Академический Документы
Профессиональный Документы
Культура Документы
In this Issue
Recreating Capitalism
Editorial
Restructuring Capitalism
In the light of Indian synthesis.
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Recreating Capitalism
Editorial
The forward march of Nature in humanity is mostly invisible except to the discerning eye. When we examine deeply and closely the emerging trends in human thought and events, we can see Nature is pushing human mind and life, though a combination of internal reflection and external circumstances, to move beyond self-interest towards a more unitive and collaborative society. The first important trend is rethinking of capitalism which is the modern gospel of self-interest. The traditional theory of capitalism legitimized self-interest, competition, material or economic prosperity as valid motives of development. With the collapse of communism many capitalist thinkers croaked triumphantly over the ultimate victory of their gospel. But the collapse of Lehman Brother and the financial meltdown which followed sent a shock wave into the major citadels of capitalism and awakened capitalist thinkers to the limitations of their theories. After this event many progressive minds in business and economics are questioning this gospel of selfinterest. These new perspectives are more or less in the right direction. For example, Christopher and Julia in their article in Harvard Business Review hit the right spot when they say that the purpose of commerce is not making money but to better peoples welfare and the greatest good of the greatest number. Here comes the importance of Indian synthesis which can give a deeper orientation for restructuring capitalism in an evolutionary perspective.
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complexity of human life this stress on a perfected economic and material existence has its place in the whole: as a sole or predominant stress it is for humanity itself, for the evolution itself full of danger. *** This economic barbarism is essentially that of the vital man who mistakes the vital being for the self and accepts its satisfaction as the first aim of life. The characteristic of Life is desire and the instinct of possession. Just as the physical barbarian makes the excellence of the body and the development of physical force, health and prowess his standard and aim, so the vitalistic or economic barbarian makes the satisfaction of wants and desires and the accumulation of possessions his standard and aim. His ideal man is not the cultured or noble or thoughtful or moral or religious, but the successful man. To arrive, to succeed, to produce, to accumulate, to possess is his existence. The accumulation of wealth and more wealth, the adding of possessions to possessions, opulence, show, pleasure, a cumbrous inartistic luxury, a plethora of conveniences, life devoid of beauty and nobility, religion vulgarised or coldly formalised, politics and government turned into a trade and profession, enjoyment itself made a business, this is commercialism. To the natural unredeemed economic man beauty is a thing otiose or a nuisance, art and poetry a frivolity or an ostentation and a means of advertisement. His idea of civilisation is comfort, his idea of morals social respectability, his idea of politics the encouragement of industry, the opening of markets, exploitation and trades following the flag, his idea of religion at best a pietistic formalism or the satisfaction of certain vitalistic emotions. He values education for its utility in fitting a man for success in a competitive or, it may be, a socialised industrial existence, science for the useful inventions and knowledge, the comforts, conveniences, machinery of production with which it arms him, its power for organisation, regulation, stimulus to production. The opulent plutocrat and the successful mammoth capitalist and organiser of industry are the supermen of the commercial age and the true, if often occult rulers of its society. The essential barbarism of all this is its pursuit of vital success, satisfaction, productiveness, accumulation, possession, enjoyment, comfort, convenience for their own sake. The vital part of the being is an element in the integral human existence as much as the physical part; it has its place but must not exceed its place. A full and wellappointed life is desirable for man living in society, but on condition that it is also a true and beautiful life. Neither the life nor the body exist for their own sake, but as vehicle and instrument of a good higher than their own. They must be subordinated to the superior needs of the mental being, chastened and purified by a greater law of truth, good and beauty before they can take their proper place in the integrality of human perfection. Therefore in a commercial age with its ideal, vulgar and barbarous, of success, vitalistic satisfaction, productiveness and possession, the soul of man may linger a while for certain gains and experiences, but cannot permanently rest. If it persisted too long, Life would become clogged and perish of its own plethora or burst in its straining to a gross expansion. Like the too massive Titan it will collapse by its own mass, mole ruet sua.
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Key Perspectives
Crisis in capitalism; Deeper Malady and the Emerging Correctiveness; message for the future.
