discussing capitalism, character, and habits

Tinker, tailor, soldier, sailor, rich man, poor man, beggar man, thief … which will you be today?”

Capitalism. I am going to attempt to discuss capitalism objectively. I will admit I am getting better at doing so mostly because so many young people question me on the benefits <as well as the seemingly endless array of drawbacks>. That said. If you speak with young people there are a lot of thoughts surrounding communism, socialism and capitalism. While many of us older folk get in a tizzy over that, I do not. I believe it is healthy to discuss the nuances and aspects.

Communists view capitalism the most cynically.

“Capitalists are no more capable of self-sacrifice than a man is capable of lifting himself up by his own bootstraps.”

Vladimir Ilyich Lenin

Schumpeter viewed capitalism with a practical and realistic eye.

“There exists a parallel between education and the scale of moral values in the intellectual sectors and the administrative or bureaucratic sectors against the values and technical criteria of the economic system as it operates.”

Joseph Schumpeter

Which leads me to say I am not sure there is a more polarizing or oft-discussed issue in today’s world than Capitalism — its merits and its flaws and its effect on society & culture.

Capitalism seems to get wrapped up in right versus wrong and morals and greed and a bunch of other things. I have said it before and will say it until the day I die: capitalism is simply a system in which people work and think and behave. It may encourage some things and discourage some others, or let’s say incentivize people to do and think certain ways, but in the end it is a system in which people make choices.

That said. Stephen Covey <author of ‘7 habits of highly effective people’> reminds me of some important principles when it comes to business and capitalism. I admit I originally wasn’t a big fan of Covey and thought “7 habits of highly effective People” not only a vapid read, but the kind of tripe that encouraged non-effective people to think they were effective simply because they ‘implemented’ what effective people seemed to do <rather than make their behavior extensions of their general being>.

But I also admit that i believe almost any business book with regard to ‘what makes people successful’ tripe and relatively useless in the scheme of things <in that people tend to use them as a ‘how to be successful’ rather than thought pieces>.

So my initial thought was nothing against Covey in particular.

Anyway. In hindsight I think I missed the real point of the book (and Covey). I read the book as “a things to do” primer. By the way, my fear is the bulk of readers did as I did.

My point?

I should have taken note that he really was arguing less about discipline, but more about characteristics of personal character and purpose <beyond dollars and cents>. He was adamant that employees were not merely pistons in a machine, powered and oiled to efficiency through rewards and punishments, but rather employees were people. And, even better, individual people <not flocks of sheep>. I should have taken note that he drew inspiration from researching the past. He read almost 200 years of “success literature “.  He discovered that for almost 150 years the most common theme in American business leadership literature was character and that it was only after the Second World War it switched to touting superficial qualities such as appearance and style.

I should have taken note when he added an 8th habit:  “find your voice and inspire others to find theirs.”

I believe in hindsight I should have taken note of his steadfast belief in character above all else.

The Economist wrote this about him:

“… he tried to rescue the notion of character from both the simple minded purveyors of self-help (who imply that you can change your character as easily as your underpants) and the social service establishment (which ignore questions of character by blaming everything on the system).”

And maybe what I wish the Economist writer had noted is that it seems like we have become a working society of “how to” lists.

• How to get things done.
• How to be a better person.
• How to be happy.
• How to be a good leader.
• How to be effective.

I wish Covey were still alive because once he saw how we have become a ‘how to’ society <rather than one which learns how to on their own> I tend to believe he may have just gone back and written a new book called “oops, 7 equals zero if you don’t understand the notion of character.”

In my pea like brain I see the issue as this.

Today’s business world has become a person silo business issue.

Huh?

• Silo one – I am a person of character.
• Silo two – I am a person who can drive profit.

Uhm. And both silos are in one business person. And what this means is exactly how we get these crazy cause related business issues. What I mean is that the profit person is in one room and then goes to another room and says “well, let’s do something good.” And good is just something else you check off your list so that your character person can pat itself on the back and say “yup, I do have character.”

Do I know how to solve it?

Nope.

I know I do not believe Lenin ‘Capitalists are no more capable of self-sacrifice than a man is capable of lifting himself up by his own bootstraps’ because while I do agree that no one can lift themselves up by their own bootstraps I don’t agree that capitalists are not capable of self-sacrifice.

I also know that I wish I could send an email to Stephen Covey or even Peter Drucker.

They would know what to do and what to say.

Maybe they could address the natural challenges capitalism offers to businesses and business people that, in general, it is system that is not needs based, but rather profit based. And that translates into despite the fact we have huge needs that don’t get filled, our business world seems to remain mostly all about the profit.

Capitalism, at its worst, focuses money, profit and success on the already successful. It doesn’t oppress the poor it simply ignores the poor as the rich get richer.

Historically speaking this bears out.

