Spring/Summer 2004 (by Rinaldo Brutoco |
Kosmos Journal)
GN3 Editorial Comment: Many are
beginning to see the tri-sectoral or threefold
nature of global social life through the activity of
civil society, governments and business. There is
also increasing understanding of the essential and
complementary roles of the institutions of culture,
polity and economy in the pursuit of integral
sustainable development. As the article below
discusses, the balance of power is shifting and new
paradigms are necessary in order to harness a
growing global collective intelligence towards
sustainable development. Economic power implies
greater responsibility and business must be
conducted "in a way that is sustainable for society
and the planet."
What started out as an interview with Rinaldo
Brutoco by Nancy Roof turned into a full-scale
article. Rinaldo was so articulate that after the
first question he was able to carry the ball alone
ending in 15 pages of valuable text. We have pared it
down for this issue and will include more in future
publications. What catapulted Rinaldo into action was
the following question: Governments are losing as
business and civil society are gaining global power
and influence. Sovereign states arose with the
Industrial Age and economic progress. In the 21st
century they are no longer capable of furthering
economic growth so people have begun to look to
business and civil society for leadership. How do you
see the relationship between these three global
forces?
This is one of my favorite topics. You are asking
about the relative strengths and weaknesses of the
three sectors of global society. Sovereign nation
states operate unilaterally, bilaterally and through
multilateral institutions that they create such as the
United Nations. Civil Society is equally diverse.
Business encompasses both the local employee who makes
coffee and donuts on the corner or serves a taco on
the streets of Tijuana all the way up to the largest
corporation in the world.
Sovereign States in a Global World
Let's start with governments. They are the easiest
to understand. From the late 1600s to 1700s all the
way up through the 20th century you find a period of
formation of national sovereign states. The concept of
sovereignty is a post-medieval concept. It was the
solution to social organizations at a time when
society had very different interests, challenges and
opportunities. As is the case with most if not all
institutions they often survive long past their useful
viability. They were created four hundred years ago,
became the dominant political force and are now
irrelevant.
Why? Because the concept of sovereign nation states
has little legitimacy in a world that is inherently
global. That vendor selling tacos in Tijuana is in
global commerce. The cost of the meat he puts in the
tacos and the cost of the corn tortilla are based on
global commerce and international treaties. But we
believe the fiction that somehow because he is doing
this on one side of the Mexican-American border it is
more relevant than if he did it on the other. You can
play this fiction out through endless iterations.
American trucking interests say that each Mexican
truck illegally stopped within 50 miles of the border
violates NAFTA. They do it because they have the power
to do what they want, despite the fact that they have
a treaty to the contrary. They are trying to resist
the nature of global commerce even with their
next-door neighbor. That silliness extends ad
infinitum. Why? We don't live in nation states
anymore. We are global citizens.
About 25 years ago people started asking me where I
was from. I had the good fortune to be born in Canada,
raised in the U.S., and lived overseas for extended
periods of time. I've often wished that some green
skinned people would land in a saucer. It would be the
best thing in the world because then we would realize
that someone with brown, yellow or red skin would look
very normal. We'd see the contrast so dramatically
that we'd all come together.
Although it is humorous to mentally picture little
green men from space, it is nonetheless an apt way to
encounter a very serious subject. Obviously, we are
all part of one global family. That is our primary
allegiance -- if you doubt that for a minute, ask an
astronaut who has viewed our beautiful blue planet
suspended in the vast void of outer space and they
will validate this point. Hence, forces inherently
larger than they can control affect sovereign states,
which are historical and artificial divisions within
our home planet. Worse yet, their attempt to control
by utilizing these artificial separations is causing
an acceleration of the breakdown of human society.
Air knows no borders. Acid rain knows no borders.
Oceans know no borders. Coral reefs know no borders.
In fact from 150 miles in space you can't see any
borders at all with the possible exception of the
original Great Wall of China, which today is not a
border. This shows the utter irrelevancy of borders.
That we hang on to the national thing gets us into
unlimited amounts of mischief.
A modern day example would be that the U.S. has
gone to war with Iraq. Apart from questions of
morality and complex geopolitical issues, it is
obvious that national sovereignty is a major issue.
Let's forget that for a second and say: You know there
was a guy in my little village of Ojai shooting at the
police. The police are entitled to go take him out.
That is a legitimate function of police power properly
used. Therefore, if the world's village chooses to
pass rules and certain individuals choose not to
follow them, they should be subject to the normal
processes of law. This means arrest by an
internationally appropriate police force and trial in
an appropriate international forum.