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What is the remedy? Reporting on the deliberations of the conference cited above in Harvard Business Review, Joseph Bower, Herman Leonardo and Lynn Paine argue that the corporate world must take an activist role in solving the problems confronting capitalism because most of the national governments are weak and do not have the will or the capability to solve these problems. The corporate world is in a better position in terms of resources, skill and expertise to solve the maladies and give a new direction to capitalism. Corporations have to collaborate with the government and other institutions to provide solutions which can pull capitalism out of its crisis. However, in this approach or solution there is not yet a radical questioning of the tenets of capitalism. Most of the threats to capitalism listed in the HBR article are external and not regarded as intrinsic to capitalism. Market capitalism combined with western-type of democracy is still regarded as the best approach to prosperity and a better society. However, the authors of the article admit the failure of capitalism to address the problem of equity: The growing gap makes a mockery of the idea that growth benefits all. There is also recognition that business must take an active interest in solving the societys problems and the need for a collaborative approach to solving societys problems which are not part of traditional capitalism. Here comes the importance of another article in Harvard Business Review, where, Christopher Meyer and Julia Kerby present a wider and a more incisive criticism of the two major tenets of capitalism: Competition and the primary of financial indicators like Return on Equity and Gross Domestic Product (GDP). In this article, Meyer and Jerkins make the following critical points on the present condition of capitalism: Obsessive and exclusive emphasis on competition and financial parameters like ROI and GDP has lead to misdirected priorities in capitalist economies. Financial gain is not the soul of capitalism. The overall objective of commerce is to better peoples welfare or in other words, the greatest good of greatest number of people. Financial indicators like GDP or ROI cannot be the sole measure of human wellbeing. If they are used as a part or a limb of a wider system of measurement of human wellbeing that includes non-financial parameters like education, health, then it helps. But if financial parameters become the sole aim of capitalism it derails the whole system. Similarly, the real source of an economys vitality is not competition but innovation. Competition can help innovation but strategic collaboration can also be a fertile source of innovation.
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than that? Because when we get the money, that seldom seems to be enough. The question is, are we in danger of throwing the baby out with the bathwater? The bathwater is the inefficiency and intolerance of communism, while the baby is its idealism. And that is what capitalism is sadly lacking. There is a cancer in the heart of capitalism. It is the lack of a cause that can stir the heart. Whats it all for and for whom? The first stage in rethinking capitalism is to be absolutely clear about what its all for and who its for. I dont think the answer that its for the financiers i.e. the shareholders is a very adequate answer at all, either practically or morally. Nevertheless, capitalism is perhaps trying to recover its soul through the new values emerging in business like ethics, corporate social responsibility environmental sustainability, which are becoming some of the new imperatives in business. A recent issue of Harvard Business Review asks in its front page, what great companies do differently and answers: They create value for society, solve the worlds problems and make money, too. The editorial of this issue of HBR sums up the new thinking emerging in business and management: Any manager will tell you that his or her company stands for more than just the bottom line: It takes care of its workers, limits its carbon emissions, improves the welfare of its communities. Notions of good practice change over time. In the early 1900s Henry Ford fattened his workers paychecks to help turn them into consumers. Later, big companies began rewarding employees for their loyalty with jobs for life. In recent years corporate social responsibility became an imperative. Now, in the information age, when we can more easily measure our effect on the world around us, companies are increasingly taking responsibility for their big footprints. Perpetually running counter to all this, of course, is Milton Friedmans famous observation that the only true responsibility of business is to make money. In the same issue, a leading management thinker, Rosabeth Mass Kanter writes, Articulating a purpose broader than making money can guide strategies and actions, open new sources of information and help people express corporate and personal values in their everyday work. Another well-known management Guru, Gary Hamel goes still further into a more or less spiritual domain when he argues that the traditional goal of maximizing wealth is inadequate in many respects because it lacks the power to fully mobilise human energies and therefore tomorrows management practices must focus on the achievement of socially significant and noble goals and deeper soul stirring ideals such as honour, truth, love, justice and beauty which have long inspired human being to extraordinary achievements. Similarly, the motive of self-interest, as the source of efficiency, productivity or prosperity is also now coming under critical questioning in the light of new discoveries in science. The traditional capitalist thinkers justified selfinterest and competition based on old scientific notions that human nature is inherently selfish and the Darwinian struggle for existence and survival of the fittest is the best way to growth and prosperity. However according to new science human nature is not as selfish as it thought to be in old science. There is a less selfish and more cooperative and altruistic element in the human genetic nature. This new scientific perspective is entering into business and management thinking. Yochai Benkler, Professor for Entrepreneurial Legal Studies at Harvard Law School, in his article, Unselfish Gene after discussing emerging scientific discoveries related to collaboration states:.
