Capitalism’s benefits exceed just profits

I recently attended a Conscious Capitalism conference. Conscious capitalism is “a way of thinking about capitalism and business that better reflects where we are in the human journey, the state of our world today, and the innate potential of business to make a positive impact on the world.”

Capitalism is half of the term because no form of economic system has lifted more people out of poverty, hands down. As the Conscious Capitalism website states, “Business is good because it creates value, it is ethical because it is based on voluntary exchange, it is noble because it can elevate our existence, and it is heroic because it lifts people out of poverty and creates prosperity. Free enterprise capitalism is the most powerful system for social cooperation and human progress ever conceived. It is one of the most compelling ideas we humans have ever had.”

Making a profit for a business is like breathing oxygen for people — it is critical for survival. But most people wake up each day with a greater purpose than simply staying alive. The same should be true of businesses. Their greater purposes should be far greater than simply making a profit. I’ve had the good fortune of consulting for, researching, or otherwise knowing the inner workings of dozens of new businesses in my career. Except for two people just before the dotcom bubble burst in 2000, no one’s primary motivation for starting a business was profit. The main reason for most was that they saw a customer need that they thought they could fulfill better than any other company. Often, they also yearned to have the autonomy of being their own boss.

Of course, they also hoped for good financial returns for the risk they were taking. Businesses that function with a higher level of consciousness consider more stakeholders to be important to the success of the enterprise. Perhaps, the most obvious example is reducing any adverse impact on the environment. Many companies have discovered that if they think deeply about how to reduce their impact on the environment they actually develop an innovation that is better for their business. Some farmers in this area, for example, have put covers on their waste lagoons and captured methane gas to sell.

Some companies have discovered that it is cheaper not to spend money on recruitment and selection. They keep a list of prospective employees at the company and hire on a first-come, first-served basis. They don’t screen for criminal record or drug use, for example. They do spend resources on helping employees show up for work — possibly periodically helping with transportation or reminder calls. They will fire people if necessary, but these “second chance” resources are less costly than typical recruiting and selection expenses and the employees that succeed are incredibly loyal and productive. Greystone Bakery, which provides baked goods to Ben and Jerry’s (think brownie fudge ice cream), successfully uses this model.

The outdoor equipment company REI provides two “Yay” days per year to help with family and work balance. Many companies require requests for time off in advance. But an REI employee who sees a 75-degree forecast for the following day in January can simply tell REI that tomorrow they are off to the beach. This way employees get to take advantage of the absolutely best outdoor conditions (perfect ski days for REI employees up north) for their non-work time.

This conference asked us all to ponder the following question: “Is there something in our lives or businesses that could improve if we applied a higher level of consciousness?”

Eric Dent is endowed chair professor of Ethics at Florida Gulf Coast University.


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