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March 26, 2010
False Choice
Every vacation, I try to read a long book. This week, I tackled Anna Karenina, Tolstoy’s masterpiece. Leave it to me to focus on the business angle in the classic love story. But find it I did, in a conversation between Konstantin Levin and his brother Sergei. It is the disagreement on the basis of human motivation, common good versus personal interest.
Sergei posits that it is vital to the future of Russia to spend money on health care and education for the peasantry. He says, “Can there be any doubt of the usefulness of education? If it is good for you, it’s good for everyone.”
Konstantin replies, “Maybe all that is good, but why should I worry about setting up medical centers I’ll never use and schools that I won’t send my children to…the motive force of all our actions is, after all, personal happiness….in our present day institutions I see nothing that contributes to my well-being…The roads are no better and cannot be better; my horses carry me over the bad ones as well…I will always defend with all my might those rights that touch on my interests…no activity can be solid unless it is based on personal interest.”
Sergei’s retort follows, “The chief task of philosophy in all ages has consisted precisely in finding the connection that necessarily exists between personal and common interests. The birches are not stuck in, there are planted or seeded, and they ought to be carefully tended. Only those nations that have a future…have a sense of what is important and significant in their institutions and value them.”
How is this relevant to the present time? Howard Schultz, CEO of Starbucks (disclosure: a client) related a story at his annual shareholders’ meeting earlier this week. He said that he had a phone call from an investor about a year ago, at a low ebb of the company’s fortunes. The investor recommended that Howard cut health benefits for his partners working at the stores, particularly those who were employed only part-time. Howard responded by stating that the health benefits were going to continue and that if the investor did not like that decision then there were lots of other public companies to follow.
In this context, Matthew Bishop’s new book, Road From Ruin, is an excellent read. Bishop argues that “capitalism must rediscover its soul….the obsession with short term profits helped to inflate the recent bubble…a culture known as IBGYBG (I’ll be gone, you’ll be gone) grew up in many businesses…based on one-off transactions rather than long term relationships. ..If capitalism is to emerge from the current crisis in better shape than before, it must be refocused on the longer term…the time has come for business leaders to stop offering up as an excuse Milton Friedman’s famous argument that “the social responsibility of business is to maximize its profits…a company must ask what sort of society will shape our customers in twenty years.”
It is a false choice to suggest that personal interest must contravene common good. Those of us in PR must take a strong position with our clients to operate with the mindset of business as a positive force in society. You can do well by doing good, or as Jeff Immelt of GE says, “green can equal green.”
Posted by Edelman at March 26, 2010 3:10 PM |
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Comments
Richard - What a timely (and excellent) book you chose to read! Wonderful post. Tolstoy's words still ring true years later. Thanks!
Posted by: Anne McPherson at March 26, 2010 4:52 PM
One of my first questions when discussing capitalism back in Uni days was (or still is) how sincere is capitalism when making positive acts in society? This will relate on how to convince corporations to do good. Do good because it will improve your bottom line or Do good because it is your responsibility to the people? A book I'm reading 'Capitalism 3.0' (Peter Barnes) gives a strong statement in the first chapter, "Assets in the commons are meant to be preserved regardless of their return to capital". Perhaps the debate will never end, as you can't please everyone but everyone should agree this should not hinder people obtaining benefits.
Posted by: Patria at March 26, 2010 9:18 PM
CSR is becoming one of the most important subjects that we learn as PR students. In the same class every person has a different opinion about how this part of the company has to be managed.For me it is surprising that there are a lot of people that would do whatever it takes to get a profit not paying attention to anything apart from their own benefit.
After read the entry I will try to read Anna Karenina see what I can learn from it.
Posted by: Alberto Rivilla at March 30, 2010 8:46 AM
As always, we, humans let ourselves be influenced by the environment around us, and if today we live in a capitalist society means that we have become very individualistic. It is amazing to see that in developed nations, citizens no longer have interest about the common good but only about their own interests. There is no longer the feeling of helping others and the act of doing good has become simply to donate money. However when analyzing the developing countries, in which the religion has much power, it is possible to identify a tremendous desire to really help the next, through contributions both physical and monetary. In poor countries the population is definitely more concerned with their similar. Maybe our economy has influenced us so much that we lost concern for those who are near us and unfortunately we are becoming lonely people. It is extremely gratifying to see someone like Richard Edelman talking about this matter. It shows that our society is not lost, and that even within large businesses there is still the possibility of the common good becomes bigger than the financial interest.
Posted by: Elvira Pilatti Pais at April 2, 2010 6:34 AM
The short-sightedness of so many of the arguments against the health care reform are dismaying, when you realize our elected officials are there to protect and grow this country's future. I love the planting of the birches parallel in the novel.
Thanks,
Barry
Posted by: Barry Collodi at April 2, 2010 8:47 AM
Outstanding post!
Pure personal interest capitalism from Adam Smith is rooted from an era (1776) when there was generally a one-to-one connection between the supplier and the consumer. Twenty-first century capitalism has multiple intermediaries, each pursuing their own self-interest; increasingly challenging the “invisible hard”. This, combined with the fact that since 1900 the average education of employee and consumer stakeholder groups has increased from 3rd grade to over 12th grade; business leaders must manage social systems versus mechanical systems.
A 1776 world-view is unlikely to get desired results in 2016.
Posted by: Hugh Campbell at April 2, 2010 9:02 AM
As public relations professionals we are called to serve the greater good rather than just serve the needs of just our clients. In all of these stories you have talked about, the message has been the same: if do good you will get good things in return. We need to speak the truth to our target audience, sometimes if its not what is in our client’s best interest. That is why ethics is such a huge part in what we do: we are the mediators between the world of the everyday man and the corporate world. We may be the only channel of communication for some people who need to hear a certain message and it is our duty to give that message as clear as possible so everyone has a shared understanding. Of course we also must be loyal to our clients, as they are the reason we have the resources to do what we do, but if anything we are asked to do is not in the best interest of our publics we are taking two steps forward and three steps back. There is a very delicate balance that public relations professionals must maintain in order to effectively influence and communicate with our target audience.
Posted by: Stephanie Romano at May 8, 2010 9:25 PM