Tag Archives: ethics

Ethics In Business and Leadership

[This post is the speech given by Prof. Surya Sethi at World Forum for Ethics in Business – International Leadership Symposium Monday, April 2, 2012 in Singapore. Reproduced here with permission.]

I have been asked to cover a broad spectrum of issues relating to business regaining trust for sustainability within the context of climate change and the global energy crisis. Importantly, I have been asked to do so in 10 minutes reflecting the efficiency of the city-state we are in.

Let me begin by differentiating between moral and ethical values. Based on what I heard this morning, there appears to be some confusion between morals and ethics. The former define individual character and are based on personal beliefs of right and wrong or good and bad. The latter are essentially standards and codes of conduct, expected in a specific context, from the group an individual belongs to. Ethics typically encompass societal, corporate, national, professional or other similar compacts. Individually, we consider killing as morally wrong but an army killing thousands is considered ethical and is often decorated as an act of bravery for common good.

Business enterprises, today, manned largely by morally upright individuals are collectively killing the planet we share with a ferocity, intensity and speed matching that of war; and getting rewarded for creating unprecedented valuations and competitive supremacy. Consumption for the sake of consumption, growth for the sake of growth, profit for the sake of profit and support for policies and policy makers that uphold all of the foregoing are the ethical values guiding these enterprises.

The anthropogenic damage to the earth’s ecology over the last 60 years exceeds the damage done by humans over their entire history up to 1950. The fine balance between physical, chemical and biological processes that sustain the earth as a single interdependent system has been disturbed. The earth has moved well outside the range of her natural variability exhibited over the previous half a million years in the very least. Abrupt ecological changes with non-linear feedbacks in the earth’s dynamics, leading to catastrophic outcomes, are a real possibility today. Ethics should be price determining and not price determined by markets. Under-pricing natural capital and ignoring concomitant risks is fuelling the consumption boom.

Importantly, the growth, the consumption and the benefits have been concentrated in the privileged few. The top 20% of the world consumes 80% of its output while the bottom 80% lives on the balance 20%. The bottom 20% lives in dire poverty at a consumption of less than $1.25 PPP/day or about 50cents/day in nominal cents in a country such as India which is home to a third of these global unfortunate. Going just by income poverty, the number living below this dire threshold has come down by some 500 million – almost entirely because of a reduction in China. However, the broader multidimensional poverty index that includes parameters such as health, education, gender equality, access, empowerment etc. pushes the share of these destitute people to about 25% of the global population. Importantly, the number of people below the global poverty line of $2 PPP per day consumption remains stubbornly at about 2.5 billion or about 36 % of humanity.

Modern energy consumption is perfectly correlated to the Human Development Index (HDI) but it still eludes the bottom 2.5 billion who remain energy starved. While 1.5 billion among them, including over 500 million from India, have no access to electricity, 2.2 billion, including some 850 million from India use some form of biomass as their primary or only source of energy for cooking food –the most basic human necessity. A larger number would be denied access were we to price energy, one of earth’s fastest depleting natural resource, at its true value. The primary reason for this is the continuing disproportionate consumption by the well-to-do.

OECD countries, with a combined population less than India enjoy the world’s highest living standards. Yet, OECD’s incremental commercial energy consumption for the period 1997-2007 (before the financial crisis); was 3.2 times that of India. During this period, India’s share of global commercial energy consumption rose from 2.9% to 3.6% while OECD’s share fell from 58% to just over 50%. This drop was singularly due to the growth of China’s share as it became the world’s largest energy consumer.

The disproportionate consumption of energy is far worse than the figures reveal. In a globalized world, big business has moved significant parts of OECD’s production base in search of cheaper natural capital including the environmental commons, which though priceless, is still available for free in China and the developing world.

If one looks at GHG emission on a consumption basis and not production within their borders, then EU 15 emissions are up by 47% and the US emissions have risen 43% since 1990. The embedded emissions in imports of EU-15 are about 33% of emissions within their borders. This translates to about 3 tons per capita of embedded emissions in imports. The embedded emissions import for the US is 20% or about 4 tons/capita – In 2000, the level of embedded emissions imports in both the US and EU15 were only 3% . The embedded emissions alone in imports for US and EU-15 are twice and 1.6 times respectively of India’s total per capita GHG emissions.

The greatest lie that we are being told by big business and the policy makers supported by them is that resource efficiency is the answer to sustainability. Despite huge gains in resource use efficiency, the world is consuming more natural capital today than ever before and we are on auto pilot to at least a 3.5 degree Celsius warming. If IPCC is right, this will unleash catastrophic events and mass annihilation of the world’s poor in the foreseeable future.

Simply stated, current patterns of consumption and production, ladies and gentlemen, are unsustainable. CSR activities such as opening schools and hospitals or green-washing board rooms with efficient lights are simply inadequate. Also inadequate is a business mindset that first influences and then merely meets current regulations and sees value only in monetary terms based on a simplistic cost-benefit analysis

We need a policy framework that first limits our use of fossil fuels and other forms of natural capital and then gradually reduces it in a cradle to cradle paradigm fuelled by innovation. Our growth model must be an inclusive one that reduces unsustainable overconsumption by a few and redistributes that to the bottom 50% of this world. No, I do not seek to make the poor rich by making the rich poor – I simply seek the right of the bottom 50% of the world to have a dignity of life afforded by consumption at 50% of the poverty levels within the OECD. The current inequities whereby the world’s third largest economy in PPP terms (India) is placed 134th in terms of its HDI and has the world’s largest concentration of poor, malnourished adults and under-weight children are unsustainable.

