From Capitalistic to Humanistic Business

From Capitalistic to Humanistic Business

Edited by

Michael Pirson

Fordham University, USA

Ulrich Steinvorth

University of Hamburg, Germany

Carlos Largacha-Martinez

Universidad EAN, Colombia

and

Claus Dierksmeier

University of Tübingen, Germany

Selection, introduction and editorial content © Michael Pirson, Ulrich Steinvorth,

Carlos Largacha-Martinez and Claus Dierksmeier 2014

Individual chapters © Respective authors 2014

All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission.

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First published 2014 by

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Contents

List of Illustrations

Notes on Contributors

Transforming Capitalism – An Introduction

Michael Pirson, Claus Dierksmeier, Ulrich Steinvorth, and Carlos Largacha-Martinez

I   Restitution of Fair Play

1 The Gaming of Games and the Principle of Principles

Roger L. Martin

2 The Global Economic Crisis Requires a Global Ethic: The Manifesto for a Global Economic Ethic

Hans Küng

II   For Qualitative Growth

3 Qualitative Growth: A Conceptual Framework for Finding Solutions to Our Current Crisis That Are Economically Sound, Ecologically Sustainable, and Socially Just

Fritjof Capra and Hazel Henderson

4 The Changing Social Role of Business in a World of Collapsing Boundaries

Sandra Waddock

III   For Cooperation and Community

5 The Possibility of a Pluralist Commonwealth and a Community Sustaining Economy

Gar Alperovitz and Steve Dubb

6 Roadmap to a New Economics: Beyond Capitalism and Socialism – Economics as if Children and Their Future Actually Mattered

Riane Eisler

7 Co-op Capitalism: A New Economic Model from the Carnage of the Old

Noreena Hertz

IV   Change by Specific Reforms: Basic Income, Property Rights, Money, and Education

8 Marx’s Critique of Capitalism and the Concept of Basic Income

Ulrich Steinvorth

9 What Defines Capitalism? What Is Wrong with It and How to Fix It?

Shann Turnbull

10 Local Money as Solution to Capitalist Global Financial Crises

Felix Fuders and Manfred Max-Neef

11 Transforming Capitalism and Self: From Ego-system to Eco-system Economies

Otto Scharmer and Katrin Kaufer

Conclusions

Ulrich Steinvorth

Index

List of Illustrations

Figures

10.1 Bank accounts (fractional reserve banking)

10.2 Exponential function

10.3 USD total money supply

11.1 Three levels: symptoms, systemic disconnects, paradigms of economic thought

11.2 Theory U: one process, three instruments

11.3 Eight acupuncture points of transforming capitalism to 4.0

11.4 The matrix of social evolution

Maps

6.1 Old economic map

6.2 New economic map

Table

11.1 The challenge-response model of economic evolution

Notes on Contributors

Gar Alperovitz was formerly Lionel R. Bauman Professor of Political-Economy at the University of Maryland and is co-founder of the Democracy Collaborative, an organization developing community wealth-building approaches to local and national democratic reconstruction. He is Co-Chair (with James Gustave Speth) of the Collaborative’s Next System Project. A former Fellow of Kings College, Cambridge University, and of the Institute of Politics at Harvard, Alperovitz was previously a Legislative Director in the U.S. House of Representatives and the U.S. Senate (with Earth Day Founder, Senator Gaylord Nelson of Wisconsin); and a special assistant in the Department of State. He currently also serves as a founding Board member of the New Economics Coalition. Among his most recent books are: What Then Must We Do? Straight Talk About the Next American Revolution and America Beyond Capitalism and Unjust Deserts (with Lew Daly.) Earlier books include: Atomic Diplomacy: Hiroshima and Potsdam and The Decision to Use the Atomic Bomb. Alperovitz’s writing appears regularly in publications ranging from The New York Times to The Nation and on a number of online forums. Television news and commentary programs he has appeared on include: Meet the Press, Charlie Rose, The O’Reilly Factor and NPR’s All Things Considered.

