One function system to rule them all?
The (attempted) reconfiguration of Business, Politics and Society - globally.
YORKSHIREMAN 1: There were over a hundred and fifty of us living in a small shoe box in’t middle of road.
YORKSHIREMAN 2: Cardboard box?
YORKSHIREMAN 1: Right.
YORKSHIREMAN 2: Aye, you were lucky. We lived for three months in a rolled-up newspaper in a septic tank.
The exchange is from The Four Yorkshiremen, a 1967 comedy sketch1 in which claims of deprivation are countered with ever more extreme and silly claims. It is very funny.
My questions are: Are those who decide upon corporate Purpose statements following the same ‘out-do everybody else’ logic, even if unwittingly? If so, why is it even happening? And what does it all mean for globalization?
Let’s start with the Business Purpose issue. Patagonia, an outdoor clothing manufacturer, states its Business Purpose thus:
“We’re in business to save our home planet.”2
Now, I do not doubt that Patagonia makes fine, sustainable products but I am skeptical when it declares its primary reason for being (Business Purpose answers the question ‘What are we here for?’3 ) to save planet Earth. Two reasons:
It is such a huge but diffuse claim (surely, more the kind of line one would expect to see on the cover of a Marvel comic?) that it strikes me as being meaningless.
It is an unequivocally political goal rather than a business goal, and I see troubles ahead if that trend continues and all companies progressively become politically driven.
Politics has always impacted Business … BUT, until recently, Business and Politics were partitioned, enabling them to operate synergistically:
In times when industry and the arts flourish, men are kept in perpetual occupation, and enjoy, as their reward, the occupation itself, as well as those pleasures which are the fruit of their labour.4
Now, however, if Business becomes an arbiter of Politics, it surely risks killing off any synergies and increasing the likelihood of fragmented and chaotic outcomes.
The ‘Business Purpose 21st century’ (BP21) switch
The BP21 upgrade happened just prior to and during the COVID-19 pandemic. Before that, Purpose statements related to specific Business outcomes. Here are two examples from 2002 …
Goldman Sachs: To provide excellent investment and development advice to major companies.
Metropolitan Police: Making London safe for all the people we serve.5
Then, in 2019 and 2020, a radical shift. BP21 arrived. American business association, The Business Roundtable, came up with this formulation, signed by 181 CEOs of major U.S. corporations:
Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.
Here’s the World Economic Forum:
The purpose of a company is to engage all its stakeholders in shared and sustained value creation. In creating such value, a company serves not only its shareholders, but all its stakeholders – employees, customers, suppliers, local communities and society at large.
Well, okay, but didn’t Business do all of that in the past? In the West, up until The Great Outsourcing (circa 1990 to 2010), Business operated on a more local and self-contained basis than it now does and, by so doing, added a great deal of vibrancy to local communities.
And here’s The British Academy with its Principles for Purposeful Business:
The purpose of business is to profitably solve the problems of people and planet, and not profit from causing problems.
Wow, this takes things to a very different conclusion, doesn’t it? The focus shifts dramatically from assertions that are positive about the role of Business and related directly to outcomes over which Business has direct control (i.e. create a great product/service, build a great customer base), to a new concept where, for many, Business is regarded, first and foremost, as harmful and whose key objective, therefore, must be to minimize the harm that it causes.
Have we really redefined a mechanism that has given the human race astonishing progress, longevity and prosperity as potentially evil? Are we insane?
One Function-system to rule them all
Which brings us to the nub of this matter and I’m going to attempt to draw an analogy between J.R.R. Tolkien’s “One Ring to rule them all” and events in the post-World War 2 era. Here is Tolkien’s poem:
Three Rings for the Elven-kings under the sky,
Seven for the Dwarf-lords in their halls of stone,
Nine for Mortal Men doomed to die
One for the Dark Lord on his dark throne
In the land of Mordor where the Shadows lie.
One Ring to rule them all, One Ring to find them,
One Ring to bring them all and in the darkness bind them
In the Land of Mordor where the Shadows lie.6
Now, bear with me, please: I’m suggesting that a similar dynamic has occurred, and is ongoing, right across our ‘home planet’. The Elven-kings, Dwarf-lords and Mortal Men are equivalent to different operating systems, each of which is constructed from three foundational pillars. There’s more in an earlier post but, briefly, the pillars are:
POLITY which, in the West, for the past couple of hundred years has been based upon liberal democracy within nation-states.
SOCIETY which encompasses ‘the way we do things around here’. This includes religious beliefs (or lack of them), sexual mores and the vast array of both overt and subtle beliefs about the way we live and interact. In the West this includes a great deal of individual freedom.
BUSINESS which operates under the aegis of specific Polities and Societies.
The way these three elements are coordinated obviously gives rise to different forms of governance - equivalent, if it’s not stretching the point too far, to the elves, dwarfs and mortals of Tolkien’s wonderful imaginings.
The different forms of governance here on our home planet include democracies, monarchies, oligarchies and various forms of authoritarian or totalitarian regime, but the big divide, when everything is reduced to basics, seems to me to come down to bottom-up versus top-down, Democracy versus Autocracy.
