CHALLENGING ASSUMPTIONS OF OLD BUSINESS MODELS
By Arthur Lyon Dahl
People and institutions act within a framework of assumptions about the world, how it works, and what is right and wrong. The assumptions, absorbed unconsciously throughout life, are constantly reinforced and generally unquestioned. Where these in fact do not conform to reality and become obstacles to change, it is necessary as a first step to question such assumptions. This is the challenge faced by business today.
One of the most fundamental assumptions at the foundation of modern neoliberal economic thinking is that people are fundamentally selfish and aggressive, which leads to the acceptance as normal of market and political forces powered by ego, greed, apathy and violence, and a society that places the highest values on wealth, power and fame.
This reflects the animal nature of man. Animals have no free will, but live within the natural constraints of their ecosystems that keep them in balance. When humans give priority to their animal nature and give it free rein, they have no natural limits and become worse than the animal, as demonstrated by our violence, wars, carnage, and multiple forms of inhumanity and exploitation.
In the economic system, the principal measure of success is wealth, whether personal wealth or national wealth measured as GDP.
At the corporate level it is profit, return on capital and stock market valuation that generate this wealth.
While we can easily understand and condemn individual behaviour that is so greedy, selfish and aggressive that it injures others, we do not see as easily how these values are incorporated in our institutions, particularly traditional corporations.
Those old models are still part of many corporations, where greed is institutionalized, ready to do anything to maximise profits, with the ends justifying any means. And as institutions, they have little conscience, moral framework or sense of humanity to restrain them. They are driving climate change, the destruction of biodiversity, massive pollution, human exploitation, extremes of poverty and wealth, the arms race, the privatisation of knowledge and science, and most of the other ills that have escaped from any control.
Normally it is government that should ensure the common good of all, but corporate lobbies and corruption now control most governments, and there is no global governance for non-state entities like corporations. All the efforts at multilateral cooperation among states to address human rights and environmental sustainability fail in implementation because they have no influence over those with the real power today in the economic system.
Selfishness is behind the whole consumer society, with traditional business models cultivating endless wants and even addictions in the search for profits, regardless of the human and environmental costs.
Think of the alcohol and tobacco industries, the arms industry, junk food and many other sectors that take no responsibility for the impact of their production.
That system defines “happiness” in material terms as having things, being accepted, following the crowd, cultivating animal pleasures, all very superficial and temporary.
Yet studies show that, once basic material and social needs are met, there is no further increase in happiness, and no correlation with wellbeing.
Other economic values are equally suspect.
From a systems perspective, competition is highly inefficient, creating duplication, with winners and losers causing a waste of resources, and innovations milked for profits rather than contributing to the greater good. The recent example of government funding for COVID-19 vaccine development captured as corporate intellectual property to be sold to the wealthy for extravagant profit while depriving the poor of protection and extending the pandemic.
This is not a new problem. Black racism has its roots in the transatlantic slave trade over the last 400 years. Colonisation was driven by the entrepreneurial search for wealth by conquest, but exploiting the rich soils of the new world required cheap labour, and Africa was the nearest source. Governments supported these new entrepreneurs by passing laws defining blacks as property rather than human beings to facilitate their exploitation, legalising and justifying slavery, and laying the foundation for modern racism. Today exploitation takes other forms, but the consequences are equally immoral.
To address this problem, we must start by questioning the basic economic assumptions about human nature. But on what basis can one identify such false assumptions and question them?
Human authorities are constantly arguing about what is right and wrong, with no way to judge between them.
Down through history, the fundamental paradigm changes in the organisation and evolution of human society have come from religion, with its claim to divine authority.
Only such authority provides a “touchstone of truth” by which to judge basic assumptions, at least relative to the social needs of the time and place.
The Baha’i Faith provides a framework of values for the needs of today’s rapidly evolving world society, physically united but still far from accepting the oneness of humankind.
This rejection of our unity in diversity is at the root of today’s crises.
Religion as exemplified in the Baha’i Faith teaches that human reality is essentially spiritual, at least in potential.
We can and should rise above our animal reality.
This requires education, and especially the spiritual education to higher values like honesty, integrity, trustworthiness and generosity that come from religions. It also teaches social values such as moderation, justice, love, reason, sacrifice and service to the common good.
These are the values upon which all civilisations have been built, and are now needed today more than ever to lay the foundation for a world civilisation to emerge.
The opposite of selfishness is acceptance of the oneness of humanity, that every human being is a trust of the whole, and suffering anywhere in the world causes all of us to suffer.
True happiness comes from living a virtuous life, refining one’s character and contributing to the advancement of civilisation through one’s profession and acts of service.
The inefficiency of competition can be replaced by cooperation and reciprocity, with innovation motivated by service to the common good, and wide consultation on the best use of discoveries for the advancement of society as a whole.
A market can work best with an honest consultation between buyers and sellers about a just price between cost and need. The economic system can still generate wealth, but with the aim of making everyone wealthy.
Where wealth is the measure of economic success, power is its political equivalent. Today’s challenges of governance and the desire for power and fame are similarly selfish and aggressive. Clearly the concept of power as a means of domination, with the accompanying notions of contest, contention, division and superiority, are behind the failure of all governments today to serve the common good and must be left behind.
We need systems of governance that empower everyone to contribute, consulting on needs and searching for solutions that provide for the wellbeing of all and the sustainability of the environment upon which we all depend, free from the battles of ego that define politics today.
The same can be said about the religious systems of the past. As with all human institutions, the structures and hierarchies added to older religions became similarly corrupted by selfish interests and must be replaced, which is why we see a continuing process of religious renewal down through the centuries.
With respect to business, the conclusion that must be drawn is that, to bring about the change that is needed, we must transform the very nature of old economic institutions that are the embodiment of greed and selfishness inherent in their legal charters, stock markets and financial institutions that give absolute priority to profit and return on investment.
One way forward: economic entities such as corporations that are using new legal charters that define their social purpose, with profit being only one measure of efficiency.
Governments also need to provide a framework of law and regulation that defines the common interest to be respected, including at the global level.
New non-financial measures and systems of accounting are needed to define progress and motivate positive action.
They could guide us to restore climate stability and productive ecosystems and prevent pollution. They could define a society able to meet the basic material needs of all with proper nutrition and good health, to provide meaningful work and access to education, to encourage knowledge, science, art and culture, all by fostering the values and spiritual capital that would be the measures of an ever-advancing civilisation.
Corporate charters are already being redrafted and there is the political and social will to accelerate this evolution.
Admittedly there are sectors of the economy with no social purpose that would disappear.
Changing the ground rules by which businesses operate from selfishness to service would transform corporations from the root of the problem to part of the solution.
The lobbies and vested interests that block the necessary transformation would vanish, and make possible the acceleration in positive action that is needed to save us before it is too late.