From social entropy to social ecology:
the social responsibility of organisations
Jos Schoenmaker / Hermanus Meijerink
From social entropy to social ecology:
the social responsibility of organisations
A Seminar for Inspiration
MAY 22th and 23th 2002
The Social reality of São Paulo as Mirror of the Social Reality of the World
São Paulo is the largest Brazilian and South American city. With a population of 17,8 million, it is the 4th megacity of the world.
Founded by Jesuits on the shore of the Tietê River, at 30 km of the shore of the Atlantic Ocean, São Paulo was the main starting point for the colonization of Brazilian hinterlands by the Portuguese during the 16th and 17th century, for the national export of sugar and coffee during the 18th and 19th century and the start of Brazilian Industrial Revolution in the beginning of the 20th century. By this way, São Paulo became the "locomotive" of Brazilian economy, its industrial, financial and also cultural center, with a GDP of US$ 91 billion, what means a Per Capita of US$ 5.286 and an Average Income of US$ 663,75 (IBGE-97). Therefore it is also one of the world wealthiest and most modern cities, as is shown by the forest of sky scrapers that characterizes its skyline, its beautiful buildings, avenues, palaces and homes of the rich people shown on its postcards. You can live here with the same comfort and facilities of the richest places of the world. But all these aspects that characterize the "Order and Progress" as it stands in the Brazilian Flag, have also their counter-side: the pollution of air, water and soil; the logistic problems of traffic and mass transport that it has in common with most megacities; the "natural disasters", as the floods during each rain season. But the counter-side of his "progress" becomes more evident in its social dimension.
By the reasons mentioned before, São Paulo became last century the main attraction point for the migration of millions of Brazilians, living in the vast underdeveloped areas of this continental country, in search of better life conditions (income, housing, education, health) and better life perspectives for their children. But, as happened with Mary and Josef when they came to Bethlehem, when "there was no place for them in the hostelry" and they had to install themselves in the stable, these millions of people only find a place in the endless outskirts of this huge city, in its so called "periphery", living in poor districts and miserable slums, far away from the postcard city that was build and is maintained with the work of their hands. (3,4 millions live in slums; 6,8 millions in live in bad housing conditions (57% of the total population). In these districts most streets remain unpaved, there is no infra-structure, you hardly see concluded houses. In the slums people live amid the sewer of their own overcrowded shanties. There is no beauty for the eyes, few leisure opportunities. Children grow up there without ever seeing another scene- can we imagine what this means for the formation of their character? Millions of people have to travel for four hours or more each day, in overfilled trains, busses and vans, to go and come back from their work.
Why do they stay here? Because for most of those millions who came to São Paulo, the city still offers better opportunities then they have in their place of origin. Their children have grown up in this city and don’t know any alternative. They survive with the crumbs, the table scraps of the progress of the city, and have to pay a high price for that, as shown in the social indexes.
- 50% of the poorest citizens earn 16,2% of the income, while 1% of the richest earn 10,3%, which means that 31%, or 5,6 million live below the poverty line.
- 65% work in the informal sector (75,3% until 18 years), without any social security.
- 19,9% of the registered labor force (or 1,8 million) are unemployed;
- 15,80 of each 1000 children die before one year (compared with 34,6% of Brazil as a whole);
- 29% (or 5,1 million) are illiterate (compared with a index of 41% in the North East of Brazil!!)
Although access to basic education is assured now for 97,4% of the population, few have the opportunity to study further, and therefore have less opportunity to find regular work:
- Activity Index for people with 7 years of school education or less- 48,5%
- Activity Index for people with 12 years school education or more- 82,5%
This creates a dramatic situation - it means that beside the 1,8 millions of unemployed, 51,5% of the youngsters are not finding a place on the "labour market" and have to find other ways to survive. This creates an explosive social situation. Thousands of them live on the streets, on all corners of the avenues children are begging for money and people are trying to sell all sort of things. An increasing number of young people get involved in illegal and criminal activities- robbery, kidnapping, prostitution, drug abuse, and so on, associated with an explosion of violence. About 9 000 people are killed each year in S.Paulo (much more then in the most civil wars around the world!), and most of them are young people: murder is the main reason for the death of youngsters in São Paulo. Most crimes remain unpunished. Even so, the prisons are overcrowded (in some places, 3 prisoners per m2, so that 2 must stay upright while the 3th can sleep for a while) provoking violent rebellions between prisoners themselves, with the most terrific scenes of violence ever seen!
In face of this dramatic social situation, is nothing being done? Yes, many good things are being done, by the government, by churches, by community organizations, and also through social actions of companies.
Núcleo Maturi is participating in a network of community based organizations which perform an essential role in tackling the social needs of the poorest, in fields such as education, health, housing, income generation, prevention of criminality and violence, support to handicapped people, among others. We are contributing to strengthen these community based organizations to improve and broaden their services according to local social demands, by articulating the organizations, fostering mutual aid, establishing partnerships with institutions of other sectors, facilitating in this way the access of community based organizations to available resources and services.
Many best efforts are being realized to revert this social situation. We care of them as seedlings for a better future. But we must also recognize that all these efforts are powerless, as long as no radical changes are brought about in our worldwide social order. "Radical" in the sense of changes that go until the roots of the social evil of our times.
The social drama of São Paulo is part of the social drama that is unfolding worldwide. São Paulo is only a little part of the mirror showing the social reality of humanity nowadays.
- More then 1 000 000 000 people (20% of world population) is living with less then US$ 1/day;
- 4 billions of the 6,1 billion world population (65%) is living below the poverty line;
- The difference between the richest 20% and the poorest 20% in the world was:
o 11 times in 1913;
o 30 times in 1960;
o 72 times in 1998.
