In his famous work from 1971, “A Theory of Justice”, the philosopher John Rawls states the following:
“Society … is typically marked by a conflict as well as by an identity of interest. There is an identity of interest since social cooperation makes possible a better life for all than any would have if each were to live solely by his own efforts. There is a conflict of interests since persons are not indifferent as to how the greater benefits produced by their collaboration are distributed, for in order to pursue their ends they each prefer a larger to a lesser share.”
Everybody prefers a larger to a lesser share. This sentence is as relevant today as it was in 1971. It provides a neat summary of human nature and illustrates the challenges we face in terms of the sustainability of the planet. When both the rich and the poor want more, but less is available because of poor harvests caused by climate change, or because of a lack of money caused by corruption on a grand scale, something has to give. The results can be catastrophic, and we are currently facing unprecedented levels of suffering, discontent and anger that could put the future of the entire planet at risk.
Potential solutions either have to be enforced (through legislation) or agreed upon (through consent). Legislation seems to be the easy answer, but the flaws in this approach were already pointed out by the Greek philosopher Anacharsis in the 6th century BC, when he said: “written laws are like spider’s webs; they will catch, it is true, the weak and poor, but would be torn in pieces by the rich and powerful.”
Consensus among major stakeholder groups – often broadly categorized as governments, business and civil society – is therefore needed to ensure lasting peace and stability. This will never be achieved in full, but given that the world we live in is characterized by crises such as conflict, corruption, inequality and a general lack of trust, there seems to be consensus about at least two things. Firstly, that the rules of the game have to be revisited, and secondly that all these problems are so large and complex that they can only be addressed through partnerships between the major stakeholders. The concept of global corporate citizenship that was introduced by Klaus Schwab in 2008 is particularly useful in this regard.
The classical concept to describe such consensus is that of a social contract, but there is a feeling that this might be a bit too legalistic to receive widespread support. The UN Global Compact is another example of a set of universal principles that various groups can subscribe to. More recently, the World Economic Forum’s Global Agenda Council on Values initiated a process to discuss a new Social Covenant.
Regardless of whether such an agreement is called a contract, a compact or a covenant, a critical success factor is fairness of decision-making. In his work, Rawls introduced the idea of a “veil of ignorance”, a thought experiment that assumes that people are not aware of their own position, e.g. when I negotiate the terms of a contract I do not know whether I will be rich or poor once it is implemented, and therefore I try to achieve the maximum amount of fairness for all concerned. It is called a thought experiment because it is not achievable in practice – we all know that people are very aware of their own positions. However, when we see how quickly people fall from grace or rise to new heights these days – from investment banker to felon, from shop steward to captain of industry – this experiment suddenly does not seem so abstract after all…
Author: Daniel Malan is the director of the Centre for Corporate Governance in Africa at the University of Stellenbosch Business School (South Africa) and is also a member of the World Economic Forum’s Global Agenda Council on Values.
Image: Shoppers fill Regent Street in central London. REUTERS/Andrew Winning