Congressman Joseph Kennedy III, D-Mass., called me last month, and I found myself in the middle of a proud Minnesota moment.
It’s not every day one of “those” Kennedys calls. I was a bit emotional when I heard his voice calling me “Sir.” As a teenager I had stood in the snow on Inauguration Day, 1961, hearing President John Kennedy ask me (and all Americans) what I would do for my country. Our family was there, as my father would be Jack Kennedy’s ambassador to Thailand.
In Bangkok, my brother and I once had to share the guesthouse in the ambassador’s residence with Robert and Ethel Kennedy when they passed through on an official visit. Joseph Kennedy III is their grandson.
I remember where I was when I heard that President Kennedy had been shot: standing with other Harvard freshmen alongside the pool in the athletic center for a mandatory swim class. None of us wanted to swim but we couldn’t leave the gym to follow the news, so we just stood there and waited for fate to dispose of our country’s fortune.
In 1968, I was staying with my grandmother in Washington, D.C., while training for service in Vietnam with the Agency for International Development. Early one morning, she came into my bedroom in tears and shook me awake, saying, “They shot him. Bobby.” I put the pillow over my head, just wanting the news to go away.
But last month, Joseph Kennedy III wanted my help. In 2004, I had written a book called “Moral Capitalism” for a Minnesota-based network advocating corporate social responsibility — the Caux Round Table for Moral Capitalism. Kennedy told me he wants to make “Moral Capitalism” part of the national conversation on the future of our country leading up to the 2020 elections. Would I help him with ideas?
What else could I say but yes? My job for the Caux Round Table is to promote ethical principles for business and finance. And when one of “those” Kennedys wants to work on your idea for the good of the country, it’s a special gift.
Now, what’s important here is not me or my book, but the Minnesota roots of the idea of Moral Capitalism the book explains.
In 1994, the Caux Round Table issued the first set of ethical principles for global business, working with Japanese and European business leaders in the little Swiss hamlet of Caux, not far from Geneva.
The idea that a globalizing capitalism needed a moral compass came from Minnesotan Robert Macgregor, who had worked for Ken and Bruce Dayton. Other Minnesotans who contributed their perspectives to the initiative were Charles Denny, CEO of ADC Telecommunications; Tony Andersen, head of H.B. Fuller; Ron Baukol, senior vice-president-international of 3M, and Roger Parkinson, then publisher of the Star Tribune.
Michael Olson, a former lawyer for Dorsey & Whitney, introduced me to the Caux Round Table in 1999. Winston Wallin, former president of Pillsbury and then CEO of Medtronic, later asked me to become the network’s global executive director. Win wanted private business to focus on job creation, especially in poor countries.
All these Minnesotans shared a sense of what, as a lawyer, I would call fiduciary responsibility regarding the private powers they held to act in the best interest of customers, employees, owners, creditors, communities and the environment. Others, like our current governor, Tim Walz, call this approach to holding an office of trust and responsibility “servant leadership.”
One finds this virtue in Minnesotans down through the generations. Hubert Humphrey and Harold Stassen had it in abundance. A better quality of life exists here in Minnesota because of such leadership excellence in generations past.
When I accepted Wallin’s offer, all that the Round Table really had to its name was a set of seven ethical principles for business. What to do with them? I turned to Fred Senn, a founder of Fallon Advertising. I had worked with Fred in the 1990s on making the case for funding early childhood education.
The first thing Fred told me was: “You have to write a book to explain the principles.” That I could handle.
But then, a few minutes later, he turned toward me with a cheery gleam in his eye and said: “You have to call it ‘Moral Capitalism’ ”
“Fred, no one will buy that idea,” I replied. “Who these days thinks that capitalism can be moral?”
“That’s the point,” Fred answered, smiling. “When they object, you ask them to explain why people in business and finance must give up their morality when they go to work. Using the idea of Moral Capitalism will get people thinking about what is the best that they can do.”
A sort of echo of Kennedy’s inaugural address, I would say. Also of Lincoln’s call for divided Americans to heed the “better angels of our nature” and of Washington’s advice to his fellow Americans that:
“There is no truth more thoroughly established than that there exists in the economy and course of nature an indissoluble union between virtue and happiness; between duty and advantage; between the genuine maxims of an honest and magnanimous policy and the solid rewards of public prosperity and felicity; since we ought to be no less persuaded that the propitious smiles of Heaven can never be expected on a nation that disregards the eternal rules of order and right which Heaven itself has ordained.”
The standard raised by Moral Capitalism is to turn business back into a vocation that gives our lives dignity and lasting meaning. It is a kind of personal ministry, a stewardship of wealth and opportunity.
The process of Moral Capitalism is a dialectic between ethical responsibility on one side and free market wealth creation on the other. It is a meeting place between idealism on one side and practicality on the other.
Joseph Kennedy III and I agreed that Moral Capitalism avoids the extremes of greedy selfishness and the grandiose failures of socialism.
William James put it this way: “The community stagnates without the impulse of the individual. The impulse dies away without the sympathy of the community.”
In Christian terms, it recognizes that it is right for us to pray for our daily bread, but also that we do not live by bread alone, but “by every word of God.”
In terms of economic theory, Moral Capitalism blends the two great books of Adam Smith — one a theory concerning humanity’s “moral sentiments” and the other on how free markets and the division of labor create the “wealth of nations.”
Moral Capitalism sees an enterprise’s intangible assets — social capital and human capital — as necessary for wealth creation and business success. It optimizes value for a business by lowering its risks through responsible management of relationships with stakeholders.
A company that takes good care of its stakeholders cannot but make money for its owners. There is no necessary conflict between ethics and capitalism.
I shared with Congressman Kennedy some of our policy ideas to facilitate the practice of Moral Capitalism in American business and finance. I hope he will act on them.
Stephen B. Young, of St. Paul, is global executive director of the Caux Round Table, an organization dedicated to promoting ethical capitalism.