- As result, 20% of the world population owns now 86% of the world income.
- UN estimates that 0,6% of the world’s yearly GDP would be necessary to provide access for all to basic education, health, food and family planning;
- Still- 11 millions of children die each year around the world (30 000/day= 6 World Trade Centers) by health and nutritional reasons that could easily be prevented;
- While US$ 750 billion is spent on weaponry each year.
- Only 20% of the original world forests remain, and about 10 000 species of plants and animals are extinguished each year.
This shows, as a Brazilian musician sings, that: "Something is out of order in the Social Order of the World".
As said before, all efforts to revert this situation will be powerless to detain this process of social entropy, unless we reach the roots of it, to find a way to sustainable development from the social point of view- a way to Social Ecology.
To reflect on these theme together, we met in this Seminar.
"Seminar" comes from the latin word "semina", which meens "seed". We hope that during this Seminar we will succeed together to sow seeds that can contribute towards a better social future.
FROM SOCIAL ENTROPY TO SOCIAL ECOLOGY
The social responsibility of organisations.
Social life and the Laws of its Development
"All men are caught in an inescapable network of mutuality, tied in a single garment of destiny.
Whatever affects one directly affects all indirectly. I can never be what I ought to be until you are what you ought to be. And you can never be what you ought to be until I am what I ought to be."
Martin Luther King
This phrase of Martin Luther King, is very meaningful for what we call now Globalisation: mankind as a whole is tied in a single garment of destiny, woven by threads of interdependency, in such a way that "whatever affects one directly, affects all indirectly". We can say that through Globalisation the world is becoming "one global village", as McLuhan quoted in the 60’s.. We could also say that through Globalisation mankind as a whole became in fact one global "social organism", of which all individuals and organisations are part of, like the cells and organs are part of our human body.
By the presentation of the social reality of São Paulo as part of the social reality of the world it became clear that this global social organism is heavily wounded, that the way we are dealing with our interdependency is leading to "social entropy". The conclusion was that all efforts to revert this situation will be powerless unless we reach the roots of it, to make possible "radical" changes towards a Social Ecology.
So, now it is our task to come to a deeper understanding of what Social Life is about, to get a deeper insight in the functioning of the Social Organisms, and the conditions that make this functioning healthy or unhealthy, or, in other words- the conditions that lead towards Social Entropy or Social Ecology.
Therefore the next 2 introductions will be quite conceptual. From the level of the factual reality we will go now to the level of the ideas, to build a conceptual framework, through which we can come to a clearer insight into actual reality and possible directions for its further development. So, maybe you will get a feeling that the matter is quite abstract, but we hope it will make sense to you.
The threads of the social tissue and the spheres of Social Life
What are we talking about when we use the word "Social"?
We are referring to the field of the relations between human beings and their institutions, in their multiple forms. In this sense, a conversation is a social happening, but also all kinds of organisations –be it companies, schools, governmental institutions or NGO’s, or even this seminar- they are nothing more then different forms of "structured relations between human beings", as are the relations between organisations and institutions on local or global level. So, the "social tissue" is woven by all these relations between human beings and their institutions.
But we can use the word "Social" also in a qualitative meaning, referring to the "social quality" of these relations: the measure in which they promote the well being of the totality of human beings involved in these relations. In this sense we can speak of "socially healthy" and "socially unhealthy" relations, of a healthy or unhealthy social organism.
Let’s look now out of what kind of relations the social tissue is woven. Therefore we have to look to the different ways the human being is related to his social environment.
For example: this seminar (collecting the elements that made it possible)
Then we can see:
- human beings relate socially to have their needs satisfied (all human beings are "needy", on the physical, social and cultural/spiritual level- bases for the Motivation Ladder of A.Maslow);
- human beings relate socially mobilizing their capacities/skills/knowledge etc. in cooperation with others (all human beings are, at least potentially, "skilful")
- human beings relate socially through agreements (all adult and emancipated human beings are "mouthy"- in the sense that they can express/defend their own concerns).
So, we can say that the social tissue is woven exclusively with 3 threads:
- human capacities that are mobilized by cooperation with others;
- human needs that are satisfied by goods and services resulting from this cooperation;
- human relations to others which are structured/ordered by agreements
We can say that Social Life, in all it’s forms, has essentially to do with the structuring of relations, through which capacities/skills are mobilized to satisfy other’s needs.
In this image becomes clear that we can look to Social Life as an invisible but real stream of social energy (like electricity) in which skills ("positive" pole) move through agreements (neutral- +/-), to meet and satisfy needs of others ("negative" pole).
The image of the lemniscate shows an inversion: from social point of view, skills of one person (or group) are mobilized to meet the needs of others. When skills are moved to meet own needs you have socially spoken a "short-circuit", provoking much damage. All social progress is due to the fact that each of us is factually working for others,to meet his/her needs, and that our own needs are met not by my own work but by that of others. We can easily imagine in what primitive social stage we would be still living if each of us should maintain him/herself through his/her own work- growing his own food, weaving his own clothes, etc. Only a few of us would barely survive!
This a fundamental key of what Ecology is about.
In the image of the human body- all cells and organs are mobilizing their contribution towards the whole of the organism, and are maintained not by themselves but by the whole organism. When cells or organs work and grow for themselves you got a cancer, and the organism becomes sick. The same principle you find in Nature- the basis for Natural Ecology
In this image we can also recognize that Social Life is composed by 3 distinct spheres, each one with a specific character or task:
Cultural Life- through which human capacities/ skills are mobilized;
Rights Life- through which relations between human beings and institutions are structured (by agreements, laws, policies, explicit or implicit mutual expectations, etc);
Economic Life- through which human needs are satisfied (by "consumption" of goods or services)
When we look now to Social Life in a qualitative sense, i.e. in the sense of the promotion of the well being of the totality of human beings involved, we can say that this well being will be greater in the same measure that:
- the needs of all are adequately satisfied;
- the skills/capacities of all are most and best mobilized;
- the agreements are accomplished, are kept/maintained.
