Are Markets Moral? … Reflecting on Economics and Virtue

Economy is Doing Well_Colleen Lane

Photo Credit: Economy is Doing Well, by Colleen Lane, Flickr

I’m not an economist, but am fascinated by conversations about economics. The reality is that we all live within economies, and yet rarely reflect on the morality of these systems within which we live.

Here are some of my reflections on the relationship between economics and virtue as I address this question: Are markets moral?

Healthy Cultures Included Healthy Economies

I would argue that healthy cultures are characterized in part by healthy economies. While most individuals quickly associate economies with transacted goods and services, the heart of economic systems is relational in nature—“the incredible social networks that capital both creates and depends upon.” Economies are the relational context within which we serve one another and contribute to human flourishing.

Healthy Economies Depend on a Healthy Environment or Culture

But one of the key challenges to healthy economies and markets is the environment or ecology that surrounds the economies or markets. If the surrounding ecology is healthy, this typically translates into a healthy economy. Conversely, if the surrounding ecology is unhealthy, this typically translates into a challenged and unhealthy economy.

Daniel Finn puts it this way: “An awareness of the interplay of markets and their contexts is critical for understanding under what conditions the outcomes of voluntary interactions of individuals and businesses in the market will be considered just.” Finn sees four dimensions the “context” or ecology surrounding economies:

  1. The Construction of Markets by Government (markets being properly defined by law)
  2. The Provision of Essential Goods and Services
  3. The Presence of Morality among Individuals and Groups
  4. The Existence of a Vibrant Civil Society

Depending on That which Markets Cannot Create

To answer the question of whether markets are moral therefore requires us to look outside economic markets. Markets depend on forces—such as individual and group morality—that markets themselves are not able to produce.

On this point William McGurn notes that the economy “depends on virtues—self-restraint, honesty, courage, diligence, the willingness to defer gratification—that it cannot itself create.” Restating it—healthy economy is dependent on something that the economy itself cannot produce.

Moral Markets Surrounded by Multiple Sectors

In light of such arguments by Finn and McGurn, health and morality of economic markets are dependent on the health and morality of the surrounding culture and ecology. As someone working to train leaders especially in the non-profit and church realms, I feel the need for leaders in these sectors to better understand their contribution to healthy economies and healthy cultures.

Such leaders play an important role in nurturing this dimension of virtue—virtue that serves as the social or spiritual capital upon which healthy economies are dependent. Just as the business and government sectors play vital roles, the non-profit and religious sectors also play a key role in nurturing healthy economies and the virtue upon which healthy markets may function.

Because of the power of healthy economies to contribute to human flourishing, it is vital for the people of God in religious sectors to engage in theological reflection and practical conversation that will help contribute to the social and spiritual capital upon which the incredible social network of the economy may flourish.

Virtues and Leadership

Though not specifically dealing with economics, for those wanting to engage the importance of virtue in leadership a bit more, I recommend you take a look at an article Jim Lanctot and I wrote for the International Journal of Leadership Studies entitled Character and Leadership: Situating Servant Leadership in a Proposed Virtues Framework.

The Moral Market and You

It is easy to look around and feel powerless to affect the economy in a positive and healthy manner. Drawing on the insights of William McGurn and others, perhaps a great first and best place to start is with your closest sphere of influence.

  • Are you working to nurture virtue and morality within your own life and the life of those closest to you (children, family friends)?
  • Are you using your place in the market as a voice and presence to help create what the market itself cannot create?
  • Are you engaging in your work and market activity with responsible action, a spirit of value creation (giving more than you take), and commitment to steward your gifts and talents in a way that productively contributes to the flourishing of the world around you?

Such action at the personal and local level leaves a powerful ripple in the markets and economies of which you are part.

So, are markets moral? It depends on the surrounding environment, which means it also depends on you. Let’s be a force for positive and healthy economic flourishing within our sphere of influence.

The Web of Work: Serving and Being Served through Work

Web, david reid, Flickr

Web, david reid, Flickr

Have you paused recently to reflect on how interdependent we are in our work and within an economy? For those with independent streaks, this question might be received as insulting. But I mean this in the best sense of interdependence. No-one truly is independent. We rely upon countless others throughout our day, and others rely upon us.

