humanity and in our own small sphere, for the Caux Round Table, as well.

The Pope gave his very personal endorsement to our study of the covenants of the Prophet Muhammad to respect and protect Christians – a work which has much promise for a more peaceful future for humankind, not only in the Middle East and Africa, but as spiritual leadership for all of us when we think about others of different faiths and ethnic origins.

I copy his letters to us here:

For the sake of all of us, I hope that the collective wisdom of his Roman Catholic Church will bring forth a successor with his faithfulness, humanity and ability to reach beneath the surface of our human self-mortifications to draw forth “the better angels of our natures.”

An Anniversary Deserving Our Attention

By the rude bridge that arched the flood,
Their flag to April’s breeze unfurled,
Here once the embattled farmers stood
And fired the shot heard round the world.
-Ralph Waldo Emerson, “Concord Hymn”

When does a people deserve to be a free nation? That question is now before us in Ukraine, Gaza and Taiwan.

Today, as I write this, is the 250^th anniversary of the decision by people who called themselves “Americans” to take up arms with which to oppose soldiers of Great Britain in the battles of Lexington and Concord, Massachusetts and during the harassment of British soldiers their subsequent retreat back to Boston.

As a young American, I made the pilgrimage to the town commons in Lexington and the bridge in Concord where the American Revolution took its beginning. Tiny fields of combat, but big enough to set off a great political undertaking and a war of historic significance.

The cause of the Americans had been legitimated by the arguments of John Locke in his Second Treatise of Civil Government that government is a trust to benefit the people. When the King and Parliament of Great Britain broke their trusteeship obligations as noted in the July 4, 1776, Declaration of Independence, they gave right to the colonists of their North American colonies to demand and seek independence as a free and sovereign people.

The Caux Round Table Principles for Government ground human justice on public office held only as a public trust and never as a personal dominion over others, following not only the argument of John Locke, but also the ethics of the Old Testament (Ezekiel 34), Mencius (reny), Taoism (wuwei), Cicero (trusteeship), the Qur’an (khalifa-ship) and the Thosapit Rachathamma of Theravada Buddhism.

The Wikipedia entry for those battles reads:

The Battles of Lexington and Concord were the first major military campaign of the American Revolutionary War, resulting in an American victory and outpouring of militia support for the anti-British cause. The battles were fought on April 19, 1775, in Middlesex County in the colonial era Province of Massachusetts Bay, within the towns of Lexington, Concord, Lincoln, Menotomy (present-day Arlington) and Cambridge. They marked the outbreak of armed conflict between the Kingdom of Great Britain and Patriot militias from America’s thirteen colonies.

In late 1774, colonial leaders adopted the Suffolk Resolves in resistance to the alterations made to the Massachusetts colonial government by the British Parliament following the Boston Tea Party. The colonial assembly responded by forming a patriot provisional government known as the Massachusetts Provincial Congress and calling for local militias to train for possible hostilities. The colonial government effectively controlled the colony outside of British-controlled Boston. In response, the British government, in February 1775, declared Massachusetts to be in a state of rebellion.

About 700 British Army regulars in Boston, under Lieutenant Colonel Francis Smith, were given secret orders to capture and destroy colonial military supplies reportedly stored by the Massachusetts militia at Concord. Through effective intelligence gathering, Patriot leaders had received word weeks before the expedition that their supplies might be at risk and had moved most of them to other locations. On the night before the battle, warning of the British expedition had been rapidly sent from Boston to militias in the area by several riders, including Paul Revere and Samuel Prescott, with information about British plans. The initial mode of the Army’s arrival by water was signaled from the Old North Church in Boston to Charlestown using lanterns to communicate “one if by land, two if by sea.”

The first shots were fired just as the sun was rising at Lexington. Eight militiamen were killed, including Ensign Robert Munroe, their third in command. The British suffered only one casualty. The militia was outnumbered and fell back and the regulars proceeded on to Concord, where they broke apart into companies to search for the supplies. At the North Bridge in Concord, approximately 400 militiamen engaged 100 regulars from three companies of the King’s troops at about 11:00 am, resulting in casualties on both sides. The outnumbered regulars fell back from the bridge and rejoined the main body of British forces in Concord.

The British forces began their return march to Boston after completing their search for military supplies and more militiamen continued to arrive from the neighboring towns. Gunfire erupted again between the two sides and continued throughout the day, as the regulars marched back towards Boston. Upon returning to Lexington, Lt. Col. Smith’s expedition was rescued by reinforcements under Brigadier General Earl Percy. The combined force of about 1,700 men marched back to Boston under heavy fire in a tactical withdrawal and eventually reached the safety of Charlestown. The accumulated militias then blockaded the narrow land accesses to Charlestown and Boston, starting the siege of Boston.