If we can agree about this, we can take a next step and ask ourselves: what are the main social conditions to make possible that:
- a) the needs of others will be most adequately satisfied;
- b) the skills/capacities of others will be most mobilized/ potentialized;
- c) the agreements with other people, organisations and nations will be most accomplished, kept/maintained?
A key to these social conditions, fundamental for the promotion of the well being of all citizens, we can find in the ideals of the French Revolution, seen as basic conditions to be acquainted in a New Social Order they were striving for, although not succeeding to realize it concretely. These ideals were: Liberty; Equality; Fraternity.
Taking this key to the 3 spheres of social life, we will see that Liberty is the basic social condition for the healthy development of Cultural Life; Equality is the basic social condition for the healthy development of Rights Life and Fraternity for the healthy development of Economic Life.
We can recognize then the following "social laws" :
a) Needs of others (=social needs) will be more adequately satisfied the more our economic relations are actively oriented towards perceiving and meeting those needs (Fraternity) and less adequately satisfied the more our economic relations are oriented toward maximizing own profit/benefit.
b) Capacities, skills and potentials (Cultural Life) will be more mobilized the more we promote in our cooperation and cultural relations the freedom of others and will be less mobilized the more cooperation and cultural relations are conditioned or externally determined.
c) The agreements (laws, policies, contracts, etc.) will be stronger and better accomplished when they are established in equality between the parts, and will be weaker, less stable and less accomplished the more power is exerted by one of them.
A teacher who actively tries to find means to meet the needs of each of his students in his learning process will have more work and better results, then the teacher who is giving standard lessons, which are more comfortable for himself.
In the same way:
- The needs of my suppliers, co-workers, actual and potential clients will be less adequately satisfied the more I am, as producer, oriented towards maximizing my own profit/benefit, therefore paying the less possible to suppliers and co-workers and selling my product for the highest possible price;
- When I, as consumer, buy things made by others in the supermarkets or shops, looking only for the best quality at the lowest price, my consciousness is more oriented towards maximizing my own profit, and less oriented towards the work conditions of the people who made its production possible (just remuneration, work of children, etc) and by this way I’m getting co-responsible for the maintenance of these conditions.
- When my consciousness, as shareholder or investor, is more oriented towards the highest possible return on my investment then to the responsible way my investment is applied in the economic process, I am taking active part in the break down of companies and economies that are facing difficulties and financially are not that interesting any more.
We can easily recognize in these examples the actual rules of the "economic game", and also their results on the level of the satisfaction of the need of all.
b) Cultural Life
- A co-worker who is said what he has to do, how he has to do it, etc. will mobilize less his capacities then a co-worker who is taking own responsibility and is given more free space for own initiative and learning from experience and errors;
- More creative ideas and solutions come forth when the participants of a meeting or organisation have the opportunity (free space) to express themselves and when more space for personal commitment and initiative is assured;
- Cultural/technological development is more stimulated when there is a free flow of information and knowledge then when this flow is restrained or conditioned.
c) Rights Life
- Principles of decision making:Autocratic- (one (group) decides, the others have to obey; Democracy: the decision by the majority must be agreed by the minority; Sociocracy: the best decision is the one that has no objection based on arguments by any of the participants
- Principle of Participative management- the more the participants of an organisation get involved and can participate on equal basis in the establishment of the policies that rule the cooperation between them, the more they will be committed and accomplish them.
Until now we found the 3 threads of which the whole of the social tissue is woven, related to the 3 spheres of Social Life:
- the satisfaction of needs- Economic Life
- the mobilizing of skills/capacities- Cultural Life
- the structuring of relations – Rights Life
We found the 3 basic social qualities that are determinant to healthy development of each of these spheres, to make possible their healthy contribution to the whole of Social Life, and also their counter qualities:
- Economic Life: Fraternity X Maximizing own profit/benefit;
- Cultural Life: Liberty X External Determination
- Rights Life: Equality X Power Exertion
No social institution (be it of Economic Life, Rights Life, Cultural Life) can exist without functioning at least partially according to these qualities, and thereby promoting social well being. Fact is that, on the other side, they are functioning according to the mentioned counter-qualities, and thereby creating human suffering somewhere and thereby promoting social entropy. Our challenge consists in create conditions which make possible a development of our organisations into the direction of Social Ecology. We will look more closely to this issue in our introduction of tomorrow.
As a first conclusion we can say that the main conditions for the development of Social Ecology are:
- that each social life sphere can fulfil its role and develop according to its inherent social qualities;
- that each sphere maintains itself within the border of its own field, not invading or overwhelming the field of the other spheres, and thereby respecting their autonomy. (In this aspect the sphere of Right Life has to fulfil a central role).
We can also recognize the main reasons that are leading now to social entropy on the level of the Global Society:
- the inherent quality of one social life sphere is transferred to another:
o Liberty in Economic Life (Liberalism);
o Equality in Cultural Life (Fundamentalism);
o Fraternity in Rights Life (Protectionism)
FROM SOCIAL ENTROPY TO SOCIAL ECOLOGY
The social responsibility of organisations.
The essence of economic life and its influence on social life.
This morning Jos showed us a general view of the social situation in Brazil and São Paulo and its relation to the world. Globalisation calls for the necessity of finding the way to Social Ecology.
