Business As A Social Calling ... Part 2

Good afternoon all ... I began this thread at 30,000 Feet ASL as I like to say. It was my intention to position business in relation to and as a function of two things:

1) Profit ...

2) Social Interaction ...

And, to place these two things, Profit and Social Interaction as equals in the conversation that I am proposing. Many people, especially socially conscious people it seems, come to any conversation about business with the starting proposition of business as an evil entity ... or at the very least profit as evil. Some also come with the proposition that business could be a force for social good. I find it most interesting that some can hold both positions simultaneously ... i.e.: business as an evil entity that could be a force for social good.

Probably I'm actually most in the camp of those who think of business as equally hold the potential for being evil or a force for social good ... depending upon the leadership and constituency of the particular business in question.

When business becomes organized around (Milton) Friedman's brand of laissez-faire capitalism I think it too easily falls into the hands of those who are either largely or solely driven by self-interest ... i.e.: the profit motive. Oversimplifying his economic theory Friedman himself would say that business has no obligation other than to make money for shareholders. And his justification for this position was that in a purely market-driven system ... i.e.: pure capitalism without any constraints ... the market would always self-correct, forcing the producers (i.e.: businesses) to create the highest value propositions possible for consumers This sounds great on paper, but seldom proves out in the actual market-place. A clear example of this would be Sam Walton's model for Wal-Mart. This model rests on two very simple premises:

Offer the lowest prices for any given item

Make the widest possible range of products that consumers want available to them conveniently

As any who have followed the success of Wal-Mart knows this model proved to be particularly successful in the U.S. market ... but now without significant social costs. The formula follows Friedman's advice perfectly ... i.e.: provide the highest possible value to consumers which will in turn create the greatest possible profit to the shareholders. The Wal-Mart example also demonstrates how a supposedly free system actually manipulates the social system when a single provider such as Wal-Mart becomes so influential that it begins to shape the system in an imbalanced way to support its own outcomes over those of all others. This does not follow Dr. Milton Friedman's theory of a free-market system, or even what would be called something like pure capitalism. Instead it uses the government to bolster the aims of a priviledged few over the aims of the many. [We'll save the specifics of Milton Friedman's economic theory and the Wal-Mart example for some other posting ... in the meantime if you want to pursue this a bit more try the streaming videos of Dr. Friedman's PBS TV show Free To Choose ... these are well worth watching and a treat (or maybe a terror depending on your point of view I guess) ... Arnold Schwarzenegger hosts the video presentation.] So I think ideologically that Friedman's economic theory at the heart of capitalism makes perfect sense for an evolving society ... especially for a society aiming at the greatest opportunity for the largest numbers of people within that society.

As simply put as possible Friedman's economic theory was in his words based on the premise of being Free To Choose ... the ability to direct one's economic life without interference.

Economically it would be hard to object to Friedman's ideas based on the evidence ... i.e.: those societies that allowed the greatest freedom in economic choose have prospered financially to the greatest extent overall. You see this in societies like those in the United States, Japan, Hong Kong, Israel ... and you see the opposite in the most controlled economic societies on the planet like those much of Eastern Europe (until recently) and others. When you look you'll find the evidence glaring ... if you use this as the sole measure of success. When you add in other less individual benefits, beyond financial gain and immediate self-interest, you can paint a different picture or tell a different story. When you look for the percentage of poor individuals, especially working poor individuals, in these societies the numbers of people you could define in this way stand out. When you add in the cost to other societies that are supporting the benefits and gains accrued by those in the most financially successful countries again the picture distorts and the story changes from one of enormous success to one of great human tragedy in some cases. When you again step back and take an even larger view, and begin to consider the cost on the planet at-large and the costs that have been accumulating through time the picture and the story become depressing to anyone willing to really consider what the evidence suggests ...

... a highly polluted environmnet

... over-fished and dying oceans

... entire societies suffering famine

... people dying from the lack of clean water

And, this of course represents only a partial picture or story of the world today.

Yet, when we look at what business has done on the plus side we see that in virtually every case these same ills are least present where the society has most supported the success of the businesses operating within these societies ... and that these societies are the ones most likely to export support to other less successful societies as well.

Yet, we can also say that relatively these societies have in the past taken more from less economically successful societies than they have given back. So the questions we are now facing and have now begun to ask (rightfully so IMO) include the obligations of the most successful societies in relation to those less fortunate. We are also asking what obligations the businesses that have been able to grow and become so successful while housed in these societies have to the societies that house and permit them ... and to those societies who have been unable to date to create such successes. I think these are good questions to be asking. This begins our conversation about about Social Influence ... i.e.: who has social influence and how are they using it ... and maybe how should they be using it? Largely what we can call Social Influence begins with the way we perceive the world ... what we choose to put our attention on ... and then how we interpret what we perceive. The output/result of this process we call decision-making ... although I prefer the phrase, decision-taking. For my two-cents this begins with our thinking process which itself resides in our way of being ... i.e.: who you are. When we begin with ourselves we access our greatest potential point of leverage.

My attention has been, and continues to be, on how can we most leverage the success of our businesses and our business model to extend the benefits to the greatest number of people on the planet ... and to the planet herself ... via the very institution that has proven so successful in producing these benefits for so many already ... the institution of business.

In closing this particular post what I think remains important will be to remember and consider that the things that got us to where we are today, and the way we do things today, may not be what get us to where we want to be tomorrow. I remain ever hopeful that we are both capable of and actually learning the lessons of history that we can and are applying to creating futures that work for ever greater numbers of people going forward. Best regards, Joseph Riggio, Social Ontologist Princeton, NJ