Economics and Business

These two pieces are excerpted from Cultural Maturity: A Guidebook for the Future:

Values and Economics:

Once we step beyond Cultural Maturity’s threshold, in an important sense every question becomes a moral/ethical question. More commonly, we’ve divided concerns into those that are moral and those that are not. With our Modern Age, we’ve done so in a particularly explicit way. We’ve come to view the products of whole cultural domains as “value free”—as good in and of themselves.

Science/technology and economics/business represent the two realms that in modern times we have most often seen as value-free. In fact, neither of these spheres has ever really been value-free. But while we have operated within the context of Modern Age values and beliefs, the fact that we’ve often acted as though they have been has rarely gotten us into great trouble. “The more scientific and technological advancement the better” and “the more economic benefit the better” have worked as acceptable rules of thumb. But today things aren’t quite so simple—and in the future they will be even less so.

[I did science first.] The other realm that we’ve commonly given value-free status to is the world of money—whether it manifests more abstractly in the ideas of economics or takes applied expression in the interactions of business. We use the familiar phrase “it’s just business” to affirm this value-free status. In fact, the economic sphere, just by what it is, could not be more value-laden. But because money represents an ultimate material abstraction, it is not surprising that we might in modern times confuse it with truth. Like science, this is a crayon we have in recent times mythologized and given special importance. Indeed, today it has come to trump science in its assumed last-word significance—at least functionally (money increasingly defines what science gets done), if not always in our conscious beliefs. If there is one aspect of our human complexity that in our time we have made our God, this is it.

As with science, we like to think of the economic sphere as rational and a world apart from moral concerns—except perhaps where dishonesty comes into play. But the fact that we tend to think of the monetary realm as value-free is again a product of the times in which we live rather than truth in any final sense. Because we are unconscious of the power that it holds, we need to be particularly attentive to potential blindnesses and the importance of mature systemic perspective when it comes to economic concerns.

It helps to put this need to think in larger ways with regard to the world of money in historical perspective. If we lived in the Middle Ages or in a tribal culture, we would find modern material values not just confusing, but unacceptable. In the Middle Ages, while material wealth had significant influence, simple greed was also considered one of the seven deadly sins. Within tribal cultures, the difference is even more pronounced. In tribal societies, it is not acceptable for individual advantage to threaten the well-being of the group. These differences are of more than casual consequence. Much of the antipathy non-Western peoples often have for Western values lies in these differing views of competition and wealth, differences commonly perceived as having deeply moral significance.

A culturally mature reframing of the monetary realm starts with the importance, described earlier, of defining wealth—and human benefit more generally—in ways that are more systemically complete. A sign outside my local plumbing store provides the needed reminder: “Money will buy a pretty good dog, but it won’t buy the wag of its tail.” Cultural Maturity very specifically does not call for replacing materialism with some romanticized opposite. But it does very much call for more encompassing ways of thinking about and measuring human success. Progress in a culturally mature world continues to be about wealth creation, about the generation of new capital, but capital now comes to include all that goes into making human life ultimately rich and fulfilling.

Such reframing is pertinent not just to determining whether money-related practices will be just in the future, but also to whether the structures of business and economics, in the long term, will work at all. Earlier I suggested that our blindness to potential economic instabilities in the recent severe recession was a product of ideology as much as simple ignorance. Economics’ reigning experts acted on the belief that free markets could largely regulate themselves, a belief that reflects an extreme right-hand—rationalist/materialist/individualist—worldview.

At the very least, such one-crayon perspective made financiers and the rest of us—very smart people included—vulnerable to dismissing, or not even seeing, potential risks. In 2004, then-chairman of the U.S. Federal Reserve Alan Greenspan proclaimed, “Not only have individuals become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient”—this specifically in reference to the impossibly complex and highly interlinked financial instruments that played a central role in the 2007 meltdown. It is forgivable that economic experts did not accurately forecast just when an economic downturn might occur. But that the greater portion of economic minds did not recognize fundamental instabilities—which in hindsight are glaring—suggests a more essential kind of blindness.

Modern economic thinking has made a start toward addressing economic questions in more systemic terms. For example, it increasingly recognizes the fact that economics is more than just a science of monetary exchange, that it is very much a social science, as much about human psychology as about rational behavior. And bit by bit, society as a whole is starting to confront the more basic recognition that economic wealth represents only part of what makes for a rich life. We are better seeing how our friendships, our families, and our communities contribute as much or more to a true sense of wealth. We are also at least beginning to grasp how the health of our physical and biological environments is also critical to our lives being worth living.

Particular economic and business questions are becoming more clearly moral/ethical concerns. And the “economic” question of how best to think abut wealth has become arguably our time’s most pivotal and ultimately defining moral/ethical concern. Money is our common medium of exchange. If we are to act in ways that ultimately serve us, how we exchange it needs to directly reflect what to us most deeply matters. If extreme materiality exacerbates our time’s crisis of purpose and has the potential to create instabilities that put us all at risk as I’ve proposed, then developing more encompassing—I could say moral—ways of thinking about the economic sphere becomes of ultimate importance.

For this chapter’s developmental/evolutionary reflections, there is a common lesson to be learned from these two domains that we have viewed as “value-free.” The future requires that we recognize how all questions are in the end moral questions—questions of value—and that we need to address them, whatever their source, with a new, more complete kind of systemic sophistication. Culturally mature perspective helps us appreciate how questions of every sort today represent aspects of our larger moral responsibility.