Sure, there are shades of Democracy (e.g. direct and representative) and Autocracy (e.g. absolute monarchy, theocracy, kleptocracy, and even kakistocracy, which is rule by unscrupulous thugs) but the big divide is between bottom-up and top-down thinking. As ever, it seems to me, the struggle is between the masses and the elites, ‘we’re all in this together’ versus ‘we’re your betters and we know best’, between populism and communitarianism.
Okay, keep that in mind while considering post-Second World War events. In a nutshell, people were sick and tired of warfare, discord and the atmosphere of fear that were the inevitable accompaniments. They were aware, too, of the massive variations in human flourishing, or lack of it, across the globe.
The heightened awareness led to an understandable longing for an end to conflict and a ‘levelling up’ of opportunity. A utopian dream of globalization was born. However, although the goals were laudable, they required huge changes in the way things are done … and such huge changes are always risky. Why? Because specific instances of Polity, Society and Business evolve over hundreds or even thousands of years and go very deep. Trying to achieve rapid change is very likely to result in unexpected outcomes.
How, then, could such a global vision even be contemplated? The idea dawned that it might work if just one Function-system was focused upon and exploited - Economy.
Buy stuff!
Several great minds addressed social systems theory throughout the 20th century: chief among them were Immanuel Wallerstein (1930-2019) and Niklas Luhmann (1927-1998). German sociologist Niklas Luhmann came up with what strikes most people as a startling premise: it is more helpful to think of society in terms of a series of systems rather than simply collections of human beings. That’s a heck of a simplification on my part but I think it communicates the general idea.
So, what are these systems? They relate to various key functions that ‘shape’ our societies. Examples of function-systems are economy, politics, law, education, sports and mass media.
[B]uying a meal is communication functioning economically; the casting and counting of a vote is communication functioning politically; presenting an argument in court is communication functioning legally. Since all these systems are operationally closed, they are the intrasocial environment of the others. They are “subsystems” of society. Each function system has its own social perspective and creates its own social reality. They are all, so to speak, subrealities of a general social reality. Still, they are not, strictly speaking, “parts” of a “whole”: society does not become less “whole” when a system ceases to function and it does not become more “whole” when a new one emerges. Before the mass media, for instance, society was not “less” than it is today.7
This realization gave proponents of globalization a clue to implementing their supposed utopia - focus exclusively on the economy function-system. Function-systems do not recognize geographical boundaries, or ethnicity, or religious belief (or lack of it), or gender, or sexual orientation so, theoretically, the closed economy function-system could operate independently and successfully to create what might be termed a ‘global mall’.
There are echoes of this in the work of American author, academic and lawyer Philip Bobbitt (1948- ). He saw the successor to the nation-state as the market-state. So, what is a market-state? Here’s Bobbit’s answer:
“In the market-state, the marketplace becomes the economic arena, replacing the factory. In the marketplace, men and women are consumers, not producers (who are probably offshore anyway).”8
And he adds a further contextual point:
If the nation-state was characterized by the rule of law – and ... the society of nation-states attempted to impose something like the rule of law on international behavior – the market-state is largely indifferent to the norms of justice, or for that matter to any particular set of moral values so long as law does not act as an impediment to economic competition.9
So, there we have it: one function-system to rule them all! - the Economy.
“Your chief role, earthling, is to buy stuff. Your home planet depends on it!”
The irony, I find, is that, having spent decades in Sales and Marketing, I now worry that these functions have been too successful. Don’t get me wrong, I’m a dedicated supporter of capitalism: it has proven to be the most effective means yet discovered to solve human problems and ensure human freedoms. But it is not necessary to make everything subject to the marketplace. To give just one example, the idea that children, as consumers of education, should be the arbiters of what is learned and how it is imparted, seems to me to be misguided.
In any event, the fact that we humans are not just put here on our home planet to buy stuff is surely being proven by the pushback from other function-systems. The economy may ignore, for example, religion or specific legal precedents, but religion and legal precedents may not ignore economy.
Function-systems have developed subtly over very long periods of time in specific locales. They are not easily cast aside, as was demonstrated by the highly intelligent and well-meaning group who promoted the French Revolution, and yet ended up dead in a France that had rapidly fallen apart into a terror state.
Perhaps the way to save our home planet is to have greater respect for the subtlety of our function-systems? Of course things must change but try to override the function-systems too aggressively and we might all end up living in cardboard boxes or rolled-up newspapers. Well, you know what I mean.
Thanks for reading.
At Last The 1948 Show, Season 2, Episode 6, written and created by John Cleese, Graham Chapman, Tim Brooke-Taylor and Marty Feldman (first aired, 31 October 1967)
https://eu.patagonia.com/gb/en/activism/
Davidson, Hugh. The Committed Enterprise (2002)
Hume, David (1711-1776). Of Refinement in the Arts, Essays Moral, Political and Literary
Davidson, Hugh. Ibid.
Tolkien, J.R.R. The Lord of the Rings (1954, 1955)
Moeller, Hans-Georg. Luhmann Explained (2006)
Bobbitt, Philip. Ibid
Bobbitt, Philip. Ibid