The moral and ethical responsibilities of capitalism and business


Reinventing capitalism will be a work in progress for years or even decades, but the great transition has begun.

- A Kaletsky, Capitalism 4.0

A debate about the moral limits of markets would enable us to decide, as a society, where markets serve the public good and where they don’t belong.

- M Sandel, What Money Can’t Buy, The Moral Limits Of Markets



A house of cards

The collapse of African Bank should not surprise anyone. What is surprising and ethically debatable is the number of asset management companies, investors and even banks who bought shares in this company. Of course they got a good return as did the handful of senior managers at the bank who each reportedly earned about R40 million a year. The banks former chief risk officer made more than R50 million in share options and are R35 million in salary and bonuses according to the Sunday Times. If we ever needed more evidence of rampant capitalism and the need for a new model, we have it with ABIL.

I can recall doing a training session at African Bank about 20 years ago when during the tea break some of the delegates brought staff members to show me their payslips. The slips displayed their net salary within brackets. In other words, they were rolling with so many loans that their monthly salary was negative. I learnt then, and I know this process has since changed, that ABIL had an arrangement with the government salary system whereby repayment on loans would be automatically deducted from government and parastatal employee salaries. One can imagine the selling that went on - like dogs in a butcher shop.

The other obvious indicator of collapse, aside from the rolling loan phenomenon, was the exorbitant, actually obscene, interest rates being charged. So we all made a lot of money at the expense of the poorly educated poor. Now we are surprised that the wheels fell off.

Of course this further disempowering of the poor has taken place for decades in the furniture retail industry. That ABIL then bought Ellerines probably sped up the collapse of the house of cards.

Time for reflection

What do we learn from this sad story? For certain every brand and its company should spend a day reflecting on its purpose and whether it and its products and services are actually creating and adding genuine and sustainable value. 

The context for value is not only economic, but also a social, cultural and an environmental one. I’m suggesting that we become sceptical of our advertised claims and promises and rather reflect honestly on the actual unblinkered value that we claim to add to our staff, customers, the economy and the broader community. We urgently need to get past the fixation to add only financial value for as few people as possible.

Perhaps the following questions could assist during this proposed time for reflection:

• Are our products and services healthy?
• To what extent is there a disconnect between the advertised promise and actual delivery?
• Do we subconsciously perpetuate a social class mind-set within our organisation structures?
• Are our own people developing significantly on an annual basis?
• Are they happy?
• Are our customer’s truly satisfied?
• Are social and environmental concerns implicit within our brand offering and behaviour?
• Do we represent and celebrate cultural diversity?

As Martin Luther King said: Life's most insistent and urgent question is what are you doing for others? 

Professor of Government at Harvard University, Michael Sandel has stressed recently that market reasoning empties public life of moral argument. He warns us that our reluctance to engage in moral and spiritual argument, together with our embrace of markets, has exacted a heavy price: it has drained public discourse of moral and civic energy, and contributed to the technocratic, managerial politics afflict many societies today.

Sandel urges us to rethink the role and reach of markets in social practices, human relationships and everyday lives.

Let's make something positive come from the African Bank collapse. 

Let's not just point a finger but remember, as my mother often told me, that there are three fingers pointing back at you

 

                Setting our education free

 This powerful visual was part of the ANC 1994 election campaign. As I recall, it was designed by Hunt Lascaris and has inspired much of what we have tried to do at Vega. Of course the meaning then was to liberate the people from Bantu Education and to have an integrated school system with access to all. In many ways this has been achieved.

A school is not a factory

The other meaning is to free education from the narrow and limiting context of mere instruction. Far too much of what I see happening in education institutions is teaching and instruction. This is contrary to the core meaning of education which comes from the Latin, to lead out; to bring out, or elicit. As British novelist James Carr said: A school is not a factory. This contradicts the essence of education which, British poet Muriel Spark better described as a leading out of what is already in the pupil's soul.

Education is a developmental process. Literary critic Harold Bloom suggests it is getting students to know themselves. Education has become far too focused on class results.

Perhaps we should better flesh out the purpose of education so it really is a liberating force and not the teaching of people to repeat the past.

An education system should surely:

• Help pupil's identify and develop themselves.
• Show where and how to find information and this requires reading and research skills.
• Develop the ability to hold and present a point of view, both verbally and in writing.
• Teach students that we are all framed by our contexts and to show them that there are always other context and that perhaps the most important one is the human context.
• Show and allow the pupil's to practice both analytical and creative thinking: these are both parts of a single process; do not teach them as separate things. The arts and sciences are not in competition. They are equally important and a good education is using the whole brain!
• Celebrate great thinkers throughout history to inspire pupils.
• Education should be a continuous discovery and a source of amazement - as opposed to being a transmission of knowledge. British author, Edward Blishen, said that the teacher must be prepared to be a medium for that amazement.
• Focus on questions rather than answers and encourage new ways of thinking and doing things.
• Understand the mathematics of financial and economic systems and that nothing is cast in stone. All our theories are constructed.
• Learn about and understand positive and negative forms of human engagement.
• Make us more sensitive to the plight of others and that education should take us out of bubbles and not construct them.
• That an educated response needs to be, in the words of John Bogle, firstly, philosophically right, then ethically right and finally, economically right.

(Your comments and input to improve the above would be appreciated.)

The greatest challenge

Perhaps the greatest challenge in education is to find methodology and systems to engage the individual student and assist them to bring out themselves. The idea of throwing information out to a class and hoping that some of it will stick so an exam can be passed has very little to do with genuine education.

To all the hard working teachers working almost against the tide to achieve this, you deserve a huge accolade; you are part of the most important profession in the world.