The International Court is the proper place for
international crimes to be tried. I regret to say that
the U.S. refused to sign on to the International
Court. Let's get on with it and disband the armies of
the world, which have no useful purpose, so that we
can have a police force that is effective. Police
issues include global terrorism, money laundering,
illegal conduct of corporations and individuals all
over the planet who are engaging in anti-social
behavior beyond the reach of one sovereign state and
clearly affecting the entire global community. Nation
states that cling to their old sense of power create
endless mischief.
The aggregate of individual sovereign states at the
United Nations is equally as mischievous. It is not
because the UN isn't well intentioned. I have profound
respect for Kofi Annan. At the end of the day he is
trying to fix something with a broken system. What is
beyond sovereign states and the United Nations? That
is the most interesting question.
I'd like to make another observation. There was a
widespread global belief that at the end of the Cold
War there was only one superpower left. Russia was no
longer able to go toe to toe with the United States. I
think it's fascinating that the policy that was at the
core of the Cold War was called MAD, Mutually Assured
Destruction. If the purpose of the military is to
assure Mutually Assured Destruction on everything on
the planet something is fundamentally flawed. People
thought there was only one superpower left at the end
of the war. We now know that was incorrect.
There are two superpowers. Of the two, the United
States is the least strong. There is a more powerful
force in the world today. That is world public
opinion. So the end of sovereign states is when you
are the only armed titan left. But you still aren't in
charge because the entire game is a broken game and no
longer has merit or value. World public opinion has
more power.
How do we know that? Because in the face of world
public opinion the U.S. has been forced to change its
ways and will be forced increasingly every time it
sees itself as a renegade, because the rest of the
world perceives that that is what it is. That to me is
a fundamental observation. So while we thought we had
three legs on this milking stool, it turns out they
aren't the three we thought they were. It isn't
sovereign states, civil society and the business
world. It is actually only two because civil society
has the ability to form and reflect public opinion.
The world business community is there too. What
happens to a three-legged stool when we remove one
leg? Unless the person sitting on it exercises
independent balance it will collapse. Does it look
like it's collapsing? It is up to us, civil society,
who are sitting on that stool to exercise independent
balance.
There is only one question to ask. How can I serve?
The balance is in knowing that the spiritual dimension
is the force that runs through all of these items and
it is that which gives us our balance.
Civil Society a Rising Force
Civil society is rising at the end of an era of
sovereign nation states where all power was descended
from Deus Rex, the King, by God's will or some other
hierarchical system (typically patriarchal). However
denominated, that system became incorporated,
developed into nation states, ran its course and is no
longer effective. A new force called civil society is
arising in the vacuum. Fortunately there is a powerful
tool which society has created without realizing it;
it transcends all the power blocks currently known on
the planet by several magnitudes. That tool is the
Internet.
Because we are becoming independently viable it is
giving us the opportunity to create, act, and function
like a global brain. In the process we are developing
the resources for civil society to achieve a level of
effectiveness that would have been impossible in a
sovereign nation state system and would have been
highly unlikely without the interconnectivity the
Internet provides.
The metaphor of global brain is powerful (see
Sidebar 1). If you take the impact on human society of
radio, magazines, newspapers, televisions and motion
pictures, combine them all, and multiply by 100, you
still don't equal the emerging impact of the Internet.
It is not just a means of communication or a means to
spread ideology or stories or culture. It is actually
thought itself. It is collective global intelligence.
Global Brain Metaphor
Every person sitting at a single personal
computer anywhere in the world is performing the
function of a single synapse in the human brain.
Which is to say that, every single synapse in the
global brain is potentially firing to any or every
other synapse. The fascinating thing about the way
neuron science understands the pattern of the brain
is that there is no physical place in your brain or
mine where memory is stored, where logic occurs or
solutions are found. They are apparently created in
the space between -- the gaps between the synapses.
Somehow magically one synapse fires in a myriad of
directions to other synapses, which appear to be
random but are actually highly ordered. Synapses
work together through the space in between where
memory, logic, thought and human intellect reside.
To me that is exactly what has happened. Collective
Intelligence is emerging because the Internet gave
us the ability to connect the synapses.
What does that mean for civil society? World
public opinion begins to become more mature as a
fetus becomes more mature with age (see Sidebar 2).
