GYANOPROBHA

HOW SUSTAINABLE IS CLASS WARFARE?

A former student of mine from RV (class of 1990) Arun Veerappan, now a fund manager, responded to my recent post on the P A R Ts of Democracy. I publish his e-mail here, followed by my response.

I thought that you would be interested in Bill Gross' (PIMCO's CIO) perspective on the impact of globalization on the democracies and free markets of today as it (somewhat) ties in to what you are trying to say about today's democracies from a financial point of view at least, in your latest post. Gross says that globalization and free markets have resulted in "the ascendance and dominance of capital vs. labor. Add a billion or so potential workers to the global labor force... combine these with deregulation, lower taxes, and free trade, and you have a recipe for accelerating returns to capital and diminishing returns to labor". Put simply, the past 10+ years have resulted in a market where the rich have been getting richer and this market has been legitimized and 'voted into office' in the US twice over, at a minimum. However, in India, this market was clearly 'voted down' in the last federal election by the people and the past few state elections have also produced similar results. Despite this, the balance of power continues to shift towards capital and away from labor in India as well. The key will be to ensure that free markets, within reason, are able to bring about a rising tide that can lift all boats as they have done in the past in the US, for instance. I think that this would be possible if we have a participatory democracy, as you say. However, to ensure that everybody is able to participate and make informed choices, I believe that it is important that state resources be used to provide a good primary education for ALL children. This will clearly require subsidies from rich tax payers and corporations. The question is this: do our policy markers and our tax payers have the will to get this done?

It’s always amusing to find investors and CEO’s affirming insights familiar to the left, and in left-ish language too. What Gross is talking about is straightforward class warfare. Nandigram and Singur, and the SEZ’s, and the expropriation of the landless, dalits and tribals going on all over the country in the name of “development” are just the latest phases in this war. My brother (my enormous respect for him notwithstanding) just happens to be a bit player in a side plot of this much bigger drama.

Irrespective of whether we have the BJP or the Congress at the centre, capital will for now continue to trump labour. Right now, even the left has no alternative to capitalist globalization, beyond acting as a gentle brake on the unstoppable march of capital. That doesn’t mean there is no alternative, only the left is too intellectually bankrupt and too invested in the system to think of one (with some exceptions, like the economist Amit Bhaduri). That’s why you get Manmohan making a speech that appeals to the conscience of the CII (if there is any such thing), or Manishankar Iyer lectures them on how he became a Marxist. Utterly ineffectual, even though the warnings are well worth heeding. [See below.]

Perhaps the only realistic short term alternative is a gentler, more conscionable social democratic capitalism, with well funded social provisions such as compulsory primary education and maternal and child health care, teacher training, school improvement and generally taking care of the next generation, funded through taxes and tax-free donations to charitable foundations. But this is not really going to change the basic inequalities of power and the structures that keep it going.

In the long run, capital can only win so much against labour and the environment before the pendulum starts swinging the other way. The inexorable march of capital is eventually going to erode the natural resource and human resource base of its progress. It’s already happening, if you look beyond the minority that is comfortable.

The fact is that industry as an engine of wealth creation must eventually learn to become much less destructive of nature and human beings if it is not to destroy society itself. Right now, it enjoys political power. But already India is at risk of losing its advantages in the knowledge production economy. This may be because the layer of educated people who can contribute to it is not thick enough, or because the quality of our primary and secondary education does not promote the higher order thinking and metacognitive skills that are essential for generating new knowledge, or because the majority of our children are simply too neurologically stunted because of inadequate nutrition. With no more resources to plunder and when people are tired of being exploited, even the CII will eventually have to wake up out of its triumphalist wet dream.

In this context, despite the fact that the business press and industry types have reacted predictably to Manmohan's speech as if the end of capitalism is nigh, it would be dangerously short-sighted to ignore his plea for a kinder, gentler capitalism. But more importantly, unless capitalism shows some of its much-vaunted inherent dynamism and capacity for change (creative destruction and all that), and unless it promotes fairer and more equitable innovations of business and social processes rather than just creation of wealth for the investor class, it is doomed to pull society down into a self-destructive spiral.