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For generations modern western cultures have operated on the assumption that human nature is intrinsically selfish. But now the tide is starting to turn. In fields such as evolutionary biology, psychology, sociology, political science and experimental economics, researcher are seeing evidence that the urge to selfless action or collaborate is as much intrinsic to human nature as selfishness and human being are more cooperative and less selfish that we have assumed. Another interesting new discovery in science which goes against capitalist notions of life and nature is the new ecological view of nature. According to modern ecology Nature is not merely a ruthless and competitive struggle for existence as Darwin assumed it to be. In Nature, the competitive struggle for existence is only a subordinate or secondary element in a predominantly cooperative and interdependent process where the waste of one organism becomes the food for another. Fritjof Capra, physicist and author, elaborating on the implications of this new ecological perspective for business and management, states: A sustainable business organization will apply this principle to cooperation and partnership along product cycles and countless other ways, both internally within the company and industry wide. Here we encounter again the basic tension between economics and ecology that we need to overcome. Economics deal with quantity, competition, expansion; ecology deals with quality, cooperation, conservation.
The author is a Research Associate at Sri Aurobindo Society and on the editorial board of Fourth Dimension Inc. His major areas of interest are Management and Indian Culture.
Courtesy: VILAKSHAN, Journal of Xavier Institute of Management [partially reproduced with some modifications.]
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Key Perspectives
Dharmic order; dimensions of dharma; four organs of society; message for capitalism.
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ideals of universal dharma, but each in its own way according to its unique swadharma. The third aspect of Dharma is the Yugadharma which means dharma of the age or in a wider view dharma of the contemporary world, like for example, globalism. The right course action, dharma, at any given situation or span of time has to be determined by a careful consideration of all the three dimensions of dharma. In this dharmic vision, human society is only a framework for the mental, moral and spiritual growth of the individual and community. This higher growth or evolution is achieved by a progressive subordination, renunciation or self-giving of personal or corporate interests and goals to more and more universal and impersonal goals which belongs to the common good of all or derived from universal dharma. Each individual or community has to grow by following its own unique swadharma, in complementing harmony with the swadharma of others, contributing to the common good of all and ascending progressively towards the universal dharma.
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The new values emerging in management like corporate social responsibility, environmental sustainability or even customer service can provide such a dharmic elevation to capitalism. If serving the society and customer becomes the dominant aim of business it helps capitalism to raise beyond narrow corporate self-interest and greed to a higher dharmic level. Similarly, according to Indian thought, human nature is not entirely a mass of self-interested narrowness. In every human being there is a higher mental, moral and spiritual nature which seeks for higher values like truth, beauty and goodness and capable of selfless action. This higher nature may be underdeveloped, weak, veiled or hidden behind the selfish and greedy lower nature made of the physical and vital ego, but it is there in every individual. As we have discussed earlier, the new scientific perspectives on human nature are moving closer to this Indian view. However according to Indian thought, this higher nature in human being can be consciously cultivated and brought forward in the individual or collectivity through appropriate education, inner and outer discipline and creating an external environment favourable to its growth. This is the path for the higher evolution of the individual or a group or any human activity or system of thought or practice. Capitalism, in order to progress further, has to incorporate this deeper Indian insight on human nature and the new scientific perspective on the Unselfish Gene into its system of thought and practice. These new or higher motives emerging in business like for example CSR can be misused in a manipulative or self-serving manner. But this is unavoidable because there is a corrupting element in human nature which can twist or distort even the noblest urges. Secondly, self-interest is an obstinate and subtle thing which is difficult to eliminate. These dark spots in human consciousness can be eliminated entirely only in a spiritual consciousness beyond mind or under its direct and conscious influence in human nature. But in the course of our human evolution, we have to grow towards this spiritual aim by developing the nobler, sattwic mind which can subordinate its self-interest to the larger or common good, which is a dharmic movement. The new motives emerging in business represent this sattwic evolution.
