Princeton University: A New Era in Social Economics

Princeton University: A New Era in Social Economics

Last Friday, April 9, 2010, something wonderful happened at Princeton University.

David W. Miller, Director of Princeton’s Faith & Work Initiative, attempted to tackle the monumental job of “civilizing” the economy. No small task for anyone let alone the unusually courageous and innovative Miller. Formerly the Executive Director of the Yale Center for Faith & Culture, Miller also taught a popular course in the Management School, “Business Ethics: Succeeding without Selling Your Soul.”

The ebullient Miller holds a M.Div. and Ph.D in ethics from Princeton Theological Seminary and combines that with prior experience as a senior partner in a London Private Equity firm. Among his many achievements (he looks much too young to have done all these things), Miller also held a top executive position in the securities services and global custody division at HSBC. His combination of banking, academic, and theological expertise made him the perfect host for the one day business and spirituality conference dubbed, “Civilizing the Economy: A New way of Understanding Business Enterprise?”

Miller gathered inspirational leaders from academic, civic, religious, and business fields to discuss Pope Benedict XVI’s social justice encyclical, Charity in Truth - Caritas in Veritate and how it can be applied to the practical material world of business and economics. The conference was presented from the differing perspectives of economics, theology, employees & shareholders, and CEOs. The only downside was that there was not time to attend every panel and breakout session.

The “Economist’s Perspective” was moderated by Georges Enderle, Professor of International Business Ethics at the University of Notre Dame, and presented by Leonardo Becchetti, Faculty of Economics, University of Rome II, Charles Wilbur, Emeritus Professor of Economics from Notre Dame, and Paul Oslington, Professor of Economics from Australian Catholic University.

The charismatic Becchetti spoke of the important roles of trust and charity in daily business and referred to the solidarity principle of banking in his native Rome—one of the reasons he cited for the Italian banking industry’s relative stability throughout the economic crisis. His personal roles as economics professor, banking industry board member, and head of an active NGO allow him to develop a deeper understanding of how all three disciplines interconnect.
Moderator George Enderle, a world-renowned business ethics expert, conducts research on the ethical challenges of international business and corporate decision making. When this journalist asked the panel how to bridge the gap between economic theory and every economic reality, Enderle replied that one of the first approaches begins with teaching enlightened business practices in business school. “Everything emanates from social thought,” he said.
The panelists were full of innovative and practical insights in economic and spiritual dilemmas. One of the highlights of the economics breakout session was the wise words of the impressive Charles Wilbur, Enderle colleague and Notre Dame professor. Wilbur is currently researching moral values and the economy and has written several books and articles on ethics and economics. Wilbur gave a brief, but fascinating talk on how economics is often predicated upon “patching it up when things go bad” or “cleaning up the mess” left behind by economic failure. Wilbur stated that “economic decisions are moral decisions.” He urged economists to become more proactive in preventing crises, because “economic institutions and policies impact personal lives.” Wilbur referred to an article he wrote in September 2009 for America Magazine on how industry economists fell in love with the elegant math of their formulas and neglected the human application of its original purpose. In his powerful and brilliant article, Misleading Indicators: How U.S. Economists Missed the Great Recession, he wrote of the need to apply theory to human reality.
His words were so sincere and compelling they inspired me to do some research on the professor. To my delight I discovered that Charles Wilbur is one of the prime thought leaders on “social economics”- the humanizing of economic theory with real life. Wilbur wrote that mainstream economics is based on “soulless consumerism.” Social economics places the individual human experience at the center of economic theory - not simply as “economic actors,” but as “persons that live in community.”

The premise of social economics according to Wilbur’s paper is:

“The person is the basic unit of the economy…who acts freely but within certain limits, self-interestedly but often with regard for others, and calculatedly but at times impulsively, whimsically, or altruistically, in a self-regulating economy which from time to time must be constrained deliberately in order to serve the common goodand to protect the weak and the needy…

Social Economics “is not reducible to economic calculus because it rests squarely on the conviction that humans have a worth and dignity beyond measure.” (Ed O'Boyle, pp. 1-2 )

Okay I love this guy - the retired professor that is! Here I thought that the concept of intersecting economic theory with the economic reality of everyday people was new and cutting edge and apparently (according to Wilbur’s website) it was first developed in 1941 (The Association of Social Economics). The panel led to a wonderful discovery of the like-minded scholarly field of research similar to the “better world business” work we are currently focused on at GoodB.
The one sour note of the breakout session was the oddly inappropriate words of panelist Oslington who said among other uninspired utterings that, “Protestant social ethics should disappear from the face of the earth.” He recalled in his one year teaching at Princeton in 2006-07 of being dragged to a Presbyterian Church to listen to boring old social ethics doctrine. “They had no expertise. There were no theologians or economists present,” he remarked revealing his clear disdain for these “non-experts.” The oddity escalates when realizing that one of the key presenters of the conference was Kirk O.Hanson Professor of Social Ethics at Santa Clara University in California. Also, several social ethicists identified themselves subsequently in the lecture hall. However, since “experts and non-experts” make up the economic system, it seems clear that we would all benefit from a free exchange of ideas.
But no matter - the discussion and exchange of ideas on the moral and material fusion of business and society rocked the Ivy League Halls of the old patrician bastion. This was not your daddy’s or granddaddy’s Princeton get-together, this conference set the tone for 21st century “New Economics” and the socially responsible quest for moral money. Something Harvard, U Penn, Cornell, and Stanford have been doing for a few years already has finally caught hold of Old Nassau thanks to David Miller.
Other highlights of the conference included Christine Firer Hinze, Professor of Theology at Fordham and Geoffrey T. Boisi, Chairman and CEO of Roundtable Investment Partners, and senior partner from the old partnership days of Goldman Sachs pre-1999 when they traded and risked their own money. Ahh, the good old days…

David Miller remarked in the morning that while the conference was attended and presented by top CEOs and market makers from global corporations, we should never forget the small business people who make up much of the world’s markets and the innovative entrepreneurs who create new and cutting edge businesses every day. Here, here.

One last note on the conference … if I could improve anything, I would do one thing - make it longer. My only regret there just was not enough time to hear all of the presentations and speakers. Yet, the passionate focus on the common good left participants with renewed hope for a more civilized economy. We can only hope that this conference is the beginning of a fine new Princeton tradition.

Reported by Monika Mitchell - Executive Director

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