Introduction, Overview

Moral Innovators perspectives on Hope

Globalization is a fact of life today. Country borders can no longer sustain a separation of humans by citizenship when laws cannot be comprehensively applied on a consistent basis. Humanity, as a whole, is pursuing more extreme measures to achieve short term goals that will lead to self-destruction.

Followers of abrahamic religions (Jews, Christians and Muslims) are waiting for the coming of a savior after most humans kill each other. Chinese and Indians continue to focus within their regional civilizations, with China branching out to focus on global trade to accumulate wealth (i.e. not conquest) by repeating the silk road with one belt one road. To the Chinese, the only humans on earth are Chinese. Everyone else are ghosts. The size of China attracts global attention. Japan’s efforts since 1987 to build territorial coast lines by claiming tiny reef rocks near Okinotori in the Philippine Sea is left unnoticed.

To change course from these self-fulfilling prophecies of destruction, let us thrive with knowledge of our places in the world. We need to do the right things to make our world better, not imposing views onto others with threats of destruction or hell. For thousands of years, Chinese and Indians live moral lives so they can re-incarnate into higher forms of living. These are internally focused, not imposing views onto others. Iranian prophet Zoroaster predates the Old Testament in the pursuit of monotheism that evolved through Judaism, Christianity, and Islam. The reliance on spirituality (which cannot be seen as a mental, not physical, force) drove evangelism, imposing views onto others to self-aggrandize faith.

Morality must not be imposed onto our children. Unfortunately, there is no curriculum that teaches morality to our children. Almost all of our children learn morality from parents and/or through faith. Christian Catholics baptize their babies right after birth, while Christian Protestants have started to evangelize Bible as a perfect document despite its inherent inconsistencies. Muslim umma discourages followers from leaving the faith under the penalty of death. Chinese and Indians discipline their children to teach them values that, for example, have led to the reputation of “tiger mom.” In other words, our children grow up with morality imposed upon them.

One way to introduce morality to our children is to illustrate morality through history. Let us highlight the immoral Opium Wars against China, or the American destruction of Native American civilizations accompanied by African slavery. USA would not have industrialized as fast without slaves, and Europe would not have advanced as fast without the 70,000 tons of silver taken from China by force and opium.
Let us also introduce both evolution and creation to our children. Encourage them to explore their own values. Some will pursue faith, and some will follow evolution for their own reasons. Hope supported by motivation will likely emerge as a common objective for all humans. For the 1-2 billions of starving humans today, their hope is any path to fill their stomachs. The major challenge is to encourage constructive hope based on opportunities, not faith based destructive suicide bomber mentality. For the majority of the remaining 5-6 billion humans, hope can guide us towards moral behavior, especially if introduced at an early age and collectively reinforced by a moderate (not extreme) level of faith. Prayer can be constructive, as long as we donot blindly follow faith, and we continue to work hard.

This blog is also to celebrate my child who is named “hope.”


What are high priority issues for Moral Innovators today?

While we are guided by our beliefs, please do not let time’s pressure hasten our appropriate actions. Let us act based on knowledge (or beliefs verified with truths). Do not take actions based on beliefs alone because that have led us to conflicts and future problems.

The link to many issues we face today relate to how we view “companies” that started with a history of corruption like the 17th–19th century British East India Company and Dutch East India Company (or VOC). Companies have been risk-sharing entities for investors who focus on higher profits using continuous improvement methods (i.e. innovations). Even before we treated “companies” as legal entities, ancient civilizations had monopoly practices for several thousands of years where the “victims” have been the general public. In the USA, Rockefeller’s Standard Oil Company was broken up 100 years ago. Today, OPEC (as an oligopoly) has been transferring trillions of dollars of wealth to the (mostly Muslim) oil producing nations, and Bill Gates’ Microsoft created the world’s wealthiest person (and now a Foundation that is the largest shareholder of ExxonMobil) for decades. There have not been sufficient considerations for anything not related to generating higher profit which is the difference between sales revenue offset by expenses such as labor, material, and taxes. Higher profit can be achieved by a combination of higher revenues and/or lower expenses.

To generate higher revenues, we sell products supported by advertisement and marketing. For example, Marlboro Man and Virginia Slims encouraged cigarette smoking that we have learned over the last 30 years could be harmful to our health. The Chinese are still smoking 2.3 trillion cigarettes a year, or 8 times that of the USA on a per capita basis (1800/year/person, or 5/day/person). It is important that we organize efforts to fight intentional unethical practices while respecting regional differences.  Instead of confronting the Chinese by imposing ill-defined human rights practices, we could help the Chinese save many more lives by sharing our experience on the future health care burden from smoking.

Let’s address the expenses by their major components:  Labor, Material, and Taxes. 

To reduce labor expenses, we have squeezed the US middle class with alternatives such as globalization which started with manufacturing (and continuing with services today).  The top 1% of Americans has not been affected because 1) they benefit from the resultant higher profits, and 2) the CEOs and a few other executives have not been squeezed.  Let us illustrate with a public company that trades at 10 time Price/Earnings ratio.  The company can transfer an operation (say from USA to China) to release 100 “middle class” US employees at a salary of $40,000 per year and hire 300 Chinese employees at $5,000 per year.  This would save $2.5 million per year for the company, but the CEO gets $25 million credit towards his/her bonus (calculated from $2.5 million per year times the P/E ratio of 10).  The worst part of this scheme is the fact that the CEOs walk away with big severance packages if anything goes wrong. We know that Mr. Akerson left General Motors and the new CEO Ms. Barra is addressing the faulty GM products that have killed customers during Mr. Akerson’s (and his predecessors’) tenure(s).  Usually the beginning of the change of command carries continuous improvement or innovative ideas, until the change of command is no longer new, when the focus turns to the big severance package(s).

Under normal circumstances, there is not much savings on material expenses, especially if we focus on comparable quality of materials.  Often the savings relate to logistics expenses like transportation and customs expenses.  However, the assumption of comparable quality of materials cannot be taken for granted, as there have been false claims to quality (e.g. Chinese baby milk with toxic melamine).

To reduce taxes, there is an army of experts to address a wide variety of tax issues especially for globalized businesses.  This is partly why the manufacturing economy has shifted to the services economy – because logistics, financial reporting, treasury, taxes are all services to support globalization.

Moral Innovators seek knowledge of where we are in the world.  We do the rights things to make the world a better place.  The right thing to do, in this context, is to know this process, and reward appropriate value add contributors.   Should CEOs get credit for higher profits when they are not held responsible for the delivery of higher profits?  Should governments be responsible for the “victims” of achieving higher profits driven by the CEO?  Should governments subsidize failing companies (e.g. GM, Chrysler, Citibank, Carlyle, etc.) when the CEOs continue to receive incentives in the form of bonuses and severance packages?  Can we count on our faith (e.g. US Christians) to deliver the appropriate moral foundation to support doing the right thing?

This process partially explains why the wealth gap in the USA has widened to support the super-wealthy 1% while the middle-class (the 100 jobs eliminated in this illustration) has been squeezed.