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Spiritual Capital presents a new vision of capitalist society that transcends the greed, materialism, and meaninglessness so rampant today. It offers an idea of wealth, profit, and capital that's about more than simply money. "Profit," under this system, would be not merely for private gain but would be used in part for public good. "Wealth" would be that which enriches the deeper aspects of our lives, gained by drawing upon our most fundamental purposes and highest motivations and finding a way to embed these in...
Spiritual Capital presents a new vision of capitalist society that transcends the greed, materialism, and meaninglessness so rampant today. It offers an idea of wealth, profit, and capital that's about more than simply money. "Profit," under this system, would be not merely for private gain but would be used in part for public good. "Wealth" would be that which enriches the deeper aspects of our lives, gained by drawing upon our most fundamental purposes and highest motivations and finding a way to embed these in our work. "Capital" is amassed by serving - in corporate philosophy and practice - the pressing concerns of our world. The author's dream of getting a critical mass of people and organizations to act for what's right rather than for self-serving reasons. Ideally, spiritual capital would reflect a values-based business culture. Instead of emphasizing shareholder value, it would promote "stakeholder value," where stakeholders include the whole human race and the planet itself.
In Ovid's tales from Greek mythology, we learn of a wealthy timber merchant named Erisychthon (Er-is-ya-thon). Erisychthon is a greedy man who thinks only of profit. Nothing is sacred to him. But on Erisychthon's land there is a special tree beloved of the gods. Prayers of the faithful are tied to its prodigious branches and holy spirits dance round its magnificent trunk. Erisychthon cares nothing for this. He looks at the tree and assesses the volume of timber it will produce, then he takes an axe to it. Against all protest he chops until the tree is withered and fallen and all divine life that inhabited the tree has fled. But one of the gods puts a curse on Erisychthon for his greed. From that day forward, Erisychthon is consumed by an insatiable hunger. He begins by eating all his stores, then he turns all his wealth into food he can consume. Still not satisfied, he consumes his wife and children. In the end, Erisychthon is left with nothing to consume but his own flesh. He eats himself.
Of a monster no longer a man. And so, At last, the inevitable. He began to savage his own limbs. And there, at a final feast, devoured himself.
Erisychthon is the ultimate symbol of purely economic man, and his fate is that of a way of living life, or of doing business, that is not sustainable. But he is a symbol held up to us by today's capitalism and business as we know it. He is a symbol that may represent the self-destructive fate not just of business but of our whole culture if we allow the narrow values of today's short-term, money-obsessed business ethic to dominate our broader lives and choices.
In this book, I want to look first at the assumptions and mind-set that underlie capitalist business as we know it. What are its basic values? Its primary motives? The things it takes for granted? What assumptions does business make about nature, human nature, and human motivation? Why are such assumptions and values unsustainable? Why do these assumptions ensnare business in an ultimately self-consuming spiral of behavior? Why is business as we know it today set ultimately to kill business?
How It Is Now
Modern capitalism as currently defined has only two basic assumptions about humanity. First, it assumes that human beings are primarily economic beings, with what Adam Smith called a "natural propensity to truck, barter and exchange." Second, capitalism assumes that human beings will always act so as to pursue our own rational self-interest, or at least our hunches about what will benefit ourselves. In business terms, these principles are mirrored by the pursuit of profit for its own sake and by the assumption that every business exists to maximize its own self-interest—the profits of its shareholders measured in quarterly returns.
These two basic, spoken assumptions of capitalism are underpinned by other, sometimes unconscious assumptions. Capitalism assumes that the earth is here to provide us with resources, and that these resources are unlimited. It also assumes that each agent or corporation is an island unto itself whose actions have no unwanted consequences, and whose interests are under its own self-control. There is, too, the more general assumption that the whole world of business is an island unto itself, an enterprise that can be conducted without regard to or concern for wider issues. "We don't know what's outside the window, and we don't care."
At the heart of capitalism and business-as-usual lies a very narrow definition of what it means to be human and to be engaged in human enterprise. Human beings are measured by thirst for profit and by capacity to consume. Employees are measured by their capacity to produce what others can consume. Viewed merely as consumers, customers and employees are not seen as people who value certain things, who harbor loyalties and passions, who strive and dream, who seek a particular quality of life. Big consumers (the wealthy) have more value than small consumers (the poor). Capitalism's assumption that we will always act so as to pursue our own self-interest carries the underlying assumption that human beings are essentially selfish, that we will always act to promote "number one."
