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Wanted: Redemptive Enterprises

Written by: Georgie Lee


The business of business is business? Modern managers have only a weary smile left for this theory of economist Milton Friedman. Today, most of them are committed to the ESG – environmental, social, governance – approach. The result is changes in compliance and sanctions, but not changes of heart that would be needed for a genuine transformation of capitalism.


"There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."

Milton Friedman (1912 – 2006)

American economist awarded with the Nobel Prize for Economics



Two recent global scenarios reveal much of today’s corporate culture. In January 2021, WhatsApp announced changes to its privacy policy and terms of service. The news stoked users’ fears over broader data sharing with WhatsApp owner, Facebook, raising privacy concerns, and sparked a mass exodus of subscribers to other messaging apps

like Telegram and Signal.


It was precisely such privacy concerns that led WhatsApp co-founder Brian Acton to part ways with Facebook chiefs Mark Zuckerberg and Sheryl Sandberg in 2017. He left before his

final tranche of stock grants worth US$850 million vested. Acton’s decision was described by Forbes magazine as ‘perhaps the most expensive moral stand in history’.


Is there anything wrong with maximising profits?

Big Tech’s scrutiny

Acton who is a pro-privacy zealot and boasted ‘no ads, no games, no gimmick’ under his watch, had then balked at the Facebook chiefs’ plans to monetise WhatsApp through targeted ads, and the sale of business analytics tools that risked encroaching on WhatsApp’s end to-end encryption. He had proposed to the Facebook chiefs to monetise the messaging service by charging heavy users a small fee. But his proposal was shot down, he believed, on grounds that it was far less lucrative.


Driven by the pursuit of profit, Big Tech has revolutionised the way we live. Unknown to

us, our lives are constantly under their scrutiny twenty-four hours a day, seven days a

week. They know everything we have purchased, everywhere we have been, and

everything we want. In short, they know more about everything than anyone ever has

in the history of mankind, leveraging on the power of data and artificial intelligence.


The Big Techs not only generate a lot of profit, but they virtually captured the brightest and most innovative minds in the world under their employment. And what are they doing with all of this? Well, the blunt truth is that their main focus is selling tiny little ads that appear on every screen you look at. These businesses, after all, were started to make money, and, ahem, are they lapping it up!


The Inequality Virus

Moving to a vastly different scenario, the World Health Organization (WHO) warned the Covid-19 vaccine divide between rich and poor nations is worsening by the day.

‘Rich countries are rolling out vaccines, while the world’s least developed countries watch and wait,’ said WHO Director-General, Tedros Adhanom Ghebreyesus. Not only that, the

pandemic has spawned widening inequalities. Today’s profit-driven world has enabled a super-rich elite to amass wealth in the middle of the worst recession since the Great Depression, while billions of people are struggling to pay bills and put food on the table.


The two scenarios are just outcomes of shareholder capitalism which has embedded much

of Wall Street’s culture and egged corporations on the path of profit maximisation.


In search of perfect markets

Celebrated economist and Nobel Laureate Milton Friedman’s seminal essay, headlined,

'The social responsibility of business is to increase its profits,’ published in the New York Times of 13 September 1970, became the cause célèbre for free market and shareholder capitalism. It was arguably the most consequential economic idea of the latter half of the twentieth century.


The Big Techs are not rule-takers but rule-makers.

‘There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game,

which is to say, engages in open and free competition without deception or fraud,’ Friedman

wrote. He warned of the danger of thinking about anything but profit. Everything else is thought to lead to inefficiency and self-indulgence. In short, Friedman believed that the

only business of business is business.


Scottish moral philosopher Adam Smith’s ‘invisible hand’ conjecture which said that the

pursuit of self-interest would lead, as if by an invisible hand, to the well-being of society found resonance with him. Hence, profit maximisation, he believed, would lead to a maximisation of social welfare.


Friedman has his detractors. Such a belief, Prof. Marianne Bertrand of the University of

Chicago Booth School of Business, in a New York Times interview, explained, rested on the assumption of markets functioning perfectly. ‘Unfortunately, such perfect markets exist

only in economics textbooks.’ Functioning markets operate under a set of rules or norms, whether explicit or implied. Do today’s ‘Big Techs’ and corporate behemoths truly stay

within the rules of the game? The sad truth is that they are not rule-takers or price-takers, but rule-makers. They have also become arbiters of truth. ‘They play games whose rules they have a big role in creating, via politics,’ wrote Martin Wolf in a Financial Times opinion

piece.


While there is a trend towards corporate virtue and stakeholder capitalism (as opposed to

shareholder capitalism), the penchant for pursuit of profit remains the dominant force

behind enterprise. Major corporations using the cloak of supporting progressive causes are

in effect doing so to protect their bottom line. The rising tide of woke culture seeping into

boardrooms is giving this another spin.


The rise of woke capitalism

Increasingly, corporations are sucked into woke capitalism, a term coined by New York

Times columnist Ross Douthat. They are aligning themselves to progressive social concerns,

such as race, and gay and transgender rights, while they continue to push their own

economic self-interest. In reality they are paying homage to the cultural ‘left’ to avoid

criticisms and win acceptance in order to fulfil their primary objective: making money. So-called progressive values have become powerful branding tools. Corporations today are under siege to embrace political correctness to avoid being ‘cancelled’. Capitalist enterprises and the cultural ‘left’ have become strange bedfellows for the sake of mammon.