Fritjof Capra is a scientist and science writer, as well as an environmental educator and activist. He is the co-founder of the Center for Ecoliteracy and Professor at Schumacher College, an international center for ecological studies in the UK. Capra has spent 25 years conducting research in theoretical high energy physics and is fascinated by the dramatic changes of concepts and ideas that occurred in physics during the first three decades of the twentieth century and the change in worldview that these discoveries prompted. This lead to a shift in focus to the life sciences, and over the past 30 years he has developed a conceptual framework that integrates four dimensions of life: the biological, the cognitive, the social, and the ecological. He is the author of two books which outline these topics: The Web of Life (1996) and The Hidden Connections (2002) as well as a multidisciplinary textbook, The Systems View of Life: A Unifying Vision (2014) co-authored Pier Luigi Luisi. Capra is the founder of an ecological think-tank called the Elmwood Institute which, in 1994 with the help of colleagues, he transformed into the Center for Ecoliteracy (CEL), which promotes ecology and systems thinking in primary and secondary education. The main focus of his environmental education and activism is to help build and nurture sustainable communities. During the last ten years Capra has been involved in an extended research and writing project about the science of Leonardo da Vinci and has authored two books, The Science of Leonardo (2007) and Learning from Leonardo (2013).

Claus Dierksmeier is Director of the Global Ethic Institute at the University of Tübingen, Germany. He previously worked as Distinguished Professor of Globalization Ethics and as Co-Director of the Sustainable Management and Measurement Institute (SUMMIT) at Stonehill College, USA. He has held numerous positions as Visiting Professor and Research Fellow in Spain, Uruguay and Argentina and most recently at Yale University. Over the past years, he has taught executive and graduate courses in CSR, economic philosophy, and humanistic management in Berlin and Barcelona. His areas of expertise and academic work include political, economic, and religious philosophy with a particular focus on the theories of freedom and responsibility in the age of globality. Claus Dierksmeier works as a strategy consultant, both in politics and business. He also serves on the board of directors of The Humanistic Management Network and is Academic Director of The Humanistic Management Center in Berlin. Of particular importance is his work as an editor in the Humanism in Business Series.

Steve Dubb is Research Director of the Democracy Collaborative at the University of Maryland and has worked for the Collaborative since 2004. He is the principal author of Linking Colleges to Communities: Engaging the University for Community Development (2007) and Building Wealth: The New Asset-Based Approach to Solving Social and Economic Problems (2005). In 2010, Steve co-authored a number of reports, including The Road Half Traveled: University Engagement at a Crossroads with Rita Axelroth Hodges and Growing a Green Economy for All: From Green Jobs to Green Ownership with Deborah Warren. He also conducted with Ted Howard the initial strategic planning that led to the development of the Evergreen Cooperative initiative in Cleveland, Ohio, and currently assists efforts to adapt that model to meet the needs of other cities.

Riane Eisler, JD, is President of the Center for Partnership Studies and consults for business and governments on the partnership model she introduced. She is internationally known for her contributions as a systems scientist, human rights attorney, and author of numerous books, including The Chalice and the Blade: Our History, Our Future (1988), in 25 foreign editions, and The Real Wealth of Nations: Creating a Caring Economics (2008). She teaches at CIIS and www.caringeconomy.org, has taught at UCLA, has participated in keynote conferences worldwide, and has spoken on numerous platforms, from the United Nations General Assembly, Congressional briefings, and the U.S. State Department to major universities and corporations. Eisler is editor-in-chief of the Interdisciplinary Journal of Partnership Studies, a member of the Club of Rome and the World Future Council; a fellow of the World Academy of Art and Science; founded the Caring Economy Campaign, dedicated to moving us to a more sustainable, equitable, and caring economy; and co-founded the Spiritual Alliance to Stop Intimate Violence with Nobel Peace Laureate Betty Williams to stem the pandemic of violence against women and children. She has received many honors, including honorary PhD degrees and the Distinguished Peace Leadership Award.

Felix Fuders is Professor and Researcher at the Universidad Austral de Chile, Economics Institute and Visiting Professor at the University of Erlangen-Nuremberg. He holds a Master of Arts in International Business Administration, PhD in Economics, and Social Sciences. He is has published a series of papers on the subject of regional currencies as solution to the global (financial) crisis and on sustainable development. He is the co-author of the book La Evolucion Sostenible II ‒ Apuntes para una salida razonable, which was produced in cooperation with researchers form Universidad Mondragon (Spain) and Manfred Max-Neef. He is a member of the Foundation for Sustainability (Gesellschaft fur Nachhaltigkeit e.V.), Berlin and the Network Sustainable Economics (Netzwerk Nachhaltige Okonomie), Berlin.