Work, at its core, is the means by which we serve one another in a society and an economy. Through my work I contribute to society and make myself useful to others. And through the work of others, I am served countless times throughout my day. And lest we miss this, work has both paid and unpaid expressions. From a parent working at home to care for children, to those serving in paid positions, our work—paid and unpaid—is most often the primary way we serve others.

Work becomes a beautiful web or network of service.

My Work of Serving Others Today

My work today happens to involve traveling to a conference. Because of this, my work for the day is fairly straightforward. First, I’m using time on the plane to (hopefully) serve you the reader of this blog through my work of reflecting on the meaning of work. Second, I’m going to a conference that will allow me to gain insights for my role as an academic administrator so that I may better understand how I to serve the students enrolled in the doctoral program I lead.

So this particular day, I hope that the recipients of my work are you and my doctoral students. Through my work (some of it paid and some of it unpaid), I am serving others today.

The Work of Others Serving Me Today

But the web of work does not end there by a long shot. It is barely lunchtime as I write this, and I have been served by innumerable individuals who have served me through their work.  Though I will certainly miss countless categories, consider with me the multitude of individuals who have already served me today through their work before I have even reached the lunch hour.

Waking Up

  • The furniture makers who made the bed I slept in
  • The home builders who made the home in which I live and woke up
  • The inventors and manufacturers who developed the alarm clock used to wake me

Preparing for the Day

  • The workers who made the modern conveniences of a shower, toilet, and sink
  • The product developers and distributors who make simple toiletries available so I may shave and brush my teeth
  • The clothing designers, manufactures, and laborers involved in the creation and distribution of the clothing I am wearing today

Traveling to, from, within, and in between Airports

  • The countless individuals from Henry Ford on involved in providing a reliable Ford vehicle for me to drive to the airport this morning
  • The massive number of individuals who participated in the planning, construction, and maintenance of the roadway and traffic network facilitating a smooth drive to the airport
  • The countless number of engineers, builders, and beyond involved with constructing and maintaining the parking ramp, elevator, trams, escalator, restaurants, concourses, restrooms, jet ways, tarmacs, runways, and airplanes I have encountered and relied upon today
  • The technology experts involved in bringing smartphones, computers, monitors, and avionics involved in my work and transportation today
  • The many airport and airline employees who helped with scheduling, checking in, loading bags, fueling planes, boarding, serving passengers on the plane, flying, navigating, and those attending to safety through air traffic control

Brightening the Day — Back to the Individual

And while I’m missing an endless number of categories and individuals who have served me today through products and services provided and used—even though I have never met most of them—sometimes we have the chance to get to see the person serving us and greet them by name.

One of those individuals was Gwen. Gwen served me through her work today by brewing and handing me my coffee this morning at the airport. Though a small act, Gwen brightened the early morning at the start of my travel with kindness and caffeine. While she is just one individual, Gwen reminds me that the countless number of others who served me today through their work also have names and faces.

Work and Economy is about People

At the end of the day, economy and work are not just about money, labor, and exchange. Economy and work are ultimately about people and how these people contribute to the well-being and flourishing of others. In a modest way, I’m serving people through my particular work today. In exchange for this modest commitment to serve others, in return I have been served by thousands, if not millions, through the products and services that have facilitated my work and travel today.

In light of this, I am grateful. I’m grateful for the opportunity to serve others through my work. I’m grateful for other people who likewise serve me through their work. Work provides a network of service. Work, in a very real way, becomes the glue that holds us together as a society.

An Invitation to Recognize and Value People in Their Work

So, I invite you to pause in the midst of your day.

Pause and recognize how you are serving others in your work today, both the paid or unpaid dimensions of your work. Pause and recognize how others are serving you through their work (again, paid or unpaid). Be grateful for these observations. Be grateful for these people. And, allow this thankfulness to spill over into expressions of grace and gratitude as you interact with others in your day. We live in a delightful Web of Work.

Collaboration: The Benefits, Bottom Line, & Basics

Collaboration, by AJC1, Flickr

Collaboration, by AJC1, Flickr

In a previous post I focused on the importance of removing the “I’s” from teams. Certainly there are important barriers to effective teamwork that need to be addressed, but pressing through such barriers is worth the effort. Here is a quick overview of the benefits, bottom line, and basics of collaboration.

