Thursday, December 04, 2008

Socially Responsible Capitalism

Trying to reconcile two seemingly polarised views is the essence of politics for me nowadays

Since I was a kid I have had an emotional connection to the British Labour Party. I’ve always described my politics as socialism and I’ve recently got engaged in some fascinating discussion on Tom Peters Blog about capitalism versus socialism.

My earliest recollections of politics entering my thinking was in my early teens and my late beloved Dad coming home from his work after his shift on the front line in the massive Perkins Diesel engine factory in Peterborough (in those days it employed in excess of 10,000 people). He would complain about how management were not interested in the front line workers. Dad was a staunch Union man and fought hard for the workers he supervised as a fairly senior engine inspector. He had many battles with what he called ‘out of touch management stuck in their offices.’

It was these formative years that I suppose led me to believe the Labour Party was the one for me. As a result I've always voted for either a Labour Candidate (or a Liberal Democrat as a tactical vote just so that a Conservative is not elected)

I will not change my basic allegiance to socialism but I have discovered Socially Responsible Capitalism as a concept for the first time and I am going to do some more reading on this concept.

The thing that aways worries me about a purely capitalist dogma is this rose tinted illusion we are supposed to believe that business will allow 'trickle down' of wealth taking some of the profits ‘down’ to those who are at the bottom of the pile. O yeah, who are you trying to kid is my response.

I just cannot see this as ‘real world thinking’ without some form of government regulation which is alien to capitalists.

As a consequence I've never voted for a Conservative because that party is passionately capitalist.

Mark JF one of our regular commenters posted this comment a few weeks ago:

"A young man who isn't a socialist hasn't got a heart; an old man who is a socialist hasn't got a head." David Lloyd George.

In spite of Lloyd George’s assertion that I ‘don’t have a head’ I remain socially minded and nothing will change my view about that – but at the same time I want to see the spread of genuine socially responsible capitalism.

Maybe what I am saying for the first time in my voting life is that I will look at which candidate in my constituency stands for socially responsible capitalism and he/she will get my vote. The test for me will come if that person in a Conservative I guess.


Anonymous said...

Hmmm.... this is worrying: signs that a member of the electorate might vote with his brain rather than with prejudice. I think we ought to send the Thought Police round to Trevor's house before he can infect other voters.

Anonymous said...

I think the post raises another issue: do we vote for an individual or a party?

For example, if Trevor's preferred candidate was a 90% fit with his concept of socially responsible capitalism and the others were all less than 50%, would you vote for the 90% candidate if his party (and by extension its plan for government) was only a 40% fit when a 50% candidate was the representative of a party with an 80% fit?

Trevor Gay said...

Hi Mark

Until now my heart has always ruled my head when it comes to actually putting that little cross on the ballot paper with that pencil. I’ll now start worrying about the door bell ringing in case the Thought Police appear!

You pose a great question …

I have to say the two times in a general election I voted for Clement Freud (Liberal) when I lived in East Anglia back in the mid to late 70’s early 80’s was definitely because of the person. I had seen him help a few constituents and he also gave me personal support in my NHS job as our local MP. So I guess I would probably plump for the person rather than the party given your scenario. But the joy of our democracy is that we have the choice and of course everyone has their own reasons why they vote a certain way – and that’s how it must always be.

JOHN O'LEARY said...

A lot of the business owners I know (of the boomer generation) now speak of their commitment to the double bottom line - fiscal performance and positive social impact. There seems to be quite a backlash brewing in the US against 28 years of "no purpose beyond profit" capitalism.

Trevor Gay said...

Thanks John – I feel the same and I know a number of people who agree with you. It feels to me that the worship of money has become a religion. In the UK this dates back to the disastrous Margaret Thatcher period as Prime Minister from 1979 to 1990. The sense of social responsibility was completely overtaken by her obsession for profits at the expense of community collaboration. The public was conned into believing it was all about the individual and there was no role for government in developing social cohesion.

It is brilliant to know so many businesses now see their social responsibility as equal to the bottom line profit. Long may that continue. I sense Mr Obama will turn the tide in the US with socially responsible policies – I genuinely hope so.