Notwithstanding this, there is still a welcome shift towards socially responsible investment,

spurred by concerns on climate change and the environment as well as social justice

issues. ESG (environmental, social and governance) themed investing is becoming mainstream. Currently, over $100 trillion in investments are managed by firms that have signed on to the United Nation’s Principles for Responsible Investment. Larry Fink, CEO of

multi-trillion-dollar asset manager Black-Rock, predicted a ‘fundamental reshaping of finance’ that would see investors allocating more capital to businesses that are addressing

climate change and its socioeconomic implications. Companies that operate in a sustainable

manner, Fink argued, would ‘provide better risk-adjusted returns to investors’.



"Well, if you have a standard operating procedure for it, it cannot be grace. Grace is something that you have to struggle with and grapple with. It must come from the heart and it must be borne with the spirit."

Philip Ng (1958)

CEO of the Far East Organization,

one of Asia's largest hospitality groups


Is ESG more than a public relations strategy?

Prof. Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF), wrote in his book, ‘We can’t continue with an economic system driven by selfish values, such as short-term profit maximisation, the avoidance of tax and regulation, or the externalising of environmental harm. Instead, we need a society, economy, and international community that is designed to care for all people and the entire planet.’


Sustainability goes mainstream

The ESG trend has helped focus attention beyond financial capital to natural, human and social capital. But with public opinion weighing heavily in the direction of ESG, there is cynicism that much of the pious corporate proclamations are little more than opportunistic public relations strategies.


ESG is only the latest iteration of its precursor concepts such as corporate social responsibility and the triple bottom line. While fresh ideas have emerged, a key difference is its focus on climate change and the environment. The moral necessity of ESG has gained wide acceptance. But it is heading not in the direction of cultivating true altruism but in enforcing behavioural change through compliance metrics and external sanctions. Regulations have limited effectiveness as they are quickly circumvented when there is no real change. Without inner change, it is simply behaviour modification, aided by the law.


Exploring spiritual capital

Only spiritual change from inside out can bring the desired human wellness and flourishing. It is not just a mindset change but a heart-set change that is needed for genuine transformation to take place in the world. That takes us to the oft-forgotten but most needed recognition of the importance of spiritual capital in human enterprise.


Rooted in faith, spiritual capital infuses a strong sense of purpose and mission, and promotes the practice of not only virtue but faith in business for human betterment. Faith has a powerful impact on lives, and similarly so, on business. It shifts the focus of enterprise

beyond the material and the self, offers hope and builds trust, a key ingredient for business

success. It is transformational.


Speaking of spiritual capital, Michael Novak of the American Enterprise Institute said: ‘Capitalism carries in its wake the potential for immense transformation, a true and permanent change that is moral in nature. Those nations, peoples and businesses that neglect the moral ecology of their own cultures cannot enjoy the fruits of such transformation and capitalism must be essentially moral or it falters, declines, and fails. Spiritual enterprise is capitalism in its most profound (…) form.’


Every religious faith has its own prescription for spiritual capital. However, the Christian faith offers a unique proposition that gives business a redemptive purpose beyond just the

temporal. Hence, the Biblical model of business can best be described as a redemptive

enterprise. King Solomon writing in the book of Ecclesiastes in the Bible reminds us that work ‘done under the sun’, that is, from a human perspective without God, is ‘vanity and grasping of the wind’. It is a meaningless activity. However, when done from ‘above the sun’, that is from God’s perspective, work or business finds meaning and purpose.


God’s redemptive plan

What is God’s ‘telos’ (Greek for ‘end goal’) for business? Well-known theologian and author J. I. Packer’s narrative of God’s mission in the world provides illumination for this. Packer

declared that the mission of God is nothing less than the redemption and re-creation of the entire fallen created order.


The book of Genesis tells us that God made man in His own image. All of creation lived in harmony with Him and with one another. The world was perfect when God first created it.

But the disobedience of Adam and Eve resulted in sin which led to the fall of man and separation from God.


God's plan is to restore the fallen world.

But God in His grace made redemption from sin available to all who turn to Him. John’s account in the Bible says it all: ‘For God so loved the world that He gave His only begotten Son, that whoever believes in Him should not perish but have everlasting life.’ (John 3:16)

The sacrificial death and resurrection of Jesus Christ who took away the sins of the world

made reconciliation with God possible when we acknowledge Jesus as Lord and Saviour.


God’s redemptive plan, therefore, is to restore the fallen created world back to His original intent and design which is to have His entire creation live in peace or ‘shalom’ with Him

and with one another and to have human flourishing. And not just that, it will also be a renewal of creation as Jesus Christ has declared that He will make all things new. Therefore, from a Biblical perspective, business is a platform for man to exercise his talents and gifting to steward all of God’s creation for meeting needs of human beings and to lead them back to a relationship with God.


Enterprises on a mission

A redemptive enterprise operates on the premise that God has created the necessary

conditions for doing business and generating value for human flourishing. It also affirms

that our assets and abilities are God’s gifts for creating wealth to ensure abundant life for

all. We are therefore entrusted with the responsibility and mission of wisely stewarding this redemptive enterprise. God is the owner and has empowered us to be His stewards.


In His sermon on the mount, Jesus taught His disciples ‘to seek first His Kingdom and His

righteousness’. A redemptive enterprise advances the values of the Kingdom of God by ensuring all business goals and operations are determined by a clear understanding of God’s

righteousness and truth. We are mandated to conduct just and ethical business in total allegiance to Jesus and His Kingdom.


An enterprise is an artificial person with no morality, or spirituality of its own. Its ‘conscience’

is a derivative from the stewards of the enterprise. Hence, in a redemptive enterprise,

the stewards are p