Robert Theobald is an internationally known futurist. A speaker, consultant and writer, he has been working for 40 years towards fundamental organisational and systemic change. He is President of Participation Publishers, New Orleans, Louisiana, and author of 'The Rapids of Change', 'Turning the Century' and, most recently, 'Reworking Success' (New Society Publishers). [This dialogue consists of extracts from a longer interview. There is a more detailed biography on Robert’s website.]

"I do not believe that a world run entirely on economic priorities can be stable or serve the interests of business."

Q. You were educated in economics at Cambridge when many of the major figures were teaching there -- what is your perspective on today's economic orthodoxy?

First, I must define orthodoxy as I see it. The main message appears to be that maximum economic growth coupled with all the steps necessary to achieve international competitiveness provides a desirable route into the future. The problem is that this strategy has either resulted in a huge increase in inequality or unemployment throughout the developed world. From my perspective, the inevitable changes due to the digitalisation of the economy can only increase these problems.

Q. While your statement is today increasingly accepted, many economists and businessmen would argue that these trends are only the concern of governments.

This assumes that business will not suffer if inequality and unemployment increase. It also assumes that maximum rates of economic growth will not damage ecological systems to the point that they become cost factors to business. I believe that both of these assumptions are unrealistic.

Ever since Adam Smith we have known that business requires:

• social cohesion,
• predictability, often premised on law but really based on the prevalence of a set of cultural norms,
• a basically level playing field without excessive bribery or bureaucratic interference.

Up to the present time business has assumed that these are basically "free goods." Trends throughout the world suggest that they are all under challenge. It is in the narrow self-interest of business to become involved in maintaining the cultural and political pre-conditions for its activities.

Q. Shouldn't MAI be seen as an attempt to ensure predictability and a "level playing field."

The very fact that negotiations are going on shows that some people and institutions believe that this is true. Unfortunately those who like this approach are using a very narrow approach and are not considering second and third level consequences. MAI dramatically limits the opportunity for communities and nation-states to preserve their own priorities and places commercial interests above community and cultural desires.

More importantly, in this context, it directly threatens the interests of responsible corporations. There is currently a movement among leading-edge firms away from measuring success solely in short-run profit terms. There is a recognised need for benefiting all stake-holders rather than just those who own shares and management. MAI would cause a rush to the bottom in terms of salaries, benefits, consumer protection, ecological commitments etc. and thus damage the game plans of responsible firms.

Q. As opposed to many critics of MAI, you seem to be arguing that corporations might benefit from opposing the proposed treaty.

That's exactly my point. It's partly a practical one. We need to work with all the positive forces in society and there are many corporations which fall into this category. Recent developments in such corporations as Shell show that they now recognise that they have been blind-sided by failing to look at human rights questions.

Q. Do you then see corporations as part of the societal learning process which is currently taking place?

I continue to be surprised by the failure of those in the social change movement to recognise that corporations have moved further in shifting their organisational styles than academia, media, non-profits and political systems. I believe that business has many lessons to teach the rest of society.

It must, however, be recognised that so long as the stock market rewards short-term financial profits corporations will be driven in perverse directions. Given that we are indeed moving into a knowledge economy, it is the people that corporations can attract and hold which are their most important product. Accounting practices must change to reflect this new reality.

Q. Does this mean that we must find a way of including a monetary value for people?

In the short run, the answer may unfortunately be "yes." But really effective measures will have to go deeper and recognise that monetarizing human resources hides far more than it reveals. The real issues are new sorts of measures which enable people to grasp the corporation's ability to stay on the leading edge in the rapids of change. Organisations can no longer plan in the old sense: rather they must be organised so that there is enough trust among the players that they can respond rapidly as unexpected developments occur.

Q. Are you challenging the importance of free markets then?

Not at all. Over 30 years ago, I wrote a book called Free Men and Free Markets. The real issue is to recognise the need to balance economic and social responsibilities. Communism died because it denied the importance of free markets. Capitalism could commit suicide if it fails to maintain social cohesion: the most recent report of the World Bank makes a U-turn on this issue by arguing for more social investment. The dangers are starkly visible in Russia where the worst form of cowboy capitalism has developed.

Q. So how can responsibility and competition co-exist?

This is the issue which I have already mentioned and the reason why corporations need to reconsider their position on MAI. Corporations are finding that they must co-operate with everybody including their suppliers and even their competitors. These companies assume that their workers will be responsible and make appropriate choices. They assume that their companies need to have a good reputation if consumers are to stay with them. Given these norms, they need to distinguish themselves from those corporations which sail close to the wind, exploit their workers and argue they have no responsibility for their products.

Q. What does this mean for the financial sector specifically?

There is a key choice here also. The financial markets can choose to be seen as a giant gambling casino with no moral content. Or they can be restructured to reward those activities which benefit society.

Q. And this leads on to the question of non-financial performance indicators. (Editor's note: see also interview with Stephen Viederman in last issue.)

A surprising number of groups are finding that it "pays" to be socially responsible. This is an early indicator of the reality that ignoring social issues will be increasingly costly not only for cultures but for investors.

Q. What do your views imply for future directions?

Business and the financial sector need to understand that they are necessarily involved in a massive choice process. Tom Atlee, a close colleague, argues that "the world is getting better and better and worse and worse faster and faster." There are two mutually exclusive futures. Continued exclusive concentration on purely economic issues will lead to a "race to the bottom."

The alternative is for business firms to focus on social responsibility and business ethics and to mobilise the groundswell of support which already exists. This latter route is quite possible and is where long-term profits will be found. Cultural directions are constantly challenging negative behaviours. Think about the shifts in attitudes to smoking, vegetarianism and promotive health. There are radically new opportunities for investment in positive areas. Sensible investors should be asking what the emerging socially and environmentally conscious investment opportunities will be.

Q. The MAI seems to be based on the assumption that increasing and institutionalising deregulation will make the world more predictable and better for business.

I believe that those who accept this conclusion are deluding themselves. I do not believe that a world run entirely on economic priorities can be stable or serve the interests of business. In Reworking Success I state that there are three requirements for a viable twenty-first century:

• ecological integrity,
• effective decision-making, and
• social cohesion.

These preconditions will not be achieved on the basis of economic dynamics alone. The current move toward higher unemployment and inequality will continue, driven by increasingly rapid technological change. The power and capacity of computers continues to double every eighteen months.

Q. What will happen if the basic requirements you list are not maintained?

I believe that not only will companies find their choices increasingly constrained but the quality of life of people throughout the world will decline dramatically. Experiences in such countries as Russia, India, Africa and even France show what can happen if the gap between social norms and business/governmental assumptions grows too wide. Intelligence requires that we struggle to move toward a different future than that which is supported by current economic orthodoxy. The real question is whether companies will allow their thinking to be dominated by inertia or they will see the huge new possibilities of our time.

ENDNOTES & LINKS:

Robert Theobald is seeking participation from companies in a one-year discussion group with two aims:

1. to examine how socially conscious strategies can benefit your company; and
2. to enhance your ability to create saleable products and services.

The only preconditions are the willingness to listen to other views, a recognition of the ever-increasing speed of change, a belief that we must broaden current economic models and a willingness to commit resources to the process. If you are interested contact him at rtheobald@igc.apc.org. His website is at http://www.transform.org/transform/tlc/rtpage.html)

To see further details of "Reworking Success" on the New Society Publishers site, click the book title or image, then scroll down the book titles given. The book is available from good bookshops and direct from: UK and Europe: Jon Carpenter Publishing US and Canada: New Society Publishers Paperback - ISBN 0-86571-367-7 Hardback - ISBN 0-86571-366-9