I’m looking forward to a time when the balance sheets of companies will show how much they have contributed to human well being and social capital, rather than just shareholder value. My question is: will our societies survive that long?

PLAGIARISM VS COLLABORATION IN CREATING KNOWLEDGE

Plagiarism is wrong - as teachers never tire of telling their students - because it enables an author to pass off someone else's knowledge as one's own. But in the real world where work has almost always been a collaborative enterprise, to what extent can the knowledge worker lay claims of exclusive ownership on intellectual artifacts that could not have been produced without standing on the shoulders of many other knowledge workers? In a world that increasingly needs collaboration in the production of knowledge, where does collaboration stop and plagiarism begin? In one respect, the answer is quite simple: simply acknowledge the contribution of other people's knowledge creations in creating your own. That is why it is worrying when students or professors engage in plagiarism, either wilfully and maliciously, or (as seems to be more often the case with students) in ignorance. The BBC reported some time ago that many students don't regard copying as wrong. Even when they do, they don't always seem to understand how easily and unconsciously one can begin to plagiarize, and how to avoid it. After all, there are many grey areas requiring judgment, based on the student's skills, capactiies and intentions. The question becomes even more complicated when the available technology for the reproduction of knowledge enables intellectual products of all kinds - from logos through software programs to music and images - to be so easily replicated that the melody of the choral movement in Beethoven's Ninth Symphony ('Ode to Joy') can be appropriated as a mobile phone ringtune or the reversing signal for a car. In other words, there is a problem when a particular knowledge creation of an individual author is disseminated so widely in the public domain that it becomes "common knowledge", and one may not even be aware that one is plagiarizing from other people's knowledge creations. There is also an equal and opposite problem when one appropriates publicly available knowledge like proverbs and folk songs - cultural common property - into one's own work.

But there’s another point of view to be considered. I suppose a “post-modern” approach would be to simply re-define plagiarism so that the practice of copying and pasting from websites is acceptable.

Actually, the entire culture of knowledge production in a capitalist economy encourages stealing of other people’s ideas and deception, because of the competition to gain market share or profits for one’s own ideas. So although one of the foundations of this economy is respect for individual property rights, competition erodes this by the technologies that evolve to create and disseminate knowledge.

If we look at this historically, we might notice that individual property rights only became salient in societies which made possessive individualism a cornerstone of their economic arrangement (what we now know as capitalism). This is obvious in industrial capitalism, which often grew by investing and appropriating (sometimes even stealing!) publicly owned resources. The internet itself is the evolutionary product of massive PUBLIC investment in communication by the US Defence Department. But when the basis for the economy is shifting towards the production and circulation of ideas and what we broadly call knowledge, the competition for profits erodes the very basis of profit-making from innovation, partly because of the technology in use, and partly because it’s very difficult and expensive to assert individual property rights over ideas and the products of the mind. That’s why much greater attention needs to be paid to alternative “open-source” modes of creating knowledge, freeware, etc. Also, much of the mind-work that is done nowadays, much more than the muscle work that was done earlier, needs collaboration in and between networks of producers and users. So who is the “owner” of the final product? Shouldn’t they all share in its ownership?

Who will feed all these creative minds if all the products of their creativity is made freely available? There’s a simple and perhaps utopian answer to this question: let’s stop spending billions on war and destruction, and spend it instead on fostering creativity. Think of an economy where artists, scientists, intellectuals and teachers are supported from public resources and their creations circulate freely. This is already happening to some extent: who is paying for free weblogging software? Certainly not the user! Besides, it is remarkable how the profits of companies that complain of the loss of income from stolen intellectual property have not shown a tendency to shrink, despite the growing “theft”. What they are complaining of is that their profits could have been much higher if all their products were being paid for legally.

