Systems thinking at the highest level and notions of responsible leadership are required that most political and business leaders are not capable of
It’s been called the perfect storm. Population grows; wealth creates exponential resource depletion; and our asocial economic model relies on growth, resource exploitation and money as the root, rather than the servant, of all wealth creation; and our banks and corporate entities are the dominant institutions alongside necessary but outmoded nation-states. The greatest challenges to change are the current economic system, nationalism, tribalism (in which is included religious fundamentalist churches) and misogyny.
The clash of civilisations is between those who understand that we have one world, finite resources, limited lifespans and a beautiful world, and those who believe in the infinite exploitation of people, planet and resources for personal, national or tribal gain. For some, this situation is best summed up as an Earth- and human-centric model of political economy versus neoliberal economics.
In my book, I discuss the age of globality and Earth awareness, where interdependence is the natural modus operandi, and I discuss the fact that peace is breaking out. Both of these major social systems changes in the history of humanity require three things to happen: individuals to act as local and global citizens; new global governance institutions; and new management skills and expertise to be taught in schools and universities.
Our global economic system needs new rules, and not no rules; and our supra-territorial corporations, whether state-, mutually or shareholder-owned, need new rules on governance, transparency, responsibility, rights, reporting and accountability.
So, how did we get to this state? Let’s distinguish between two issues. First, we all believe in markets, exchange and trade. Who wouldn’t? Second, it is recognised that society is made up of institutions and organisations. Both are made in our own image, but both are now in need of rigorous examination to see if they deliver public and social good and to see if they conform to the principle of ‘do no harm’ and ‘the precautionary principle’.
The corporation is an extraordinary vehicle for the creation of more prosperity and misery than could ever be imagined. For many, it is seen as a law unto itself which threatens to eat us alive. Many global corporations are so large, and so complex, that they are almost beyond reckoning – and certainly out of control. The corporation is a legal fiction – a bizarre creation which under the law passes as an individual, whereas of course it lacks body, soul and mind.
The corporate responsibility industry, of which I have been a part from some twenty-five years, has been attempting to bring the corporation into line by introducing accountability, governance and reporting measures; but these are really only playing at the edges. As former UBS director Colin Mayer says in Firm Commitment, ‘We are trying to control the whale by tickling its tail . . . there have been serious deficiencies in both the efficient delivery of public goods and services, and the effective adherence of corporations to responsible conduct.’ Norwegian- born French judge Eva Joly, charged with investigating large French corporations, said in an interview in 2014 that corporations represented a ‘new form of colonialism’. In this she echoed Rachel Carson’s sense of outrage at the irresponsibility of chemical companies in the 1950s and ’60s who put dangerous chemicals in the hands of salespeople and farmers who did not fully understand the consequences of their sales and use.
The main vehicle for the expansion of global markets and the financialisation of all aspects of life has been through the corporation, particularly through banks. Those that work for them, particularly at a senior management level, have become the foot soldiers and the prime beneficiaries of a system that serves them and some shareholders well but does not deliver social and environmental goods. If it does, it is unintentional, for it is not the main mission of the corporation to care about society, communities or the planet. And it can never be under the current rules. Just as Hitler’s lieutenants were able to argue at the Nuremburg trials that they were merely carrying out orders, so too Carson’s chemical salesmen in the 1960s and now and sub-prime mortgage purveyors in the twenty-first century were just doing their jobs, whether in the UK or the USA or elsewhere.
At present, corporations are capitalised and valued as such; but, as many have said, they should be valued on what they do, not on what they are nominally worth on the stock market. Today, the financialisation of everything means that we can apparently only measure things we can count, so money becomes the only commodity. Neoliberalism measures all those things that can be counted and cares not for all those things that matter: community, social cohesion and neighbourliness. And it most definitely does not lead to an emancipated, empowered universal capitalist class.
We have become servants of neoliberalism. So too have we become servants of atomised science rather than systems thinking, despite the wealth of evidence that we should moving in the contrary direction. This is because thinking systems or systems thinking requires time, effort, reflection and a sense of awe, and these are all aspects of life that are too difficult for most people today.
Similarly, a single bottom line is so much easier for the simple business mind than a complex map of interactions and connections, many of which are immeasurable but can only be felt, observed or dreamt about; hence the call by the UN High-Level Panel for a new model of political economy where disparate views are connected:
“For too long, economists, social scientists and social activists and environmental scientists have talked past each other – almost speaking different languages, or at least different dialects. The time has come to unify the disciplines, to develop a common language for sustainable development that transcends the warring camps; in other words, to bring the sustainable development paradigm into mainstream economics . . . That is why the Panel argues that the international community needs what some have called ‘a new political economy’ for sustainable development.”
- United Nations Secretary-General’s High-Level Panel on Global Sustainability, Resilient People, Resilient Planet (2012)
Corporations are our servants and operate by our rules. It is for us to change the rules. They work on market rules that are in urgent need of updating to make transparent the hidden connections between how they make money and their social and environmental impact. This cannot simply be left to laggardly public bodies, weak states and citizens’ movements: we must change the very operating rules on which corporations survive.
The adjustment to the steering is both simple and very difficult because it requires coordinated global action based on a shared understanding that action is needed – and that point has still not arrived. After more than forty years of the neoliberal experiment, and the financialisation of everything, we should be at the point where we join the dots and make the links between economics, climate change adaptation, population, resource scarcity and efficiency, and global governance. This requires systems thinking at the highest level and notions of responsible leadership that most political and business leaders are not capable of. The only solution is civil action from the street up to put pressure on all leaders to come to the party and stop the truck so that we do not end up in the ditch.
As trust in business and government falls to a real low point, the initiative must be seized by all those in quiet leadership positions to stop tinkering at the edges and to focus on changing the system.
Thinking the Twenty-First Century: Ideas for the New Political Economy
April 2015, Greenleaf Publishing