Richard Lipscombe said...

This is a very interesting time to have this particular discussion or thought pattern.

Can I recommend some light and interesting bed time reading on the subject?

The book is by the well know journalist and social observer Michael Kinsley. The title is "Creative Capitalism: A Conversation with Bill Gates, Warren Buffett, and Other Economic Leaders".

The proposition that forms the kernel or the core of this book is for a new type of socially responsible capitalism and it comes from Bill Gates in an address to the World Economic Forum...

See the book at

Trevor Gay said...

Thanks Richard - that is one to add to Christmas wish list .... my problem is finding the time to read all the books I keep promising myself I will read!

David Wike said...

“The thing that always worries me about a purely capitalist dogma is this rose tinted illusion we are supposed to believe that business will allow 'trickle down' of wealth taking some of the profits ‘down’ to those who are at the bottom of the pile. O yeah, who are you trying to kid is my response.”

Surely you can’t be that dim Trevor (OK you are a Manchester United supporter so maybe we have to make allowances!), but that IS how it works. I’ll give you just one example. It’s of someone who you appear to admire. Sir Richard Branson. He starts a business. It grows. He branches out into new areas. Still it grows. He becomes amazingly successful and fabulously rich. Pure capitalism. But along the way he has given jobs to many people, and so the ‘wealth has trickled down’. I could come up with lots more examples but hopefully this makes the point.

Socially responsible capitalism? Hardly a new concept. Think about the Cadbury family building Bournville village for their workforce, or Lord Lever at Port Sunlight or Titus Salt at Saltaire. Look at any of the Dragons from Dragons’ Den; all fabulously wealthy but all giving their time and money to charity. Or for your international audience, the likes of Bill Gates and Warren Buffett giving millions to charity.

As you would say, wake up and smell the coffee Trevor.

And as for ‘the disastrous Margaret Thatcher period as Prime Minister from 1979 to 1990’, well, I wasn’t a great fan of everything the lady did, but she, along with Clement Atlee, was the most influential prime minister since the war. Atlee recognised that there was a need for change in post war Britain and introduced, amongst other things, your beloved National Health Service. Margaret Thatcher realised that Britain was heading rapidly towards being a third world state and had the vision and guts to do something about it.

Despite your rosy view of the unions, they were stifling change and bringing the country to its knees. Maybe working in the public sector you didn’t appreciate this fully, but if you had effectively been held prisoner by pickets at the factory gate with monotonous regularity, maybe you would have been more appreciative of Margaret Thatcher’s stance on militant unions. Of course, ‘the management’ weren’t perfect and they still are not in many (most?) businesses, but they do have a right to manage. If you don’t like the way things are run, then you should get out and find somewhere more to your liking.

You profess to admire the US and its ability to come up with new ideas and new ways to do things, and yet you have a dinosaur view in many respects. However, at least it is encouraging that you may vote for ‘the best’ candidate at the next election. Maybe I’m missing something, but I thought that was the whole point of a democracy.

Trevor Gay said...

Hi David - The ‘purely’ capitalist dogma has got us into the state the finance of the western world is now in as far as I can see.

And who do the capitalists look to for the bailout? – The government of course. I am advocating and encouraging social capitalism and yes it’s an old concept but not one that I have studied. I like the sound of it and maybe if we had seen more of it we might not have ended up where we are now.

As regards Mrs T – why don’t you ask the thousands of families of former miners what they think of her.

Unions became strong because of terrible management that was completely out of touch with the front line. (Even in your language there is implied ‘status’ that is completely unhelpful and a recipe for confrontation rather than collaboration e.g. “managers have the right to manage” – are we still in the Victorian era? – What about partnerships? And what about the right of front line workers who contribute to the success of organisations to have their say)

You obviously believe management always has the care and concern of their workers at heart - well I would suggest it is you who should wake up and smell the coffee because taking advantage of workers by bad managers still happens in 2008.

The point of democracy is that the people of our country decide which is the best party to run Britain and it is really interesting that your wonderful heroine Mrs Thatcher and her crowd have been soundly whipped three times now since 1997 as the people express their views about which party is best equipped to run this country. If she was that good as a leader surely her legacy would have lasted a bit longer.

