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True to form, in his new documentary Capitalism: A Love Story, director Michael Moore amplifies the lies, abuses, and manipulations underlying the recent and ongoing financial crisis. In some ways appropriately, Moore points accusing fingers at Wall Street titans and their well-placed allies in government. We can recognize and perhaps celebrate the role of connection and collaboration in facilitating the bail out of the finance, auto, and other related industries.
But there is a chapter missing from Michael Moore’s story, which reveals a very different conclusion and inspires optimism and engagement, rather than pessimism and despair. This new chapter in the story of Capitalism reflects a distinctly different kind of connection and collaboration.
While some capitalists work on Wall Street, and some of those Wall Street capitalists focus on money and their personal wealth at the exclusion of nearly other things, many other capitalists build and run companies that focus on creating value for more that just themselves. And many of the capitalists on Wall Street invest in companies for reasons beyond their own self-interest and are actively participating in the emergence of Conscious Capitalism.
The missing chapter of the Love Story reveals a growing cadre of entrepreneurs, executives, and investors dedicated to practicing Conscious Capitalism – dedicated to creating conscious companies, which are purpose-driven and deliver great value to all of their stakeholders, including their customers, employees, investors, vendors, and the communities where they do business.
At its core, Capitalism is about voluntary association and collaboration, which is one of the reasons Capitalism works, why it won the battle with Socialism in the 20th Century, and why it continues to persist and flourish, in spite of its flaws and manipulations by some of its practitioners. In a market-based economy, no one forces us in deciding what to buy or where to buy it, where to work and under what conditions, or where to invest and on what terms. For the marketplace to work, the participants need to be connected – through language, culture, proximity or technology – and to collaborate to facilitate transactions and value exchange. Without connection and collaboration, there is no marketplace or Capitalism. While to some extent the financial markets function in their own realm, their foundation rests on the companies, commodities, and other things that we value or that create value. No customers, no business. No business, no stock market.
While Capitalism is about much more than Wall Street, the ecosystem of Capitalism requires capital. Just as we require food and drink to survive, grow, and flourish, businesses need capital to fuel their growth and development, and often the rate of capital required outstrips a business’s ability to generate through its revenues. And a start up, like an infant, requires nourishment from the outside to feed its launch into life.
Thus investors are one important stakeholder in the ecosystem of a business, but not the only one. Conscious investors recognize that for their capital to have the greatest effect and to yield the best return – best including their considerations other than financial, such as healthy companies, communities, and environments, among other things – the business need to deliver value to the other stakeholders and they need to collaborate with management to ensure a healthy stakeholder system.
The marketplace is increasingly saying “yes!” to environmental sustainability, poverty alleviation, peace, and opportunity for all—and business is responding. Consumers, employees, investors, and others expect businesses to participate in addressing social issues, and they look to business as a source of inspiration, meaning, and purpose as well as a platform for personal growth and societal evolution.
So, how does the marketplace reward conscious companies? In their ground-breaking book, Firms of Endearment: How World-Class Companies Profit from Passion and Purpose (Wharton School Publishing: 2007) authors Jag Seth, Raj Sisodia, and David Wolfe assess long-term and short-term stock performance of 30 companies who practice versions of conscious capitalism. The companies substantially outperform the S & P 500. The 100 Best Places to Work similarly outperform the market.
By having a clear, meaningful purpose, creating value for all stakeholders, explicitly and purposefully fostering collaboration within and between its stakeholder groups, companies and their leaders cultivate vigorous ecosystems with great energy and information flow. In the process, conscious capitalists will create healthy, sustainable, purpose-driven companies based on strong, resilient relationships with engaged stakeholders. As a result of an increasing number of conscious companies, we will advance the evolution of the marketplace as a tool to facilitate human interaction and development and a more Conscious Capitalism will emerge.
While Michael Moore may want the Love Story to end, there are new suitors entering the story, and their offerings are not only appealing, they are delicious, nutritious, and sustainable. If Capitalism is dead or dying, it is only to be reborn on new principles. From the compost of Greed-based Capitalism (which has never been the only face of Capitalism), Conscious Capitalism is sprouting. Let’s all play a role – as consumers, employees, entrepreneurs, leaders, investors, communities, citizens – in celebrating and tending its growth and development.