Lawrence Lessig, whose book "Free Culture" I have just started to read, points to the paradox that the pursuit of profits from the ownership of knowledge in the name of the so-called "free" markets has in fact led to a concentration of power in the hands of a few corporate executives and CEO's that has curtailed the free circulation of knowledge. But the so-called free circulation of knowledge is probably only possible in a more egalitarian society. Otherwise the hierarchies of power and privilege that prevail in less egalitarian societies are only "digitally enhanced" by the prevalence of free knowledge production, creating a digital divide.

CONSTANT GARDENING IN INDIA

Update (April 30, 2006) Go read the article by BBC on drug trials in India, or better still, watch the documentary. Hat tips to my younger brother Tapan, who told me today about the documentary, and belatedly to Dada, who had warned me about this last year.

India has been making waves in the global economy as a destination for jobs outsourced from more advanced countries. Indian enterpreneurs have been making spectacular profits in the BPO industry, for which the media enthusiasm seems boundless. But there is another Business Process - the testing of drugs - which also promises enterpreneurs the prospects for making a killing (or two - pun intended!). I am referring to the "market" for drug trials.

What does India have to offer? Well, in contrast to an educated English-speaking workforce touted by the BPO industry, here it's a matter of exploiting the natural competitive advantage of having a population that suffers from a large range of diseases, and doesn't know enough to ask too many questions. On the contrary, people would probably be grateful to receive free medication, and be paid a bit on the side as well for taking the medicines. Doctors, too, are mostly unable to resist the lure of rewards for agreeing to test experimental drugs on their trusting patients. Medical malpractice cases are rarely brought to court, and when they are, are usually settled in favour of the doctors. McKinsey estimates the potential market for outsourced drug trials to be $1.5 billion by 2010. In contrast to the west, where "the number of patients willing to sign up for clinical trials is abysmally low. Just 3 percent of cancer patients opt to join trials, and the number of US patients who sign up for cardiac trials has plunged by half over the past five years."

"Twenty years ago, drugs were dropping the cardiac mortality rate from 20 percent to 15 percent," says Dhiraj Narula, medical director of Quintiles ECG, a contract-research firm that organizes trials for major multinationals. "Today we're looking at drugs that will take you from 6 percent mortality to 5 percent. To prove an effect that subtle, in a way that's statistically robust, you need a lot of patients in your sample." One cardiac drug study was conducted on a whopping 41,000 subjects.

See what I mean? So what is the Indian corporate attitude to these opportunities?

Enticed by numbers like these, developing countries have been scrambling to catch Big Pharma's eye - India most aggressively of all. Like high tech call centers and software farms, which were meant to transform India's computer industry by creating skilled workers and a stockpile of modern equipment, drug trial outsourcing is seen as the fast route to economic and scientific growth - a money train that the country can't afford to miss. With this in mind, the government is working to advertise India's most pharmacologically appealing qualities, notably its doctors (English-speaking and educated abroad) and its vast number of ailing patients - 32 million diabetics alone. Many of these patients are also, in the delicate parlance of the drug world, "treatment naive," meaning they've never taken any medication for their illnesses. This is a perk for trial managers, because it lowers the risk of unforeseen drug inter­actions and avoids the troublesome process of weaning patients off one medication and onto another.

And, one might add, it lowers the risk of anyone making a fuss when things go wrong, as happened in Britain recently.

"Ninety percent of patients being recruited in India are poor," says a doctor quoted in the article. "That's the reality. Trials enroll very few patients who are rich, literate, and capable of asking awkward questions."

And when the corporates see an opportunity, the government springs forward to enable them to grab it. That, after all, the MAIN function of the state in this neoliberal guilded age.

Last year, the government took a more controversial step, amending a long-standing law that limited the kind of trials that foreign pharmaceutical companies could conduct. That law allowed companies to test drugs on Indian patients only after the drugs had been proven safe in trials conducted in the country of origin. In January, the government threw out that constraint. India, the brilliant hub of outsourced labor, was positioning itself in a newly lucrative role: guinea pig to the world.