In his second lecture he spoke of the social order as a tissue woven with three threads and distinguishing three spheres of social reality: Economic Life, Rights Life and Cultural Life, each with specific characteristics and inherent qualities.
Now we want to have a closer look at the Economic Sphere. It is not my intention to give a lecture on Economics, because Economics enables us to understand and see how economic processes work and what can be done to influence them, but does not tell us what it is. I believe that the understanding of the essence of Economic Life is a necessary condition in order to come to new and innovative ways to changes in the economic sphere which can contribute to a healthy social order.
The theme of our Workshop is Social Responsibility of Organisations, but we know that we are not coming to real social responsibility if we only work on the surface – giving donations to the poor, supporting social initiatives, etc. and if we do not see deeper and begin to look for changes that spring from a real understanding of the underlying causes of social disorder. And this has to a great extent to do with the concept of economics that rules the economy and their relation to other spheres of the social order.
I want to build an image of the essence of economic life and its main elements and inter relations.
Where does economic life start?
If we look to Nature we can see transformation processes. Rock is transformed into sand and clay by the action of the natural elements like wind, water, pressure, temperature, etc. Plants make the roots penetrate into the soil searching for nutrients and the leaves raise to find oxygen – they take nature in and then die and transform the soil. Animals have a similar action, with the difference that they can move and cause transformation regionally.
When man comes in, things are different. He is able to transform nature consciously into goods that he needs to survive and to live. He works on the land to grow food, he raises cattle, cuts trees, transports minerals, builds a shelter, etc.
However, the act of transforming nature in order to meet one’s needs is in itself not yet an economic activity; it does not constitute Economic Life. Economic Life begins at the moment the transformation of nature results into goods that he does not need for himself, when the result of his labour is directed to the needs of other people. Goods are produced and taken to people in order that through consumption they may meet their needs.
So we can now describe the essence of Economic Life as the following three activities:
1. Production: Man working and transforming nature into goods and thus creating value.
2. Distribution: Man taking goods to people who need them and are willing to give something in return.
3. Consumption: People using goods for their needs and thus destroying them, destroying value.
Prices are formed as an expression of the degree in which one person can dispose of goods and the other person needs it. In other words, in as much the particular goods are less important for one person and more important for the other. In a transaction both persons are having profit, for what one is receiving in return is more valuable than what one is giving away! It is a win-win relation.
There is still another aspect to be mentioned with regard to the creation of value. So far we saw how physical labour applied on Nature creates value. The harder man works, more value is created. For example: planting wheat or making chairs.
Man is also endowed with mental and spiritual capacities (knowledge, experience, creativity, etc.), which he can apply on the very activity of work itself. Through his physical capacity he is able to transform nature, but through his spiritual capacities he is able to transform work itself!! We can distinguish two forms of transforming labour:
1. By inventing and creating tools, machines, equipment, etc.
2. By organising work itself: division of labour, specialisation, applied knowledge, scientific management, etc.
These two forms of applying spiritual capacities transform human labour and turns it possible to create much more value than one needs. One can say that a part of value created by man is due to physical capacities, and a much greater part of it due to spiritual capacities.
Man produces goods and creates value. These goods are distributed to be consumed. His capacities, especially his spiritual capacities, enable us to create much more than is needed. Example: the work on my grandfather’s farm (2,5ha – simple tools, labour intensive, low production per person) and a modern farm (1000ha – modern machines, capital intensive, high production per person). In this way surplus arises which takes the form of capital.
The profit or capital that has been generated now leaves the Economic Sphere and migrates to the Right’s Sphere or to the Cultural Sphere
It migrates to the Right’s Sphere when one recognises the capitalist’s right to his part in the profit (dividend or higher share value) and from there it returns to Economic Life in the form of Capitalisation or Loans to finance Investments.
It migrates to the Cultural Sphere when one recognises that profit or surplus has its origin in the Cultural Sphere in as much as this sphere is responsible for and enables development of (spiritual) capacities. In this sense one can say that the Cultural Sphere is the primary source for the generation of capital, enabling the free development of man’s capacities.
Capital should flow to the Cultural Sphere by donation. In history we see many examples of this: the development of art, science, research, discoveries, religion, etc. One particular form is the donation imposed to us by the state through taxation.
Capital donated to the Cultural Sphere is "destroyed" or "consumed", but it returns to the Economic Sphere in the form of application of man’s developed capacities in the economic process.
Thus we see that the classical factors of economics (land, labour and capital) in fact are NATURE (supplying resources that are transformed by man), MAN (as the actor who by his work transforms nature into goods to meet needs of other people) and CAPITAL (as the surplus created through the source of man’s spirit). These three, Nature, Man and Capital do not belong to – are not object of the Economic Sphere as such and therefore cannot be used as commodities. As soon as they are, we immediately see the consequences on a social level.
Here we touch one of the causes of social disorder: economic factors have become object of commerce, they have become commodities.
Nature/Resources as commodity:
Nature itself has no economic value; economic value arises as soon as man transforms nature into goods for the need of other people.
Land, estates, have become object of commerce ever since Roman law instituted the right to private property. In Brazil there is a firm called "Commercial Properties". The American Indians could not understand that the white people wanted to buy their land!! "How can you sell your mother?", they exclaimed.
Attributing a price to land and speculation create inflation because money is paid without having production as a counter part. Nowadays the ownership of land and natural resources is a basis for economic power and privileges. In Brazil we see a movement of thousands of landless peasants who organise themselves to occupy non productive farmland.
Other examples we find when looking to the natural resources: oil, gas, metal, ... that are owned privately or by countries, privileging a handful of people. Soon drinking water will become a highly valued commodity in the world!