The Benefits of Collaboration

Engaging a related topic to teamwork—collaboration—a recent article in the Harvard Business Review highlights benefits to collaboration in the professional service sector. In this article, Heidi Gardner identifies collaborative work across expertise boundaries as a key path for addressing complex issues and increasing overall profitability. In this study, collaborative models were associated with increased margins, increased client loyalty, and increased competitive edge.

The Bottom Line of Collaboration

Emphasizing this point, Gardner writes: “For a firm, the financial benefits of multidisciplinary collaboration are unambiguous. Simply put, the more disciplines that are involved in a client engagement, the greater the annual average revenue the client generates.” Although there is a learning curve in moving toward collaborative practices, Gardner reminds readers that on this front “perseverance pays off.”

Although I see great value in the use of teams on multiple level, it is helpful to note that the collaborative edge of team practice also proves to be effective from an economic perspective.

The Basics of Collaboration

Gardner provides a few specific recommendations for those seeking to increase their use of collaboration.

  • Don’t squeeze your team members “…be fair to the partners you invite onto your team.”
  • Deliver what you committed to on time, without reminders.
  • Communicate openly.

While there are many factors that contribute to effective collaboration, these are helpful reminders. I appreciate the affirmation of collaborative practice in this piece by Gardner.

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How are you tapping in to the benefits, bottom line, and basics of collaboration in your work with others?

Oikonomia — Work as Stewardship

Work [Explored], by Riccardo Cuppini, Flickr

Work [Explored], by Riccardo Cuppini, Flickr

In January I attended a conference put on by the Oikonomia Network. Oikonomia is a Greek term used in the New Testament to describe the concept of stewardship and the appropriate management or administration of the resources of a household. Oikonomia is also a root word behind the English word economy, and points us to the connection between healthy economy and healthy stewardship of work in relationship with others.

The Intrinsic Value of Work

This conference for professors and theological educators is a place for those teaching or administrating in seminaries to come together and engage the priority of affirming the significance and goodness of work within our world and within our economies. Rather than work only having utilitarian benefits (i.e., just a way to bring home a pay check), there are significant theological reasons to affirm the intrinsic value of work in addition to the utilitarian value of work.

Most individuals engaged in everyday work feel the toil and struggle involved with work. Among the consequences of sin in our world is the reality of pain and toil in labor and work. But from a biblical perspective, it is important to remember that work was a part of the fabric of our world before the fall of humanity into sin.

God as Worker

In Genesis, the first description we read of God is his role as Worker and Creator:

  • In the beginning, God created the heavens and the earth” (Genesis 1:1), and
  • on the seventh day God finished his work that he had done, and he rested on the seventh day from all his work that he had done” (Genesis 2:2).

God not only worked in the beginning, he also continues to work:

  • all things were created through him and for him. And he is before all things, and in him all things hold together” (Colossians 1:16-17), and
  • he is the radiance of the glory of God and the exact imprint of his nature, and he upholds the universe by the word of his power” (Hebrews 1:3).

Workers in God’s Image

While God is described in the Bible as one who worked and continues to work, the Bible also describes humans as made in his image. Part of this image of God is our identity as those who work. A core dimension of being human is that we also create and work. And, it is important to remember that this core was a reality for humanity before the image of God in us was ever distorted by sin. Note the description of Adam’s work in the garden before the fall into sin was a reality: “The Lord God took the man and put him in the garden of Eden to work it and keep it” (Genesis 2:15).

Working with Excellence

Though work was a part of the human story before humanity’s fall into sin, sin’s presence now affects our work. What once was joyful stewardship of God’s creation now is accompanied by toil and pain. But God is in the business of redeeming what is broken. This includes the process of redeeming work.

In light of such gospel transformation, God’s people are part of the redemptive story in the area of their work as well. Through our work, we serve others within God’s household—the broader context of the world in which we live. Through our work, we both serve others and honor God. Note the New Testament call to work with excellence, as one serving the Lord directly: “Whatever you do, work heartily, as for the Lord and not for men, knowing that from the Lord you will receive the inheritance as your reward. You are serving the Lord Christ” (Col. 3:23-24).

