Business, Sustainable Development and Prosperity - Part II
- Arthur Dahl, author of the article
Excerpts from The Challenge of Sustainable Development and Prosperity
By Arthur Dahl, ©
Part II
Part I contained an initial analysis of the problems in the current system of business. In Part II the author shares a vision of sustainable development and prosperity for business through its alignment with moral and spiritual values.
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How do we foster a new moral, ethical and spiritual foundation in business? How do we establish new ground rules for business to help it contribute to a more sustainable society? The root of the problem lies in the way in which economic institutions are structured. We need to explore how we can maintain the vitality of corporate structures and their ability to evolve quickly, but within a framework built around ethical, moral and spiritual values that will help the system work effectively for society as a whole.
New values for business
Let us [now] examine the necessary new values and operating principles that would underlie a more sustainable society. On the individual level, they are readily apparent: if we want to improve human relationships we need more love, more altruism. We need a sense of justice, a willingness to share wealth and make sacrifices. We need a sense of solidarity with the human race, a sense of serving all humanity. We need a more spiritually oriented work ethic, a sense of moderation and contentment with fewer material goods. If we want to achieve sustainability, if we want to share resources effectively around the world and allow everybody to develop so that wealth is open to all, we must change our values with respect to material things and adopt a willingness to see wealth redistributed in order to reduce the dangerous extremes of wealth and poverty. We must become trustworthy and more respectful of creation and all that surrounds us. At the individual level, the more we can strengthen those values in each of us, the more we shall be equipped with the right kind of operating principles to build a sustainable society.
The same is true institutionally, since these same values can be applied to business. We can, at the business level, create a sense of service to society, recognize that business does not exist just to make money, but also to serve society. We can build the value of service into business. Business systems can easily adapt to a service orientation, but only if the goal broadens beyond profit seeking. The principle of justice also has applications in business. These applications include sharing profits with all the corporation's workers and involving them in decision making.
Business also needs to pay more attention to the sustainable management of natural resources. These should be considered as capital accounts. As with managing any other capital account, net losses are to be avoided. Business activity should produce no net loss for any of its capital accounts, be they economic accounts, human accounts or resource accounts. In the same way, businesses should avoid any net transfer of costs, or capital losses, to future generations or other parts of the world.
- Bristol (U.K.) Farmer's Market
Let us consider the market mechanism as an example of how values influence the economic system. Markets are based on competition, and all too often on some form of manipulation. A used car salesman may, for example, hide the fact that a vehicle he seeks to sell at the highest possible price has been involved in an accident that produced damage not visible to the potential buyer. Moreover, in sectors in which there are few competitors, price-fixing may be arranged to increase revenues for each participant in the scheme. Absent ethical values, or effective outside regulation, markets may seem more competitive than they actually are, just as the damaged car may appear better than it really is. But markets work best if they operate on principles of truthfulness and open consultation. Market theory is based on perfect information, but available information is rarely perfect. Prices would be set more fairly, for example, if the seller openly shared the real cost of production and the buyer fairly portrayed his or her need for the product. Consultation fosters the setting of a price that fairly balances the seller's cost and the buyer's need in terms of willingness to pay. Just so, the market would work more effectively if it were infused with a spirit of collaboration and consultation rather than, as at present, with a competitive spirit seeking to see which sides can best the others. In short, it is not so much the mechanics of the economic system that are wrong, but the values that underlie it.
Towards a more sustainable society
How do we apply these values to make society more sustainable? If we are to overcome the present fragmented approach to decision-making, we need more consultative mechanisms between businesses as well as between business and government. If we are to make decisions that involve whole systems or resources, we need to devise mechanisms and processes to make possible consultation among all stakeholders. Consultation and communication offer the means of overcoming the compartmentalization of society into isolated domains, each of which seeks to maximize its own particular area without collaborating with the other domains.
We need to find ways to make decisions within a planetary perspective, since we are dealing with a global system. Planet Earth is one country and, therefore, we need to be able to integrate decision-making up and down the various component levels - international, national, regional, local.
… [B]ecause there is no global system of taxation, we have no way of paying the costs of global governance. The United Nations must go begging to national governments for the money that it needs to pay for performing essential services at a global level. Every national treasury weighs national priorities higher, generally with an eye to the next election. This is no way to manage society globally. We must find better ways to deal with issues of taxation and redistribution at that level.
Businesses need fairness operating on a global basis. They have difficulty dealing with differing regulations, corrupt systems, and so forth. It is, therefore, in the interest of business to strengthen global mechanisms and establish a level playing field. To achieve that, it would be reasonable for businesses to pay taxes, assuming, of course, that the taxes were applied fairly. As business becomes more enlightened, it will become a leading force to establish effective global institutions, since these institutions will be good for business. Governments hold back for fear of losing power and eroding national sovereignty. … Businesses are, in many ways, well placed to lead the effort to build the structures all of us need to make this system operate more effectively on a global basis.
- Environmental monitoring in Ontario (Canada)
We must also look at another dimension, that of empowering the poor. We must learn how to involve poor people directly in their own development, without imposing on them our own view of development. … One tool for accomplishing this derives from the principle of the independent investigation of truth: it is the recognition that science is for everyone. Once we all become accustomed to thinking scientifically and in terms of process, we will understand how to monitor the environment, observe the changes taking place, and adjust our behavior accordingly.
The business community has a key role in helping us view life from a systems perspective, a perspective which is essential as we move towards a more sustainable society. We shall achieve that by getting the basic working rules right and then letting the system evolve. If our greatest challenge lies in the economic arena, it is because the present rules governing its operations are so at variance with society's real needs. As we build more sustainable businesses, we create more sustainable economies. And we set in motion the processes necessary to achieve a more sustainable civilization. That is our goal.
