In a December 3rd Harvard Business Review article (Rescuing Capitalism from Itself) Henry Mintzberg noted “since 1989, the United States has experienced some alarming changes, for example the massive infiltration of corporate money into public elections, disquieting levels of corruption in business, rising income disparities, and the decline, of all things in this country, of social mobility.”
How have these alarming changes come about? Are these the result of outside forces or are they the result of the economic system itself?
Is This What’s Needed
Mintzberg’s perspective is that “what needs fixing is our perception of society”—though he does acknowledge “capitalism needs fixing.” More to the point Mintzberg concludes these experienced alarming changes are the result of an out of balance society. Using a stool as metaphor, Mintzberg views it (a.k.a. society) is a stool with only two legs, the public sector or government and the other is the private sector or business/economic enterprise, so it can’t help but be out of balance. Accordingly Mintzberg concluded, “society needs a third leg for balance.” He argues the missing third leg of the stool is “civil society” or what he calls the plural sector wherein NGOs, member-owned cooperatives, not-for-profit organizations (e.g. Red Cross, Greenpeace) and social movements reside.
But it is not that the plural sector (the 3rd leg of the stool) doesn’t exist: we’ve had these type organizations in society for quite some time. So actually the problem isn’t that we are missing a leg! This third leg is a very thin and weak leg. Could it be that we are not valuing and correspondingly supporting and advancing the importance of it in relation to the other two, so in effect we have but two?
Mintzberg acknowledges the importance of people in society acting cooperatively, acting together and hence his advocacy for a strong plural sector. In support of this he quoted Alexis de Tocqueville’s observation of the emerging United Sates in the early 19th century, “if men are to remain civilized or to become so, the art of associating together must improve.”
What Has Happened
Mintzberg appropriately asked, “how did a word coined to describe the funding of private enterprise become the be-all and end-all of human existence?” Generally the public has been manipulated by fear and thus has not only allowed this, but has unknowingly been complicit in society’s domination by the private sector.
Unfortunately, the people of the United States have believed themselves to be as capitalism has cast them—intelligent self-interest seeking beings—who are to blindly follow the allure of capitalism’s promise of wealth through each individual’s pursuit of material self-interest. More to the point, consistent with highly valued individualism and competitiveness, people in the United States have come to internalize capitalism’s intent—the maximization of one’s material gain/wealth—as (their) life’s purpose.
Although it has always been so, in the past 45 or more years this dominance by the corporate sector has steadily increased with significant government co-optation if not capture. Hence we experience greater corporate irresponsibility (to society and the environment), exploitation of Nature and people—both within and outside the business enterprise—and gross inequality as leading effects. These and the many other adverse effects are due in large part to capitalism’s precept for the pursuit of material self-interest, of unfettered maximal profit—this is argued more fully in The Intent of Business as well as in It’s The EconoMe in a more conversational fashion.
What Needs Fixing
Mintzberg claimed what “needs fixing is our perception of society” in that we’ve “been seeing it as sitting on a two-legged stool.” He advances the need for balance among the three legs of the stool; however the term balance implies opposing forces and in fact he discusses the need for each sector (a.k.a. leg) to act as a counter force to—a check against—the other two sectors. But the sectors of society—the legs of the stool—should not be in competition with each other for the resources of society.
Mintzberg explained, that in regard to the plural sector it is not them but all of us; it is you, me, it is we. He then asserted, “we ‘human resources’ have the capacity to act as resourceful human beings—in short we need to “be engaged” with and in the plural sector. While this sounds great it doesn’t change the intent of the corporate sector and its capture of the government.
We ought not forget, the only reason a leg (i.e. a sector) is created is to support the functioning of the stool (i.e. society).
For the society to function as one whole—not as the legs of the stool, to continue with Minztberg’s metaphor, each must have an intent that supports the whole, not seek their interest and to check against each other’s overreach. This would be a very inefficient as well as ineffective. Each sector must have the intent of supporting society rather than seeking to extract whatever can be extracted for its own purposes.
We don’t simply need a stronger 3rd leg, we need different legs altogether. The legs of the stool need to be created/made with the intent of supporting all of us, so that the whole of society is sustainable.
If we change the intent of business then fundamentally we change the corporate sector, and because of its dominance in society we necessarily affect a change throughout society. But to do this we need to change our understanding of our selves as living beings, not just our perception of society. We need to gain a fuller understanding of what it means to be a human being. We need to understand that we are not merely the most intelligent animals whose life’s purpose is the pursuit material gain. Our viability as a species and sustainability as a society rests upon us acting with a fuller understanding of our very nature as people: Nothing will change until there is this foundational change in understanding.
Then and only then will we see that the man-made system of economics we’ve been adhering to for so long is detrimental to life itself. Then and only then can we begin to see how business—the organizations we humans create—can and should be managed not only for the betterment of (all) life on earth but for our very own development as people.
So let’s revisit the notion that capitalism needs fixing. You can’t fix something that is at base detrimental to life itself. Capitalism is a cancer in society. We don’t fix a cancer we rid ourselves of it.