Many developed countries and internal organisations claim rights on the Amazon forest area in order to assure that it may continue to provide oxygen for the polluted world. International pharmaceutical companies claim exclusive right (patent) on substances that are drawn from plants from the Amazon.
There is an example of an alternative to privately owned land: in Holland the land in the new Ijsselmeer polders are not privately owned. The state owns the land and pass on the right to use it to farmers because of their capacity as farmers and when they retire, the land returns to the state.
Man/Labour as commodity:
The result of man’s labour can be sold and consumed, but labour itself is not a commodity. Yet we speak of the "labour market" where there is a "supply and demand" that determine its "price": higher salaries for more demanded labour and lower salaries for excessive labour force – one dollar a day. As a result we see an increasing number of people without minimum living conditions.
In this sense slavery still exists! To a great extent slavery was abolished because of economic reasons: it is cheaper to pay US1 a day than to feed and shelter a person and his family.
Other examples are: Children driven to do heavy jobs in order to help the family survive. In Brazil women are paid about 30% less than men in similar jobs.
In principle salaries are paid out of the result of goods or services sold to people who need them. In an ever growing interdependent production and distribution system the total value produced in society should be able to assure to all people the possibility to live in dignity. The enormous technological progress should not only give people access to cheaper products but also finance the needs for physical, social and spiritual development of the whole of society. And in a globalised economy, society is the whole world.
According to a report of the UN only 0,6% of the world’s GDP is sufficient to guarantee basic needs for the world’s population which actually don’t have access to it, in the fields of education, health, food and family planning.
A further consequence of labour as commodity and low wages is the transfer of income from agricultural sector to industry and from the 3rd world to the 1st world when low wages in other parts of the world turn into a competitive advantage (example Nike production of tennis in the 3rd world and Holland sending jeans to be sewn in Poland).
The enormous growth in technology made it possible to produce all products needed by ever less people (less than 16% produce all that is needed!). This fact makes it possible to work more and more in the cultural sphere.
Capital/Capacities as commodity:
Capital is ultimately the result of the developed capacities of man to create more value than is needed for immediate consumption. So there is a direct relation between capital and capacities:
- in the form of inventions and investment of productive capital
- in the form of knowledge, know how, capacities.
Both capacities and capital are created by the forces of cultural life.
Yet we see that huge amounts of capital move constantly around the world, following the law of higher and more rapid return on the stock markets. Only about 2,5% of the total of international money transfers are related to transactions of goods. The interest paid by the developing countries because of their foreign debts total 6times the original amount.
The CEO’s main concern is how to raise the value of their company’s shares. There is the case of the Scott Paper Co where its CEO in 2 years time lowered the number of employees by 11.000, cut costs by 50%, stopped all kind of donations and prevented its executives from social activities. In this period share value raised 225% and the CEO’s compensation reached US$ 100 million.
Companies merge or are being sold in an ever increasing speed, leading to more concentration of economic power.
Capacities have also become commodities: Patents protect intellectual and artistic property. Canada recently launched an immigration program offering special conditions and facilities for people from Brazil to emigrate, but limited to highly qualified professionals in a certain age group. After world war II the US and Russia already disputed the German nuclear scientists.
Information has also become a highly valued commodity.
The consequences are clear: concentration of economic progress and power and a greater dependency on key products and services.
Now, the reason for such attitude lies in the fact that the cultural life is brought within the sphere of the economic life and the huge amount of money spent on research is the company’s investment to assure their competitive advantage when research results in new products or services. All companies are caught in this situation and we move farther away from a situation in which financial resources flow to a free or independent cultural sphere so that their outcome may benefit the whole of society.
These were some indications in which way and with what consequences there are when Nature, Man and Capital are considered as commodities.
Another problem rises when the three spheres do not maintain their autonomy and begin to influence or govern the other spheres:
Economic influence in the Cultural Sphere:
This occurs when Educational institutes, Hospitals, Research centres etc. are run as commercial businesses or when economic life dictates the cultural – educational activities
Also when the economic life creates cultural and social values through propaganda and manipulate in this way man’s real necessities.
Economic influence in the Right’s Sphere:
Some examples: Corruption and lobby to influence laws and regulations that favour economic interest.
Subsidy and protective mechanisms to favour the agriculture in USA and Europe. This month the new law of Agricultural Security and Rural Development in the US is subsidising US$ 25billion a year until 2008, while importation of tobacco, sugar and orange juice are taxed with 355, 161 and 60% respectively.
As a matter of fact, subsidy is donation to the Economic Sphere, while donation should be directed to the Cultural sphere.
Creation of international agreements (WCO, IMF, ...) based on economic interest.
So we pointed at three ways in which Social problems arise:
1 – The qualities of the spheres (liberty, equality and fraternity) acting in other spheres.
2 – The economic factors (Nature, Man and Capital) as commodity
3 – The economic sphere – and also the other spheres –overwhelming the other spheres.
Now: one thing is to become conscious of what is going on, to get an insight in the essence of economic life and to see what the consequences are when economic life passes its border. But many of these consequences are felt on a macro level and as an individual person or organisation on the micro level, we feel impotent and compelled to play the game, because otherwise we will not survive and disappear from the economic scene.
Our challenge is to find the way to a new social and economic order without losing touch with the reality we live in.
THE SOCIAL RESPONSIBILITY OF ORGANISATIONS
"THIS IS MY THESIS: caring for persons, the more able and the less able serving each other, is the rock upon which a good society is built. Whereas, until recently, caring was largely person to person, now most of it is mediated through institutions – often large, complex, powerful, impersonal; not always competent; sometimes corrupt. If a better society is to be built, one that is more just and more loving, one that provides greater creative opportunity for its people, then the most open course is to raise both the capacity to serve and the very performance as servant of existing major institutions by new regenerative forces operating within them."