Contributor Profile: Jeff
As CEO of Cause Alliance Marketing, Jeff Klein designs and facilitates collaborative cause-related marketing programs. He currently serves as President of the Conscious Capitalism Alliance and Conscious Capitalism, Inc.—a nonprofit dedicated to “liberating the entrepreneurial spirit for good” co-founded by John Mackey, CEO of Whole Foods Market. Jeff wrote his new book, Working for Good: Making a Difference While Making a Living, to support conscious entrepreneurs, intrapreneurs, leaders, and change agents at work.
Twitter: @babajeff
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“At its core, Capitalism is about voluntary association and collaboration, which is one of the reasons Capitalism works… In a market-based economy, no one forces us in deciding what to buy or where to buy it, where to work and under what conditions, or where to invest and on what terms. For the marketplace to work, the participants need to be connected – through language, culture, proximity or technology – and to collaborate to facilitate transactions and value exchange. Without connection and collaboration, there is no marketplace or Capitalism. While to some extent the financial markets function in their own realm, their foundation rests on the companies, commodities, and other things that we value or that create value. No customers, no business. No business, no stock market.”
Great insights, Jeff! I haven’t seen the Michael Moore film yet, but anticipated it would only give half (albeit an important half) of the story. Thanks for telling the other half! I have a post of my own brewing on this topic. I’ll be sure to share with you.
Great article Jeff! Thanks for your words.
Here is another summary from the Washington Post that comes to a similar conclusion – http://www.washingtonpost.com/wp-dyn/content/article/2009/10/01/AR2009100104837.html
Thank you Mike and Tristan. Great article you pointed to Mike. Let’s get this message out. We need thoughtful conversation and consideration of the broader implications of our actions.
Jeff, Here's another chapter that hasn't been read. It begins with a white paper published on the web in 1997 which describes an alternate economic paradigm. The model is published without copyright with the aim of spreading a meme.
http://www.p-ced.com/about/history/
12 years on we can read of conscious, constructive, creative and compassionate forms of capitalism but only one takes on the task of defining the ethical principles on which it is based.
http://www.p-ced.com/about/background/
Essentially, human progress rather than debt based on abstract numbers is the only real measure of wealth and as a fundamental predicate, people are not disposable.
First deployed to source a microfinance initiative in Russia it is now deployed in Ukraine where the activism it funds has begun to create impact on domestic adoptions.
http://www.ecademy.com/node.php?id=136324
It comes not from a billionaire but a homeless man who 6 years ago was fasting for economic rights in Chapel Hill where the Center for Poverty Work and Opportunity was created a year later by John Edwards.
Instead of trying to brand the concept, imagine what could be done for the rest of these children with some collaboration. I refer to 100,000 in orphanages, unknown numbers in what have been described as 'Death Camps' for the the disabled and as many as 200,000 living on the streets.
That it's possible has been proven, but it needs getting cllose to the action and going toe-to-toe with organised crime, rather than abstracting to a mere financial model from a distance..
Jeff, as someone who has been researching the matter of conscious capitalism for the past five years, I can tell you that we are on the same page with respect to our admiration of companies that stand for a meaningful purpose, and that integrate that purpose into everything they do – from the products they sell to the way they treat people and the planet. My second book, The High-Purpose Company (Collins: 2007), beat Firms of Endearment to the market by just a few months. I thought it was really neat how, although we had no way of sharing data or knowing how each other’s methodologies were structured, our two research-based books came to strikingly similar conclusions. I took this as an optimistic sign, and I am glad to see so many purpose-driven companies thriving in our economy.
Where you and I seem to differ is in our takeaway of Michael Moore’s main thesis. I believe Moore is telling a more prolific story, and that more of us involved in the CSR community might benefit by listening carefully.
Moore’s core message is not that all capitalism is evil. In fact, in Moore’s movie he features several purpose-driven companies, including Alvarado Street Bakery, as examples of what can be done when business leaders decide to embrace socially just business models.
Moore’s main message is that we live in a fundamentally imbalanced society – a plutonomy – where the top one percent of the population controls the vast majority of the Nation’s wealth. Upholding the top one percent are the nation’s premier financial institutions, which is why Moore points the finger at Wall Street.