Indian CEO's, whose family members will never be the subjects of drug trials themselves, can afford to be philosophical about it, and take the long historical view.

"Are patients here more vulnerable?" asks Brijesh Regal, CEO of the New Delhi-based firm Apothecaries, which runs clinical trials for pharmaceutical companies. "Obviously. They're poor. They're illiterate." Nonetheless, he argues, most of the problems can be attributed to the growing pains of a new industry. He points to the thalidomide fiasco in the 1950s - women who were given the drug for morning sickness delivered children with severe birth defects - as evidence that every developing industry has problems. "Why are we so concerned about India?" he asks. [Good heavens! Are We?] "If problems happened everywhere else, they will happen here. We are a massive country without a lot of regulatory infrastructure."

Regal's willingness to accept collateral damage may seem chilling, but it has some historical precedent. The path of medical progress is strewn with cases of questionable ethics, desperate practices, and misguided experimentalism, if not outright exploitation. And since patients with the fewest options are invariably the ones most likely to try (or be forcibly volunteered for) risky new treatments, be it an artificial heart, an unproven pill, or a radical lobotomy, they're also the ones who bear the brunt of medicine's experimental nature. In this light, outsourcing trials to a country where decent medical care is scarce, and medication scarcer, is just the globalization of an old equation.

So when you read that the same New Delhi-based firm headed by Mr. Regal has set up a NGO for independent GCP [Good Clinical Practice] auditing, ethics committees to aid CROs [Clinical Research Organizations], I hope you get a nice, warm, fuzzy feeling!

New Delhi-based Apothecaries Limited has launched a non-governmental organization "Apothecaries Foundation" to foster the culture of Good Clinical Practices (GCP) in the country. Apart from organizing highly focused seminars and structured training sessions for investigators, the Foundation has also formed an "Independent Ethics Committee (IEC)" to oversee ethical aspects on behalf of interested sponsors.

The Foundation is in the process of preparing a team for independent GCP audits and has plans to accredit Investigators who would clear a test to establish their GCP skills. IEC of the Foundation welcomes medical institutions, which are keen to streamline the operations of their own ethics committees.

This first-of-its-kind move has stemmed out of the company's acute awareness of the chasm existing in the institutions engaged in clinical research in India says Brijesh Regal, chairman Apothecaries Limited.

The Apothecaries Foundation regards itself as "independent" - i.e., not attached to a pharmaceutical company, unlike other CRO's, and highly trusted by Big Pharma.

"Aventis, Cipla, Eli Lilly, Glaxo and Dabur have found us responsible team-mates in whatever assignments they have given us", says Brijesh [Regal].

"Responsibility" here means taking the longer view, and helping companies re-define ethical standards, so that they can sacrifice without too many ethical qualms the lives of "patients with the fewest options". In turn, patients with more options may benefit from the lessons learnt by Big Pharma and the medical profession as a whole from these deaths. When peoples' lives are valueless, what's the harm in profiting from their death, especially when the potential benefits to business and to society are so great?

Excuse me while I puke...I'm probably not tough-minded enough to stand these contemporary Swiftian examples of liberal, utilitarian reasoning.

DEATH BY A THOUSAND MEASURES

Here is an article from a recent online newsletter that I receive from Wharton called Knowledge at Wharton. It seems to have something to say about the kinds of things we have been discussing recently in relation to goal setting, teacher appraisal, etc.

It seems to me that the business world is now re-discovering a truth that was always known in the world of education: viz., that there are valuable processes in organizations that cannot be captured through process or product metrics. This seems to be particularly true of innovation (according to the article), but also (I would suggest) about learning. Generally, it may be true of any situation where one has to develop a creative understanding of an unprecedented situation on the basis of a limited range of experience or other resources for understanding inherited from the past.