The Future of Economics and Business:

Essential leadership tasks: Economists, bankers, and business leaders must work to establish sustainable economic systems that succeed for all the world’s people—and for the planet as a whole. The most forward thinking among them will provide leadership with that most pivotal task of reformulating profit and progress.

The answer to the economic sphere’s Question of Referent? In the end, economies are simply about the exchange of value. In Chapter Seven, I described how material wealth represents the most abstract, right-hand measure of value, and how today it has come to define what economies are about—and, in effect, what human value is most about. I also began to put the economic sphere in broader evolutionary perspective, and with this, to describe how our relationship to material wealth necessarily becomes different with Cultural Maturity’s changes.

A brief evolutionary summary: Material wealth has always had importance, but consistent with its ultimate right-hand contribution, in very early historical periods its significance remained secondary to more basic determiners of value such as connection with nature and tribe, religious edict, and the bonds of blood and family. Native American potlatches involved the exchange of wealth, but their primary purpose was the solidifying of tribal bonds. Over time, we saw growing separation of the monetary from the social, but the process has been gradual. Earlier I noted how medieval belief made greed one of the seven deadly sins. With the more commerce-based world of the Modern Age, material wealth came increasingly to define the primary bottom line for our actions. Today, money represents much more than just a medium of exchange. It has become the aspect of experience that we most mythologized—in effect, our determining ideology. As we approach Transition, this equating of material wealth with value often reaches a startling extreme.

I’ve proposed that this particularly defining Transitional dynamic—like any dynamic carried beyond its timeliness—increasingly puts us in danger. I’ve described how it has become a major contributor to today’s crisis of purpose. I’ve also argued that it can’t continue even to serve us economically, how it plays a major role in modern economic instabilities, producing inevitable house-of-cards dynamics.

The structural question of just what kind of economic system might most benefit us in the future is beyond both the scope of this inquiry and what we can now grasp at all adequately. It is quite possible that major changes of a structural sort will really not be that important. We can reasonably assume that future economic models must be more systemic in the sense of being more fully global in their scope. Future economic models will also clearly need to better support long-term benefit along with short-term profit. But it is too early to know whether basic economic mechanisms will need to be that much different from what we see today.

But there is a lot of a less structural sort we can say. The most important recognition brings us back to that Question of Referent. With Cultural Maturity’s changes, we should find ourselves increasingly appreciating and applying more fully systemic referents. At a macroeconomic level, that means replacing wholly monetary measures such as GDP with referents that better take into account all that contributes to well-being—not just material growth, but also the health of our families and communities, the continued vitality of natural environments, and our larger sense of human purpose. Personally, it means the kind of maturity in relating to money that I described in Chapter Four—the ability to be smart about money, and at the same time to appreciate money as simply a resource we use to support a meaningful life. Today we see at least beginning progress on both of these fronts.

We can also assume that future models must be more attentive to limits—for example, to the danger of having economic institutions that are too big to fail. When we begin to think of profit not just in terms of short-term gain, but in terms of long-term benefit, this greater maturity in the face of limits becomes obviously important—and not just socially, but also economically. For example, while addressing climate change may involve significant short-term costs, if we think at all long-term it becomes clear that climate change denial would prove ultimately much more costly.

Many of the most important needed changes in the economic sphere have to do with how we think about the economic sphere’s relationship to other cultural domains—in particular, government. In this chapter’s section on governance, I will address the most critical challenge in this regard: the need to confront money’s current hold on the workings of government. But we also need to learn to think more systemically about how the economic sphere and government relate when it comes to crafting effective economic policy. Here we encounter one of the most important needed “bridgings” when it comes to social policy. Culturally mature perspective makes it clear that free market purism ultimately can’t work, that it leads to benefit primarily for the rich and a lack of attention to shared assets such as infrastructure, health care, and the environment. But culturally mature perspective makes it equally obvious that ill-conceived regulation can undermine economic vitality in ways that are damaging all the way around. Cultural Maturity’s changes should help us better appreciate the complementary roles that freedom and limitation each necessarily play in fair and sustainable economic policies, and through this, to help us develop more pragmatic, and ultimately creative, policy approaches.

Changes we see today more specifically in the world of business add important further elements to this evolving picture. Some of the most valuable new thinking about leadership in recent years, for example, has come from the business world. That we find such innovation springing from the world of business—where values tend not to be the initial concern—might seem a surprise. But it very much makes sense. Globalization and technological advancement have had particularly immediate effects on business, requiring it to deal with ever more rapid change and an increasingly networked world. More than any other sphere, business quickly pays the price if leadership is not up to the task.

We should expect to continue to see leadership innovation coming from the world of business in times ahead. If for no other reason, this will be the case because businesses want to attract the best of workers, and increasingly the best of workers will be those with culturally mature capacities. To appeal to such workers, business leadership and business structures must better reflect and more directly draw on culturally mature beliefs and values.

While in our time we see the beginnings of both more systemic ways of thinking about wealth and more creative leadership in the economic sphere, we also see some of the most unsustainable of Transitional dynamics. In particular, the growing discrepancy between rich and poor presents one of today’s most glaring—and ultimately dangerous—Transitional Absurdities. Inequality itself is not the problem—within limits, it spurs individual initiative and wealth creation. But extreme inequality threatens democratic institutions and results in ultimately unstable economies. It is quite possible that the harshest lessons about economic limits in times ahead will come from ignoring the instabilities that such discrepancies inevitably create.