Bolstered by intellectual trends like Newtonian science and its accompanying technology and by Darwinian "survival of the fittest," capitalism's own "laws of motion" (law of competition, law of profit maximization, law of capital accumulation) have locked business-asusual into a ruthless pursuit of competitive advantage in a world whose resources its own practices are constantly diminishing. This is not sustainable. Like Erisychthon, business is destined ultimately to consume first its own resources and then itself. We see this in the repeated fate of many Fortune 500 companies, which don't sustain themselves for even five years.
Why is business-as-usual unsustainable? On the surface—and no less valid because constantly talked about—are issues like the exhaustion of resources and accompanying environmental damage. At present rates of consumption, petroleum supplies are reckoned to last for perhaps another fifty years. As the Third World develops, these rates of consumption can only increase. As I began this book, vast population areas of the country where I live (England) were under floodwater. Global warming, we are warned, is set to continue and with it the extreme weather conditions that bring devastation to previously stable population centers and to the businesses that thrived within them. Environmental pollution and the global warming to which it is leading are also melting the polar ice caps, thus leading within fifty to a hundred years to a rise in sea levels that will flood most of the world's major coastal cities. Many scientists are now warning that this could occur even within the next ten years. Before or as that happens, the melting of the ice caps is set to reverse the Gulf Stream that protects northern Europe from being a frozen wasteland. These are not problems facing some distant, unfathomable future. The children of today's business and political leaders will inherit this legacy in their lifetimes. We may live to see it.
There are other obvious problems for the sustainability of business (and accompanying political strategies) as currently practiced. The assumption that human beings are primarily consumers favors the big consumers over the small. This has led to increasing unevenness in the distribution of the world's wealth, not just between nations and geographical areas, but often within wealthy societies. Extreme wealth lives side by side with the most extreme poverty in nations such as India, the United States, and Brazil. Such imbalance bodes ill for political and social stability within societies where it exists (high crime, family breakdown, civil unrest, a sense of despair, domestic terrorism, potential revolutions).
Between rich and poor nations, inequality leads to the pressure on the poor to migrate to wealthier areas, swelling populations of illegal immigrants and the accompanying social and political unrest. It creates both a global underclass and various domestic under-classes. Extreme inequality adds to the sense that "globalization" means simply the colonization of the poor by the wealthy capitalist world. This leads to humiliation and rage. It fuels the hatred of terrorists who both envy and fear the wealthy in developed nations. All these things are bad for business. Capitalism creates a shadow of itself that, like Erisychthon's greed, reaches round to consume itself.
Less obviously, the assumption that human beings are purely economic creatures who live to make money increases the stress and exhaustion of the "winners" who serve the existing system. Other values—time with the family, time to relax, time to nourish inner needs, time to enjoy the accumulated wealth, opportunity to find fulfillment in the work we are doing, a sense of fundamental purpose in life—are sacrificed in the pursuit of ever more profit, ever bigger monetary growth. People who lead and work within the mighty corporations generating all this profit might be tempted to ask, with Charles Handy, "What is this business for and to whom does it belong? Are we who work in these businesses, be they social or commercial, their instruments or something more than that?"
The major cause of stress in most of our lives today is a loss of meaning. Things change so quickly and so constantly, so many of our old certainties no longer apply, that we have lost our essential bearings. There is reengineering, downsizing, redefinition of jobs, corporate break-ups and mergers, the musical chairs of new CEOs, the often-sham offers of empowerment and autonomy, the short-term contracts and their diminution of loyalty, commitment, and trust. And that's just business stress. In our private lives we experience the erosion of moral and religious certainties, changes in family and relationship structure, constant mobility, loss, divorce, retirement, and the death of loved ones. Twenty-first-century life has become like the Caucus Race in Lewis Carroll's Alice Through the Looking Glass. Someone says "Let's play a game"—but there are no rules and no clear sense of the playing field's boundaries Someone shouts "Begin!" and we all start running around. Then, at some arbitrary point, someone shouts "Stop!" There are no winners and no losers. We haven't a clue what it's all about. We are left with nothing from the effort but stress and the kind of world-weariness described by the English poet William Wordsworth,
The world is too much with us; late and soon,
Getting and spending, we lay waste our powers:
Little we see in Nature that is ours;
We have given our hearts away, a sordid boon!
This Sea that bares her bosom to the moon;
The winds that will be howling at all hours,
And are up-gathered now like sleeping flowers;
For this, for everything, we are out of tune;
It moves us not....
Meaninglessness and the stress to which it gives rise is the major cause of illness in the developed world today. Diseases like depression, anxiety, chronic fatigue syndrome, alcoholism, drug abuse, and suicide are obviously stress-related. But mainstream medicine now recognizes a crucial stress factor in the so-called physical illnesses of high blood pressure, heart disease, cancer, and even Alzheimer's disease. Stress depresses the human immune system's ability to fight off any disease. Stress releases a constant stream of adrenaline for "fight or flight" behavior, along with other stress hormones that raise concentration to a critical height—in the short term. Over an extended period, they burn us out.