Hazel Henderson, D.Sc.Hon., FRSA, is the founder of Ethical Markets Media, LLC and the creator and the co-executive producer of its TV series. She is a world renowned futurist, evolutionary economist, a worldwide syndicated columnist, consultant on sustainable development, and author of the Axiom and Nautilus award-winning book Ethical Markets: Growing the Green Economy (2006) and eight other books. She co-edited, with Harlan Cleveland and Inge Kaul, The UN: Policy and Financing Alternatives (1995; US edition, 1996), and co-authored with Japanese Buddhist leader Daisaku Ikeda, Planetary Citizenship (2004). Her editorials appear in 27 languages and in 200 newspapers syndicated by InterPress Service in Rome, New York, and Washington DC, and her book reviews appear on Seeking Alpha, a London-based market e-letter. Her articles have appeared in over 250 journals, in the USA, Japan, Venezuela, China, France, and Australia. Her books are translated into eight languages. She sits on numerous boards and is Fellow of the World Business Academy. She leads the Transforming Finance initiative, created the Green Transition Scoreboard, co-developed with Calvert the GDP alternative now renamed the Ethical Markets Quality of Life Indicators and co-organized the Beyond GDP conference for the European Commission. In preparation and subsequent to the EC conference, she has funded three Beyond GDP surveys, finding strong support worldwide for ESG metrics in national accounting. In addition, she has been Regent’s Lecturer at the University of California-Santa Barbara, held the Horace Albright Chair in Conservation at the University of California-Berkeley, and advised the U.S. Office of Technology Assessment, the National Academy of Engineering and the National Science Foundation from 1974 to 1980. She holds Honorary Doctor of Science degrees from the University of San Francisco; Soka University (Tokyo); Worcester Polytechnic Institute, Massachusetts (USA); and Wilson College, Pennsylvania (USA). She is an active member of the National Press Club (Washington DC), the World Future Society (USA), a Fellow of the World Futures Studies Federation and a member of the Association for Evolutionary Economics. She serves as an Honorary Judge of the Youth Citizen Entrepreneur award and the KATERVA Global Awards for Sustainability. Henderson has received many awards including the 1996 Global Citizen Award which she shares with Nobelist A. Perez Esquivel of Argentina. In 2007, she was elected a Fellow to Britain’s Royal Society of Arts, founded in 1754.

Noreena Hertz is a decision-making guru, bestselling author, and strategist who advises some of the world’s top CEOs and presidents on economic, geopolitical, and business decisions. She graduated from university at the age of 19. By the age of 23 she was advising the Russian government on its economic reforms. At the age of 29 she was working with the governments of Israel, Egypt, Palestine, and Jordan on the Middle East Peace Process. Described by the Observer as one of the world’s leading young thinkers, Vogue as one of the world’s most inspiring women and on the Cover of Newsweek’s September 30, 2013 issue, Noreena is known for her visionary ideas. In The Debt Threat, she predicted the 2008 financial crisis, and in The Silent Takeover, she anticipated that unregulated markets and massive financial institutions would have serious global repercussions. Her latest book Eyes Wide Open: How to Make Smart Decisions in a Confusing World was published in September 2013 to global acclaim. Her books are translated into 22 languages. A much sought-after commentator on television and radio Hertz contributes to a wide range of publications and networks including The BBC, CNN, CNBC, The New York Times, The Wall Street Journal, The Daily Beast, the Financial Times, the Guardian, The Washington Post, The Times of London, Wired, and Nature. She has given Keynote Speeches at TED and The World Economic Forum, as well as for leading global corporations, and has shared platforms with such luminaries as President Bill Clinton, Tony Blair and Ken Robinson. Her work was the inspiration for Bono’s (RED) campaign. She is a Board Member of Warner Music Group and sits on various charitable boards.

Katrin Kaufer is co-founder and research director at the Presencing Institute and research fellow at the Community Innovators Lab (CoLab) at MIT’s Department of Urban Studies and Planning. Her research focuses on leadership, social transformation, and socially responsible banking. She has consulted with mid-sized and global companies, nonprofit organizations, the World Bank, and the United Nations Development Programme. She currently works with the Global Alliance for Banking on Values, a network of twenty financial institutions that focus on relinking finance with a shared intention for positive social change. She also co-developed the Global Classroom concept at the Presencing Institute, an online learning platform that links live-streamed virtual classroom interaction with small-group dialogue and local action. Kaufer earned her MBA and PhD from Witten-Herdecke University in Germany. Her dissertation focused on socially responsible banking. More information can be found at www.presencing.com.