The author is a Research Associate at Sri Aurobindo Society and on the editorial board of Fourth Dimension Inc. His major areas of interest are Management and Indian Culture.
Courtesy: VILAKSHAN, Journal of Xavier Institute of Management [partially reproduced with some modifications.]
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Restructuring Capitalism
Nivas A holistic vision for incorporating higher values of the Indian synthesis into capitalism in the light of an evolutionary perspective.
Key Perspectives
Competition and collaboration; stages of inner awakening; higher evolution of capitalism.
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In the initial stages of human development, competition develops survival skills and the faculties of the pragmatic mind for adaptation and innovation. It awakens the inert physical man to the throb of life, forces him to face the difficulties and challenges of life and as a result helps him to progress from the physical to vital level. It also helps him to progress further by awakening the other vital motives of achievement, enjoyment, expansion, conquest. But if these vital motives are not kept in check or subordinated to a moral sense for the well-being of others and the community as a whole, then it leads to all the evils of traditional capitalism, which we see in western society like inequality, overconsumption, and environmental degradation. On the positive side we cannot deny that free enterprise and competition, wherever it is allowed to function without much government control, create rapid economic progress and prosperity. Moreover competition in terms of quality, cost and innovation is beneficial to the customer. Similarly, if firms compete with each other in terms of employee well-being, social and ecological responsibility and customer service, then it is beneficial to the community as a whole. So what is needed is an awakening in every section of the human society to the unity mutuality and interdependence of life, in man and Nature. In a life-system governed by the laws of unity and interdependence, the wellbeing of each part is depended on well-being of others and the wellbeing of the whole. When this awakening and recognition is there, then much of the harmful forms of competition will disappear and there will be a greater urge among the individuals and the groups towards cooperation for the well-being and progress of the greater whole.
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These four stages of evolution from the stage of competition based on self-interest to the highest stage of self-giving happens through a process of natural evolution aided by a combination of external circumstances, education, thought and culture. But this natural process of evolution can be made fully conscious and accelerated by awakening the individual and the community to the higher laws of unity and the four stages of growth. When our individual and communal life becomes conscious of these greater truths of life, then, keeping the highest ideal constantly in the background of our mind, we can progress consciously from where we are at present to the next higher stage, using appropriate educational and motivational strategies.
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moral pressure to do it... if reality is like it is experienced by the ecological self, our behaviour naturally and beautifully follows the norms of strict environmental ethics. [Capra F, 1997]
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without attachment to any fruit or reward, without any egoistic attitude or motive, as an offering or sacrifice to the Divine. This is the traditional Indian attitude towards these things, that all work can be done if it is done according to the dharma and, if it is rightly done, it does not prevent the approach to the Divine or the access to spiritual knowledge and the spiritual life. There is, of course, also the ascetic idea which is necessary for many and has its place in the spiritual order. I would myself say that no man can be spiritually complete if he cannot live ascetically or follow a life as bare as the barest anchorites. Obviously, greed for wealth and money-making has to be absent from his nature as much as greed for food or any other greed and all attachment to these things must be renounced from his consciousness. But I do not regard the ascetic way of living as indispensable to spiritual perfection or as identical with it. There is the way of spiritual self-mastery and the way of spiritual self-giving and surrender to the Divine, abandoning ego and desire even in the midst of action or of any kind of work or all kinds of work demanded from us by the Divine. If it were not so, there would not have been great spiritual men like Janaka or Vidura in India and even there would have been no Krishna or else Krishna would have been not the Lord of Brindavan and Mathura and Dwarka or a prince and warrior or the charioteer of Kurukshetra, but only one more great anchorite. The Indian scriptures and Indian tradition, in the Mahabharata and elsewhere, make room both for the spirituality of the re-nunciation of life and for the spiritual life of action. One cannot say that one only is the Indian tradition and that the acceptance of life and works of all kinds, sarvakarmani, is un-Indian, European or western and unspiritual.