Corporations used to be ‘collective’ enterprises: for the people and the people’s people <society>. Well into the 1970’s companies still defined themselves in terms of products/services offered and overall contribution to society. It was beginning in the 1980’s when finance capitalism drove vision and shareholders profits to become the ultimate objective <trumping even quality of offerings>. Raakesh khurana <Harvard> stated at a business roundtable in 1990:

“Corporations are chartered to serve both their shareholders and society as a whole.”

Ah. But then in 1997 he denied responsibility beyond that of the shareholders.

“The notion that the board must balance the responsibility to stakeholders other than shareholders fundamentally misconstrues the role of directors… “

I am not picking on him, he was simply reflecting upon the current status of the business world. What this really means is that companies, and people in companies, focused on the mere aggregation of financial assets.

This also means business simply stressed every man for himself (and, yes, i purposefully say ‘man’).

And CEOs have certainly thought of themselves. Between 1965 and 2000 the ratio of CEO pay to the typical worker expanded from 24:1 to 300:1. Maybe more concerning is the spread increased significantly between the CEO and the 3rd in command. CEO’s, due to income alone, became isolated from the real worker as well as the real world. They started living in their own bubble <or some version of a business hell>.

By the way, this aggregation of financial assets also means management became inherently more short term focused … and ended up rejecting slow thoughtful methods of decision making and became enamored with gut & instinct.

An outcome of this trend?

Leaders became charismatic; not thought leaders. They became more inspirational and less rational.

In the end I will state the obvious: the pursuit of wealth, or profit, for its own sake not only creates objective blindness, but that blindness strips all productivity of morals and ethics.

And I will also state the obvious: pursuit of wealth and profit is a complex formula.

It is very easy <too easily I may add> to make it an “I” issue. As in ‘person decision’ which inevitably leads to some random ‘psychopathic’ type discussions where this person is ‘this’ or ‘that’, but it really isn’t.

It is a societal and cultural multi-dimensional issue, as in, ‘I do some things because external factors either encourage or demand it <in business and every day Life>’. Yeah. Beyond the incentive levers of an individual business, society wields its own levers of incentives.  My last comment on this part about capitalism is that any crisis we may believe we have with regard to capitalism is first and foremost a crisis <or some derivative of crisis> of society’s character.

Which makes me circle back to Covey.

Effectiveness and ‘greatness’ in leadership begins, and ends, with character. Despite what some boardrooms suggest and some ‘results based’ ideology, profits do not measure true effectiveness.

Regardless. I will close with something David Simon <producer of The Wire> said very well about capitalism:

“Mistaking capitalism for a blueprint as to how to build a society strikes me as a really dangerous idea in a bad way. Capitalism is a remarkable engine again for producing wealth. It’s a great tool to have in your toolbox if you’re trying to build a society and have that society advance. You wouldn’t want to go forward at this point without it. But it’s not a blueprint for how to build the just society. There are other metrics besides that quarterly profit report.

The idea that the market will solve such things as environmental concerns, as our racial divides, as our class distinctions, our problems with educating and incorporating one generation of workers into the economy after the other when that economy is changing; the idea that the market is going to heed all of the human concerns and still maximise profit is juvenile.”

Ah.

…. the idea that the market is going to heed all of the human concerns and still maximise profit is juvenile.

Rationalizing what is happening in today’s society is a natural tendency and it is much much easier to focus on ‘capitalism’ rather than suggesting any dysfunction as effects of modern society: over-stimulation, consumerism, something in the water, the kids today, or too much television <despite the fact we often do>. But I find it difficult to believe there was ever a time … within any economic system … when people weren’t constantly running afoul of their own basic human traits.

What do I mean? We tend to rationalize the pursuit of our own drives. We always have and always will. We tend to, well, denounce, condemn, criticize, censure, attack, rail against, lambast, vilify, revile <pick whatever word you would like> other people for pursuing theirs if theirs happens to oppose ours. All this natural conflict of our ‘humanness’ leads to general unhappiness with ‘the system.’ But before we start wagging our finger at capitalism as if it has been a naughty little boy, we should be looking in the mirror.

We should be examining our character.

Anyway. So I close this brief discussion on capitalism with words from a USA State of the Union address:

“… wheel of progress – to create and build and expand the possibilities of individual achievement; to free other nations from tyranny and fear; to promote justice, and fairness, and equality under the law, so that the words set to paper by our founders are made real for every citizen. The America we want for our kids – a rising America where honest work is plentiful and communities are strong; where prosperity is widely shared and opportunity for all lets us go as far as our dreams and toil will take us – none of it is easy.”

Sometimes we take things for granted.

We certainly take aspects of capitalism for granted and when things don’t go well we lash out in a seemingly indiscriminate fashion.

We look at big things as little things we deserve.

We see what others have and expect that we should have it also.

That isn’t capitalism’s fault that is our <people’s> fault.

Honest work.

Well.

That takes character.

So maybe the issue isn’t capitalism, maybe its, uhm, our own character. Ponder.