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12 Community: Enhancing Social Capital

Young, Stephen Berrett-Koehler Publishers ePub

As for those that have faith and do good works, God will bestow on them their rewards and enrich them from his own abundance.

—The Holy Koran, Surah Women at 4:173

there is no truth more thoroughly established than that there exists in the economy and course of nature an indissoluble union between virtue and happiness; between duty and advantage;

—G. Washington, April 30, 1789

TO ARGUE THAT COMMUNITY IS A STAKEHOLDER for a business is to reject out of hand the selfish temptations of brute capitalism. The Caux Round Table presumes that business lives within a civic order, not in a jungle where competition must be vicious, where its results may well prove to be solitary, poor, nasty, brutish, and short, and where the cash nexus stands in for fiduciary responsibilities.

Immutable relationships of mutual dependency and advantage bind business and society together. Business serves society with wealth creation, and society advances business by enhancing social capital.

Business has power in society; its decisions affect the lives of many. Power necessitates accountability, for without concern for consequences, bad masters will easily put power to bad uses. Power abused calls forth mistrust and raises fears over dependency status. Power abused undermines civil order. As long as capital is powerful, therefore, the moral sense of humanity requires that business be accountable for the ways in which it creates wealth.

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5 Moral Capitalism and Poverty: Must the Poor Be With Us Always?

Young, Stephen Berrett-Koehler Publishers ePub

When my pockets were full of money, all my friends were standing round;
Now when my pockets are all empty, not a friend on earth can be found.

—Ramblers Blues, American folk ballad

Plate sin with gold, and the strong lance of justice hurtless breaks; Arm it in rags, a pigmys straw does pierce it.

—King Lear, act 4, scene 4, William Shakespeare

MARKET CAPITALISM AND THE PRIVATE PROPERTY it uses to create an endless flow of wealth bring great benefits. But, within national economies and in the world at large, not everyone shares in this wealth. Consider the facts on global poverty even after a decade of dramatic economic growth, during which time private sector market activity created the controversial phenomenon known as globalization.1 Communism committed suicide, and free markets were finally recognized as the economic system that best produces goods and services.2

One billion people in the world are doing well, mostly in the European Union, the United States, Japan, Canada, Australia, Singapore, Hong Kong, Korea, and in a few other countries. The face value of stock market capitalization in these wealthy countries rose from roughly some $9 trillion in 1990 to some $35 trillion before the market downturn of 2000. These stock markets hold more than 95 percent of the worlds equity capital. By the end of the decade, on the other hand, half of all our humans—three billion people—live on less than three US dollars a day. Another two billion people are poor but live in countries that are making some economic progress.

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9 Owners and Investors: Exploiters or Potential Victims?

Young, Stephen Berrett-Koehler Publishers ePub

Coat-check girl: Goodness, what beautiful diamonds! Mae West: Honey, goodness had nothing to do with it.

—from the movie, Night After Night

In making judgments, the Early Kings were perfect, because they made moral principles the starting point of all their undertakings and the root of everything that was beneficial. This Principle, however, is something that persons of mediocre intellect never grasp. Not grasping it, they lack awareness, and lacking awareness, they pursue profit. But while they pursue profit, it is absolutely impossible for them to be certain of attaining it.

—The Annals of Lu Bu Wei, p. 570

IN SECTION 3 OF THE CRT PRINCIPLES FOR BUSINESS, the next stakeholder constituency supporting every business (after consideration of its customers and employees) is its investors—its owners and creditors. If customers provide a moral compass for capitalism, then those who finance private ventures to produce what consumers desire are those who turn value preferences into material achievements, creating wealth in the process.

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Appendix I

Young, Stephen Berrett-Koehler Publishers ePub

Published in 1994


The Caux Round Table believes that the world business community should play an important role in improving economic and social conditions. As a statement of aspirations, this document aims to express a world standard against which business behavior can be measured. We seek to begin a process that identifies shared values, reconciles differing values, and thereby develops a shared perspective on business behavior acceptable to and honored by all.

These principles are rooted in two basic ethical ideals: kyosei and human dignity. The Japanese concept of kyosei means living and working together for the common good, enabling cooperation and mutual prosperity to coexist with healthy and fair competition. Human dignity refers to the sacredness or value of each person as an end, not simply as a mean to the fulfillment of others purposes or even majority prescription.

The General Principles in Section 2 seek to clarify the spirit of kyosei and human dignity, while the specific Stakeholder Principles in Section 3 are concerned with their practical application.

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2 The Many Varieties of Capitalism

Young, Stephen Berrett-Koehler Publishers ePub

It was God who created the heavens and the earth. He has sent down water from the sky with which He brings forth fruits for your sustenance. He has subdued the ships which by His leave sail the ocean in your service. He has subdued the rivers for your benefit, and subdued for you the sun and the moon, which steadfastly pursue their courses. And he has subdued for you the night and the day. Of everything you have asked for he has given you some. If you reckon up Gods favors, you could not count them.

—The Holy Koran, Surah Abraham, 14:30

The Great Tao is universal like a flood.
How can it be turned to the right or to the left?
All creatures depend on it,
And it denies nothing to anyone.
It does its work,
But it makes no claims for itself

—Tao Te Ching, No. 34

NATIONAL ECONOMIES MARCH to the beats of different drummers. Doing business in Japan differs from doing business in China. Corporate laws and forms of corporate finance are different in the United States than in Germany, France, and most of the European Union nations. Values, therefore, do make a difference to business. National economies like those of the Chinese and the Japanese, with deep and intense cultural foundations, construct patterns of business practice and legal regulation consistent with core principles of their national cultures.

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