Enlightened business leaders must not only define sustainability in terms of guaranteeing inter-generational resource equity but also see the unsustainability of not removing current intra generational inequities and thereby delivering the minimal adaptive capacity to the bottom 2.5 billion of fellow humans in the face of impending abrupt climate events.

In closing, I quote Mahatma Gandhi who said: “The world has enough to meet everyone’s need but not enough to satisfy even one man’s greed!

I thank you for your time and attention.

Dualism

After being called one of the top 50 philosophy bloggers, I feel almost obliged to write another post on philosophy. This might vex Jat who, while appreciating the post on my first car, was somewhat less than enthusiastic about my deeper thoughts. Also looking askance at my philosophical endeavors would be a badminton buddy of mine who complained that my posts on death scared the bejesus out of him. But, what can I say, I have been listening to a lot of philosophy. I listened to the lectures by Shelly Kagan on just that dreaded topic of death, and by John Searle (again) on the philosophy of mind.

Listening to these lectures filled me with another kind of dread. I realized once again how ignorant I am, and how much there is to know, think and figure out, and how little time is left to do all that. Perhaps this recognition of my ignorance is a sign of growing wisdom, if we can believe Socrates. At least I hope it is.

One thing I had some misconceptions about (or an incomplete understanding of) was this concept of dualism. Growing up in India, I heard a lot about our monistic philosophy called Advaita. The word means not-two, and I understood it as the rejection of the Brahman and Maya distinction. To illustrate it with an example, say you sense something — like you see these words in front of you on your computer screen. Are these words and the computer screen out there really? If I were to somehow generate the neuronal firing patterns that create this sensation in you, you would see these words even if they were not there. This is easy to understand; after all, this is the main thesis of the movie Matrix. So what you see is merely a construct in your brain; it is Maya or part of the Matrix. What is causing the sensory inputs is presumably Brahman. So, to me, Advaita meant trusting only the realness of Brahman while rejecting Maya. Now, after reading a bit more, I’m not sure that was an accurate description at all. Perhaps that is why Ranga criticized me long time ago.

In Western philosophy, there is a different and more obvious kind of dualism. It is the age-old mind-matter distinction. What is mind made of? Most of us think of mind (those who think of it, that is) as a computer program running on our brain. In other words, mind is software, brain is hardware. They are two different kinds of things. After all, we pay separately for hardware (Dell) and software (Microsoft). Since we think of them as two, ours is an inherently dualistic view. Before the time of computers, Descartes thought of this problem and said there was a mental substance and a physical substance. So this view is called Cartesian Dualism. (By the way, Cartesian coordinates in analytic geometry came from Descartes as well — a fact that might enhance our respect for him.) It is a view that has vast ramifications in all branches of philosophy, from metaphysics to theology. It leads to the concepts of spirit and souls, God, afterlife, reincarnation etc., with their inescapable implications on morality.

There are philosophers who reject this notion of Cartesian dualism. John Searle is one of them. They embrace a view that mind is an emergent property of the brain. An emergent property (more fancily called an epiphenomenon) is something that happens incidentally along with the main phenomenon, but is neither the cause nor the effect of it. An emergent property in physics that we are familiar with is temperature, which is a measure of the average velocity of a bunch of molecules. You cannot define temperature unless you have a statistically significant collection of molecules. Searle uses the wetness of water as his example to illustrate emergence of properties. You cannot have a wet water molecule or a dry one, but when you put a lot of water molecules together you get wetness. Similarly, mind emerges from the physical substance of the brain through physical processes. So all the properties that we ascribe to mind are to be explained away as physical interactions. There is only one kind of substance, which is physical. So this monistic philosophy is called physicalism. Physicalism is part of materialism (not to be confused with its current meaning — what we mean by a material girl, for instance).

You know, the trouble with philosophy is that there are so many isms that you lose track of what is going on in this wild jungle of jargonism. If I coined the word unrealism to go with my blog and promoted it as a branch of philosophy, or better yet, a Singaporean school of thought, I’m sure I can make it stick. Or perhaps it is already an accepted domain?

All kidding aside, the view that everything on the mental side of life, such as consciousness, thoughts, ideals etc., is a manifestation of physical interactions (I’m restating the definition of physicalism here, as you can see) enjoys certain currency among contemporary philosophers. Both Kagan and Searle readily accept this view, for example. But this view is in conflict with what the ancient Greek philosophers like Socrates, Plato and Aristotle thought. They all believed in some form of continued existence of a mental substance, be it the soul, spirit or whatever. All major religions have some variant of this dualism embedded in their beliefs. (I think Plato’s dualism is of a different kind — a real, imperfect world where we live on the one hand, and an ideal perfect world of forms on the other where the souls and Gods live. More on that later.) After all, God has to be made up of a spiritual “substance” other than a pure physical substance. Or how could he not be subject to the physical laws that we, mere mortals, can comprehend?

Nothing in philosophy is totally disconnected from one another. A fundamental stance such as dualism or monism that you take in dealing with the questions on consciousness, cognition and mind has ramifications in what kind of life you lead (Ethics), how you define reality (Metaphysics), and how you know these things (Epistemology). Through its influence on religions, it may even impact our political power struggles of our troubled times. If you think about it long enough, you can connect the dualist/monist distinction even to aesthetics. After all, Richard Pirsig did just that in his Zen and the Art of Motorcycle Maintenance.

As they say, if the only tool you have is a hammer, all problems begin to look like nails. My tool right now is philosophy, so I see little philosophical nails everywhere.