THE INSTITUTION AS SERVANT – Robert Greenleaf –
Robert Greenleaf was manager of Human Resources Development in several big companies in the USA as IBM, among others. Based on this experience, he founded an Institution for Servant Leadership. Servant Leadership is in his view the form of Leadership required for our times: it is the task of the leader to create conditions by which those who he is leading can take increasing own responsibility for their tasks and develop the skills which are needed to deal with it.
In the same way, the main reason for the existence of every institution is the service towards the needs of others outside of the institution. So, not only the leaders but also the institutions must develop themselves as Servants, and therefore – as expressed in his thesis- it must raise both the capacity to serve and the very performance as servant.
He came to this thesis not through a theoretical but through a pragmatic way, out of his experience as manager within several companies and institutions. We can recognize in this thesis the principles we mentioned yesterday about the basic dynamic of social life, out of which we can identify the "regenerative forces" he is speaking about:
This image expresses that social life, in all its forms, has essentially to do with the structuring of relations by which capacities are mobilized to meet the needs of others.
We saw that the mobilization of capacities is the task of what we called the Cultural Life sphere; the satisfaction of needs is the task of the Economic Life sphere and the structuring of relations is the task of the Rights Life sphere. We also spoke about the basic social quality required for each of these spheres, so that it can fulfil this task in a proper way, contributing towards a Social Ecology, and the counter qualities by which they fulfil this task in a anti-social way, resulting in Social Entropy:
- Economic Life: Fraternity X Maximizing own profit/benefit;
- Cultural Life: Liberty X External Determination
- Rights Life: Equality X Power Exertion
In these basic social qualities we can recognize the "regenerative forces" mentioned in the thesis of Robert Greenleaf, which will "raise both the capacity to serve as the very performance as servant of existing institutions", contributing to build a better society, which is: "more loving, more just and provides greater creative opportunity to its people".
The more we make possible that people within our institutions can mobilize their capacities out of their own free will, the more we will be raising the "capacity to serve" of these institutions and the more creative opportunity we will be offering.
The more we make possible that the actions of our institutions are actively oriented to meet in the most adequate way the real needs of others with which it is related through its work (clients, suppliers, co-workers, etc), the more we will be raising "the performance of serving" of our institutions, and the "more loving" our society will become.
The more we make possible that agreements, contracts, policies, treaties, etc which structure the relations between persons and between institutions, are established in a equivalent way, i.e. on basis of equality inter parts, the more "just" will become our relations, institutions and society.
A first dimension of the Social Responsibility of Organisations has to do with the promotion of these conditions within each organisation and within their relations towards other organisations with which they cooperate.
How can these conditions be promoted?
The primary social responsibility of every organisation is related to the adequate satisfaction of the needs of those they are working for- delivering products and services that can meet in the most adequate way the needs of actual and potential clients. To make possible this adequate satisfaction, a basic condition is that these needs are perceived. So each organisations should ask regularly to itself: "what are we actually doing to perceive what our clients are really needing; what can we do to become more aware of that?".
For many companies the clients are anonymous consumers of their products and services. Through advertising they try to become visible for potential consumers, presenting their products and services in a way that they become desirable for them, in many or even most cases associated to qualities that are not inherent to them. For example, cars, clothes, and other products, especially the most expensive, are not only or even in the first place personal transport or dressing attributes, but means to make visible a certain status. Searching to maximize own profit and benefit, the main question put by most companies is not "what are our actual and potential clients really needing?" but "how can we make our products and services desirable to those who can pay most for it?"
The delivering of a certain product or service is made possible by the cooperation of many people and institutions (co-workers, suppliers, traders, shareholders, etc) and the results should also be shared by them in a way that meet their needs in the most adequate way. When one of the parts- those who have most power (e.g. shareholders, traders, etc)- search for maximizing their own profit and benefit, the result is that the needs of the others will be less adequately met. For example, the low prices of Supermarkets in Brazil, in many cases is made possible by exploration of co-workers and suppliers, in such a way that they don’t receive for their work what they really need to make possible the continuity of their work in a dignifying way.
Therefore, a fundamental condition for the healthy development of economic life is that those relations of interdependency are structured in an Associative way, establishing agreements about their cooperation and sharing of the results.
The way in which the relations between cooperating persons and institutions are structured, making possible decision making among them already belongs to the sphere of Rights life, where the basic social quality to be pursued is that of the equality of the partners in defining the agreements, policies, etc. that will rule their cooperation. The central question here is: "what are we doing to make possible participation based on real equality in the decision making about policies, etc. among those who are cooperating and taking co-responsibility in realizing them?"
Participative management in different forms can promote this condition, making possible more participation in decision making by those who are affected by them. For example, the Sociocracy developed by Gerard Endenburg, a Dutch manager of a company in electronics, also adopted within our family Company, is a model for participative management in a form by which equal participation is assured through representation of all parts concerned in the decision making about policies of the organisation. All concerned parts are represented within the policy making circles on different levels of the company, interlinked with each other. Decisions are taken on "consent basis", i.e. a decision is taken when no one has objections based on arguments against that decision. So long there are objections, the decision making process goes on, until consent (no objection) of all is attained. Within the context of this seminar it is not possible to enter this issue in more details.