It grows, learns, adapts and changes. So will world
public opinion. Nothing is more powerful than an
idea whose time has come. That idea is that “we the
people” are capable of taking back society. We will
be doing it not just through institutions. Civil
society will take direct responsibility for many
aspects of global society.
Birth of Humanity Metaphor
Society is going through a turbulent period that
I analogize to human birth. Think what it is like
for a human fetus to come down through the birth
canal. A fetus in the womb develops the electrical
systems, the biomechanical systems, the musculature,
the neurons to be viable, but doesn't achieve it
until it exits the birth canal. It is dark. It is
messy. It is cramped. It is painful to both mother
and child. Yet with a plan that has been in place
for at least 3 1/2 to 4 million years, magically the
child is born. The instant the child comes out in a
normal healthy situation it is dependent on its
mother and father for every necessity of life, but
it becomes its own unique thinking personalized
package of divine reception capable of listening to
the encoded messages of the universe. The pain is
over. The child loses most of the memory of the
passage. What is left is a viable human being. To me
the earth is now in the final stages of exiting the
birth canal. Human society is becoming independently
viable. The Internet is what is permitting that to
happen.
The Power and Responsibility of Business to the
Whole
My hope and my expectation is that business is
going to help us solve global problems. Why? With
the exception of very few businesses, military
contracting being one of them, most businesses don't
win when there is a war going on. Also most have
morality about what they do every day. They realize
that you can't sell anything during Armageddon.
There is no room for a taco stand next to a suicide
bomber. War is very bad for business with the
exception of the guy making the bombs. It is in the
enlightened self interest of the business community
to be engaged in global peace initiatives.
The truth is that what is good for business is
what is good for people and the planet. Even if you
can get away with a little bit of greed for a period
of time it will catch up with you and the smarter
people get, the quicker it will catch up.
We started with a scandal, Enron. You notice how
fast it started cascading? It took a few more months
before Anderson, then it wasn't long before MCI,
Adelphi, then the Tyco revelations and now it's the
entire mutual fund industry collapsing. The New York
Stock Exchange had to take down and rebuild its
entire governing structure. No one individual will
ever again be both Chairman of the Board and CEO of
the New York Stock Exchange. No one will ever again
have the power of unlimited personal greed at the
expense of that most powerful of capitalist
institutions.
I gave a speech in February 2003 to Corporate
Directors called The Demise of the Imperial CEO. It
was about tribal leadership. What is the legitimate
and appropriate role of the Board versus the CEO?
Shared power, not monolithic power, is consistent
with the new paradigm. Sovereign nation states as
well as corporations have gone past the imperial CEO
time of the Caesars to a time when all the
stakeholders of the corporation need to be heard.
The companies that embrace that approach will be the
most successful. They will not only treat their
employees and vendors better, but also their
customers and shareholders. The shareholders will
get a better return and they will treat the
community they operate in better. Next will be
concern for planet Earth. That's what's coming. I
was unsure of what the reaction would be of the 300
Directors because I was actually calling on them to
rise to a higher level and a higher role. The result
was a standing ovation. They understood we had a
huge opportunity for everyone to win.
Does that mean that every Director has come
around? No. But it is becoming the dominant
paradigm. When you have negative restraints like
Sarbanes- Oxley combined with these positive forces,
the likelihood is that this is an irreversible
trend. When we walk away from the imperial CEO and
embrace the tribal model that gives us the ability
to facilitate the bigger change particularly since
business has an amazing amount of power.
The first thing we are going to do is to
encourage more connection with civil society. I see
the business community leading and being supported
by and in turn supporting civil society.
Demonstrations in the streets against the World
Trade Organization, the IMF, the World Bank, and
against globalization are a result of the old
paradigm utilizing latent forces to divide and
conquer. This will not succeed in the end.
We believe in the World Business Academy that our
job in the business world is to be of service. There
are interesting corollaries if you accept that.
Think of what that does to redefine profit. Think of
what that does to redefine what you do in the world
and how you do it. Think of how it changes the
economic system. Our job is to try to understand
what works on the material plane of reality. If it
is true that business is the dominant institution on
the planet, that very belief implies a special
obligation that no other institution has.
Willis Harman, my co-founder of the World
Business Academy, used to use the analogy of the
Holy Roman Empire. It was the dominant institution
in Europe in the Middle Ages. Therefore it had the
responsibility to think about how the whole system
would work. Because businesses have enormous power
today it is incumbent on them to have not only a
normal level of commitment to service to the planet,
but to have the level of responsibility that comes
from being the dominant player.
Why do I say business is the dominant player?
