For more than a decade now we in India have been moving in the direction of some form of capitalism. It is a much misunderstood and much reviled system, which seems to put everyone on the defensive, and one of our defence mechanisms is to use euphemisms like "the market" to describe it. Although I am an apologist of this system, I too have been deeply concerned about some nasty myths that have taken hold inside the corporation in the past 15 years, which Henry Mintzberg and others have recently written about, and which might explain its recent failings.
The first myth is that since we are all self-interested human beings, intent on maximizing personal gain, our only duty is to the bottom line, implying that everything goes and everyone has a price as long one stays within the narrow limits of the law. This myth ignores that a company exists in a social space and that man is a social animal, as Aristotle reminded us more than two thousand years ago, and integrity, self-respect and cooperation have always been equally important values to the system’s success. Leaders of the enduring companies have always known this and tempered dogmatic individualism with social engagement as a form of enlightened self-interest. I have found that the lives of most entrepreneurs and senior managers is characterised by an ethic of ceaseless work combined with a ceaseless renunciation of the fruits of their toil. They work so hard that they have no time to enjoy their money. Aditya Birla, JRD and Rattan Tata, Azim Premji, Narayana Murthy the more successful they became, the more they tended to live frugally. Max Weber had called this "secular asceticism", and had used it to characterise Protestant entrepreneurs, but it can easily define most outstanding businesspersons (and outstanding lawyers, doctors, artists, scientists.) Hence, the spirit that took hold in the nineties on Wall Street and in the dotcom world was pathological, and for the critics to characterise the system as synonymous with greed and selfishness is wrong. Another myth is the notion that the corporation exists only to maximize shareholder value and the claims of other stakeholders in society customers, employees, suppliers, and the community at large are subordinate. Again, enduring companies have always believed that shareholders must receive a good return, but they are able to balance shareholder’s expectations with those of other constituencies. Successful companies know that they exist because of their customers; they don’t serve customers by serving themselves, but serve themselves by serving their customers, and the more selflessly they do it the more successful the enterprise becomes. I expect the balance in the system will right itself over time, as it usually does, and the old truth will re-emerge that capitalism, like democracy, is by no means perfect, but it is better than any of the alternatives. Gurcharan Das NASTY CAPITALIST MYTHS TOI March 23, 03