The gospel according to Adam Smith – Spiritual Capitalism

Is doing good compatible with making money? It is if you practise spiritual capitalism. Art DeLorenzo and I were having a hard time connecting. He’s a 67-year-old retired financial adviser in the New York City area whose budding consulting practice keeps him from settling into an easy chair. I’m a journalist in San Francisco, perpetually on deadline. Several appointments we set were moved or missed, but we kept trying. Late one evening, as we seemed finally to settle on yet another date for our interview, DeLorenzo threw out a comment that would prove as valuable as anything he said in our hour-long phone call days later.

“Wait a moment.” DeLorenzo paused. “I could say 3 p.m., but the group I’ll be meeting with before you, they tend to run over. It’s just their habit, but I know this. So I’d rather not book you right up against them. I don’t want to compromise the integrity of my commitment to them.”

The details of one man’s business schedule might not seem meaningful at first. But in that moment I realized DeLorenzo’s deliberate emphasis on a few choice words—“the integrity of my commitment”—was a straightforward yet eloquent statement of a still-fuzzy but increasingly important trend: spiritual capitalism.

Spiritual capitalism doesn’t mean prayer sessions on the shop floor and guided meditations in the boardroom. At least it doesn’t have to. What it does mean is the success of an enterprise is measured by values like “integrity” and “commitment” as much as by targets like “efficiency” and “profitability.” It’s based on the recognition that every businessperson—whether you’re the CEO of a major multinational or the head of your own small firm—is in the service industry, and the services rendered must benefit not just yourself and your shareholders, but the planet and other people as well. The first commandment of the growing spiritual-capitalism movement is: Taking care of business means taking care of others.

The spiritual father of spiritual capitalism is not Mahatma Gandhi or the Dalai Lama. It’s Adam Smith. After all, there’s a reason why his most famous work is called The Wealth of Nations and not The Wealth of Individuals. Smith, the 18th-century philosopher, argued that the free market—in which “every man, so long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with any other man”—is the best way to build wealth. He also argued that the benefits of the free market should accrue not just to individuals but to society as a whole.

In his book, Business and the Buddha: Doing Well by Doing Good, management consultant Lloyd Field writes that “Smith presented this moral philosophy: ‘The average man and woman, along with the society in which they lived, should be the primary beneficiaries of a wealthy nation.’”

For anyone looking to incorporate spirituality in business, the bottom line is more than just the basis for commercial success; it’s the foundation for a just and sustainable society.

More and more companies, large and small, are taking a page from Smith’s book, even if many of them don’t use the word “spiritual” to describe what they’re doing. Google has coined the catchy corporate slogan “Don’t be evil,” and through its philanthropic foundation google.org has committed more than $75 million in grants to research projects and investments that advance renewable energy and help entrepreneurs in the developing world. Staff at Allianz, the 118-year-old German insurance agency, learn to listen—with their hearts—to clients’ financial concerns to serve them better. Advisers at Ameriprise Financial, a retirement planning firm with $500 billion in assets under management, receive training in compassion, forgiveness and gratitude to help them become more successful. Dr. Hauschka Skin Care, a German distributor of holistic remedies and cosmetics, takes fair trade principles a step further by investing in the African communities that sell its products. One World Everybody Eats, a small café in Salt Lake City, Utah, in the U.S. asks patrons to pay what they can afford.

Why do companies like these do it? Not just because it’s the “right” thing to do, but because—yea, verily, even when walking in the valley of the shadow of recession—spiritual capitalism is a smart business move. Employees and managers who embrace spiritual values like compassion and forgiveness are happier—and therefore more productive. Add some soul to your sales pitch and guess what? You sell more.

Increasingly, consumers are using their purchasing power to buy stuff from companies that espouse spiritual capitalism. Witness the popularity of green energy, fair trade products and organic produce, as well as the growth of the socially responsible investment sector, a $2 trillion business according to the Social Investment Forum. Just as important is the fact that the perceived conflict between “doing good” and “making money” is on its way out.

“Most of us are in the habit of thinking in a linear fashion: If this, then not that,” says Terry Mollner, who co-founded the socially responsible investment firm Calvert Group in 1982. “If I care about profits, then I can’t care about being green. But we’re in a new era of collective consciousness now in which priorities don’t need to be hierarchical. The whole hierarchy is in the service of the common good, including the profit-making.”

Spiritual capitalism is consequently not a zero-sum game, but a holistic approach to business that’s quickly becoming more—much more—than the sum of its parts.

Spiritual capitalism got its start during the 1970s, in the business ethos that prioritized people over profits and gave birth to idea of social entrepreneurship. “We were hippies shouting to the masses,” recalls Mollner. “This was after the ’60s when we had a temper tantrum and thought we were rebelling against businesses that had only to do with profits. Everyone moved to the farms and started growing their own food. We set up community land trusts; we established alternative currencies. And out of all this came the idea for socially responsible businesses that would focus not on making a profit but on having a decent relationship with the employees, the environment and the community.”

These enterprises weren’t as successful as their creators had hoped. Why not? A big part of the reason was that without profits, they couldn’t be self-sustaining. Businesses can’t survive on good intentions alone. By setting up the Calvert Group, Mollner wanted to demonstrate that a company’s spiritual ethos could help it do good while giving it a competitive advantage. Some 30 Calvert-branded funds are on the market, representing hundreds of billions of dollars in market value, and socially responsible investing (SRI) has become one of the primary sectors in which money and spirit meet.

SRI began as a method for excluding socially harmful products—alcohol, tobacco, weapons—from investment portfolios. “We were evaluating companies based on what bad things they had done in the past,” Mollner explains. This quickly proved insufficient for SRI pioneers, so they began screening firms for the good things they were doing: for their spiritual values. “We realized that we wanted companies that were not just not doing bad things but that were promoting the common good,” says Mollner.

Today, SRI fund managers screen potential investments for environmental responsibility, social justice and corporate governance—all factors that contribute to a positive balance in the spiritual ledger.

Adam Smith would be proud.

Source: Ode Magazine

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One Response to “The gospel according to Adam Smith – Spiritual Capitalism”

  1. Ron Robins Says:

    Great post on spiritual capitalism. I started getting interested in ‘spiritual investing’ – investing with a spiritual perspective – some forty years ago. In recent years, I’ve created a website for such investors. The site also covers the latest global investing news and research from that perspective.

    The site is at http://investingforthesoul.com/

    Best wishes, Ron Robins

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