Richard Lipscombe said...

David.... Go Liverpool - they are the team for this year with Stevie as Captain Courageous... They are a champion team not a team of Champions and that will count this year... I write here though about the book Creative Capitalism... It puts the complexity of merely co-joining two ideologies in the hope that you will discover a new robust super-ideology... The notion that an ideology that flourishes when markets fail can co-exist with an ideology based on markets not failing is a hard ask. Best wishes to you fellow Liverpool hopeful - fingers crossed, legs crossed, etc and this will be our year.

Trevor Gay said...

Dream on Richard and David – I predict that Man United will finish at least 10 points ahead of Liverpool yet again a the end of the season next May. By the way …. Have you both got your tickets to the Liverpool end of season dinner and dance? – It’s being held in January.

Football banter is the best ….

JOHN O'LEARY said...

Trevor, getting back to the notion of the "double bottom-line" - it sounds like you're fine with an individual or organization making a healthy profit. The question is whether they're also being responsible to their stakeholders (employees, customers, community, etc.), correct?

Trevor Gay said...

John - Absolutely, definitely indisputably Yes!

I just love the idea of individuals making profit. I want to make a profit in my own business.


My main concern is, and always has been, that without some kind of regulation we cannot just rely on goodwill to assume money will flow down to the front line. It’s like wishing pigs might fly.

I don’t agree with government ‘running everything’ but I do agree with government making rules to ensure businesses are responsible about money moving from those who have too much beyond ther means to those who do not have enough.

Does that make sense?

JOHN O'LEARY said...

I'm with you, Trevor. Over the years I've gone back and forth about how MUCH government should be involved in business, but I've never questioned whether it should have a role. And right now many of us in the States are reacting to eight years of inept, faux conservative, economic leadership. I actually look forward to a time when there is principled economic conservative leadership sufficiently represented in our government to maintain a healthy debate with its opponents (which includes me most of the time).

So you sound like a capitalist to me - of the small business variety - though the term capitalist probably carries more unwelcome baggage on your side of the puddle than on mine. I wish you success in your business - for both bottom lines.

Trevor Gay said...

Hi John – thanks for that my friend

I’ll accept I’m a capitalist with a socialist centre – how’s that for a Brit compromise?

Whatever I achieve in business - or in life - I hope I will always keep an eye on both bottom lines – I like that concept so thanks again.

As you can tell John I am not an economist but it does feel to me like your new president is saying all the right things when it comes to social responsibility - I hope Mr Obama can introduce at least some discussion about a universal healthcare system on your side of the pond.

Richard Lipscombe said...

What I love about football is it is Simplicity in a pure form.

Take the case of Liverpool and Manchester United.

The capitalists run the clubs. They decide who to keep and who to trade, where the games are played, how they are played ("the spirit" of the modern pound sterling driven game I mean), what they will sell as merchandise, etc.

Meanwhile, the punters decide whether to be socially responsible or not - they decide where the fights are to be fought, who can attend to have their heads bashed in, when to call a halt to proceedings (after six or sixty serious injuries or only when the cops show up!), etc.

I submit that Socially Responsible Capitalism works for football so it can surely work for every other field of endeavour too....

Trevor Gay said...

Hi Richard - It is a great shame that a few mindless idiots (who are not ‘real’ football fans anyway) create an image of widespread hooliganism.

As with many things in life the 2% or less spoil the image of the 98%.

I recall going to a high profile match in the 1970’s at Old Trafford when Manchester United played Derby County. 63,000 people attended the match. The newspapers the following day had banner headlines about the 100 (0.15%) or so fans that caused trouble ... the newspaper never mentioned the 62,900 (99.85%) fans who behaved impeccably for the entire occasion … Oh well such is life …

Richard Lipscombe said...

Hi Trevor...

You make my point well.. We all can utilise Simplicity (simple language, analysis, selective quoting, etc) to make an invalid case.

It is probably also the case that most of the evil attributed to Capitalists is a reflection of less than 2% of them around the world.

