Conscious Capitalism


Keynote by Raj Sisodia, international speaker and award-winning author on Conscious Capitalism, at the Shared Value Summit held recently in Gurgaon.

“The best way to organize human society is in some form of democracy, which is all capitalism is, free markets and free people.”

“Higher purpose is an essential element of a conscious business; just like a conscious human being has a purpose to their life beyond just making money and then dying.”

Conscious Capitalism is becoming essential for business, to rethink how it operates and how it defines its purpose. For us as human beings and that is where we draw the analogy; we have a choice, we can choose to live at a caterpillar level which is all about consumption, material, self, or we can evolve. On the journey of rising consciousness, we can spread truth and beauty and become agents to help others and ourselves flourish. The same applies to corporations. We can relegate them to continue to operate at a caterpillar level i.e. the only purpose is to produce profits for the owner or for the shareholders. It also means one takes in financial resources, human resources and physical resources and gives out products and profit. Else we can allow organizations to evolve to higher levels of consciousness where they also act as agents helping others flourish, spreading light and beauty in the world.

As stated by Peter Kestenbaum, mentor to several emerging firms, “We have reached such explosive levels of freedom that we are in charge of our own mutation, we can remain stuck or we can evolve and there’s no real limit to how far we can evolve.” The word capitalism was coined by Karl Marx and is essentially looked at as exploitation. If we look at the economic history of the world over the last 2000 years, the per capita incomes on an inflation adjusted basis for the last 2000 years were roughly $470 in the year 0 and then 1000 years later, it went down to $453 per person per year. So, in a thousand years we did not make progress but we went backwards, as globally per capita income of $450 means 90 plus percent of people were living on less than a dollar a day.  So, this was the default condition of humanity, people were poor, basically struggling to survive. As we moved into the 15th century and the beginnings of the Renaissance, we had the invention of the printing press. So, these were big steps forward coming out of the dark ages as a species, but it did not impact ordinary human beings. 90% of people were still illiterate. Another couple of hundred years we entered the age of reason and enlightenment.  Science, philosophy, Isaac Newton, Joseph Galileo starting to understand the laws of nature, our place in the universe, incredible breakthroughs for humanity but again there was no impact on ordinary lives. The industrial revolution in the 18th century was a turning point. We could produce a lot more efficiently and effectively. We had machines that could make products instead of people making products and that lead to a significant breakthrough because now with higher productivity came higher prosperity for those societies which had access to that technology. So, that was a big technological breakthrough but that was not enough to change the world.

Declaration of independence of the US happened in 1776 and a country was born on the basis of a set of ideas, which revolved around freedom and liberty. Religious freedom, political freedom and economic freedom is what America is all about. Humanity has taken off on a vertical trajectory since per capita incomes after being flat for thousands of years have risen fifteen-fold or 1500% on an average. Literacy has gone from 10% to 90%.

The fact is that people cannot be innovative and creative when they are operating in survival mode. We cannot deliver prosperity without innovation and creativity. We should reinvent everything and that is not going to happen when the clear majority of people are disconnected, disengaged, cynical and distrustful. We must address this issue with urgency as something has gone wrong in the story of business and capitalism over time. There are number of possible explanations for this. Firstly, is the narrow perspective of profit maximization i.e. the only purpose of business is to maximize profits or to maximize shareholder value. The idea of maximizing any one thing in an interconnected interdependent living system is inevitably going to lead to the decline and potential death of that system because if you just focus on one piece you start to neglect and tradeoff against the other sides. It is not about maximizing one thing it’s about promoting the flourishing of the whole. So this idea has done great damage because it has treated people as means to that end.

The world has fundamentally changed and we have had multiple tectonic shifts in the lifetime of most people. We human beings are changing rapidly and businesses have not adapted to all the ancient operating system. The rate of change outside an organization exceeds the rate of change inside. A major change happened in 1989, the coming down of the Berlin war. The best way to organize human society is in some form of democracy, which is all capitalism is, free markets and free people. 