Hans Küng studied theology and philosophy at the Pontifical Gregorian University in Rome and was ordained a catholic priest in 1954. In 1960, he was appointed professor of theology at Eberhard Karls University, Tübingen, Germany. In 1962, he was appointed peritus by Pope John XXIII, serving as an expert theological advisor to members of the Second Vatican Council until its conclusion in 1965. In a 1963 tour of the United States, Küng’s controversial work earned him an honorary doctorate from St. Louis University. Küng’s publications, speeches and projects on the subjects of papal infallibility, evolution and euthanasia from a Catholic perspective have prompted extensive discussion (both criticism and acclaim) among the world religious and political leaders. In the early 1990s, Küng initiated a project called Weltethos (Global Ethic), which is an attempt at describing what the world’s religions have in common (rather than what separates them) and at drawing up a minimal code of rules of behavior everyone can accept. His vision of a global ethic was embodied in the document for which he wrote the initial draft, Towards a Global Ethic: An Initial Declaration. This Declaration was signed at the 1993 Parliament of the World’s Religions by religious and spiritual leaders from around the world. Later Küng’s project would culminate in the UN’s Dialogue Among Civilizations to which Küng was assigned as one of 19 eminent persons. Küng taught as a tenured professor of ecumenical theology at the University of Tübingen until his retirement (Emeritierung) in 1996.

Carlos Largacha-Martinez is Professor at the School of Business at the Universidad EAN, Bogotá, Colombia. His main interests are authentic leadership, humanistic management, complex theories applied to management (quantum mechanics), and immaterial communication (beyond self-fulfilling prophecy). He has done consultancy in inspirational leadership to companies like WoodGroup (Energéticos), World Vision International (Colombia), BBVA, and Bancoldex, among others. Within that consultancy to Energéticos, with Peter King and Juanita Cardozo, they wrote the award-winning case for the ‘Leadership Challenge’ done by MIX (McKinsey, HBR, and London Business School). He was Vice-Chancellor of Research at Universidad EAN, where he co-lead the creation and development of the PhD in applied management. He is Fellow of the Graduate School of the University of Miami, and alumni of the Kennedy School of Government – Harvard University. As a TEDx speaker in 2012, he presented his ideas about the urgent need for authenticity in management and leadership. He leads the Colombian Chapter of the Humanistic Management Network. In 2014 he received the award of ‘Best Professor’ within all the Schools at Universidad EAN.

Roger L. Martin is Premier’s Chair in Productivity & Competitiveness and Academic Director of the Martin Prosperity Institute at the Rotman School of Management. From 1998 to 2013, he served as Dean. Previously, he spent 13 years as a Director of Monitor Company, a global strategy consulting firm based in Cambridge, Massachusetts, where he served as co-head of the firm for two years. His research work is in integrative thinking, business design, strategy, corporate social responsibility, and country competitiveness. He writes extensively and is a regular contributor to: Harvard Business Review’s The Conversation blog, the Financial Times’ Judgment Call column, and Washington Post’s On Leadership blog. He has written 15 Harvard Business Review articles and published eight books: Playing to Win (with A.G. Lafley) (2013), Fixing the Game (2011), The Design of Business (2009); The Opposable Mind (2007); The Responsibility Virus (2002); Canada: What It Is, What It Can Be (with Jim Milway, 2012); and Diaminds (with Mihnea Moldoveanu, 2009), and The Future of the MBA (with Mihnea Moldoveanu, 2008). In addition, he co-edited Rotman on Design (with Karen Christensen, 2013). In 2013, Roger has placed several times on the Thinkers 50 list, a biannual ranking of the most influential global business thinkers, moving from 32nd in 2009 to 6th in 2011 and to 3rd in 2013. In 2010, he was named one of the 27 most influential designers in the world by Business Week. In 2007 he was named a Business Week B-School All-Star for being one of the 10 most influential business professors in the world. Business Week also named him one of seven Innovation Gurus in 2005. Roger received his AB from Harvard College, with a specialization in Economics and his MBA from the Harvard Business School.

Manfred Max Neef is a Chilean economist and environmentalist known mainly for his human development model based on fundamental human needs. He began his career as a professor of economics at the University of California, Berkeley in the early 1960s. Max Neef traveled through Latin America and the United States, as a visiting professor in various universities, as well as living with and researching the poor. He worked with the problem of development in the Third World, describing the inappropriateness of conventional models of development that have contributed to poverty, debt and ecological disasters for Third World communities. In 1981, Max Neef wrote From the Outside Looking In: Experiences in Barefoot Economics, a narrative of his travels among the poor in South America. In the same year, he founded the Centre for Development Alternatives (CEPAUR). In 1982, Max Neef won the Right Livelihood Award for his work in poverty-stricken areas of developing countries. Max Neef ran for President of Chile as an independent in the 1993 election. He achieved 4th place, with 5.55% of the vote. In 1993, Max Neef was appointed rector of the Universidad Austral de Chile in Valdivia. He served in that position for eight years. Max Neef is a council member of the World Future Council. He is also affiliated with the European Academy of Sciences and Arts, the Club of Rome, the New York Academy of Sciences, and the Leopold Kohr Academy of Salzburg (an institution founded by Leopold Kohr). Among his honoraria are the University Award of Highest Honour (Soka University); Doctor Honoris Causa (University of Jordan); Chile’s National Prize for the Promotion and Defense of Human Rights; and the Kenneth Boulding Award, the highest honor bestowed by the International Society for Ecological Economics (August 2008). On May 10, 2009,he received an Honorary Doctorate in Humane Letters and was Commencement Speaker to the 158th Graduating Class of Saint Francis University.