On the level of the Cultural Life sphere of the organisations, a central concern of all companies, and the main reason for the existence of their Human Resources department is related to the mobilization of the human capacities and potentials of these organisations. This issue is intrinsically related to that of Motivation. We saw that capacities are most mobilized when people can do their work out of their own free will, i.e. out of own motivation. A first condition for this is that the co-workers can understand the meaning of their work towards the fulfilment of the Mission of the organisation and the ethical principles that are guiding its development, in such a way that they can really identify themselves with it. A Mission and Principles statement on the wall can never fulfil this task if it is not kept alive, deepened and renewed by reflection involving all integrants of the organisation. A second condition is the promotion of own responsibility, own initiatives to improve the results of their work towards the aims of the organisation. And then becomes clear that what really motivates people is not the fulfilment of routine duties of their function but to contribute towards the development, the improvement of the organisation towards better results in its service to clients. A colleague of us, Adriaan Bekman is researching this issue within several organisations: young people are invited to improve the functioning of the organisation related to aspects where the company or department is facing difficulties or new challenges. They are invited to find and develop ways to improve or change the way of "doing the job", by own initiative. To fulfil this task he can ask for and will receive the support he needs. The results for the companies have been surprising and also for the commitment of those young people (which will carry the organisation in the future) with the company.
So far we looked to the Social Responsibility of organisations related to its internal functioning and the development of each life sphere of the organisation according to its proper social quality.
Now we want to look to the Social Responsibility of organisations in their relation towards society as a whole. In the past social responsibility was exerted mainly through Philanthropy- support of social and cultural activities as expression of personal or organisational "good will". The expression "Social Responsibility" already makes clear that to act in a social responsible way is in fact a duty: the organisation is linked in a interdependent way with society as a whole and cannot subsist as an isolated social organism. For the sake of the subsistence of organisations on the long run it must also take care in a responsible way of the natural and social environment in which it is inserted. The concept of Social Responsibility is evolving from Philanthropy towards what is being called Organisational Citizenship. Organisational Citizenship has been defined as the acting of organisations on ethical basis in all its internal and external relations.
We can come to a better understanding of what this Citizenship is about when we look to it in the perspective of individual citizenship. As a citizen, each individual is taking part of society, in the Economic, Political and Cultural sphere.
All human beings take part of Economic Life as consumers, and as such we are co-responsible for what is produced, the way it is produced and the consequences of it. Through consumption, and paying to have access to it, we make possible the whole economic process. We can say that the consumer is the "sleeping giant of the economy": in our consumer behaviour we are actually still more oriented towards the satisfaction of our own needs in the most profitable way and mostly sleeping on the level of our co-responsibility towards the economic process by which production and delivering is made possible. When the consciousness of the consumer changes, as is already the case in the field of Ecological responsible products, this has its influence on the whole of the economic process. Within the field of Fair Trade we already can see an awakening consciousness on the level of social responsible products.
As adult human beings we also take part of political life, although it is mostly restricted to voting from times to times and reading or watching what the newspapers or TV’s are noticing. In the political sphere are defined the policies, laws etc which rule our relations within society as a whole. As citizens we must accomplish them (e.g. not to drive faster then permitted, nor pass through the red lights, pay the taxes, etc) and we do it, maybe more to avoid punishment then out of real commitment with these laws, based on free recognition of their worth. Social responsibility on the level of political life means an active participation, exerting our possible influence on what social issues are being discussed and regulated on political level.
We also take part of Cultural Life, but mainly as consumers of "cultural goods" (books, cinema, theatre, religion, etc.) and less as "cultural co-producers". Our social responsibility in this sphere means an active interest in the social and ethical questions of our times, searching to deepen our understanding of them and participating in their discussion within society. E.g. Globalisation, Bio-technology, etc. are social issues of our times and we are co-responsible for the ethical aspects related to them.
From the same perspective we can look now to the social responsibility of organisations as Organisational Citizenship, related to the ways organisations are dealing with their social responsibilities on the level of the economic, political and cultural sphere of society as a whole.
In the same way that each citizen, as consumer, is co-responsible for the quality of the whole economic process, Organisational Citizenship requires that each organisation takes responsibility not only for its own part in the economic process, but also for that what happens before and after it. Several actual trends already show an evolution in this direction: the quality certifications and also the "trackability" of products, by which the whole production process is registered and can be checked. Also the emerging concept of "chain responsibility" by which the different organisations interlinked within the economic process define together their quality principles and measures. There is a growing awareness that a company should not only take into consideration its responsibility towards its shareholders, but that Social Responsibility has to do with taking responsibility towards the interests of the "stakeholders"- i.e. all those who are related and have interest in the existence of the company (co-workers, clients, suppliers, community institutions, etc.). All these examples show a positive evolution in the direction of a more Associative Economy, which is a basic condition for the healthy development of Economic Life.
.In his lecture of yesterday Hermanus has given several indications about the social responsibility of organisations within economic life, related to the ways they are dealing with the economic factors of Nature, Men and Capital/Knowledge, which must not be dealt with as "commodities".
In a similar way, Social Responsibility of Organisations has been pointed out as referring essentially to 3 P’s: Planet, People and Profit.
The responsibility towards the Planet is inherent to the economic process, which starts at nature (extraction of raw material, use of natural resources), affects nature during the production, distribution and consuming/using process (pollution of air, water and earth, energy sources, etc) and ends at nature (e.g. final disposal of the products and its reintegration in the natural cycle or within the economic cycle through recycling). Dealing in a responsible way with out Planet is our main Social Responsibility towards the next generations of Mankind as a whole.
The social responsibility towards People has to do with the following questions:
- How can we meet in the most adequate way the real needs of the community/ the world’s population? Since maximizing own profit is actually the ultimate goal of companies (and even a condition for its survival since this principle is actually ruling economy as a whole) , the social result is that a decreasing minority of people can have more and more sophisticated "needs" satisfied, while an increasing majority of the world’s population can’t have access to satisfaction of most basic needs. At least 1/3 of the world population is starving by hunger amid the greatest abundance ever seen- much more is produced then is really needed, but the poorest have no access to it. Being ruled by the principle of maximizing own profit, economy can’t fulfil its social role related to the satisfaction of real needs of the community as a whole.