Internet was invented in the 50’s by the US government and it was called DARPANET. Tim Berners-Lee invented the World Wide Web. It impacted the lives of billions of people. An ordinary person today has access to more information instantaneously at their fingertips anytime, anyplace for free on any subject than the richest billionaire in the world did 20 years ago. What that means is that every corporation, every government, almost every life now operates with transparency. In 1995 half the people on this planet had neither made nor received one single phone call in their lifetime. In India in 1995, there was 1 phone per 100 people tele density. Today there are more active phone numbers than there are people and we have social media like Facebook, Twitter, YouTube etc. We have an explosion of connectivity. Now almost every person is connected in that grid.  It’s like we have a shared central nervous system, anything happening anywhere can be known and acted upon and energies can coalesce around shared passions and causes. There is an underlying infrastructure that exists today for that connectivity. 

Another big change is that we are becoming more conscious.  Our entire journey on this planet can be thought of as gradually awakening and elevating our consciousness.  Human beings unfortunately were stuck in the animal mode for the longest time and now we are gradually starting to move out of that mode. More and more of us are enabled to move beyond survival and explore the higher reaches of what it means to be born as a human being. More human beings are now able to step back and see the bigger picture, understand the consequences of their actions on others and can see into the future, they have a better sense of right and wrong and the things that were acceptable in the past are no longer acceptable. A lot of changes have been observed whether it was slavery, colonialism, apartheid, gay marriage etc. We are rising to higher consciousness and are becoming more peaceful. We are living with declining violence. Fewer people are being killed in wars with no major nations going to war in the last 70 years.  Fewer people are being killed by terrorists as compared to historic averages. Fewer people by far are being killed through murder in the US. There is less violence in schools, less domestic violence, less incidents of rape et al. Resorting to violence is an animalistic response and as our consciousness rises we move past that. We are recognizing the power of diversity and we are learning to live in harmony with nature.

The world has changed so much.  We have to fundamentally rethink, reinvent, and question every assumption. What will it take for companies to flourish in the future? At a minimum, companies have to be in harmony with all these changes. They have to be aligned right; the fact that people are more intelligent, people care for meaning and purpose, there is a rise of caring, nurturing and feminine values – all of these things have to be part of defining our business. They have to be aligned with and positively associated with what we are trying to do businesses themselves have to reflect that same consciousness. 

Higher purpose is an essential element of a conscious business; just like a conscious human being has a purpose to their life beyond just making money and then dying. A conscious company tries to have an impact on the world in its chosen area. It’s not a business with a mission; it’s a mission with a business.  All of us are part of an interconnected interdependent system of customers, employees, suppliers, communities, farmers, investors etc. When we are connected the well-being of one impacts the well-being of the other and if we systematically tradeoff the well-being of some for the well-being of others within that system then eventually we will kill that whole system. So, it is important to align and integrate the interests and look for a win-win across all stakeholders.

Google is a good example of a company that always had a sense of higher purpose, organize the world’s information, and make it easily accessible and useful. They’ve extended that into areas from text information into books to audio, video, maps, to skies, to oceans, to malls, now to things like self-driving cars. Tata is a great example of a conscious company purpose driven company right from the beginning. As a colonized country India needed steel and Jamsetji Tata set up the first steel plant, India needed electric power they set up Tata Hydroelectric when he got turned away from a hotel which said English only he decided India needed a great hotel and built the world’s leading hotel.

If you think about the great leaders throughout human history, the ones who have changed our condition for the better, they have embodied tremendous strength with a tremendous capacity for caring for people. These are the ones that have transformed the world for the better. The leaders that purely embodied power and strength like Hitler and Stalin and Mao almost destroyed human civilization. Any leader who is all about them self, who is selfish cannot be a great leader because a selfish leader uses other people to achieve their personal goals. 

Conscious capitalism is about combining, caring and self-interest. Companies who align their forces together, they are not just creating financial wealth but also being socially responsible. Making profits is important as we need money to put up the infrastructure etc. but it matters how the money has been made because that money can be made in a way that puts all kinds of burdens and liabilities on society. This whole planet is one system, we are all interconnected, interdependent and we have to start acting in that way as the well-being of each other is inherently important and it should be to all of us.

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