Stewarding Our Work Well

Stewardship—oikonomia—is a helpful frame through which to consider the broader meaning of our everyday work. Certainly leadership is one context for stewardship. Leaders serving with a stewardship mindset recognize that their role is not simply about making decisions regarding their own resources, but rather making decisions that consider the needs of others and effectively stewarding the resources of the organization in a manner that considers the interests in which others are vested.

But in addition to leaders leaders, viewing our work under the leadership of God means that all workers have a stewardship responsibility. If we believe what the Bible says about God—“The earth is the Lord’s, and everything in it, the world, and all who live in it” (Psalm 24:1)—then all workers have a stewardship responsibility in their work to faithful care for and steward the resources of God’s household well.

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What are the resources that have been entrusted to you? What are the skills, talents, and abilities you’ve been given? How are you using your work as a pathway for stewarding both who you are and what you have in service of others and contributing within the wider economy within which you live and work? Work is a primary context for living as stewards. May this vision of oikonomia give you renewed energy to lead, serve, and work as stewards in God’s household—the world within which we live.

Breaking the Cycle of Generational Poverty

Joy, Marwa Morgan, Flickr

Photo Credit: Joy, by Marwa Morgan, Flickr

Generational Poverty

Generational poverty is a real issue in our world. While many people experience individual poverty in their lives due to the loss of a job or another tragedy, generational poverty emphasizes patterns where two or more generations continue in poverty within the family structure. Generational poverty is often characterized and reinforced by such causes as limited educational opportunities, poor health or ongoing battle with disease, and an inability to access resources such as land, finances, and information in the pursuit of a sustainable living.

Leaders are certainly not the only answer to addressing such issues and breaking the cycle of poverty, but leaders are important partners along the way. I’m passionate about training leaders, so I’m particularly drawn toward the conversation of empowering leaders to think intentionally about their role in this vital conversation.

From Nonprofits to Business

Engaging generational poverty is not only a topic for nonprofits, governments, NGOs. It is also a topic worth the engagement of leaders from multiple sectors. Many companies are moving toward corporate social responsibility (CSR) initiatives in an effort to play a part. One global example I’ve especially appreciated comes from the Indian-based Tata Group whose founder believed: “In a free enterprise, the community is not just another stakeholder, but is, in fact, the very purpose of its existence.”

Local Models

Some of the best models I’ve observed are not in large-scale corporate CSR initiatives or multinational NGOs. I certainly value large-scale efforts, but sometimes the models that are most helpful for learning are the smaller and local examples.

So what are effective models for helping to break the cycle of generational poverty?

Here are two I’ll highlight:

A Few Blocks Away…

A few blocks away from where I live, I’ve had the opportunity to see Urban Ventures play a role in breaking the cycle of generational poverty in Minneapolis. Leaders from Urban Ventures often say they do three things in an effort to break the cycle of generational poverty—jobs, families, and education. They orient their programs around job training, support of families, and support of children in their educational development. Through these targeted three areas, Urban Ventures is providing a proactive strategy around which partner organizations like businesses, foundations, churches, and other community groups may come together and break this cycle locally.

To Fond-des-Blancs, Haiti

Generational poverty shows itself internationally as well, often in more stark forms. I have the privilege of working on the board of HCDF (Haiti Christian Development Fund), and through this connection have a front row seat to one of the best models of community development I’ve seen. Inspired by and started out from the community development work of John M. Perkins (founder of the Christian Community Development Association), HCDF launched in 1982 to bring its model of community development to the Fond-des-Blancs region of southern Haiti.

Agricultural Project

HCDF Agricultural Project

With a passion to break the cycle of poverty in Haiti, HCDF has a 30 year history of working to develop and empower the people of Fond-des-Blancs. Through their approach to K-12 education, church-planting, micro-lending, agricultural initiatives, and intentional leadership development, the Fond-des-Blancs community is experiencing transformation.

WP_20140612_007

What Can I Do?”

So what can you do to help address generational poverty?

First, look around you for organizations like Urban Ventures and HCDF who are actively engaged in holistic models of addressing generational poverty. Partner with these local groups.

L’Exode School

L’Exode School

Second, look beyond your context and be a part of global solutions. HCDF is a powerful example of community development done well. Would you consider a donation to the agricultural, educational, or leadership development work of HCDF as you look to your year end giving? If so, please go to HCDF.org where you may donate online and join me in supporting this important work.