Let’s be honest about the current circumstances our Nation faces, and Moore’s depiction thereof. Our premier financial institutions accepted $700 billion in no-strings bailout money. The banks have not disclosed where the bailout money went, though we know a portion of it was used to pay executive bonuses. The banks also continue to oppose proposed consumer protection reforms and other measures that would shield citizens against unfair industry practices. In all, I’d say Wall Street has shown itself to be less than honorable during a period of peaked economic stress for America’s middle class.
Given the widening gap between America’s “haves” and “have nots” (in addition to the reasons for that gap), some might characterize the current financial crisis as a social justice issue. That is one of the key points in Moore’s film. It is also a key point made by many in our industry who we consider leaders: Dr. Muhammud Yunus, Robert Glassman and Hazel Henderson to name a few. It’s just that these leaders deliver the message in a very different way from Moore.
We in the CSR industry need to ask ourselves what our role should be in all of this. I agree it is wonderful to continue to promote and protect the interests of legitimately responsible and purpose-driven companies. At a certain point, however, more force is necessary. This industry needs rebels, too.
There is a part of me that believes that if we continue to allow Bank of America, Citigroup, Goldman Sachs and others to continue be traded in our SRI funds and flouted on our “Best Citizens” lists, as they are today, then we will not be promoting justice, and we will not be doing our jobs.
Dear Christine,
Thank you for your thoughtful response, and pardon me for the delay in responding back. Clearly we agree on much in this context – more than not. I agree that the abuses of Wall Street are unacceptable and gross abuse.
I think the tone and content of your critique and others, like Dr. Yunus, is more thoughtful and likely to be more effective and not stir up uninformed populist sentiment again Capitalism per se. Such blind antipathy, which is what Michael Moore stimulates to a considerable extent, is not healthy or productive. At least, not in my view.
By the way, I love your book and your work, and hope you can join us for one of our events at some point. As a matter of fact, I was lobbying to invite you as a presenter for our upcoming Catalyzing Conscious Capitalism Summit, but others prevailed.
Best regards, and thank you again,
Jeff
Conscience Capitalism – an article worth reading,
Hi Jeff;
[Sorry for the delay in my reply]. I posted a link to this blog post on my blog post in order to attract more people to a meaningful conversation about the ups and downs of capitalism! See: http://www.apesphere.com Ah, the joys of social media…
Thanks for your feedback. It's so interesting how Moore stirs people up. Frankly I love the guy. If I ever get the chance to meet him in person the first thing I'll do is give him a bear hug and thank him for inspiring me to write dozens of pieces, call specific companies out, launch investigative research and undertake initiatives I might never have had the courage to have done otherwise.
I've said it before and I'll say it here on your blog. If it weren't for Michael Moore going into Nike CEO Phil Knight's office with a camera crew, asking about sweatshop labor while filming “Downsize This!” in the late 1990's, I might never have written my first book. He got me interested in CSR, and has been an inspiration to me and to others I know. (I can feel you rolling your eyes!!! Worse, maybe). That's OK. We'll agree to disagree here. To me, the guy is a hero, antics and all. (Especially the antics. I happen to like those;-)
I like your work, too. Hopefully we can meet someday.
Best wishes,
Christine
Hi Jeff;
[Sorry for the delay in my reply]. I posted a link to this blog post on my blog post in order to attract more people to a meaningful conversation about the ups and downs of capitalism! See: http://www.apesphere.com Ah, the joys of social media…
Thanks for your feedback. It's so interesting how Moore stirs people up. Frankly I love the guy. If I ever get the chance to meet him in person the first thing I'll do is give him a bear hug and thank him for inspiring me to write dozens of pieces, call specific companies out, launch investigative research and undertake initiatives I might never have had the courage to have done otherwise.
I've said it before and I'll say it here on your blog. If it weren't for Michael Moore going into Nike CEO Phil Knight's office with a camera crew, asking about sweatshop labor while filming “Downsize This!” in the late 1990's, I might never have written my first book. He got me interested in CSR, and has been an inspiration to me and to others I know. (I can feel you rolling your eyes!!! Worse, maybe). That's OK. We'll agree to disagree here. To me, the guy is a hero, antics and all. (Especially the antics. I happen to like those;-)
I like your work, too. Hopefully we can meet someday.
Best wishes,
Christine
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