The article seems to me to provide support for my belief that if you focus too much on measures of achievement, you will only focus on achievement that is measurable. Usually (but not always), these are short term achievement objectives. Consequently, in focusing on short term measures, we tend to lose sight of long term gains or losses that may exert a lift or a drag on the organization as a whole. I also believe in what is actually an analogue of what economists call Goodhart’s law: there are certain situations in complex settings like economies, organizations, and in life generally where the overly focused pursuit of tangible (measurable) performance indicators undermines what these indicators are supposed to indicate.

This is not to say that the pursuit of such measures should be abandoned. The article argues that process metrics continue to be valuable in many situations. One just needs to understand that there are situations where they may be inappropriate, and develop a judgment about when to apply them and when not to. The knowledge generation enterprise may be one such. The building up of what social scientists are now calling social capital may be another. The problem is that learning, innovation, the building up of networks of trust and solidarity, and many other important things that add value to organizational or associative life tend to be very difficult to pin down through measures.

WHOSE business knowledge?

WHOSE perspective are we adopting in the IB Business & Management course? An organisation has many stakeholders, so why do we insist on studying it from mainly the perspective of managers and shareholders? What about the knowledge of organisations required by customers, pressure groups, employees, unions, the great invisible public? Consider Union Carbide and Bhopal.

As a member of the first curriculum review committee which began reviewing the previous IB syllabus back in 1996, I was glad to see that the current syllabus has many encouraging features which were anticipated then. But one of my proposals then was that the IB should move away from presenting just one perspective, and should also provide opportunities (as it does analogously in the Group 4 project) to bring other disciplines such as history, sociology and anthropology to bear on the study of organisations (rather than insist that all issues be framed within a decision-making framework - who is making the decisions?). Unsurprisingly, my proposal fell on unreceptive ears at the time (and no criticism of my colleagues is implied), so I made it again in 2000 so that some discussion can be generated before the next review is due. Again, I was ignored.

I am aware that this would make the course into something other than a Business Management course and that teachers would resist the idea because of lack of material in the form of a convenient textbook (most of which adopt a management perspective, being designed for management courses), as well as lack of training. But consider this: who was trained to teach courses like ITGS or Environmental Systems? Where are the "textbooks" in these subjects? Shouldn't we as teachers strive to go beyond our training if we are teaching "for the 21st century"?

Why am I proposing this breach of tradition? Because organisations nowadays affect many more people in diverse ways, not all of them benign, and therefore should be open to the scrutiny of a well-informed public, not just of managers and investors. The absence of such scrutiny tends to turn them into "unaccountable tyrannies". Of course, many business courses now include discussions of ethics and social responsibilities, but these are usually peripheral to the main thrust and direction of the courses.

More broadly, if if we are educating for more democratic societies, then the PARTs of democracy we should be should be emphasizing are Participation, Accountability, Responsiveness and Transparency. Our courses should provide for a plurality of views and perspectives that encourage these aspects. I don't think the IBOshould consciously associate itself with any one perspective in a course which is as deeply ideological as a business and management course.

THE PLEASURES OF BUSINESS PROCESS OUTSOURCING

BPO has been sold as the new economic nirvana in India. Millions are being invested hiring hopeful English-speaking youngsters from India's "shining" middle class into call centres and other IT-enabled jobs, the cutting edge of the service industry in India, now getting a little blunt as the advantage shifts into the outsourcing that has now hit the biotech and pharmaceutical industries as global pharmaceuticals discover how easy it is to conduct clinical trials in India. With the ready supply of human guinea pigs in an overpopulated country, who's going to bother if a few experiments go wrong ? With a government keen to take advantage of these trends, don't expect too many concerns to be voiced about health and safety. After all, you can't make an omlette without breaking a few eggs. Besides, we need a level playing field with other great respecters of their citizens' rights like China and Burma and Indonesia, or the newly democratic countries at the fringes of "old" Europe.