Most capitalist are not monsters rather they are God fearing people, with integrity, good social values, and a love of their Dad just like you Trevor - my old mate.

Too often we find it convenient to use Simplicity to negate the complexity of the issue and in the process we are forced to take arms against the wrong foes - perhaps this is why the UK and Australia followed America into Iraq.

We see evil where none exists and we live in a constant state of fear when we should live with our hearts full of hope and joy.

My sense is that we indeed have a brand of "Socially Responsible Capitalism" being played out in the UK and Australia today. I sense that we are lucky because our capitalists (let me use your figure of 98% here too as I have not actual stats either) are people with a social conscience and a willingness to help others. You often use the example of Sir Richard Branson in this blog - well is he is an evil capitalists?

From what I understand of Sir Richard Branson - he is a socially responsible capitalist.

The world is complex. Complexity is combated by a requisite amount of variety. Too often Simplicity as practiced here by you my friend lacks the requisite variety need to cope with the complexity of the issue being raised - your brand of Simplicity is mostly selective, simplistic, and restrictive.

Complex systems are open and expansive like our universe thus they are forced to change - Simplicity systems are closed looped and entropic as they wind down due to a lack of open ended feedback and diversity.

I believe we have socially responsible capitalism with us today - the proof is that the news is full of the 2% of bad capitalists who are the exceptions that prove my case.

Cheers mate and in the spirit of solidarity and complexity I say "go Man U you beauties!!!"

Trevor Gay said...

Hi Richard – great reply - my response briefly to a few points.

You say – “Too often we find it convenient to use Simplicity to negate the complexity of the issue”

I would say too often we apply complexity to unnecessarily blur issues when simplicity can focus the arguments.

You say - “We see evil where none exists and we live in a constant state of fear when we should live with our hearts full of hope and joy.”

I live my love full of optimism, hope, joy, enthusiasm and passion for God, family and work and I try to make a difference – I never look for evil and I love every new day.

You are right again to say that Sir Richard Branson is one of my heroes and I see him clearly as a social capitalist – I don’t think I’ve ever used the term ‘evil’ to describe capitalists have I?

You say – “Too often Simplicity as practiced here by you my friend lacks the requisite variety need to cope with the complexity of the issue being raised - your brand of Simplicity is mostly selective, simplistic, and restrictive.”

I say – you are probably right -I do like to keep things very, very simple. I plead guilty on all charges – probably on the basis that despite the fact I have all the right boxes ticked in my CV and in my academic and management career - when judged by qualifications - I am not as widely read and academic as many people who will be able to put forward arguments about complexity theory that I frankly don’t even begin to understand. What I will never do however is pretend to be something I am not – i.e. an expert in complexity ‘theory’ or simplicity ‘theory.’ Richard – you know that I am just a pretty ordinary guy of average intelligence who wants to see things that do not need to be complex, to be kept simple. I happen to believe many millions of people want that too.

Finally and on a much lighter note thanks for the Man United boost – this season we may let Liverpool enjoy a bit longer at the top of the table until we decide in the New Year to get out of second gear and cruise past Liverpool as always.

Anonymous said...

"The problem with using simple language is that you have to know what you are talking about"...Unknown

Simplicity translates the complex into knowledge and action. Isn't that the essense of teaching and learning? You begin with the complex concept, use a simple example, quote, story to explain it as it gives folks the opportunity to assign meaning to the complex. You "question" to check for retention...and you move on.

Closed looped performance management systems are indeed simple as the basics of business and management are equally simple. There is a leadership element, a customer and market focus element, a planning element, a process and product design and development element, an employee well being and satifaction element, a business results element and a balanced scorecard/information and analysis element. Is this not the essense of the Shewart Cycle...Plan-Do-Check-Act? The loop is closed but it systematically includes "cycles of refinement" to institutionalize continuous performance improvement. Another example of simplicity translating the seemingly complex into an actionable management system that can be used at any level of an organization.

Simple works.

Trevor Gay said...

Thanks Dave - I have often said and written that "complexity is merely the sum of simple parts." I feel that even more strongly the older I get. Surely the task of any good leader to make stuff understandable for the people doing the work.

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