Stress and exhaustion are clearly bad for the people who suffer them. They lead to disease and premature death. But stressed and exhausted people are also bad for business. They reduce overall creativity and productivity, they are prone to illness and absence from work, they cost companies and national economies money. Stress-related illness costs the United Kingdom 3.9 billion pounds sterling annually. It costs the United States 10 percent of gross national product each year.
Again, business as we know it, business that assumes money and only money is the bottom line, is unsustainable because it has led to a leadership crisis within top companies. The problems and challenges facing business today are enormous: rapid change, globalization, new technology, greater customer expectations, political, social, and ecological crises. Yet, as professor John Hunt from the London Business School points out, devoting one's life to making ever more money for the shareholders isn't ultimately very inspiring. As an executive from Shell USA said to me recently, "The trouble with corporate life is that it is essentially dispiriting. Corporations are about making money. They define work as the pursuit of money. But we human beings are essentially spiritual creatures. We are on a lifelong quest for meaning. So our corporate lives exclude what we really care about."
Great leaders usually want to serve great causes, want their lives and their work to count for something, want to make a difference in life. Such people are attracted to politics, medicine, research, education. They are seldom found at the top of large corporations. Many who were have left to work for nonprofit organizations like Save the Children or the major NGOs. This critical shortage of great leaders is bad for business.
As the pool of potentially great leaders has drained, leaving behind the pure money seekers, business has become increasingly dirty business. Capitalism itself has never had any moral principles or framework. It is an economic theory, not a moral or social philosophy. The market, pure and simple, is its bottom line. Very early capitalism was contained within the moral and spiritual vision of Christianity, hence all those altruistic Quaker businessmen of the Victorian era. But as ethics and values have eroded generally in society, business is left with the ethics of Gordon Gecko, the ruthless corporate raider portrayed in Wall Street. New millennium business has been exposed as a moral quagmire, where biggest crocodiles will use any kind of cheating, fraud, or false accounting to fill their own bellies. As John Plender said in his recent book Going off the Rails, "The American way of doing business has been hijacked by the values of a financial community that is so preoccupied with trading and dealmaking that it has lost sight of the purpose of its own business. There is indeed a crisis of legitimacy in modern capitalism."
Not content with cheating society at large (all those tax evasions), or even their customers, the leaders of companies like Enron, WorldCom, and a host of others were willing ruthlessly to cheat their own stockholders. In Plender's words, "Everyone in the [Enron] story was involved in potential conflicts of interest. And everyone—including the watchdogs—had been bought by Enron in one way or another." As the consequent fall in stock prices and market instability have shown, dirty business is bad for business.
Finally, business today is killing business because it is locked into a short-term, problem-solving, profit-maximizing mentality. In the words of this book, business is not using its whole brain, not using its full intelligence. If my mind is focused on the money I can make in three months' time (quarterly returns), my whole perspective is narrow and limited. I use my rational, linear, problem-solving intelligence to solve immediate problems that stand in the way of a quick buck. I am blind to broader issues like the long-term viability of the planet or even the shorter-term viability of my own society or company, or the lifestyle and values I am forcing upon myself and my family. I don't reflect. I don't plan ahead. I don't look at "the big picture." I don't allot adequate time or devote sufficient resources to the research needs of my company. I don't look at long-term safety features or future growth.
In Britain recently, we have seen our entire rail infrastructure crack. For months the trains virtually could not run. Too late, Railtrack (the private company in charge of Britain's rail network) saw not only that present lines had deteriorated beyond acceptable standards of safety but also that wholly inadequate plans had been considered for how to enable the nation's rail network to serve the pressing needs of future traffic. Why? Short-term profit and the short-term thinking it had spawned. Investors wanted good quarterly dividends; senior managers felt their job was to ensure them. As is common in large corporations, managers' bonuses were linked to quarterly results.
Railtrack's story is not unusual. Short-term, uncommitted investment by huge, anonymous investment funds is the scourge of today's business, depriving company leaders of control over their own planning and debasing the whole ethic of doing business. Such investments, and their inflationary and destabilizing effect, were at the heart of the crisis that struck the Tiger Economies in the late 1990s. Short-term, get-rich-quick investments were also responsible for the catastrophic decline in Marconi shares at the beginning of the new millennium. Money-making has become money-grubbing, and money-grubbing is bad for business.
Excerpted from SPIRITUAL CAPITAL by DANAH ZOHAR IAN MARSHALL Copyright © 2004 by Danah Zohar and Ian Marshall. Excerpted by permission of Berrett-Koehler Publishers, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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