While BPO investors have been laughing all the way to the bank, here is a rare insight into the conditions of the cybercoolies who make their mirth possible.

New BPO mantra: Dial M-e-n-t-o-r
ALLEN O'BRIEN

TIMES NEWS NETWORK[ MONDAY, FEBRUARY 21, 2005 10:03:59 PM ]

* Cause : You bloody Indians, you don't know nothin'... You brownie, don't act smart... Why is your mouth stinking, you rat? That's what call-centre execs hear from Western callers.

* Effect : Call centres are hiring shrinks to mentor their staff and that of others in the same business. Delhi Times does a reality check...

Mentoring. That's the latest call-centre-to-call-centre trend. "The mentoring of call centre execs involves counsellors advising them on career, health, mental issues," says Sanjay Salooja, CEO of Empower, a BPO which plays mentor. "Everything is done anonymously. Call centre execs either call us up or e-mail queries. We then revert back with possible solutions," says Deepak Raheja, a psychiatrist with Empower. Why shrink therapy? "Because call centre execs are young and likely to crumble under work pressure. And if there are abusive calls, they can be totally shattered."

Psychiatrists make execs mentally strong to overcome difficult situations, says Meenakshi Mathur (name changed) of Eserve Solutions, a BPO. Agrees Lalit Tiwari, an exec with Wipro Spectramind, "Since we work 24x7, we need a mental balm; three hours of sleep isn't enough to soothe one's nerves after those calls." Adds Manpreet Kaur of GE Capital: "If all call centres could employ staff to provide mental-relaxation tips to execs, not only would people in the BPO sector last longer, they'd love their jobs too."

FAQs & answers
A first-hand account of SOS beeps from call centres

Q: I'm unable to cope with my work I try to meet deadlines but fail.

A: Prioritise your work. Adopt time management.

Q: Long working hours and working in shifts disturbs my personal life.

A: Accept reality. Plan weekly activities based on the time you have.

Q: I'm unable to work at night. Do I need special inputs?

A: Take a minimum of 8 hours' rest. Eat balanced meals.

Q: My job is hectic, monotonous, meaningless. How do I feel enthusiastic?

A: Find interesting and different ways of doing the job. Else, ask for different responsibilities.

Q: I'm fed up. I'm capable but my company underutilises me. My job offers no scope for career growth.

A: Look at others in your company and find out what qualities they have. Try honing your skills accordingly.

Q: I'm a stranger in my team. I have no role in decision-making.

A: Talk with your manager and clarify matters.

Q: Suddenly asked to join a new project, I'm insecure. There is no communication with the management.

A: Adopt the BIF (Behaviour, Impact, Feelings) approach. Have a word with your supervisor.

Q: My job is tough, my superiors are tougher. I face disciplinary action even if I exceed a call by a second more than the stipulated time.

A: Find out from colleagues how to complete calls in time.

Q: I've lost all interest in social outings. I just feel like sleeping.

A: Catch up with your social life on your weekly off.

Q: My superior tries to take advantage of me on the night shift. How do I handle it?

A: Ascertain policies related to harassment at the workplace. Take collective action if possible. [LOL]

Q: I work all night, sleep through the day. I don't have a proper sexual relationship with my husband. If this continues, my marriage will break up.

A: Speak to your bosses and get your shift changed. Else, change your job.

BUSINESS - NO LAUGHING MATTER?

Here are a two examples of business humour. I find it interesting that this kind of humour is almost always at the expense of businesses and their bosses. There are examples of other kinds (in jokes, puns, etc.) but they are usually found in ads. Most business humour seems designed to elicit a smile rather than a rip-roaring laugh. What, apart from themselves, do people in business find funny, I wonder?

Both are from sources that I cannot now remember.