- How can we deal in a more responsible way with our relations towards the stakeholders of the company-i.e. all people and organisations who are making possible the work of our company (clients, co-workers, shareholders or creditors, suppliers, distributors, etc). How can we structure these relations in a more associative way, establishing agreements about the sharing of responsibilities and results of our co-operation?
The social responsibility towards Profit, referring to the way it is generated and the final destination given to it, can be seen as the most crucial issue to be dealt with, within a social responsible economy.
About the way profit is generated we can say that it arises as economic value exceeding what is required to satisfy in an adequate way the needs of those involved in the economic process. Profit, in its healthy form, is the result of knowledge applied to the economic process, resulting in higher quantitative and qualitative production at lower costs. Higher quality has to do with the way we are dealing within the economic process with nature and people involved, as mentioned above.
Even so, much profit still is generated by irrational exploration of natural resources, transferring the costs to the next generations, and by exploration of the work of people (labour of children, low salaries, underpayment of suppliers, etc).
Much profit is also still generated in a non proper way, as Hermanus pointed out in his lecture, when rights (e.g. access to natural resources, property) and cultural goods (knowledge, information, etc.) are transformed into commodities (through acquisitions, patents, etc). These rights and cultural goods are essential means to make possible and to develop the production process, which is the only real and factual economic value creating process. If these factors are transformed into commodities, we are not any more in the realm of real economy but in the realm of speculative economy, which affect the economy in an unhealthy way, as becomes visible on the stock market and its oscillations, by which Economy is actually being ruled.
Profit results of knowledge applied on the economic process, and by this way economic life is nurtured by cultural life. In the same way, cultural life is nurtured by economic life through profit that is liberated to make further development possible. In this way a life cycle is generated and maintained: knowledge and capacities developed in the cultural sphere flow to the economic sphere, generating exceeding value (profit). Profit that is destined to cultural life, make possible further development of knowledge and capacities.
For that reason, profit should not remain in the economic sphere but flow back to cultural life, to nurture its further development. When this is not the case, the source of innovation dries out and development stagnates. Companies recognize this in practice, investing a lot in research and innovation processes, by this way becoming stronger and stronger. On the other side, Cultural Life is becoming more and more bounded by economic life, becoming less and less free. What is being researched and supported is directly linked to the own interests of the companies themselves, which means – for example- a restriction to the development of possible alternatives that from the point of view of society as a whole could be more valuable. The results of research are also economically bounded, used to improve own profit- patents and royalties are not only a means to assure a return of investments made in research, but to generate profit by themselves.
We can say that social development is promoted in the measure that profit flows from the economic sphere to the other spheres of social life.
Partially this happens through taxation and also through donations (personal and organisational donations for social/cultural purposes, sponsoring, foundations, etc.). The level of well being of the population of the 1th world – access to social security, education, health etc. are assured by this way. But, in general, and especially in the countries of the 3th world, profit is mainly re-invested in economic life itself, with the ultimate goal not of meeting the real needs of the community as a whole but of generating more profit for its own sake. The consequences become visible in the (lack of) quality of life of most of the world population, increasingly excluded from development. On the other side, it results in a speeding up of economic life itself- oriented to more and more production, in less time, by less people, putting a huge stress on the life rhythm of all and on the (ab)use of natural resources.
In this way economic life is overruling the other social life spheres (cultural and rights sphere), submitting them more and more to its own interests.
This we can call a cancerous process, which can be lethal for the social organism. A cancer happens when the cells of an organ start to multiply themselves for their own sake, and not to fulfil their proper task within the organism as a whole. This is what is happening actually within economic life in its relation to the social organism.
This reality can only be changed by the strengthening of an autonomous rights sphere, which function is to define- with equal participation of all concerned- the agreements/laws/limits, etc. that regulate the functioning of each social life sphere and the interaction between them on the level of the society as a whole. The strengthening and democratisation of local, national and international institutions (as UNO, WTO, etc) and the creation of other institutions required to fulfil this role can be seen from this perspective as a basic requirement.
It was our intention with this seminar to bring a contribution to deepen the understanding of the participants about the basic conditions for the healthy development of social life, in the sense of Social Ecology and thereby contributing to the understanding of the causes of Social Entropy.
Out of this understanding we tried to point out directions in which organisations can develop themselves in a healthy way as social organisms, and contribute towards the healthy development of society as a whole. This requires that each one assumes his responsibility as citizen and that each organisation assumes its responsibility on the level of Organisational Citizenship, in its relation to economic life, cultural life and rights life.
Surely many questions remain unanswered, also to us. But we hope that this understanding and the indications that were given can will stimulate and help you further on the way of becoming more and more social responsible.
The world and mankind are in need of it!
Assenza, Gaudenz- Beyond the Market- Economics for the 21th Century- New Economy Publications- 1992- ISBN 0 948229 15 2
Bos, Alexander- Uma Revisão da Economia- Indicadores para uma Renovação Social- in Chão e Gente – 1997
Budd, Christopher- Prelude in Economics- New Economy Publications
Glasl, Fritz- Enterprise of the Future—Hawthorn Press 1997
Steiner, Rudolf- Towards Social Renewal- Basic Issues of the Social Question- Rudolf Steiner Press, London, 1977
Steiner, Rudolf- Economics- The World as One Economy- New Economy Publications 1993
Steiner, Rudolf- The Social Future- Anthroposophic Press INC- New York- 1972
Webdesign optimiert für Firefox