Macro Change through Micro Improvements

Sunny Pebbles, Laura Thorne, Flickr

Photo Credit: Sunny Pebbles, by Laura Thorne, Flickr

I read an interesting article in The Economist recently. It is entitled Little Things that Mean A Lot, and the author argues that businesses should aim for lots of small wins that add up to something big.

New Routes to Organizational Success

The article focused primarily on the role of analyzing large pools of data in order to identify opportunities for incremental improvement. One illustration came from UPS. In America, there are some 60,000 UPS vans that drive 100 plus miles each day. If through data analysis UPS can find ways to reduce driving by 1 mile per day for each van, it is estimated that the company would save close to $50 million in fuel and related costs each year.

Although most of us are not looking for $50 million in small wins for our organizations, the new market realities in our world are calling for most organizations (for profit and nonprofit alike) to look for both big and small opportunities. Most of the “big wins” have already been identified since the beginning of the Great Recession. It is now time for organizations to up their game in finding the “small wins.”

Building a Mountain with Pebbles

One of the quotes in the article expresses the need in this manner: “It is about building a mountain with pebbles.” While most of us would simply prefer to find the mountain, the new realities of our world often translate to using a both-and approach to organizational improvements.  We need to have an explorer mindset, looking for new mountains of opportunity. We also need to have the mindset of the statistician, looking for macro opportunities within the micro dimensions of business and organizational life.

Explorers and Statisticians

How are you pursuing big-wins through small opportunities? How are you maintaining the entrepreneurial mindset of the explorer, while also seeing the details as the researcher or statistician would? This requires us to partner well with others on this journey. This requires us to build our teams with a diversity of expertise so that we can pursue growth and opportunity on both fronts.

Enjoy the journey, and keep your eyes open for macro change through micro improvements.

People, Planet, and Profit — Business Leaders and Sustainable Economics

United States Capitol

Photo Credit: United States Capitol, Justin A Irving, purposeinleadership.com

Today I had the pleasure of meeting with a group of business and political leaders at the United States Capitol in Washington, DC. Facilitated by The Washington Institute, a group of leaders who are interested in the integration of faith and work gathered to hear insights from key leaders in Washington.

Economics of Mutuality

One of these senior business leaders was Jay Jakub of the Mars Corporation who shared a great deal about the corporation’s thinking on the economics of mutuality. Jakub began by noting that if you want to make money for a year you ask one set of questions, but if you want to make money for 100 years you ask different questions. The 100-year questions revolve around mutuality and sustainability, and challenge the purely profit-driven approach to business rooted in Milton Friedman’s economic theory.

A Triple Bottom Line

To summarize the in-depth presentation we heard, Mars is aggressively piloting and pursuing a Triple Bottom Line approach to business and economics.  While a single bottom line approach is the norm in most business—particularly within publicly traded companies—Mars and other corporations are growing in also taking the bottom line of people and planet seriously as well. Taking profit, planet, and people seriously in the corporate environment means identifying and implementing metrics to measure performance in all three bottom line variables of People, Planet, and Profit.

Triple-Bottom-Line

The Triple Bottom Line & The Economics of Mutuality

Myopic Economics

Economic approaches that isolate only one of these variables will err. A profit-only approach to business burdens people and damages the environment. A planet-only approach to business often is unsustainable because it is not profitable, and because the lack of sustainability will not serve people. A People-only approach sounds helpful, but often lacks environmental consciousness and likely will fail in the long run due to an absence of profitability.

Holistic Economics

The key insight I took away from this interaction with Jay Jakub is to pursue business economics in a holistic manner. Pursuing only one bottom line priority is myopic (People, Planet, OR Profit) and is driven by short term questions in pursuit of short term solutions. In contrast to a myopic and short term approach, pursuing the Triple Bottom Line of People, Planet, and Profit leads to a business economic model that is bearable, equitable, viable, and ultimately sustainable.

I’m hopeful that Mars and many other companies will make a successful transition from the single bottom line to the triple bottom in the next decade. Societal, economic, and human flourishing in our world under God’s care will benefit greatly from such transformation!