Download petrobras_sinking.pps

Download Jonik-CEOs-Protest.gif

There is another one doing the rounds of the internet, which is a spoof ad for a consulting company called Accidenture. Find it through Google, because the file I got from Gugai couldn't be properly uploaded onto this blog for some reason. Be careful which sites you hit. DON'T go to Gagreport if you are offended by tasteless and adult material! There may be others. You have been warned!

FRIEDMAN AT IT AGAIN

Here he is, this time in The Guardian, tracing in tedious detail the supply chains for the innards of his Dell laptop. All this huffing and puffing to make the point that "as countries got woven into the fabric of global trade and rising living standards, which having a network of McDonald's franchises [or Dell laptops - GP] had come to symbolise, the cost of war for victor and vanquished became prohibitively high."

Of course, earlier in the same extract, he writes: "The Golden Arches Theory stipulated that when a country reached the level of economic development where it had a middle class big enough to support a network of McDonald's, it became a McDonald's country. And people in McDonald's countries didn't like to fight wars any more. They preferred to wait in line for burgers."

His Golden Arches Theory is complete rubbish, of course, as the bombing of Mac eating Yugoslavs by NATO bombers in 1999 proved.

Let's recall this quote from an earlier Friedman book, The Lexus and the Olive Tree:

"The hidden hand of the market will never work without a hidden fist. McDonald’s cannot flourish without McDonnell Douglas, the designer of the US Air Force F-15, and the hidden fist that keeps the world safe for Silicon Valley’s technologies to flourish is called the US Army, Air Force, Navy and Marine Corps."

And as the former US Secretary of State Madeleine Albright asked Colin Powell when he proved to be a reluctant warrior in Gulf War I: "What’s the point of having this superb military you're always talking about if we can't use it?"

So remember what keeps the word safe for McDonald’s burgers and Dell Computers – the power to kill people now and then. According to Friedman’s logic, then, killing off your actual and/or potential customers is a great way to defend so-called “free market democracy” .

But also read this comment from Matt Taibbi,who seems to be even more allergic to Friedman than I am, and a great deal funnier to read than either Friedman or me.

 

Businesses and social capital

This example of a small business (and I'm sure there are many others) suggests what may be a novel way of measuring business success. Although there is no single measure, the main measures of success so far has been profits, which is often expanded to profitability and market share. But these measures still reflect a shareholders' perspective, not one of society as a whole. But this example of a what is known as "societal orientation" in marketing, or a community-friendly business model, seems to be of interest as a possible starting point for developing such a measure.

A new buzzword doing the rounds in economics and the social sciences generally is 'social capital', referring to community ties, networks, norms, trust, and public goods of various kinds. Although the World Bank discusses social capital in the context of poor countries and development, it is essential for all societies.

Large scale destruction of social capital leads to large scale disasters, some very visible, others much less so. Given that there is plenty of evidence that many large businesses destroy publicly available social capital while promoting the private appropriation of financial, physical and even intellectual capital (possibly a new meaning to the term 'creative destruction', used by Schumpeter to refer to a well-known duality of capitalism), it would seem that megabusinesses often tend to destroy the social, cultural, moral and institutional infrastructure that is necessary for them to function properly. It therefore makes sense to research business models that create net social capital as a measure of their success. It's true that some corporations claim to do this on the side as a demonstration of their ethical stance and corporate responsibillity. But I don't think this defines the limits of what's possible by way of ethical business.

In a society which places so much value on scientific, technological and artistic creativity and innovation, there seems a marked reluctance to even discuss social innovation of this kind, for reasons which aren't far to seek. So one's moral sensibilities are rarely allowed to influence one's practical imagination and creativity. There are exceptions like Anita Roddick and EF Schumacher. But the kinds of businesses described in this article may well be the harbingers of a new kind of post-capitalist society. If I had the time and the leisure and the resources, this is one of the things that I would research. Even in a B-school!

It's quite possible, by the way, that some of the most trenchant critics of present-day capitalism and its most pragmatic but idealistic reformers are hidden away among the faculties of business schools. But I wouldn't bet on it!