Michael Pirson is Director of the Center for Humanistic Management and Associate Professor of Global Sustainability and Social Entrepreneurship at the Fordham School of Business, USA. Pirson is also a founding partner of the Humanistic Management Network, an organization that brings together scholars, practitioners, and policymakers around the common goal of creating a life-conducive economic system. He is the co-editor of the Humanism in Business book series and has published widely. He is also an active board member of three social enterprises and has worked for and with businesses, non-profits, embassies, political campaigns, and local and national governments.

Otto Scharmer is a senior lecturer at Massachusetts Institute of Technology’s Sloan School of Management. He is founding chair of the Presencing Institute, a research community dedicated to social innovation. He is the founding chair of the MIT IDEAS Program, which takes leaders from civil society, government, and business from Indonesia and China on a nine-month action learning journey in order to co-create profound social innovation in their communities. With the German government and the Gross National Happiness Centre, a non-governmental organization in Bhutan, he co-founded the Global Well-being and Gross National Happiness Lab, which brings together innovative thinkers from developing and industrialized countries to prototype new ways of measuring well-being and social progress. He has worked with governments in Africa, Asia and Europe and led leadership and innovation programs at corporations such as Alibaba, Daimler, Eileen Fisher, Fujitsu, Google, Natura, and PriceWaterhouse.

Ulrich Steinvorth is a German political philosopher. He has published on topics in moral philosophy and applied philosophy, as well as the history of philosophy and metaphysics. Until his retirement in 2006, Ulrich held posts at various German universities. From 2006 to 2011, he was a visiting professor at Bilkent University (Ankara), from 2011 to 2012 at the University of Tokyo, Japan, and from 2012 to 2013 at George Mason University, USA.

Shann Turnbull obtained an MBA from Harvard University in 1963 and published The Management of Capital in 1965 to promote modern financial analysis in Australia. He became a part time teacher at Australia’s first business schools while working as a serial entrepreneur; founding many enterprises with three becoming traded on the Australian stock exchange. From 1967 to 1974 he was in charge of research for a private equity group that acquired and re-organized a dozen publicly traded companies. In 1970, he also became a founding joint CEO/owner of a mutual fund management company. In1973, his first academic paper Time Limited Corporations was published in ABACUS, a journal of accounting, finance, and business studies. Turnbull pioneered research and teaching of corporate governance and in 1975 he published his first book on Democratising the Wealth of Nations. The novel ideas in his book led to consulting assignments for multi-national corporations, United Nations, World Bank, and governments, including in 1991 the Peoples Republic of China and Czechoslovakia. Turnbull has been a prolific writer on reforming the theories and practices of capitalism. In 2001, he obtained a PhD from Macquarie University with a thesis that showed how the science of control and communication in the animal and the machine described as cybernetics could be extended to organizations to create a science of governance as presented in his articles. His thesis built upon his education as an electrical engineer in Tasmania in 1957 and a BSc from the University of Melbourne in 1960. Turnbull applied the methodology developed in his dissertation to evaluate and rate the governance integrity of the largest 100 organizations in Australia by turnover for three years from 2001. From 2001 to 2006 he was the Australian Advisor to the London based Hermes Focus Asset Management. In 2002 he was commissioned by the London based New Economics Foundation to write a public policy booklet on A New Way to Govern: Organizations and Society after Enron. He has taught business courses at a number of acclaimed universities including Macquarie University, University of and Sydney University. In 2011, Turnbull founded the Green Money Working Group in the UK to provide liquidity for small and medium-sized enterprises in the event of another financial crisis.

Sandra Waddock is the Galligan Chair of Strategy, Carroll School Scholar of Corporate Responsibility. She is a Professor of Management in the Carroll School of Management at Boston College. She was the co-founder of the Leadership for the Change Program; Sustainability, Responsibility, Community at Boston College and the Initiative for Responsible Investing. In the fall 2012 and during the academic year 2006–2007, she was a Visiting Scholar at