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The Executive's Compass: Business and the Good Society

Book Review

David Levy - Vice President

Published September 1, 1993  |  September 1993 issue

By James 0'Toole
Oxford University Press
162 pages

An expert on management and organizational development recently explained to me that in the course of one's career, what needs to be learned changes. At one point basic skills might be important, and later on teamwork or more sophisticated, specialized skills in management, marketing or finance become essential. Assuming that we continue to grow, our development needs also evolve.

Having recently attended an executive development program at the Aspen Institute (a humanities-based approach), the obvious question arose: Does one's career evolve to a point where a serious look at the classics could make a difference? As a means of executive development, should one systematically approach the original words of the political economists, moral philosophers and social activists of all times beginning with Aristotle, Sophocles, Plato and Thucydides, through the writers of the Enlightenment such as Locke, Rousseau, Jefferson and Hamilton, and concluding with contemporary thinkers like Milton Friedman, Betty Friedan, Martin Luther King Jr., Lester Thurow and Malcolm X?

The short answer is that such a look would likely benefit most of us as a fascinating intellectual experience, but that those in leadership positions can most directly benefit because as policymakers, heads of corporations and opinion leaders they are in the business of doing more than managing; they are navigating their "followers" and institutions to some destination through the shoals of conflicting values.

James O'Toole, one of the moderators at the Aspen Institute and the author of The Executive's Compass, says that leadership's destination is no less than the good society. All the seminar's collected readings, daunting as they may seem, are discussions or debates about the nature of a better world. Set in different times and responding to different cultural circumstances, these classical thinkers argue about which values should predominate. The executive seminarians' task is to somehow make this mass of ideas comprehensible by first grouping the values into "schools" and then understanding the tensions between them.

The Executive' Compass, essentially an executive summary of the seminar, contains O'Toole's method to help organize this material. As the title implies, his hook develops a compass as a model. In fact it is a compass to the values examined in the seminar and similarly in the hook. At the northern most point of the compass are the liberty-oriented thinkers like Friedman, Hayek and, of course, Adam Smith who are concerned not only about market freedoms, but also individual liberties.

These libertarians share the north-south axis on opposite poles with the egalitarians. Among them are Rousseau, Marx, Jefferson (somewhat) and Arthur Okun. They argue that notions of equality are the highest values and that economic and cultural disparities and inequalities need correcting, typically through governmental policies which often redistribute wealth and correct the perceived failures of the marketplace.

The eastern point of the compass belongs to those O'Toole calls corporatists, who believe that the government should be a player-coach in the struggle for economic efficiency rather than the libertarians' referee. Modern-day corporatists, according to O'Toole, "argue that national antitrust laws are irrelevant and anachronistic, and should be relaxed to encourage the concentration and coordination needed to meet foreign competition." Historically, the efficiency (a.k.a. corporatist) school includes Keynes, Machiavelli and Plato, while on the list of contemporaries are J.K. Galbraith, Robert Reich, Lester Thurow and Japanese industrialists.

On the opposite pole from the corporatists are the communitarians. They do not believe that the good society is predicated on full employment and an ever increasing standard of living. Rather, they are focused on the quality of life issues and generally advocate environmental policies to conserve natural resources. They favor decentralization and worry about the dehumanizing effects of big governments, big unions and big businesses. Among them are Thomas Jefferson, Thorstein Veblen, Rachael Carson and E.F. Schumacher (Small is Beautiful: Economics as if People Mattered).

O'Toole's argument is that we have always had a tension along both the liberty-equality and efficiency-community axes of the compass. That has been a healthy tension that has brought us to an ever-changing picture of the good society. Many philosophers would argue that as we get more of one value, we get less of the polar opposite: it's zero sum. When there's more freedom to choose, we become less equal and when we heighten efficiency, it's at the expense of our humanity.

O'Toole's point is that the good society has always contained all four values in varying proportions. It is the clash of these values that has been the essence of the great books, essays, plays, letters and speeches that are examined in the Aspen seminars and discussed in The Executive's Compass.

Often, leaders face these same value clashes and deal with them as expediently as they can. Most feel that they are experiencing them for the first time, with little sense that they may trace back as much as 2,500 years.

Aspen's executive development goes to the origins of these values and may well yield value-based intellectual direction essential for leadership. Here then is the difference that this style of development can make: It begins the separation among those leaders who know where they are headed and why, and those who are blown about by the political winds. Failing that, at a minimum, the development should provide a modicum of philosophical comfort that typically accompanies a better-than-superficial understanding.

In a recent interview with Robert Lucas, I posed the question, "... Have the neo-Keynesians stormed the castle in Washington?" His response: "What troubles me about neo-Keynesians is not so much that they have a clear-cut ideology that I dislike, but that they have too little ideology. They are good at rationalizing anything ... These guys have enough talent to put a semi-respectable economic rationale on whatever in the hell the politicians come up with."

I believe the intent at Aspen and of O'Toole's book is not to give the seminarians a set of answers, but rather to introduce them to a discussion on values that has lasted for many generations and has provided our cultural roots. They do not promote one value over the other, but clearly argue with the expediency approach to leadership wherein dwell those "good at rationalizing anything."

Personally, I began the seminar pointed directly to the north on O'Toole's compass. That is toward the value of liberty. That didn't change, except perhaps to be further reinforced. In fact, at one point a fellow seminarian waved her finger at me and said, 'You who love Milton Friedman so much, tell me..."

What did change during this systematic glimpse of the age-old discussion of the good society were my thoughts on the importance of the other points of the compass. If in varying degrees all values will co-exist, then how must we treat those values with which we don't agree?

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