Communities are Conservative, Business is Progressive
There is an inherent conflict between communities and companies. Communities (family, neighbourhood, tradition) try to maintain stability. Companies are driven by the nature of the capitalism market system to innovate and change. (See Schumpeter’s “creative destruction” on wikipedia) .
Stability vs Destruction
Companies close their factories and replace deeply experienced craft men with young computer geeks who can build the model inside a CAD/CAM system. Companies move accounts payable from outside of town, to outside of the continent and 25 middle managers who have spent 25 years working in accounts no longer have a workplace to go to. The community is hit by this loss of incomes and hope.
What is the right balance between Creative Destruction (Capitalism) and Stability (Community)?
This may be a moot question – Creative Destruction is an international, intercontinental force. A community has little power to decide “we will step outside of this cycle”.
Europe is facing this on a brutal scale. These two forces are pulling the euro project in many directions, testing political will, raising emotions. Karl Marx predicted that capitalist society would come to this point – debasement of the money supply (otherwise known as Quantitative Easing), greater and greater proportion of profit going to the owners of capital (not labour), monopolistic tendency in industries. His view was that capitalism would inevitably collapse under its own success.
Community has provided the softening balance that has kept capitalism from collapsing under its own successes. However we face an intense conflict. We don’t have free markets, we have crony capitalism. The banks that should have failed, were not allowed to fail. The bankers at the center of the capitalism disaster turned to community to save themselves – and community did.
Capitalism is needed to innovate, but Community is needed to soften the harsh blows and to save capitalism from its own failings.
Changing and Caring
- Entrepreneurship is needed in society, in public service, in schooling as much as it is needed in business. The modern world needs a continual updating mechanism – otherwise our nation will be left behind. We have found no other comparable mechanism than the market to continually improve products, services and people (evolution is a sort of market mechanism).
- Society needs a balancing function. The brutal consequences of competition – loss of jobs, loss of value of skills, unemployment, increasing cost of debt servicing… need people who can support us in tough moments.
This conflict is always going to be there. Society wants stability. Global markets force change.
How can society cope with the ever increasing speed of global change? What happens when companies innovate fast? How can we help communities accommodate the increased pace of change?
It is Messy, isn’t it
I don’t have any simple answers. I am currently taking the course “Moral Foundations of Political Systems” on Coursera with Yale Professor Ian Shapiro. Over the past 5 weeks we have moved through Enlightenment, to Utilitarianism, to Marxism and this week onto Social Contract theory. I love several moments in the course where Shapiro asks a simple question to the partipants… they give a go at what seems a simple enough question… and then he smiles and says “it is messy, isn’t it. You can’t take the politics out of human decisions.”
What are your thoughts?