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Capitalism is facing a crisis - and desperately needs a remedy. There are many reasons for this, says Govindarajan, adding that a central problem is that there is something rotten at the core of American corporate values - it measures success by short-term personal financial gains. That needs to change.
Balanced Approach
This is where Indian philosophy, which balances the pursuit of wealth and material success with the mastery of the self and the quest for inner happiness, comes in, offering, as it does, an alternative to the greed is good ethos that has characterised the neo-conservative economic thinking pervading the corporate corridors of the US and much of the western world. The deeply introspective, yet practical, wisdom contained in ancient Indian texts such as the Bhagavad Gita, Mahabharata and the Vedas also stands in stark contrast to the language of conquest popularised by management theories based on Sun Tzu's sixth century BC classic, The Art of War. Says T.V. Mohandas Pai, Member of the Board of Director, Human Resources, Infosys Technologies: When people are in trouble, they always fall back on ancient wisdom to see what went wrong. It is not without reason, therefore, that recently, the ISBs Centre for Leadership, Innovation & Change organised its first international conference on Igniting the Genius Within. One of the topics discussed was Indian philosophy. The idea, says S. Ramnarayan, Professor and Member of the Management Committee of the Centre, was to expose students and management professionals to broader management vision and to look for integration of various perspectives.
Inclusive Capitalism
So, what specifically does Indian philosophy offer that the current thought in management doesnt? Says V. Krishnamurthy, former Deputy Director, BITS Pilani: The introspective qualities of ancient Indian philosophy are missing in the modern materialistic corporate chase. The latter is always focussed on getting things accomplished (without bothering much about the cost). It means that the cornerstone of corporate philosophy should be something bigger than money. This is not to say that businesses should stop, or even slow down, their pursuit of profits. It simply means corporate leaders should adopt a more holistic approach, incorporating the interests of all stakeholders, customers, employees, society, etc. - instead of remaining focussed only on narrow shareholder value. C.K. Prahalad, Paul and Ruth McCracken Distinguished University Professor of Corporate Strategy at the University of Michigans Ross School Business, calls it Inclusive Capitalism. In this context, he says corporate social responsibility, so popular among companies and their spin meisters these days, is best a transition phase for a company. Thats where you learn that there is more to business than just profit maximisation. The final stage will be reached when companies realise that dealing with the impoverished in the world is not something they should do only once in a while. The key lies in thinking differently about the very purpose of business, he says.
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Ethical Dharmacracy
M. Rammohan Rao, Dean of ISB, feels Indian philosophy is relevant because business should not just be about one self but about the society and the environment it works within. Pai of Infosys has an interesting take on the growing importance of Indian philosophy in management. The fact is that we are Indians; so, consciously or unconsciously, the countrys value system resonates in what we do. And not only does it hold true for the companies but also for individuals leading them. He cites the example of Infosys Chairman & Chief Mentor N.R. Narayana Murthy: his philosophy of simplicity, many will argue, is really a reflection of pan-Indian values. The Tata Group, which, arguably, practices inclusive capitalism with greater zest than any other business house, is another example. Says Radhakrishnan Nair, Chief Human Resource Officer, Tata Steel: Wealth generation is important but it should be kept in trust to improve the communities in which we live. The Parsi motto of good thoughts, good words and good deeds is extremely rich in its effort to elevate human suffering. A true Tata person believes in simple living, high thinking and being genuinely affectionate.
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According to Prahalad, the idea is to develop a system that places the individual at the epicentre of corporate strategy. Such a goal, though, looks unattainable in the short to medium term. Can it ever be reached? Thats impossible to answer with any degree of certitude, but if it is, then India would have made a defining contribution to management science. Says Kaipa: It may be time for what a Los Angeles Times reporter proposed last year that the US should move towards Dharmacracy not Democracy.
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