Business is a socially manufactured series of behaviors and processes. Current business practices, guided by capitalist ideologies, which focus on short term profit maximizing approaches and exploitation of resources, are leading us down a path of social and environmental destruction – which equates to planetary destruction. A paradigm shift from capitalism to Planetarianism is proposed. Planetarianism refocuses local, domestic and global business to prioritize conserving and revitalizing the Earth’s resources to ensure economic, social and environmental survival for the long term. Panetarianism is a universal virtues based framework governed by a global democratic participatory body.
It is widely accepted that our global economy is broken. Capitalism, as we know it, has been the making of this breakdown. Exploitation of natural resources, inadequately regulated international business practices and unreigned, self serving executives have lead us down a path towards ecological disaster. The local, domestic and global economy operates within the ecology of the planet Earth. Sustaining the Earth’s resources is of paramount importance to creating a global economy that will endure for the long term for the benefit of the individual and society alike.
No longer is the business of business business, Mr Friedman. Corporate social and environmental responsibilities override the need to maximize profits for the benefit of shareholders and incentivized executives. Even the founding father of capitalism, Adam Smith (1759) wrote that “All members of human society stand in need of each other’s assistance, and are likewise exposed to mutual injuries. … The wise and virtuous man is at all times willing that his private interest should be sacrificed to the public interest.”
To achieve the change to Planetarianism it is suggested that an urgent shift in leadership and corporate behavior is required. Because man has formulated the norms of business it is therefore a learned phenomenon and it can be modified. It is proposed that an overriding focus on the virtue of trust be the vehicle to transform our economic framework towards Planetarianism.
A return to Virtues:
The virtue of trust, as defined as the expectations of the intentions and behaviors of between two or more entities is the overriding principal of any human exchange. It exists at both Micro and Macro levels. It is enhanced and diminished by consecutive interactions. Two other virtues; behavioral integrity and transparency lead to elevated or diminished trust levels.
Behavioral integrity is the consistency of an acting entity’s words with actions. It affects follower commitment as well as organizational and vision commitment due to increased levels of trust.
Transparency validates (or invalidates) expected behavior, confirming behavioral integrity, again leading to increased trust.
Virtues based business entities such as Toyota Motor Corporation and Hyundai have proven to deliver not only sustainable long term economic results, but have allowed their corporations to be both innovative and economically competitively superior.
Successful virtues based businesses must be championed and rewarded at the local, national and global level in order to promote a culture of virtues.
Global Democratic Regulatory body:
Planetarianism proposes that in addition to a virtues approach to business, an all-powerful global democratic regulatory body must be promoted to establish rules through dialogue and debate and to mandate and enforce those rules. Just as we have the club governing body, the municipal governing body, the state and the federal governing body so too is it essential that we establish a global governing body to oversee and regulate all business activities. As our club committee is elected democratically so too the global governing body needs to be democratic. Our planet is a village and as one group of people with shared common goods, we need to band together to ensure those goods are managed and sustained for the long term.
Counting Everything:
Counting everything is an enormously important, but often ignored principle. The environmental and social costs and benefits of the consumption or restoration and creation of natural resources must appear in corporate reporting, for example in the Income Statements of all business. These values must be determined from within industry, implemented initially as a voluntary reporting mechanism, but ultimately, within the short term, be mandated as essential business practice by a global body. There is a dire urgency to implement this global regulatory body.
It is proposed that one universal measurement be used for each of the sociocultural, environmental and economic cost/benefits of doing business. All economic, social and cultural scales are social constructions, created by humans to measure and place value on aspects of society. Therefore social and environmental resources can be assigned a universal value in order to apply a reporting framework to their consumption or conservation.
Transparency:
Global regulatory bodies also need to mandate that social and environmental performance reporting be transparent and made available to the individual. The cost of environmental and social harm is usually borne by others than those who created the harm and they do not, as yet, appear on the offender’s financial statements. Business needs to report organizational performance in a way that individuals can interpret the organization’s social and environmental impact. The language of that reporting must become vernacular in order that the individual can make an informed decision as to whether or not to transact with that organization, whether it be a financial institution, a manufacturer or a service provider.
Champion and promote trust, behavioral integrity and transparency
Count and report the social and environmental impacts of conducting business
Prioritize the establishment of global democratic governing bodies
Quickly move towards mandating transparency in reporting social and environmental costs/benefits of doing business in order to increase trust
Champion and promote increased trust, behavioral integrity and transparency
Beaton, R. & Maser, C. (2012). Economics and ecology: United for a sustainable world. Boca Raton, FL: CRC Press.
Palanski, M., Kahai, S., & Yammarino, F. (2011) Team virtues and performance: An examination of transparency, behavioural integrity and trust. Journal of Business Ethics, 99, 201-216.
Queinnec, Y. (2012). Sustainable contracts – A legal innovation aimed at serving the common good. In C. Bonanni, F. Lepineux & J. Roloff (Eds.), Social Responsibility, Entrepreneurship and the Common Good: International and Interdisciplinary Perspectives (pp. 32-52) New York, Palgrave MacMillan.
Adam Smith
Dr. Marilyn Waring
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