Economic origins and the pendulum shift

Chapter 5

It was with much relief that I discovered the accuracy of the horologist’s instructions. The photographs had helped with some of the more complicated details and now, through his wise counsel, the grand instrument’s mechanism took form – released from its packing crate after a journey of many thousands of miles, a family heirloom now returned to its place of origin—or near enough—after more than a century of wandering. The reassembly of grandfather clocks is the sort of thing for which you need to consult the expertise of a horologist. It is a finicky craft, and success is confirmed only when all pieces are in place and the pendulum is set in motion. Once the initial wobbles are overcome, a smooth rhythm settles in, climbing up that familiar arc and terminating in a motionless and instant about face. The moment of inflection – when the movement shifts – is the mystery. Our eyes are not trained to catch the imperceptible change of direction; we see only that it has happened.

The longcase (or grandfather) clock was invented in 1670 at the close of the Early Modern period, an era which also witnessed the initial flourishing of the mercantile class in the West, a development that in turn gave rise to the Colonial economies and their trading and early capitalist practices. Soon afterward, the corporation was born and was fuelled in its growing ambitions by the enormous release of human power and confidence as industrialization spread. In 1819, the corporation was endowed with the rights of a “person” under U.S. law (more on that in the coming months). And not long afterward, debt-based capitalism, set racing by the caffeine pill of consumerism in the post-World War era, raised the pulse of commerce to the fever pitch we now think is normal. Wealth creation became a mantra, and capitalism a high-revving engine fueled by the hybrid science of economics and reason that we call economic rationalism.

The period historians call The Enlightenment set in motion the inexorable rise of science and, in particular, the scientific method of observation, hypothesis, experimentation and conclusion. This ‘fact-based’ way of arriving at a conclusion about reality has become the primary way we come to know anything with confidence, and before this epistemological juggernaut all mystery evaporates. Somehow (I am sure social historians can elaborate much better than I) along this trail of “progress” reason and economics fused to create preference for actions that made economic sense above any other kind of sense. Economic justification rules the roost, suggested by the slogan of my local bank, which declares, “making money make sense.” And in this state of affairs, central bankers, industry titans and prognosticating economists became the great high priests in the growing cult of capital.

Yoked to the socio-political engine of capitalism, making money and wealth creation became an irrefutable logic—money makes the world go round after all. But commerce is an amoral institution and a profit statement an impersonal report devoid of human relational meaning. The pursuit of profit by owners who could pay little economic rent for the privileges of plying their trade was then accelerated by the relentless discipline of optimization and supercharged by data and analytics. We have together built a mountain of environmental, social, and moral debt like the unstable tailings pile beside the mine entrance or the accumulating pressure in an earthquake-prone fault, which threaten to engulf the valley below and shatter the known landscape. Whether climate change or the moral carnage of an Enron, or a Libor scandal, or any other form of profit maximizing excess, more and more of us are saying, “enough!”

Somewhere in recent time, perhaps in the darkness of the 2008/9 recession, the pendulum has started moving in the other direction.

I didn’t catch the brief instant of the shift, but when I wander through the bookstore—or gaze across my own over-stuffed shelves—I see that a trend has begun and is picking up speed. More and more is being written about the “soft” side of running a business. In the past few years, titles like: The Human EquationStart with WhyThe Purpose Economy, The Human BrandMaking GoodFixing the GameExtreme TrustThe Five Dysfunctions of a TeamFirms of EndearmentEmotional IntelligenceAppreciative Leadership, and many more all point to a growing dissatisfaction with the way business interacts with society. The incongruity of values between current executives from the Boomer generation and their workforce of Millennials is not just a factor of age but rather represents the occurrence of a real shift. But why? What lies behind this new pattern? Businesses, through their leaders, are responding to something as they always do, and they are responding quickly.

We are recognizing the consequence of our excess. We have seen that the commercial double-play team of rationality to profit to single-minded optimization has thrown the ball away. It is the failure of success.

Purpose as a critical leadership influence signals a real change in direction, not just another management fad. It seems more and more of us want businesses to solve real social problems and not just make money. We expect more from business – more than has ever been asked of it.

Though our rapidly secularizing culture may have led many of us to abandon (or never encounter) religious or educational institutions as authors of meaning, our innate hunger for something bigger than ourselves lingers.

Today, we wrestle with the discomforting realities of a society founded on rational self-interest:

  • a widening wealth gap and manufacturing sweatshops
  • rising youth unemployment and crippling debt
  • climate change and environmental degradation
  • and the list goes on…

And yet, just like that, the pendulum reverses. Increasingly, business must solve social problems, not create them:

  • “Reduce, Reuse, Recycle” and “Less is more”
  • consumer activism and “Occupy”
  • CSR, sustainability and authenticity
  • “where it’s made, how it’s made” and “open source”

The pendulum gathers momentum.


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