Monthly Memos

Business's Values And The Value Of Business

Charles I. Mundale
Executive Director of MCCR

June 1993

Economic activity is the dominant cultural force in modern society. Other forces--various forms of religious fundamentalism and "new age" ideologies--vie for influence, but it is the various forms of capitalist economy that are carrying the century. The values that sustain this economy shape the institutions and ultimately determine the quality of contemporary life. If those values tilt in the direction of rapacity and greed, institutions will destabilize and the quality of life deteriorate. If self-interest is enlightened by responsibility and competitiveness contained by obligation, the opposite effects will occur.

In 1954, Peter Drucker, the most durable of management gurus, cited the dangers to society and to business inherent in capitalism's emphasis on our acquisitive instincts. Profits are "the first responsibility" of management, he declared, but he devoted the rest of his essay to managers' "social responsibilities."

He was uncompromisingly blunt: "The hostility to capitalism and to capitalists is moral and ethical," he asserted. "Capitalism is being attacked not because it is inefficient or misgoverned but because it is cynical." And the source of that cynicism lies in the belief that "private vice leads to public virtue."

"No society can be lastingly built on such belief," Drucker concluded. "The public good must always rest on private virtue."

More than 30 years later, capitalism's ethical foundations continued to worry him. Again, his attitude towards profits was at once absolute and qualified. Again, he called them "the first responsibility," but again, he insisted that economic results cannot be the only goal. "All conservative thinkers have held since Aristotle that to subordinate a major institution to a single value is a grievous mistake that will ultimately deprive the institution of the ability to produce any results."

Drucker's warning evokes a convincing analogy from biology. Any species, flora or fauna, that grows without regard to its environment ultimately destroys the ecosystem and itself with it. When this happens at the cellular level, we call it cancer.

Nature, it seems, has been teaching the lessons of pluralism for eons.

In terms of that lesson and Drucker's warning, it can be said that the Minnesota Center for Corporate Responsibility seeks to make the world safe for capitalism by making capitalism safe for the world. Only by achieving the latter can we assure the former.

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