First of all, statistics: Of the 100 largest
economies in the world over half of them are
businesses and that number is going up dramatically
every day. So we are not far from a time when the 70
largest economies in the world will all be
corporations. These corporations operate beyond any
international law. They operate beyond political and
environmental constraints. They are huge entities
that stride across the globe with all the power of
ancient Rome. They have the ability to retract from
one area of the world and appear quickly in another
as they choose, usually causing havoc in their wake.
There are some companies, not many, that seem to be
trying to learn how to exercise this extraordinary
power in a benign way. Those companies need to be
encouraged.
Secondly, does anyone in the world today really
believe that the political system in every advanced
nation in the world isn't being funded and run by
business? You couldn't have a better example than
the United States. Basically four or five industries
put up almost 100% of the money for George W. Bush's
nomination and election. Who are those industries?
Look how pharmaceuticals are 30 to 40% more
expensive in the U.S. than in any foreign country
even though they are made in the U.S. The military
procurement industry? Look at what's happened to the
military arms budget in the U.S. The Insurance
Industry? Look what's happened to protect insurance
companies from their own remarkable manipulations of
financial markets and the public has been forced to
pay. The number one donor was military arms, two,
military procurement, three, pharmaceuticals, four,
insurance. These are the big winners. Everyone else
is losing because they put up $250 million dollars
and are reaping tens of billions in return. They
made a bet and won.
Unfortunately the American public permits its
coverage of election issues to be just like a
horserace. Instead of looking at the interesting
questions and causes and having a vibrant dialogue
they have permitted the media to trivialize the
entire electoral process preferring entertainment to
information. I am not singling out Bush more than
others, because historically there was far too much
buying of influence in the prior administration as
well. However, the current administration is
particularly egregious in this regard and has gone
beyond all prior precedents.
Political interests around the globe are much too
influenced by the short- term economic interests of
business. Business is inordinately powerful in
politics and they are major funders of academic
institutions as well. In science they can basically
write the contract so the research comes out the way
they want. So you wonder who is in charge globally?
“Follow the money” and you will find out who is
calling the shots. Where does the money come from?
Business.
For every dollar that is circulating in the
global economic system, how much do you think is
spent on goods and services? Less than 2%. So 98% of
the money circulating is just money chasing money.
We are running a global casino. And when you run a
casino who wins? The house can't lose because the
house makes the rules. People must get clear about
what is happening.
The World Business Academy started 17 years ago
with three objectives. One, to change the perception
of people in business as to what their
responsibilities are to all their stakeholders --
which includes the public first and foremost. Two,
to change the perception of young people as to what
business' appropriate role in society is so that
they will go into business with higher expectations
of how they can be of service rather than avoiding
business because they feel it is too dirty,
egregious, rapacious or destructive. Three, to
change the perception of society at large as to what
standards are minimally acceptable in business for
the well-being of society.
If people will put their money where their values
are, business will turn on a dime. I loved a quote
in your Journal last month and have used it several
times since. Peter Senge, a fellow of the Academy
said, If you want to know how to get a car that
will run on 100 miles a gallon -- all China has to
say is 'yes, we want your cars as long as they get
100 miles per gallon'. When the marketplace
speaks like that, business will listen.
We wrote the first piece on Spirit in Business 12
or 13 years ago. When we first wrote it we thought
we had to be very careful not to threaten people.
But we put it out there before anyone had used the
concept. Today it is actually quite common. People
are beginning to think about what it means. We have
gone through the early wave of misunderstanding so
people no longer mistake it for religion. Now spirit
is commonly being invoked in all the best ways. That
we are having the conversation at all is
extraordinarily positive.
We started writing articles about the environment
more than a decade ago although it was not perceived
by most as a real global issue. It wasn't a
legitimate concern of business. It was something
that non-profit organizations should focus on and
then as only one of many voices for balancing our
social needs. Today I don't think there is a serious
business voice in any of the developing world that
doesn't fundamentally agree with the premise that we
have to conduct business in a way that is
sustainable for society and the planet. This is
quite a shift in less than two decades.
The Academy now has 15-16 years of cutting edge
materials in their archives. It is the best-kept
secret. People say how come I didn't know about
these new perspectives? The answer is that people
were not ready to hear.
The good news is that these conversations are
beginning to be heard and felt and the implications
are beginning to work themselves out in the
marketplace. (End)
Link to Original Article:
http://www.kosmosjournal.org/articles/spring2004/global_players-rinaldo_brutoco.html |
